Exhibit 10.18
ONSALE
1995 EQUITY INCENTIVE PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
This Agreement is made and entered into as of December 6, 1996 (the
"Effective Date") by and between Onsale, a California corporation (the
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"Company"), and the purchaser named below (the "Purchaser"). Capitalized terms
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not defined herein shall have the meaning ascribed to them in the Company's 1995
Equity Incentive Plan (the "Plan").
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Purchaser: ▇▇▇▇▇ ▇▇▇▇▇▇
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Total Number of Shares: 20,000
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Purchase Price Per Share: $5.00
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Total Purchase Price: $100,000
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1. Purchase of Shares.
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1.1 Purchase of Shares. On the Effective Date and subject to
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the terms and conditions of this Agreement and the Plan, Purchaser hereby
purchases from the Company, and the Company hereby sells to Purchaser, the total
number of shares set forth above (the "Shares") of the Company's Common Stock at
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the purchase price per share as set forth above (the "Purchase Price Per Share")
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for a total purchase price as set forth above (the "Purchase Price"). As used in
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this Agreement, the term "Shares" refers to the Shares purchased under this
Agreement and includes all securities received (a) in replacement of the Shares,
(b) as a result of stock dividends or stock splits in respect of the Shares, and
(c) in replacement of the Shares in a merger, recapitalization, reorganization
or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s) under
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which Purchaser will take title to the Shares is:
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Purchaser desires to take title to the Shares as follows:
[_] Individual, as separate property
[_] Husband and wife, as community property
[_] Joint Tenants
[_] Alone or with spouse as trustee(s) of the
following trust (including date):
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[_] Other; please specify:
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1.3 Payment. Purchaser hereby delivers payment of the
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Purchase Price as follows (check and complete as appropriate):
[_] in cash in the amount of $_____________, receipt of which is
acknowledged by the Company;
[_] by cancellation of indebtedness of the Company to Purchaser
in the amount of $____________;
[X] by tender of a Full Recourse Promissory Note in the principal
amount of $100,000, secured by a Pledge Agreement of even
date herewith;
[_] by the waiver hereby of compensation due or accrued for
services rendered in the amount of $________.
2. Delivery.
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2.1 Deliveries by Purchaser. Purchaser hereby delivers to
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the Company (i) this Agreement, (ii) two (2) copies of a blank Stock Power and
Assignment Separate from Stock Certificate in the form of Exhibit 1 attached
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hereto (the "Stock Powers"), both executed by Purchaser (and Purchaser's spouse,
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if any), (iii) if Purchaser is married, a Consent of Spouse in the form of
Exhibit 2 attached hereto (the "Spouse Consent") executed by Purchaser's spouse,
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and (iv) the Purchase Price by delivery of a Secured Full Recourse Promissory
Note in the form of Exhibit 5 and (v) a Stock Pledge Agreement in the form of
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Exhibit 6, executed by Purchaser (the "Pledge Agreement").
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2.2 Deliveries by the Company. Upon its receipt of the
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Purchase Price and all the documents to be executed and delivered by Purchaser
to the Company under Section 2.1, the Company will issue a duly executed stock
certificate evidencing the Shares in the name of Purchaser, to be placed in
escrow as provided in Section 11 until expiration or termination of both the
Company's Repurchase Option and Right of First Refusal described in Sections 8
and 9 and payment in full to the Company of all sums due under the Note.
3. Representations and Warranties of Purchaser. Purchaser
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represents and warrants to the Company that:
3.1 Agrees to Terms of the Plan and this Agreement.
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Purchaser has received a copy of the Plan and this Agreement, has read and
understands the terms of the Plan and this Agreement, and agrees to be bound by
their terms and conditions. Purchaser
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acknowledges that there may be adverse tax consequences upon purchase and
disposition of the Shares, and that Purchaser should consult a tax adviser prior
to such purchase or disposition.
3.2 Purchase for Own Account for Investment. Purchaser is
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purchasing the Shares for Purchaser's own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Shares within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Purchaser has no present intention of selling or otherwise
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disposing of all or any portion of the Shares and no one other than Purchaser
has any beneficial ownership of any of the Shares.
3.3 Access to Information. Purchaser has had access to all
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information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.
3.4 Understanding of Risks. Purchaser is fully aware of:
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(i) the highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (e.g., that Purchaser may not be
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able to sell or dispose of the Shares or use them as collateral for loans); (iv)
the qualifications and backgrounds of the management of the Company; and (v) the
tax consequences of investment in the Shares. Purchaser is capable of
evaluating the merits and risks of this investment, has the ability to protect
Purchaser's own interests in this transaction and is financially capable of
bearing a total loss of this investment.
3.5 No General Solicitation. At no time was Purchaser
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presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Shares.
4. Compliance with Securities Laws.
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4.1 Compliance with Federal Securities Laws. Purchaser
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understands and acknowledges that the Shares have not been registered with the
Securities and Exchange Commission ("SEC") under the Securities Act and that,
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notwithstanding any other provision of the Stock Option Agreement to the
contrary, the exercise of any rights to purchase any Shares is expressly
conditioned upon compliance with the Securities Act and all applicable state
securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws. The Shares are being issued under the Securities Act
pursuant to (the Company will check the applicable box):
[X] the exemption provided by SEC Rule 701;
[_] the exemption provided by SEC Rule 504;
[_] Section 4(2) of the Securities Act;
[_] other: ___________________________.
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4.2 Compliance with California Securities Laws. THE SALE OF
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THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT, IF NOT YET QUALIFIED WITH
THE CALIFORNIA COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH
QUALIFICATION, IS SUBJECT TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH
SECURITIES, AND THE RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE
PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION
BEING OBTAINED OR AN EXEMPTION BEING AVAILABLE.
5. Restricted Securities.
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5.1 No Transfers Unless Registered or Exempt. Purchaser
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understands that Purchaser may not transfer any Shares unless such Shares are
registered under the Securities Act and qualified under applicable state
securities laws or unless, in the opinion of counsel to the Company, exemptions
from such registration and qualification requirements are available. Purchaser
understands that only the Company may file a registration statement with the SEC
and that the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2 SEC Rule 144. In addition, Purchaser has been advised
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that SEC Rule 144 promulgated under the Securities Act, which permits certain
limited sales of unregistered securities, is not presently available with
respect to the Shares and, in any event, requires that the Shares be held for a
minimum of two years, and in certain cases three years, after they have been
purchased and paid for (within the meaning of Rule 144), before they may be
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resold under Rule 144. Purchaser understands that Shares paid for with a Note
may not be deemed to be fully "paid for" within the meaning of Rule 144 unless
certain conditions are met and that, accordingly, the Rule 144 holding period of
such Shares may not begin to run until such Shares are fully paid for within the
meaning of Rule 144. Purchaser understands that Rule 144 may indefinitely
restrict transfer of the Shares so long as Purchaser remains an "affiliate" of
the Company or if "current public information" about the Company (as defined in
Rule 144) is not publicly available.
5.3 SEC Rule 701. The Shares may become freely tradable by
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non-affiliates if issued pursuant to SEC Rule 701 promulgated under the
Securities Act (under limited conditions regarding the method of sale) 90 days
after the first sale of Common Stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
SEC, subject to the lengthier market standoff agreement contained in Section 7
of this Agreement or any other agreement entered into by Purchaser. Affiliates
must comply with the provisions (other than the holding period requirements) of
Rule 144.
5.4 State Law Restrictions on Transfer. Purchaser
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understands that transfer of the Shares may be restricted by Section 260.141.11
of the Rules of the California
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Commissioner of Corporations, a copy of which is attached hereto as Exhibit 3,
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and that the certificate(s) representing the Shares may bear a legend to that
effect.
6. Restrictions on Transfers.
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6.1 Disposition of Shares. Purchaser hereby agrees that
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Purchaser shall make no disposition of the Shares (other than a permitted
transfer under Section 9.6) unless and until:
(a) Purchaser shall have notified the Company of the
proposed disposition and provided a written summary of the terms and conditions
of the proposed disposition;
(b) Purchaser shall have complied with all
requirements of this Agreement applicable to the disposition of the Shares;
(c) Purchaser shall have provided the Company with
written assurances, in form and substance satisfactory to counsel for the
Company, that (i) the proposed disposition does not require registration of the
Shares under the Securities Act, or (ii) all appropriate action necessary for
compliance with the registration requirements of the Securities Act or of any
exemption from registration available under the Securities Act (including Rule
144) has been taken; and
(d) Purchaser shall have provided the Company with
written assurances, in form and substance satisfactory to the Company, that the
proposed disposition will not result in the contravention of any transfer
restrictions applicable to the Shares pursuant to the provisions of the
Commissioner Rules identified in Section 4.2.
6.2 Restriction on Transfer. Purchaser shall not transfer,
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assign, ▇▇▇▇▇ ▇ ▇▇▇▇ or security interest in, pledge, hypothecate, encumber or
otherwise dispose of any of the Shares which are subject to the Company's
Repurchase Option under Section 8 or the Company's Right of First Refusal under
Section 9, except as permitted under Section 9.6.
6.3 Transferee Obligations. Each person (other than the
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Company) to whom the Shares are transferred by means of one of the permitted
transfers specified in Section 9.6 must, as a condition precedent to the
validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Exercise Agreement and that the
transferred shares are subject to (i) both the Company's Repurchase Option and
the Company's Right of First Refusal granted hereunder and (ii) the market
stand-off provisions of Section 7, to the same extent such shares would be so
subject if retained by the Purchaser.
7. Market Standoff Agreement. Purchaser agrees in connection
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with any registration of the Company's securities that, upon the request of the
Company or the underwriters managing any registered public offering of the
Company's securities, Purchaser will not sell or otherwise dispose of any Shares
without the prior written consent of the Company or such managing underwriters,
as the case may be, for a period of time (not to exceed 180 days)
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after the effective date of such registration requested by such managing
underwriters and subject to all restrictions as the Company or the managing
underwriters may specify for employee-shareholders generally.
8. Company's Repurchase Option. The Company, or its assignee, shall
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have the option to repurchase all or a portion of the Unvested Shares (as
defined below) on the terms and conditions set forth in this Section (the
"Repurchase Option") if Purchaser is Terminated (as defined in the Plan) for any
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reason, or no reason, including without limitation Purchaser's death, Disability
(as defined in the Plan), voluntary resignation or termination by the Company
with or without cause.
8.1 Termination and Termination Date. In case of any dispute as
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to whether Purchaser is Terminated, the Committee shall have sole discretion to
determine whether Purchaser has been Terminated and the effective date of such
Termination (the "Termination Date").
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8.2 Vested Shares. "Vested Shares" are Shares which are not
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subject to the Company's Repurchase Option. On the Effective Date all of the
Shares will be Vested Shares. The number of Shares that are Vested Shares will
be proportionally adjusted to reflect any stock dividend, stock split, reverse
stock split or recapitalization of the Common Stock of the Company occurring
after the Effective Date.
8.3 RESERVED
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8.4 RESERVED
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8.5 RESERVED
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8.6 Right of Termination Unaffected. Nothing in this Agreement
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shall be construed to limit or otherwise affect in any manner whatsoever the
right or power of the Company (or any Parent, Subsidiary or Affiliate of the
Company) to terminate Purchaser's employment or other relationship with the
Company (or any Parent, Subsidiary or Affiliate of the Company) at any time for
any reason or no reason, with or without cause.
9. Company's Right of First Refusal. Before any Vested Shares held
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by Purchaser or any transferee of such Shares (either being sometimes referred
to herein as the "Holder") may be sold or otherwise transferred (including
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without limitation a transfer by gift or operation of law), the Company and/or
its assignee(s) shall have an assignable right of first refusal to purchase the
Vested Shares to be sold or transferred (the "Offered Shares") on the terms and
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conditions set forth in this Section (the "Right of First Refusal").
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9.1 Notice of Proposed Transfer. The Holder of the Shares shall
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deliver to the Company a written notice (the "Notice") stating: (i) the
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Holder's bona fide intention to sell or otherwise transfer the Offered Shares;
(ii) the name of each proposed bona fide purchaser or other transferee
("Proposed Transferee"); (iii) the number of Offered Shares to be transferred to
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each Proposed Transferee; (iv) the bona fide cash price or other consideration
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for which the Holder proposes to transfer the Offered Shares (the "Offered
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Price"); and (v) that the Holder will offer to sell the Offered Shares to the
Company and/or its assignee(s) at the Offered Price as provided in this Section.
9.2 Exercise of Right of First Refusal. At any time within
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thirty (30) days after the date of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase all
of the Offered Shares proposed to be transferred to any one or more of the
Proposed Transferees named in the Notice, at the purchase price determined in
accordance with Section 9.3 below.
9.3 Purchase Price. The purchase price for the Offered Shares
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purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the cash equivalent value of the
non-cash consideration shall conclusively be deemed to be the value of such non-
cash consideration as determined in good faith by the Company's Board of
Directors.
9.4 Payment. Payment of the purchase price for Offered Shares
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will be payable, at the option of the Company and/or its assignee(s) (as
applicable), by check or by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or to such assignee, in the case of a
purchase of Offered Shares by such assignee) or by any combination thereof. The
purchase price will be paid without interest within sixty (60) days after the
Company's receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
9.5 Holder's Right to Transfer. If all of the Offered Shares
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proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section,
then the Holder may sell or otherwise transfer such Offered Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
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such sale or other transfer is consummated within 120 days after the date of the
Notice, and provided further, that (i) any such sale or other transfer is
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effected in compliance with all applicable securities laws and (ii) the Proposed
Transferee agrees in writing that the provisions of this Section will continue
to apply to the Offered Shares in the hands of such Proposed Transferee. If the
Offered Shares described in the Notice are not transferred to the Proposed
Transferee within such 120 day period, then a new Notice must be given to the
Company, and the Company will again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.
9.6 Exempt Transfers. Notwithstanding anything to the contrary
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in this Section, the following transfers of Shares will be exempt from the Right
of First Refusal: (i) the transfer of any or all of the Shares during
Purchaser's lifetime by gift or on Purchaser's death by will or intestacy to
Purchaser's "immediate family" (as defined below) or to a trust for the benefit
of Purchaser or Purchaser's immediate family, provided that each transferee or
other recipient agrees in a writing satisfactory to the Company that the
provisions of this Section will continue to apply to the transferred Shares in
the hands of such transferee or other recipient; (ii) any transfer of Shares
made pursuant to a statutory merger or statutory consolidation of the Company
with or into another corporation or corporations (except that the Right of First
Refusal
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will continue to apply thereafter to such Shares, in which case the surviving
corporation of such merger or consolidation shall succeed to the rights of the
Company under this Section unless the agreement of merger or consolidation
expressly otherwise provides); or (iii) any transfer of Shares pursuant to the
winding up and dissolution of the Company. As used herein, the term "immediate
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family" will mean Purchaser's spouse, the lineal descendant or antecedent,
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father, mother, brother or sister, adopted child or grandchild of Purchaser or
Purchaser's spouse, or the spouse of any child, adopted child, grandchild or
adopted grandchild of Purchaser or Purchaser's spouse.
9.7 Termination of Right of First Refusal. The Right of First
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Refusal will terminate as to all Shares on the effective date of the first sale
of Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the SEC under the Securities Act
(other than a registration statement relating solely to the issuance of Common
Stock pursuant to a business combination or an employee incentive or benefit
plan).
10. Rights as Shareholder. Subject to the terms and conditions of
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this Agreement, Purchaser will have all of the rights of a shareholder of the
Company with respect to the Shares from and after the date that Purchaser
delivers payment of the Purchase Price until such time as Purchaser disposes of
the Shares or the Company and/or its assignee(s) exercise(s) the Repurchase
Option or Right of First Refusal. Upon an exercise of the Right of First
Refusal, Purchaser will have no further rights as a holder of the Shares so
purchased upon such exercise, except the right to receive payment for the Shares
so purchased in accordance with the provisions of this Agreement, and Purchaser
will promptly surrender the stock certificate(s) evidencing the Shares so
purchased to the Company for transfer or cancellation.
11. Escrow. As security for Purchaser's faithful performance of this
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Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser's spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company ("Escrow Holder"), who is hereby appointed to
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hold such certificate(s) and Stock Powers in escrow and to take all such actions
and to effectuate all such transfers and/or releases of such Shares as are in
accordance with the terms of this Agreement. Purchaser and the Company agree
that Escrow Holder will not be liable to any party to this Agreement (or to any
other party) for any actions or omissions unless Escrow Holder is grossly
negligent or intentionally fraudulent in carrying out the duties of Escrow
Holder under this Agreement. Escrow Holder may rely upon any letter, notice or
other document executed by any signature purported to be genuine and may rely on
the advice of counsel and obey any order of any court with respect to the
transactions contemplated by this Agreement. The Shares will be released from
escrow upon termination of the Right of First Refusal provided, however, that
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the Shares will be retained in escrow so long as they are subject to the Pledge
Agreement.
12. Restrictive Legends and Stop-Transfer Orders.
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12.1 Legends. Purchaser understands and agrees that the Company
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will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the
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Shares, together with any other legends that may be required by state or federal
securities laws, the Company's Articles of Incorporation or Bylaws, any other
agreement between Purchaser and the Company or any agreement between Purchaser
and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON PUBLIC RESALE, TRANSFER, AND RIGHT OF FIRST REFUSAL
OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A
RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE AND TRANSFER
RESTRICTIONS AND THE RIGHT OF REPURCHASE AND RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES.
The California Commissioner of Corporations may require that the
following legend also be placed upon the share certificate(s) evidencing
ownership of the Shares:
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
12.2 Stop-Transfer Instructions. Purchaser agrees that, to
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ensure compliance with the restrictions imposed by this Agreement, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
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12.3 Refusal to Transfer. The Company will not be required (i)
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to transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shares, or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares have been so transferred.
13. Tax Consequences. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER
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ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR DISPOSITION OF
THE SHARES. PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED WITH ANY TAX
ADVISER PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION
OF THE SHARES AND THAT PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY TAX
ADVICE.
14. Compliance with Laws and Regulations. The issuance and transfer
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of the Shares will be subject to and conditioned upon compliance by the Company
and Purchaser with all applicable state and federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company's Common Stock may be listed or quoted at the time
of such issuance or transfer.
15. Successors and Assigns. The Company may assign any of its rights
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under this Agreement, including its rights to repurchase Shares under the Right
of First Refusal. This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this Agreement will be binding upon Purchaser and
Purchaser's heirs, executors, administrators, legal representatives, successors
and assigns.
16. Governing Law; Severability. This Agreement shall be governed by
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and construed in accordance with the internal laws of the State of California as
such laws are applied to agreements between California residents entered into
and to be performed entirely within California, excluding that body of laws
pertaining to conflict of laws. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain fully effective and enforceable.
17. Notices. Any notice required to be given or delivered to the
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Company shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices. Any notice required to be given or
delivered to Purchaser shall be in writing and addressed to Purchaser at the
address indicated above or to such other address as Purchaser may designate in
writing from time to time to the Company. All notices shall be deemed
effectively given upon personal delivery, three (3) days after deposit in the
United States mail by certified or registered mail (return receipt requested),
one (1) business day after its deposit with any return receipt express courier
(prepaid), or one (1) business day after transmission by rapifax or telecopier.
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18. Further Instruments. The parties agree to execute such further
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instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
19. Headings. The captions and headings of this Agreement are
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included for ease of reference only and will be disregarded in interpreting or
construing this Agreement. All references herein to Sections will refer to
Sections of this Agreement.
20. Entire Agreement. The Plan and this Agreement, together with all
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its Exhibits, constitute the entire agreement and understanding of the parties
with respect to the subject matter of this Agreement, and supersede all prior
understandings and agreements, whether oral or written, between the parties
hereto with respect to the specific subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Purchaser has
executed this Agreement in duplicate as of the Effective Date.
ONSALE PURCHASER
By: /s/ S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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(Please print name)
President and CEO
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(Please print title)
[Signature page to Onsale Restricted
Stock Purchase Agreement]
LIST OF EXHIBITS
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Exhibit 1: Stock Power and Assignment Separate from Stock Certificate
Exhibit 2: Spouse Consent
Exhibit 3: California Commissioner Rule 260.141.11
Exhibit 4: RESERVED
Exhibit 5: Secured Full Recourse Promissory Note
Exhibit 6: Stock Pledge Agreement
EXHIBIT 1
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STOCK POWER AND ASSIGNMENT
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SEPARATE FROM STOCK CERTIFICATE
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Stock Power and Assignment
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Separate from Stock Certificate
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FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement No. ___ dated as of __________________, 19___, (the "Agreement"), the
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undersigned hereby sells, assigns and transfers unto ________________________,
shares of the Common Stock of ONSALE, a California corporation (the "Company"),
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standing in the undersigned's name on the books of the Company represented by
Certificate No(s). ______ delivered herewith, and does hereby irrevocably
constitute and appoint the Secretary of the Company as the undersigned's
attorney-in-fact, with full power of substitution, to transfer said stock on the
books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE
AGREEMENT AND ANY EXHIBITS THERETO.
Dated: _________________, 19___
PURCHASER
-------------------------------
(Signature)
-------------------------------
(Please Print Name)
-------------------------------
(Spouse's Signature, if any)
-------------------------------
(Please Print Spouse's Name)
Instructions: Please do not fill in any blanks other than the signature line.
------------
The purpose of this Stock Power and Assignment is to enable the Company to
acquire the shares upon a default under Purchaser's Note and to exercise of its
"Repurchase Option" and/or "Right of First Refusal" set forth in the Agreement
without requiring additional signatures on the part of the Purchaser or
Purchaser's Spouse.
EXHIBIT 2
---------
SPOUSE CONSENT
--------------
Spouse Consent
--------------
The undersigned spouse of Purchaser has read, understands, and hereby
approves the Restricted Stock Purchase Agreement between Purchaser and the
Company (the "Agreement"). In consideration of the Company's granting my spouse
---------
the right to purchase the Shares as set forth in the Agreement, the undersigned
hereby agrees to be irrevocably bound by the Agreement and further agrees that
any community property interest shall similarly be bound by the Agreement. The
undersigned hereby appoints Purchaser as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.
-------------------------------
Purchaser's Spouse
Address:
-------------------------------
-------------------------------
EXHIBIT 3
---------
California Commissioner Rule 260.141.11
---------------------------------------
(a) The issuer of any security upon which a restriction on transfer has been
imposed pursuant to Sections 260.102.6, 260.141.10 or 260.534 shall cause a
copy of this section to be delivered to each issuee or transferee of such
security at the time the certificate evidencing the security is delivered
to the issuee or transferee.
(b) It is unlawful for the holder of any such security to consummate a sale or
transfer of such security, or any interest therein, without the prior
written consent of the Commissioner (until this condition is removed
pursuant to Section 260.141.12 of these rules), except:
(1) to the issuer;
(2) pursuant to the order or process of any court;
(3) to any person described in Subdivision (i) of Section 25102 of the Code or
Section 260.105.14 of these rules:
(4) to the transferor's ancestors, descendants or spouse, or any custodian or
trustee for the account of the transferor or the transferor's ancestors,
descendants, or spouse; or to a transferee by a trustee or custodian for
the account of the transferee or the transferee's ancestors, descendants or
spouse;
(5) to holders of securities of the same class of the same issuer;
(6) by way of gift or donation intervivos or on death;
(7) by or through a broker-dealer licensed under the Code (either acting as
such or as a finder) to a resident of a foreign state, territory or country
who is neither domiciled in this state to the knowledge of the broker-
dealer, nor actually present in this state if the sale of such securities
is not in violation of any securities law of the foreign state, territory
or country concerned;
(8) to a broker-dealer licensed under the Code in a principal transaction, or
as an underwriter or member of an underwriting syndicate or selling group;
(9) if the interest sold or transferred is a pledge or other lien given by the
purchaser to the seller upon a sale of the security for which the
Commissioner's written consent is obtained or under this rule not required;
(10) by way of a sale qualified under Section 25111, 25112, 25113, or 25121 of
the Code, of the securities to be transferred, provided that no order under
Section 25140 or subdivision (a) of Section 25143 is in effect with respect
to such qualification;
(11) by a corporation to a wholly owned subsidiary of such corporation, or by a
wholly owned subsidiary of a corporation to such corporation;
(12) by way of an exchange qualified under Section 25111, 25112 or 25113 of the
Code, provided that no order under Section 25140 or subdivision (a) of
Section 25143 is in effect with respect to such qualification;
(13) between residents of foreign states, territories or countries who are
neither domiciled nor actually present in this state;
(14) to the State Controller pursuant to the Unclaimed Property Law or the
administrator of the unclaimed property law of another state; or
(15) by the State Controller pursuant to the Unclaimed Property Law or by the
administrator of the unclaimed property law of another state if, in either
such case, such person (i) discloses to potential purchasers at the sale
that transfer of the securities is restricted under this rule, (ii)
delivers to each purchaser a copy of this rule, and (iii) advises the
Commissioner of the name of each purchaser;
(16) by a trustee to a successor trustee when such transfer does not involve a
change in the beneficial ownership of the securities;
(17) by way of an offer and sale of outstanding securities in an issuer
transaction that is subject to the qualification requirements of Section
25110 of the Code but exempt from that qualification requirement by
subdivision (f) of Section 25102;
provided that any such transfer is on the condition that any certificate
evidencing the security issued to such transferee shall contain the legend
required by this section.
(c) The certificates representing all such securities subject to such a
restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their face a legend, prominently stamped or printed
thereon in capital letters of not less than 10-point size, reading as
follows:
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFORE, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
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EXHIBIT 4
---------
RESERVED
--------
EXHIBIT 5
---------
SECURED FULL RECOURSE PROMISSORY NOTE
-------------------------------------
Secured Full Recourse Promissory Note
-------------------------------------
Mountain View, California
$100,000 December 6, 1996
1. Obligation. In exchange for the issuance to the undersigned
----------
("Purchaser") of 20,000 shares (the "Shares") of the Common Stock of ONSALE, a
--------- ------
California corporation (the "Company"), receipt of which is hereby acknowledged,
-------
Purchaser hereby promises to pay to the order of the Company on or before
January 15, 1996, at the Company's principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the Company
may direct, the principal sum of One Hundred Thousand Dollars ($100,000.00)
together with interest compounded semi-annually on the unpaid principal at the
rate of eight percent (8%), which rate is not less than the minimum rate
established pursuant to Section 1274(d) of the Internal Revenue Code of 1986, as
amended, on the earliest date on which there was a binding contract in writing
for the purchase of the Shares; provided, however, that the rate at which
-------- -------
interest will accrue on unpaid principal under this Note will not exceed the
highest rate permitted by applicable law.
2. Security. Payment of this Note is secured by a security interest
--------
in the Shares granted to the Company by Purchaser under a Stock Pledge Agreement
dated of even date herewith between the Company and Purchaser (the "Pledge
------
Agreement"). This Note is being tendered by Purchaser to the Company as part of
---------
the purchase price of the Shares pursuant to that certain Restricted Stock
Purchase Agreement between Purchaser and the Company dated of even date with
this Note (the "Purchase Agreement").
------------------
3. Default; Acceleration of Obligation. Purchaser will be deemed to
-----------------------------------
be in default under this Note and the principal sum of this Note, together with
all interest accrued thereon, will immediately become due and payable in full:
(a) upon Purchaser's failure to make any payment when due under this Note; (b)
upon the filing by or against Purchaser of any voluntary or involuntary petition
in bankruptcy or any petition for relief under the federal bankruptcy code or
any other state or federal law for the relief of debtors; or (c) upon the
execution by Purchaser of an assignment for the benefit of creditors or the
appointment of a receiver, custodian, trustee or similar party to take
possession of Purchaser's assets or property.
4. Remedies On Default. Upon any default of Purchaser under this
-------------------
Note, the Company will have, in addition to its rights and remedies under this
Note and the Pledge Agreement, full recourse against any real, personal,
tangible or intangible assets of Purchaser, and may pursue any legal or
equitable remedies that are available to it.
5. Rule 144 Holding Period. PURCHASER UNDERSTANDS THAT THE HOLDING
-----------------------
PERIOD SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE COMMISSION
WILL NOT BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE UNTIL
EITHER (A) THE PURCHASE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR BY OTHER
PROPERTY ACCEPTED BY THE COMPANY, OR (B) THIS NOTE IS SECURED BY COLLATERAL,
OTHER THAN THE SHARES THAT HAVE NOT BEEN FULLY PAID FOR IN CASH, HAVING A FAIR
MARKET VALUE AT LEAST EQUAL TO THE AMOUNT OF PURCHASER'S THEN OUTSTANDING
OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED INTEREST).
6. Prepayment. Prepayment of principal and/or interest due under
----------
this Note may be made at any time without penalty. Unless otherwise agreed in
writing by the Company, all payments will be made in lawful tender of the United
States and will be applied first to the payment of accrued interest, and the
remaining balance of such payment, if any, will then be applied to the payment
of principal. If Purchaser prepays all or a portion of the principal amount of
this Note, the Shares paid for by the portion of principal so paid will continue
to be held in pledge under the Pledge Agreement to serve as independent
collateral for the outstanding portion of this Note for the purpose of
commencing the holding period under Rule 144(d) of the Securities and Exchange
Commission with respect to other Shares purchased with this Note, unless
Purchaser notifies the Company in writing otherwise and the Company consents to
release of the Shares from the Pledge Agreement.
7. Governing Law; Waiver. The validity, construction and performance
---------------------
of this Note will be governed by the internal laws of the State of California,
excluding that body of law pertaining to conflicts of law. Purchaser hereby
waives presentment, notice of non-payment, notice of dishonor, protest, demand
and diligence.
8. Attorneys' Fees. If suit is brought for collection of this Note,
---------------
Purchaser agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection therewith whether or not such suit is
prosecuted to judgment.
IN WITNESS WHEREOF, Purchaser has executed this Note as of the date and
year first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
[Signature page to Onsale Secured Full Recourse Promissory Note]
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EXHIBIT 6
---------
STOCK PLEDGE AGREEMENT
----------------------
Stock Pledge Agreement
----------------------
This Agreement is made and entered into as of December 6, 1996 between
ONSALE, a California corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇ ("Pledgor").
------- -------
R E C I T A L S
- - - - - - - -
A. In exchange for Pledgor's Secured Full Recourse Promissory Note to
the Company of even date herewith (the "Note"), the Company has issued and sold
----
to Pledgor 20,000 shares of its Common Stock (the "Shares") pursuant to the
------
terms and conditions of that Restricted Stock Purchase Agreement between the
Company and Pledgor of even date herewith (the "Purchase Agreement").
------------------
B. Pledgor has agreed that repayment of the Note will be secured by
the pledge of the Shares pursuant to this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Creation of Security Interest. Pursuant to the provisions of the
-----------------------------
California Commercial Code, Pledgor hereby grants to the Company, and the
Company hereby accepts, a first and present security interest in the Shares as
collateral to secure the payment of Pledgor's obligation to the Company under
the Note. Pledgor herewith delivers to the Company his Common Stock
certificate(s) No.(s) ___________, representing all the Shares, together with
one stock power for each certificate in the form attached as an Exhibit to the
Purchase Agreement, duly executed (with the date and number of shares left
blank) by Pledgor and Pledgor's spouse, if any. For purposes of this Agreement,
the Shares pledged to the Company hereby, together with any additional
collateral pledged pursuant to Section 5 hereof, will hereinafter be
collectively referred to as the "Collateral." Pledgor agrees that the
----------
Collateral pledged to the Company will be deposited with and held by the Escrow
Holder (as defined in the Purchase Agreement) and that, notwithstanding anything
to the contrary in the Purchase Agreement, for purposes of carrying out the
provisions of this Agreement, Escrow Holder will act solely for the Company as
its agent.
2. Representations and Warranties. Pledgor hereby represents and
------------------------------
warrants to the Company that Pledgor has good title (both record and beneficial)
to the Collateral, free and clear of all claims, pledges, security interests,
liens or encumbrances of every nature whatsoever, and that Pledgor has the right
to pledge and grant the Company the security interest in the Collateral granted
under this Agreement. Pledgor further agrees that, until the entire principal
sum and all accrued interest due under the Note has been paid in full, Purchaser
will not, without the Company's prior written consent, (i) sell, assign or
transfer, or attempt to sell, assign or transfer, any of the Collateral, or (ii)
grant or create, or attempt to grant or create, any security interest, lien,
pledge, claim or other encumbrance with respect to any of the Collateral.
3. Rights on Default. In the event of default (as defined in the
-----------------
Note) by Pledgor under the Note, the Company will have full power to sell,
assign and deliver the whole or any part of the Collateral at any broker's
exchange or elsewhere, at public or private sale, at the option of the Company,
in order to satisfy any part of the obligations of Pledgor now existing or
hereinafter arising under the Note. On any such sale, the Company or its
assigns may purchase all or any part of the Collateral. In addition, at its
sole option, the Company may elect to retain all the Collateral in full
satisfaction of Pledgor's obligation under the Note, in accordance with the
provisions and procedures set forth in the California Commercial Code.
4. Additional Remedies. The rights and remedies granted to the
-------------------
Company herein upon default under the Note will be in addition to all the
rights, powers and remedies of the Company under the California Commercial Code
and applicable law and such rights, powers and remedies will be exercisable by
the Company with respect to all of the Collateral. Pledgor agrees that the
Company's reasonable expenses of holding the Collateral, preparing it for resale
or other disposition, and selling or otherwise disposing of the Collateral,
including attorneys' fees and other legal expenses, will be deducted from the
proceeds of any sale or other disposition and will be included in the amounts
Pledgor must tender to redeem the Collateral. All rights, powers and remedies
of the Company will be cumulative and not alternative. Any forbearance or
failure or delay by the Company in exercising any right, power or remedy
hereunder will not be deemed to be a waiver of any such right, power or remedy
and any single or partial exercise of any such right, power or remedy hereunder
will not preclude the further exercise thereof.
5. Dividends; Voting. All dividends hereinafter declared on or
-----------------
payable with respect to the Collateral during the term of this pledge (excluding
only ordinary cash dividends, which will be payable to Pledgor so long as
Pledgor is not in default under the Note) will be immediately delivered to the
Company to be held in pledge under this Agreement. Notwithstanding this
Agreement, so long as Pledgor owns the Shares and is not in default under the
Note, Pledgor will be entitled to vote any shares comprising the Collateral,
subject to any proxies granted by Pledgor.
6. Adjustments. In the event that during the term of this pledge,
-----------
any stock dividend, reclassification, readjustment, stock split or other change
is declared or made with respect to the Collateral, or if warrants or any other
rights, options or securities are issued in respect of the Collateral, then all
new, substituted and/or additional shares or other securities issued by reason
of such change or by reason of the exercise of such warrants, rights, options or
securities, will be immediately pledged to the Company to be held under the
terms of this Agreement in the same manner as the Collateral is held hereunder.
7. Rights Under Purchase Agreement. Pledgor understands and agrees
-------------------------------
that the Company's rights to repurchase the Collateral under the Purchase
Agreement, if any, will continue for the periods and on the terms and conditions
specified in the Purchase Agreement, whether or not the Note has been paid
during such period of time, and that to the extent that the Note is not paid
during such period of time, the repurchase by the Company of the Collateral may
be made by way of cancellation of all or any part of Pledgor's indebtedness
under the Note.
-2-
8. Redelivery of Collateral. Upon payment in full of the entire
------------------------
principal sum and all accrued interest due under the Note, and subject to the
terms and conditions of the Purchase Agreement, the Company will immediately
redeliver the Collateral to Pledgor and this Agreement will terminate; provided,
--------
however, that all rights of the Company to retain possession of the Shares
-------
pursuant to the Purchase Agreement will survive termination of this Agreement.
9. Successors and Assigns. This Agreement will inure to the benefit
----------------------
of the respective heirs, personal representatives, successors and assigns of the
parties hereto.
10. Governing Law; Severability. This Agreement will be governed by
---------------------------
and construed in accordance with the internal laws of the State of California,
excluding that body of law relating to conflicts of law. Should one or more of
the provisions of this Agreement be determined by a court of law to be illegal
or unenforceable, the other provisions nevertheless will remain effective and
will be enforceable.
11. Modification; Entire Agreement. This Agreement will not be
------------------------------
amended without the written consent of both parties hereto. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
related to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
ONSALE PLEDGOR
By: /s/ S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- -------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
(Please print name)
President and Chief Executive Officer
-------------------------------------
(Please print title)
[Signature page to Onsale Stock Pledge Agreement]
-3-