Exhibit 99.04
ONESECURE, INC.
RESTRICTED COMMON STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
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I. PURCHASE OF SHARES ............................................. 1
1.1 Purchase .................................................. 1
1.2 Payment ................................................... 1
1.3 Delivery of Certificates .................................. 1
1.4 Shareholder Rights ........................................ 1
II. SECURITIES LAW COMPLIANCE ...................................... 1
2.1 Restricted Securities ..................................... 1
2.2 Disposition of Shares ..................................... 2
2.3 Restrictive Legends ....................................... 2
III. SPECIAL TAX PROVISIONS ......................................... 3
3.1 Section 83(b) Election .................................... 3
3.2 Section 83(b) Election Acknowledgement .................... 3
3.3 Valuation of Common Stock ................................. 3
IV. TRANSFER RESTRICTIONS .......................................... 4
4.1 Restriction on Transfer ................................... 4
4.2 Transferee Obligations .................................... 4
4.3 Definition of Owner ....................................... 4
4.4 Market Stand-Off Provisions ............................... 4
V. REPURCHASE RIGHT ............................................... 5
5.1 Grant ..................................................... 5
5.2 Exercise of the Repurchase Right .......................... 5
5.3 Termination of the Repurchase Right ....................... 6
5.4 Fractional Shares ......................................... 6
5.5 Additional Shares or Substituted Securities ............... 6
5.6 Corporate Transaction ..................................... 7
VI. RIGHT OF FIRST REFUSAL ......................................... 7
6.1 Grant ..................................................... 8
6.2 Notice of Intended Disposition ............................ 8
6.3 Exercise of Right ......................................... 8
6.4 Non-Exercise of Right ..................................... 8
6.5 Partial Exercise of Right ................................. 8
6.6 Recapitalization .......................................... 9
6.7 Lapse ..................................................... 9
VII. ESCROW ......................................................... 9
7.1 Deposit ................................................... 9
7.2 Recapitalization .......................................... 9
7.3 Release/Surrender ......................................... 10
VIII. MARITAL DISSOLUTION OR LEGAL SEPARATION ........................ 11
8.1 Grant ..................................................... 11
8.2 Notice of Decree or Agreement ............................. 11
8.3 Exercise of the Special Purchase Right .................... 11
8.4 Lapse ..................................................... 12
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TABLE OF CONTENTS (continued)
Page
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IX. GENERAL PROVISIONS ................................................ 12
9.1 Assignment .................................................. 12
9.2 Definitions ................................................. 12
9.3 No Employment or Service Contract ........................... 12
9.4 Notices ..................................................... 13
9.5 No Waiver ................................................... 13
9.6 Cancellation of Shares ...................................... 13
X. MISCELLANEOUS PROVISIONS .......................................... 13
10.1 Purchaser Undertaking ....................................... 13
10.2 Agreement is Entire Contract ................................ 13
10.3 Governing Law ............................................... 13
10.4 Counterparts ................................................ 13
10.5 Successors and Assigns ...................................... 14
10.6 Amendment and Waiver ........................................ 14
10.7 Arbitration ................................................. 14
EXHIBIT A - ASSIGNMENT SEPARATE FROM CERTIFICATE
EXHIBIT B - SECTION 83(b) TAX ELECTION
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RESTRICTED COMMON STOCK PURCHASE AGREEMENT
AGREEMENT made as of this 18 day of February, 2000, by and between
OneSecure, Inc., a Delaware corporation (the "Company"), and ▇▇▇ ▇▇▇
("Purchaser").
I. PURCHASE OF SHARES
1.1 Purchase. The Purchaser hereby purchases, and the Company hereby
sells to Purchaser, 2,000,000 shares of the Company's Common Stock (the
"Shares") at a purchase price of $0.0001 per share, or $200.00 in the aggregate
(the "Purchase Price").
1.2 Payment. Concurrently with the execution of this Agreement, the
purchaser shall deliver to the Corporate Secretary of the Company (i) the
aggregate Purchase Price payable for the Shares in cash, cancellation of
indebtedness or transfer of property and (ii) a duly executed blank Assignment
Separate from Certificate (in the form attached hereto as Exhibit A).
1.3 Delivery of Certificates. The certificates representing the Shares
hereunder shall be held in escrow by the Company as provided in Article VII
hereof.
1.4 Shareholder Rights. Until such time as the Company actually
exercises its repurchase rights or right of first refusal under this Agreement,
Purchaser (or any successor in interest) shall have all the rights of a
shareholder (including voting and dividend rights) with respect to the Shares,
including the Shares held in escrow under Article VII, subject, however, to the
transfer restrictions to Article IV.
II. SECURITIES LAW COMPLIANCE
2.1 Restricted Securities.
(a) Purchaser hereby confirms that Purchaser has been informed that
the Shares are restricted securities under the Securities Act of 1933, as
amended ("1933 Act"), and may not be resold or transferred unless the Shares are
first registered under the federal securities laws or unless an exemption from
such registration is available. Accordingly, Purchaser hereby acknowledges that
Purchaser is prepared to hold the Shares for an indefinite period and that
Purchaser is aware that Rule 144 of the Securities and Exchange Commission
("SEC") issued registration requirements of the 1933 Act.
(b) Upon the expiration of the ninety (90)-day period immediately
following the date on which the Company first becomes subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Shares, to extent vested under Article V, may be sold (without
registration) pursuant to the applicable requirements of Rule 144. If Purchaser
is at the time of such sale an affiliate of the Company for purposes of Rule 144
or was such an affiliate during the preceding three (3) months, then the sale
must comply with all the requirements of Rule 144 (including the volume
limitation on the number of shares sold, the broker/market-marker sale
requirement and the requisite notice to the SEC); however, the one-year holding
period requirement of the Rule will not be applicable. If
Purchaser is not at the time of the sale an affiliate of the Company nor was
such an affiliate during the preceding three (3) months, then none of the
requirements of Rule 144 (other than the broker/market-maker sale requirement
for Shares held for fewer than two (2) years following payment in cash of the
Purchase Price therefor) will be applicable to the sale. The requirements of
Rule 144 are subject to change at any time.
(c) Should the Company not become subject to the reporting requirement
of the Exchange Act, then Purchaser may, provided he is not at the time an
affiliate of the Company (nor was such an affiliate during the preceding three
(3) months sell the Shares (without registration) pursuant to paragraph (k) of
Rule 144 after the Shares have been held for a period of two (2) years following
the payment in cash of the Purchase Price for such shares.
2.2 Disposition of Shares. Subject to the terms of this Agreement,
Purchaser hereby agrees that Purchaser shall make no disposition of the Shares
(other than a permitted transfer under paragraph 4.1) unless and until there is
compliance with all of the following requirements:
(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 the Company, that (i) the proposed
disposition does not require registration of the Shares under the 1933 Act or
(ii) all appropriate action necessary for compliance with the registration
requirements of the 1933 Act or of any exemption from registration available
under the 1933 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.
The Company shall not be required (i) to transfer on its books any
Shares which have been sold or transferred in violation of the provisions of
this Article II nor (ii) to treat as the owner of the Shares, or otherwise to
accord voting or dividend rights to, any transferee to whom the Shares have been
transferred in contravention of this Agreement.
2.3 Restrictive Legends. In order to reflect the restrictions on
disposition of the Shares, the stock certificates for the Shares will be
endorsed with restrictive legends including one or more of the following
legends:
(a) "The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The shares may not be
sold or offered for sale in the absence of (1) an effective registration
statement for the shares under such Act, (2) a `no action' letter of the SEC
with respect to such sale or offer, or (3) satisfactory assurances to the
Company that registration under such Act is not required with respect to such
sale or offer."
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(b) "All of the shares represented by this certificate are unvested
and accordingly may not be sold, assigned, transferred, encumbered, or in any
manner disposed of except in conformity with the terms of a written agreement
between the Company and the registered holder of the shares (or the predecessor
in interest to the shares]. Such agreement grants certain repurchase rights and
rights of first refusal to the Company (or its assignees) upon the sale,
assignment, transfer, encumbrance or other disposition of the Company's shares
or upon termination of service with the Company. The Company will upon written
request furnish a copy of such agreement to the holder hereof without charge."
III. SPECIAL TAX PROVISIONS
3.1 Section 83(b) Election. The Purchaser understands that under Section
83 of the Internal Revenue Code of 1986, as amended (the "Code"), the excess of
the fair market value of the Shares on the date any forfeiture restrictions
applicable to such shares lapse over the Purchase Price for such Shares will be
reportable as ordinary income on such lapse date. For this purpose, the term
"forfeiture restrictions" includes the right of the Company to repurchase the
Shares pursuant to the Repurchase Rights (as defined) provided under this
Agreement. Purchaser understands that he may elect under Section 83(b) of the
Code to be taxed at the time the Shares are acquired hereunder, rather than when
and as such Shares cease to be subject to such forfeiture restrictions. Such
election must be filed with the Internal Revenue Service within thirty (30) days
after the date of this Agreement. Even if the fair market value of the Shares on
the date of this Agreement equals the Purchase Price paid (and thus no tax is
payable), the election must be made to avoid adverse tax consequences in the
future. The form for making this election is attached as Exhibit B hereto.
Purchaser understands that failure to make this filing within the thirty (30)
day period will result in the recognition of ordinary income by the Purchaser as
and each time the forfeiture restrictions lapse.
3.2 Section 83(b) Election Acknowledgement. PURCHASER ACKNOWLEDGES THAT IT
IS PURCHASER'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S. TO FILE A TIMELY
ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS BEHALF. This filing should be made by
registered or certified mail, return receipt requested, and Purchaser must
retain two (2) copies of the completed form for filing with his State and
Federal tax returns for the current tax year and an additional copy for his
personal records.
3.3 Valuation of Common Stock. Purchaser understands that the Shares have
been valued by the Board of Directors and that the Company believes this
valuation represents a fair attempt at reaching an accurate appraisal of their
worth; Purchaser understands, however, that the Company can give no assurances
that such price is in fact the fair marker value of the Shares and that it is
possible that, with the benefit of hindsight, the Internal Revenue Service would
successfully assert that the value of the Shares on the date of purchase is
substantially greater than so determined.
If the Internal Revenue Service were to succeed in a tax determination
that the Shares received had value greater than that upon which the transaction
was based, the additional value would constitute ordinary income as of the date
of its receipt. The additional taxes (and interest) due would be payable by
Purchaser, and there is no provision for the Company to
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reimburse him for that tax liability, and Purchaser assumes al1
responsibility for such potential tax liability. In the event that such
additional value would represent more than 25 percent of Purchaser's gross
income for the year in which the value of the Shares was taxable, the
Internal Revenue Service would have six years from the due date for filing
the return (or the actual filing date of the return if filed thereafter)
within which to assess Purchaser the additional tax and interest which
would then be due.
The Company would have to benefit, in any such transaction, if a
determination was made prior to the three year statute of limitations
period affecting the Company, of an increase in its deduction for
compensation paid, which would offset its operating profits, or, if not
profitable, would create net operating loss carry forward arising from
operations in that year.
IV. TRANSFER RESTRICTIONS
4.1 Restriction on Transfer. Purchase shall not transfer, assign,
encumber or otherwise dispose of any of the Shares which are subject to the
Company's Repurchase Rights in this Agreement. In addition, Shares which
are released from the Repurchase Rights shall not be transferred, assigned,
encumbered or otherwise made the subject of disposition in contravention of
the Company's First Refusal Right under Article VI or as otherwise limited
herein. Such restrictions on transfer however, shall not be applicable to
(i) a gratuitous transfer of the Shares made to the Purchaser's spouse or
issue, including adopted children, or to a trust for the exclusive benefit
of the Purchaser or the Purchaser's spouse or issue, provided and only if
the Purchaser obtains the Company's prior written consent to such transfer
and such transferee agrees to be bound by he terms of this Agreement, (ii)
a transfer of title to the Shares effected pursuant to the Purchaser's will
or the Laws of intestate succession or (iii) a transfer to the Company in
pledge as security for any purchase-money indebtedness incurred by the
Purchaser inconnection with the acquisition of the Shares.
4.2 Transferee Obligations. Each person (other than the Company) to
whom the Shares are transferred by means of one of she permitted transfers
specified in paragraph 4.1 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 Agreement and that the transferred shares
are subject to (i) both the Company's Repurchase Rights and the Company's
First Refusal Right granted hereunder and (ii) the market stand-off
provisions of paragraph 4.4, to the same extent such Shares would be so
subject if retained by the Purchaser.
4.3 Definition of Owner. For purposes of this Agreement, the term
"Owner" shall include the Purchaser and all subsequent holders of the
Shares who derive their chain of ownership through a permitted transfer
from the Purchaser in accordance with paragraph 4.1.
4.4 Market Stand-Off Provisions.
(a) In connection with the first underwritten public offering by
the Company of its equity securities pursuant to an effective registration
statement filed under the 1933 Act, Owner shall not sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the purchase of,
or otherwise dispose or transfer for value or otherwise agree to engage in
any of the foregoing transactions with respect to, any Shares without the
prior written consent of the
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Company or its underwriters. Such limitations shall be in effect for such period
of time from and after the effective date of such registration statement as may
be requested by the Company or such underwriters; provided, however, that in no
event shall such period exceed one hundred-eighty (180) days.
(b) Owner shall be subject to the market stand-off provisions of this
paragraph 4.4 provided and only if the executive officers and directors of the
Company are also subject to similar arrangements.
(c) In the event of any stock dividend, stock split, recapitalization
or other change affecting the Company's outstanding Common Stock effected
without receipt of consideration, then any new, substituted or additional
securities distributed with respect to the Shares shall be immediately subject
to the provisions of this paragraph 4.4, to the same extent the Shares are at
such time covered by such provisions.
(d) In order to enforce the limitations of this paragraph 4.4, the
Company may impose stop-transfer instructions with respect to the Shares until
the end of the applicable stand-off period.
V. REPURCHASE RIGHT
5.1 Grant. The Company (or its assignees) is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty (60)-day period
following the date the Purchaser ceases for any reason to remain in Service or
(if later) during the sixty (60)-day period following the execution date of this
Agreement, to repurchase at the Purchase Price all or (at the discretion of the
Company) any portion of the Shares in which the Purchaser has not acquired a
vested interest in accordance with the vesting provisions of this Article V
(such shares to be hereinafter called the "Unvested Shares"). For proposes of
this Agreement, the Purchaser shall be deemed to remain in Service for so long
as the Puchaser continues to actually and physically render services on a full
time basis to the Company or any parent or subsidiary corporation, whether as an
employee, a non-employee member of the board of directors, or an independent
contractor or consultant, solely as determined by and in accordance with the
directives of the Board of Directors of the Company. By executing this
Agreement, Purchaser agrees to abide by such Board determination.
5.2 Exercise of the Repurhase Right. The Repurchase Right shall be
exercisable by written notice delivered to the Owner of the Unvested Shares
prior to the expiration of the applicable sixty (60)-day period specified in
paragraph 5.1. The notice shall indicate the number of Unvested Shares to be
repurchased and the date on which the repurchase is to be effected, such date to
be not more than thirty (30) days after the date of notice. To the extent one or
more certificates representing Unvested Shares may have been previously
delivered out of escrow to the Owner, then Owner shall, prior to the close of
business on the date specified for the repurchase, deliver to the Secretary of
the Company the certificates representing the Unvested Shares to be repurchased,
each certificate to be properly endorsed for transfer. The Company shall,
concurrently with the receipt of such stock certificates (either from escrow in
accordance or from Owner as herein provided), pay to Owner in cash or cash
equivalents (including the
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cancellation of any purchase-money indebtedness), an amount to the per Share
Purchase Price previously paid for the Unvested Shares which are to be
repurchased.
5.3 Termination of the Repurchase Right. The Repurchase Right shall
terminate with respect to any Unvested Shares for which it is not timely
exercised under paragraph 5.2. In addition, the Repurchase Right as to certain
Unvested Shares shall terminate, and cease to be exercisable, solely to the
extent set forth below, on the earliest to occur of (i) the occurrence of any
Acceleration Event, (ii) upon the occurrence of either of the Corporate
Transactions defined in Section 5.6 hereof, or (iii) with respect to any and all
Shares in which the Purchaser vests in accordance with the schedule set forth in
this Section 5.3. Accordingly, as, and provided that, the Purchaser continues in
continuous Service, as defined above, or upon the occurrence of any Corporate
Transaction, the Purchaser shall acquire a vested interest in, and the
Repurchase Right as to certain Unvested Shares, solely to the extent set forth
below, shall lapse with respect to, the Shares as follows:
(a) the Purchaser shall acquire a vested interest in, and the
Repurchase Right shall lapse with respect to, the Shares in forty-eight equal
and continuous monthly installments for each monthly period of continuous
service from December 13, 1999 for the forty-eight months following the December
13, 1999 such that the Purchaser shall be fully vested in all Shares after four
full years of continuous service completed by the Purchaser following December
13, 1999.
(b) So long as the Company's Repurchase Right remains in effect, one
hundred percent (100%) of the then Unvested Shares of the Purchaser shall vest
immediately and the Repurchase Right shall lapse with respect to such one
hundred percent (100%) of the Unvested Shares if the Purchaser dies or has a
Disability (as defined below) (each, an "Acceleration Event").
For the purposes of this Agreement, Purchaser shall have a
"Disability" when the Board has reasonably determined that Purchaser has become
unable to perform substantially his services and duties because of any physical
or mental injury or disability, and that it is reasonably likely that he will
not be able to resume substantially performing his services and duties with the
Company.
All Shares as to which the Repurchase Right lapses shall, however,
continue to be subject to the First Refusal Right until the lapse of such First
Refusal Right, the market stand-off provisions of paragraph 4.4 and the Special
Purchase Rights set forth under Article VIII.
5.4 Fractional Shares. No fractional shares shall be repurchased by the
Company. Accordingly, should the Repurchase Right extend to a fractional share
(in accordance with the vesting computation provisions of paragraphs 5.3 and
5.6) at the time the Purchaser ceases Service or pursuant hereto, then such
fractional share shall be added to any fractional share in which the Purchaser
is at such time vested in order to make one whole vested share no longer subject
to the Repurchase Right.
5.5 Additional Shares or Substituted Securities. In the event of any stock
dividend, stock split, recapitalization or other change affecting the Company's
outstanding Common Stock as a class effected without receipt of consideration,
then any new, substituted or
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additional securities or other property (including money paid other than as a
regular cash dividend) which is by reason of any such transaction distributed
with respect to the Shares shall be immediately subject to the Repurchase Right,
but only to the extent the Shares are at the time covered by such right.
Appropriate adjustments to reflect the distribution of such securities or
property shall be made to the number of Shares at the time subject to the
Repurchase Right hereunder and to the price per share to be paid upon the
exercise of the Repurchase Right in order to reflect the effect of any such
transaction upon the Company's capital structure; provided, however, that the
aggregate Purchase Price shall remain the same.
5.6 Corporate Transaction. If, after the consummation of either of the
following transactions (each a "Corporate Transaction"):
(a) a merger or consolidation of the Company, in which the
shareholders of the Company do not control a majority of the total voting power
of the surviving entity (other than a reincorporation merger); or
(a) the sale, transfer or other disposition of all or
substantially all of the Company's assets in liquidation or dissolution of the
Company,
the Purchaser is terminated without Cause by the Company or leaves the Company
for Good Reason, then the Repurchase Rights of the Company shall lapse with
respect to all of the Unvested Shares and Purchaser shall acquire a vested
interest in all of the Shares as of the date on which Purchaser's employment
with the Company ends.
For the purposes of this Agreement, the terms "Cause" and "Good
Reason" shall mean the following:
(a) "Cause" shall mean any of the following:
1. Gross negilgence, gross misconduct or the repeated
failure of Purchaser to substantially perform his duties and responsibilities to
the reasonable satisfaction of the Board; any material breach by Purchaser of
his fiduciary duties to the Company; or any breach of a material term of this
Agreement or any other written agreement with the Company. For purposes of this
Agreement, any act or acts or omission or omissions by Purchaser that have a
material adverse effect on the Company's operations, prospects, reputation or
business shall be deemed to be such a breach of his duties and responsibilities
to the Company; or
2. The conviction of Purchaser for a felony involving
violence, deceit or moral turpitude, in which case, notwithstanding anything set
forth in the above paragraphs, the Company may immediately terminate Purchaser
for Cause; or
3. Purchaser's engagement in acts of embezzlement or
dishonesty or other acts that are injurious to the Company, in which case,
notwithstanding anything set forth in the above paragraphs, the Company may
immediately terminate for Cause.
(b) "Good Reason" shall mean Purchaser's resignation or departure
by reason of a material adverse diminution in Purchaser's title,
responsibilities, duties or base salary (except in connection with an
office-wide effort to reduce expenses).
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VI. RIGHT OF FIRST REFUSAL
6.1 Grant. The Company is hereby granted the right of first refusal
(the "First Refusal Right"), exercisable in connection with any proposed
transfer of the Shares. For purposes of this Article VI, the term "transfer"
shall include any sale, assignment, pledge, encumbrance or other disposition for
value of the Shares intended to be made by the Owner, but shall exclude any of
the permitted transfers under paragraph 4.1.
6.2 Notice of Intended Disposition. In the event the Owner desires to
accept a bona fide third-party offer for any or all of the Shares (the shares
subject to such offer to be hereinafter called the "Target Shares"), Owner shall
promptly (i) deliver to the Corporate Secretary of the Company written notice
(the "Disposition Notice") of the terms and conditions of the offer, including
the purchase price and the identity of the third-party offeror and (ii) provide
satisfactory proof that the disposition of the Target Shares to such third-party
offeror would not be in contravention of the provisions set forth in Articles II
and IV of this Agreement.
6.3 Exercise of Right. The Company (or its assignees) shall, for a
period of twenty-five (25) days following receipt of the Disposition Notice,
have the right to repurchase any or all of the Target Shares specified in the
Disposition Notice upon substantially the same terms and conditions specified
therein. Such right shall be exercisable by delivery of written notice (the
"Exercise Notice") to Owner prior to the expiration of the twenty-five (25) day
exercise period. If such right is exercised with respect to all the Target
Shares specified in the Disposition Notice, then the Company (or its assignees)
shall effect the repurchase of the Target Shares, including payment of the
purchase price, not more than five (5) business days after delivery of the
Exercise Notice, and at such time Owner shall deliver to the Company the
certificates representing the Target Shares to be repurchased, each certificate
to be properly endorsed for transfer. To the extent any of the Target Shares are
at the time held in escrow under Article VII, the certificates for such shares
shall automatically be released from escrow and delivered to the Company for
purchase.
6.4 Non-Exercise of Right. In the event the Exercise Notice is not
given to Owner within twenty-five (25) days following the date of the Company's
receipt of the Disposition Notice, Owner shall have a period of thirty (30)
days thereafter in which to sell or otherwise dispose of the Target Shares to
the third-party offeror identified in the Disposition Notice upon terms and
conditions (including the purchase price) no more favorable to such third-party
offeror than those specified in the Disposition Notice; provided, however, that
any such sale or disposition must not be effected in contravention of the
provisions of Article II of this Agreement. To the extent any of the Target
Shares are at the time held in escrow under Article VII, the certificates for
such shares shall automatically be release from escrow and surrendered to the
Owner. The third-party offeror shall acquire the Target Shares free and clear of
the Company's Repurchase Right under Article V, but the acquired shares shall
remain subject to (i) the securities law restrictions of paragraph 2.2(a), (ii)
the market stand-off provisions of paragraph 4.4, (iii) the Company's First
Refusal Rights hereunder and (iv) Article VIII.
6.5 Partial Exercise of Right. In the event the Company (or its
assigness) makes a timely exercise of the First Refusal Right with respect to a
portion, but not all, of the Target Shares specified in the Disposition Notice,
Owner shall have the option, exercisable by written
8
notice to the Company delivered within thirty (30) days after the date of
the Disposition Notice, to effect the sale of the Target Shares pursuant to
one of the following alternatives:
(a) sale or other disposition of all the Target Shares to the
third-party offeror identified in the Disposition Notice, but in full
compliance with the requirements of paragraph 6.4, as if the Company did
not exercise the First Refusal Right hereunder; or
(b) sale to the Company (or its assignees) of the portion of the
Target Shares which the Company (or its assignees) has elected to purchase,
such sale to be effected in substantial conformity with the provisions of
paragraph 6.3.
Failure of Owner to deliver timely notification to the Company
under this paragraph 6.5 shall be deemed to be an election by Owner to sell
the Target Shares pursuant to alternative (a) above.
6.6 Recapitalization. In the event of any stock dividend, stock
split, recapitalization or other transaction affecting the Company's
outstanding Common Stock as a class effected without receipt of
consideration, then any new, substituted or additional securities or other
property which is by reason of such transaction distributed with respect to
the Shares shall be immediately subject to Company's First Refusal Right
hereunder, but only to the extent the Shares are at the time covered by
such right.
6.7 Lapse. The First Refusal Right under this Article VI shall remain
in effect under all circumstances but shall lapse and cease to have effect
upon the earliest to occur of (i) the first date on which shares of the
Company's Common Stock are held of record by more than five hundred (500)
persons, (ii) a determination is made by the Company's Board of Directors
that a public market exists for the outstanding shares of the Company's
Common Stock or (iii) an underwritten public offering pursuant to an
effective registration statement under the 1933 Act. However, the market
stand-off provisions of paragraph 4.4 shall continue to remain in full
force and effect following the lapse of the First Refusal Right hereunder.
VII. ESCROW
7.1 Deposit. Upon issuance, the certificates for any Unvested Shares
purchased hereunder shall be deposited in escrow with the Company to be
held in accordance with the provisions of this Article VII. Each deposited
certificate shall be accompanied by a duly executed Assignment Separate
from Certificates in the form of Exhibit A. The deposited certificates,
together with any other assets or securities from time to time deposited
with the Company pursuant to the requirements of this Agreement, shall
remain in escrow until such time or times as the certificates (or other
assets and securities) are to be released or otherwise surrendered for
cancellation in accordance with paragraph 7.3. Upon delivery of the
certificates (or other assets and securities) to the Company, the Owner
shall be issued an instrument of deposit acknowledging the number of
Unvested Shares (or other assets and securities) delivered in escrow to the
Company.
7.2 Recapitalization. All regular cash dividends on the Unvested
Shares (or other securities at the time held in escrow) shall be paid
directly to the Owner and shall not be held in escrow. However, in the
event of any stock dividend, stock split, recapitalization or other
9
change affecting the Company's outstanding Common Stock as a class effected
without receipt of consideration or in the event of a Corporate Transaction any
new, substituted or additional securities or other property which is by reason
of such transaction distributed with respect to the Unvested Shares shall be
immediately delivered to the Company to be held in escrow under this Article
VII, but only to the extent the Unvested Shares are at the time subject to the
escrow requirements of paragraph 7.1.
7.3 Release/Surrender. The Unvested Shares, together with any other
assets or securities held in escrow hereunder, shall be subject to the following
terms and conditions relating to their release from escrow or their surrender to
the Company for repurchase and cancellation:
(a) Should the Company (or its assignees) elect to exercise the
Repurchase Right under Article V with respect to any Unvested Shares, then the
escrowed certificates for such Unvested Shares (togehter with any other assets
or securities issued with respect thereto) shall be delivered to the Company,
concurrently with the payment to the Owner, in cash or cash equivalent
(including the cancellation of any purchase-money indebtedness), of an amount
equal to the aggregate Purchase Price for such Unvested Shares, and the Owner
shall cease to have any further rights or claims with respect to such Unvested
Shares (or other assets or securities attributable to such Unvested Shares).
(b) Should the Company (or its assignees) elect to exercise its
First Refusal Right under Article VI with respect to any vested Target Shares
held at the time in escrow hereunder, then the escrowed certificates for such
Target Shares (together with any other assets or securities attributable
thereto) shall, concurrently with the payment of the paragraph 6.3 purchase
price for such Target Shares to the Owner, be surrendered to the Company, and
the Owner shall cease to have any further rights or claims with respect to such
Target Shares (or other assets or securities).
(c) Should the Company (or its assignees) elect not to exercise
its First Refusal Right under Article VI with respect to any Target Shares held
at the time in escrow hereunder, then the escrowed certificates for such Target
Shares (together with any other assets or securities attributable thereto) shall
be surrendered to the Owner for disposition in accordance with the provisions of
paragraph 6.4.
(d) As the interest of the Owner in the Unvested Shares (or any
other assets or securities attributable thereto) vests in accordance with the
provisions of Article V, the certificates for such vested shares (as well as all
orher vested assets and securities) shall be released from escrow and delivered
to the Owner in accordance with the following schedule:
(1) Upon the Purchaser's cessation of Service, any
escrowed Shares (or other asset or securities) in which the Purchaser is at the
time vested shall be promptly released from escrow.
(2) Upon any earlier termination of the Company's
Repurchase Right in accordance with the applicable provisions of Article V, the
Shares (or other assets or
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securiries) at the time held in escrow hereunder shall promptly be released to
the Owner as fully-vested shares or other property.
(3) All Shares (or other assets or securities) released from
escrow in accordance with the provisions of subparagraph (2) above shall
nevertheless remain subject to (i) the Company's First Refusal Right under
Article VI until such right lapses pursuant to paragraph 6.7 and Article III and
(ii) the market stand-off provisions of paragraph 4.4 until such provisions
terminate in accordance therewith.
VIII. MARITAL DISSOLUTION OR LEGAL SEPARATION
8.1 Grant. Notwithstanding anything in this Agreement to the contrary, in
connection with the dissolution of Owner's marriage or the legal separation of
Owner and Owner's spouse, the Company shall have the right (the "Special
Purchase Right") to purchase from Optionee's spouse, in accordance with the
provisions of this Article VIII, all or any portion of the Shares which would
otherwise be awarded to such spouse in settlement of any community property or
other marital property rights such spouse may have in such shares.
8.2 Notice of Decree or Agreement. Owner shall promptly provide the
Company with written notice (the "Dissolution Notice") of (i) the entry of any
judicial decree or order resolving the property rights of Owner and Owner's
spouse in connection with their marital dissolution or legal separation or (ii)
the execution of any contract or agreement relating to the distribution or
division of such property rights. The Dissolution Notice shall be accompanied by
a copy of the actual decree or order of dissolution or contract or agreement
between Owner and Owner's spouse which provides for the award to the spouse of
one or more Shares in settlement of any community property or other marital
property rights such spouse may have in such shares.
8.3 Exercise of the Special Purchase Right. The Special Purchase Right
shall be exercisable by delivery of written notice (the "Purchase Notice") to
Owner and Owner's spouse within forty-five (45) days after the Company's receipt
of the Dissolution Notice. The Purchase Notice shall indicate the number of
Shares to be purchased by the Company, the date such purchase is to be effected
(such date to be not less than five (5) business days, nor more than fifteen
(15) business days, after the date of the Purchase Notice) and the fair market
value to be paid for such Shares. Owner (or Owner's spouse, to the extent such
spouse has physical possession of the Shares) shall, prior to the close of
business on the date specified for the purchase, deliver to the Company the
certificates representing the shares to be purchased. The Company shall,
concurrently with the receipt of the stock certificates, pay to Owner's spouse
(in cash or cash equivalents) an amount equal to the fair market value specified
for such shares in the Purchase Notice.
If Owner's spouse does not agree with the fair market value specified
for the Shares in the Purchase Notice, then the spouse shall promptly notify the
Company in writing of such disagreement and the fair market value of such Shares
shall thereupon be determined by an appraiser of recognized standing selected by
the Company and the spouse. If they cannot agree on an appraiser within fifteen
(15) days after the date of the Purchase Notice, each shall select an appraiser
of recognized standing, and the two (2) appraisers shall designate a third
appraiser of recognized standing whose appraisal shall be determinative of such
value. The cost of the
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appraisal shall be shared equally by the Company and Owner's spouse. The closing
shall then be held on the fifteenth (15th) business day following the completion
of such appraisal; provided, however, that if the appraised value is more than
twenty-five percent (25%) greater than the fair market value specified for the
Shares in the Purchase Notice, the Company shall have the right, exercisable
prior to the expiration of such fifteen (15) business-day period, to rescind the
exercise of the Special Purchase Right and thereby revoke its election to
purchase the Shares awarded to the spouse.
8.4 Lapse. The Special Purchase Right shall lapse upon the earlier
to occur of (i) the lapse of the First Refusal Right or (ii) the expiration of
the exercise period Specified in this Article VIII, to the extent the Special
Purchase Right is not timely exercised in accordance with such paragraph.
IX. GENERAL PROVISIONS
9.1 Assignment. The Company may assign its Repurchase Right under
Article V and/or its First Refusal Right under Article VI and/or its Special
Purchase Rights under Article VIII to any person or entity selected by the
Company's Board of Directors, including (without limitation) one or more
shareholders of the Company.
If the assignee is other than a parent or subsidiary corporation
of the Company, then such assignee must make a cash payment to the Company, upon
the assignment of the Repurchase Right, in an amount equal to the excess (if
any) of (i) the fair market value of the Unvested Shares at the time subject to
the assigned Repurchase Right over (ii) the aggregate repurchase price payable
for Unvested Shares thereunder.
9.2 Definitions. For purposes of this Agreement, the following
provisions Shall be applicable in determining the parent and subsidiary
corporations of the Company:
(a) Any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company shall be considered to be a parent
corporation of the Company, provided each such corporation in the unbroken chain
(other than the Company) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(b) Each corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company shall be considered to be a
subsidiary of the Company, provided each such corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
9.3 No Employment or Service Contract. Subject to the terms of the
Employment Agreement, nothing in this Agreement shall confer upon the Purchaser
any right to continue in the Service of the Company (or any parent or subsidiary
corporation employing or retaining Purchaser) for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any parent or subsidiary corporation employing or retaining
Purchaser) or the Purchaser, which rights are hereby expressly reserved by each,
to terminate the Purchaser's Service at any time for any reason whatsoever,
with or without cause.
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9.4 Notices. Any notice required in connection with (i) the Repurchase
Rights or the First Refusal Right or (ii) the disposition of any Shares covered
thereby shall be given in writing and shall be deemed effective upon personal
delivery or upon deposit in the United States mail, registered or certified,
postage prepaid and addressed to the party entitled to such notice at the
address indicated below such party's signature line on this Agreement or at such
other address as such party may designate by ten (10) days advance written
notice under this paragraph 9.4 to all other parties to this Agreement.
9.5 No Waiver. The failure of the Company (or its assignees) in any
instance to exercise the Repurchase Right granted under Article V or VIII or the
failure of the Company (or its assignees) in any instance to exercise the First
Refusal Right granted under Article VI shall not constitute a waiver of any
other repurchase right and/or right of first refusal that may subsequently arise
under the provisions of this Agreement or any other agreement between the
Company and the Purchaser or the Purchaser's spouse. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.
9.6 Cancellation of Shares. If the Company (or its assignees) shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be repurchased in accordance
with the provisions of this Agreement, then from and after such time, the person
from whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement), and such shares shall be
deemed purchased in accordance with the applicable provisions hereof and the
Company (or its assignees) shall be deemed the owner and holder of such shares,
whether or not the certificates therefor have been delivered as required by this
Agreement.
X. MISCELLANEOUS PROVISIONS
10.1 Purchaser Undertaking. Purchaser hereby agrees to take whatever
additional action and execute whatever additional documents the Company may in
its judgment deem necessary or advisable in order to carry out or effect one or
more of the obligations or restrictions imposed on either the Purchaser or the
Shares pursuant to the express provisions of this Agreement.
10.2 Entire Agreement. This Agreement supercedes all prior agreements
between the parties relating to the subject matter contained in this Agreement.
There are no other understandings or agreements between them concerning the
subject matter contained in this Agreement.
10.3 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State without resort to that
State's conflict-of-laws rules.
10.4 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
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10.5 Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the Company and its successors and
assigns and the Purchaser and the Purchaser's legal representatives, heirs,
legatees, distributees, assigns and transferees by operation of law, whether or
not any such person shall have become a party to this Agreement and have agreed
in writing to join herein and be bound by the terms and conditions hereof.
10.6 Amendment and Waiver. This Agreement shall not be amended nor any
Section hereof waived by the Company in the absence of approval of such
amendment or waiver by a majority of the Company's Board of Directors.
10.7 Arbitration. Any controversy between the parties hereto involving any
claim arising out of or relating to this Agreement shall be finally settled by
arbitration in San Francisco, California, in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The parties acknowledge that ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP represents the Company in the review of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
THE COMPANY:
OneSecure, Inc.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Address:
PURCHASER:
/s/ ▇▇▇ ▇▇▇
----------------------------------------
▇▇▇ ▇▇▇
Address:
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CONSENT OF SPOUSE
I acknowledge that I have read the foregoing Restricted Common
Stock Purchase Agreement and that I know its contents. I hereby agree that those
shares and my interest in them, if any, are subject to the provisions of the
Restricted Common Stock Purchase Agreement and that I will take no action at any
time to hinder operation of or violate the Restricted Common Stock Purchase
Agreement.
/s/ [ILLEGIBLE]
-----------------------------------
(Signature of Shareholder's Spouse)
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, ___________ hereby sell(s), assign(s) and
transfer(s) unto OneSecure, Inc. (the "Company") ___________ (_________) shares
of the Common Stock of the Company standing in _____________ name on the books
of the Company represented by Certificate No. ___ herewith and do hereby
irrevocably constitute and appoint ____________ Attorney to transfer the said
stock on the books of the Company with full power of substitution in the
premises.
Dated: ________
Signature [ILLEGIBLE]
------------------------
Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Company to exercise its rights as
set forth in the Agreement without requiring additional signatures on the part
of the Purchaser.