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EXHIBIT 10.8
EXHIBIT B
STOCK TRANSFER RESTRICTION AGREEMENT
This Stock Transfer Restriction Agreement (the "Agreement"), effective
as of January 5, 2001 is by and between mHL Development Company, an Oregon
corporation (the "Company"), and Imperial Bank ("Shareholder)
RECITALS
A. Shareholder owns, intends to purchase or has the right to
purchase shares of the Company's Common Stock.
B. The parties wish to enter into an agreement relating to the sale
or other disposition of the shares of Common Stock owned or held by Shareholder.
AGREEMENT
1. Limitations on Transfer.
1.1 Shares Subject to Restrictions Under This Agreement. For
the purposes of this Agreement, the term "Shares" shall mean all of the shares
of the Company's Common Stock owned or held by the Shareholder, including any
additional shares that may be acquired subsequent to the date of this Agreement
and all securities received in replacement of the Common Stock or as stock
dividends or splits and all securities received in replacement of the Common
Stock in a recapitalization, merger reorganization and the like.
1.2 Restrictions. In addition to any other limitation on
transfer created by applicable securities laws or by a separate agreement
between the Company and Shareholder, including, if applicable, a Restricted
Stock Purchase Agreement, Shareholder shall not sell, or otherwise transfer,
including transfers by gift and by operation of law, any interest in any of the
Shares except as provided in this Agreement. Any transfer of the Shares in
violation of this Agreement shall be void.
2. Company Repurchase Rights.
2.1 Triggering Events. On the occurrence of any of the
following events (each a "Triggering Event"):
A case or proceeding with respect to the Shareholder is
commenced under any applicable bankruptcy, insolvency,
reorganization, receivership or readjustment of debt law or
other similar law; an order for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian, or other officer
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having similar powers over Shareholder or over a substantial
part of Shareholder's property is entered, or an interim
receiver, trustee or other custodian of Shareholder or of a
substantial part of Shareholder's property is appointed or a
warrant of attachment, execution or similar process against any
substantial part of Shareholder's property is issued;
the Company shall have the option to repurchase any and all Shares owned or held
or to be acquired by exercise of an option by Shareholder (the "Optional
Redemption") pursuant to the terms of Section 2.2; provided, however, that any
unvested shares subject to an option at the time of Triggering Event shall be
canceled, and Shareholder shall have no right to exercise any option with
respect to those shares.
2.2 Terms and Conditions of an Optional Redemption. An
Optional Redemption shall be subject to the following terms and conditions:
(a) Upon the exercise by the Company of an Optional
Redemption, the Shareholder shall be obligated to sell all of the
Shares. The Company shall exercise an Optional Redemption by written
notice to the Shareholder at any time after the Optional Redemption is
exercisable thereby (a "Notice of Exercise").
(b) In the case of any exercise of the Optional
Redemption, the purchase price of the Shares shall be the amount that
the Company and the Shareholder agree upon or, if they are unable to
agree within 15 days following the Notice of Exercise, the amount
determined in accordance with the appraisal procedures set forth in
Section 2.2(c).
(c) The following procedure shall apply in
connection with any appraisal in connection with an exercise of the
Optional Redemption:
(i) The Shareholder and the Company shall
attempt to agree upon a single appraiser prior to the
expiration of the 30-day period following the Notice of
Exercise. If they so agree, such appraiser shall, as
promptly as possible, determine the amount that reflects
the current value of the Shares by first determining the
value of the Company in terms of assets and liabilities,
present earnings, future prospects and all other
relevant factors, and then determining the proportion of
such value represented by the Shares considering the
existence of senior securities, if any, and the number
of the Shares in relation to all outstanding shares and
options, warrants, purchase rights and/or rights
convertible to shares of the Company's capital stock,
but without applying any minority interest discount or
illiquidity or similar discount (the "Fair Market Value
of the Shares"). The appraiser's written determination
shall be
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final, conclusive and binding upon all parties to the
purchase and sale. The Company and the Shareholder shall
share equally the costs and fees of the single
appraiser.
(ii) If the Shareholder and the Company are
unable to agree upon a single appraiser within the
30-day period after the Notice of Exercise, the
Shareholder shall appoint one appraiser and the Company
shall appoint one appraiser (each party giving notice of
the appointment to the other) within 30 days after the
expiration of such period, and the two appraisers so
appointed shall choose a third appraiser within 30 days
after appointment of the second. If either party fails
to appoint an appraiser, or if the two appraisers fail
to choose a third, the appraiser or appraisers appointed
in accordance with the foregoing procedures shall serve
as the sole appraiser or appraisers. Any written
determination of the Fair Market Value of the Shares
signed by at least two appraisers shall be final,
conclusive and binding upon all parties to the purchase
and sale. If no two appraisers so agree within 60 days
following the appointment of the last appraiser, the
median of the Fair Market Value of the Shares as
determined by each of the three appraisers, or the
average of the Fair Market Value of the Shares if there
are only two appraisers, shall be final, conclusive and
binding upon all parties to the purchase and sale
subject to the following modifications:
(A) if there are three appraisers
and each arrives at a different determination of
the Fair Market Value of the Shares and any such
amount is more than 5% different than the
average of all three appraisals, the appraisal
that is the farthest away from the average
(either high or low) shall be discarded and the
average of the remaining two appraisals shall be
the Fair Market Value of the Shares.
(B) if there are only two appraisers
and each arrives at a different determination of
the Fair Market Value of the Shares and the
difference between such amount exceeds 10% of
the lower amount, a third appraiser shall be
appointed by the two appraisers or, if they fail
to appoint a third appraiser within 10 days
after the later of the two determinations of the
Fair Market Value of the Shares, by the
presiding judge in the county seat in which the
Company has its principal place of business upon
petition thereto by either appraiser or by
either of the Shareholder or the Company. The
third appraiser shall conduct an appraisal in
accordance with this Section 2.2(c)(ii) as
promptly as is practicable and the results of
such appraisal and all other
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appraisals conducted pursuant to this Section
2.2(c)(ii) shall be subject to all applicable
provisions of this Section 2.2(c)(ii), including
the foregoing clause (A).
Except as hereinafter provided in the case of the use of a single
appraiser, each party to the appraisal shall pay the compensation and expenses
of the appraiser appointed by such party. The compensation and expenses of the
third appraiser shall be shared equally by the Shareholder and the Company. If
only one appraiser is used pursuant to this Section 2.2(c)(ii), the compensation
and expenses of such appraiser shall be paid by the party that appointed such
appraiser.
(iii) Each party appointing an appraiser
hereunder shall use reasonable diligence to select as an
appraiser an individual or firm that by training and
experience is knowledgeable concerning the methods of
ascertaining the fair market value of an interest in a
privately-held business engaged in the primary business
of the Company. Any appraiser appointed pursuant to
Section 2.2(c)(ii) shall be a member of either or both
of the American Society of Appraisers and the Institute
of Business Appraisers.
(d) On a date specified by the Company that is not
later than 45 days after the Notice of Exercise in the case of a
purchase price determined under Section 2.2(b) other than in accordance
with the foregoing appraisal procedures described in Section 2.2(c) or,
in the case of a determination of the purchase price of the Shares in
accordance with such appraisal procedures, not later than 30 days after
the determination of the Fair Market Value of the Shares (the relevant
date in any such case being the "Section 2.2 Closing Date"), the Company
shall pay to the Shareholder ten percent (10%) of the Fair Market Value
of the Shares, and the balance payable in 60 equal monthly installments,
including interest on the unpaid balance at the rate of eight percent
(8%) per annum from the Section 2.2 Closing Date; installments to
commence one month after the Section 2.2 Closing Date with no
restrictions on prepayment.
(e) On the Section 2.2 Closing Date, the Shareholder
shall deliver to the Company certificates evidencing the Shares and a
certificate dated as of the Section 2.2 Closing Date, containing the
representation and warranty of the Shareholder as to its unrestricted
legal right, power and authority to assign, transfer and deliver its
Shares and that at the closing on the Section 2.2 Closing Date the
Company will receive good and marketable title to such Shares, free and
clear of all liens, claims, equities, encumbrances and restrictions of
every kind other than the restrictions set forth in this Agreement.
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In the event the Company does not elect to exercise the Optional Redemption, the
Shares shall remain subject to the terms of this Agreement. The Company's
repurchase rights are in addition to the Company's right of first refusal set
forth in Section 3 of this Agreement.
2.3 Other Agreements. The repurchase rights contained in
this Agreement are in addition to repurchase rights that may be included in a
separate agreement between Shareholder and the Company, including, if
applicable, a Restricted Stock Purchase Agreement. The repurchase price to be
paid by the Company for any Shares after Triggering Event shall be governed by
the terms of this Agreement only to the extent that such Shares have been
released from the repurchase terms contained in a separate agreement between the
Company and Shareholder.
3. Company Right of First Refusal. If Shareholder desires (or is
required) to sell or transfer any of the Shares in any manner, Shareholder shall
first obtain a firm, unconditional written offer signed by a bona fide
prospective purchaser (the "Bona Fide Offer"), stating the number of Shares to
be purchased, the total purchase price and the terms of payment of the purchase
price. Shareholder shall mail a copy of the Bona Fide Offer to the Company. The
Company shall have a right of first refusal to purchase any portion of the
Shares covered by the Bona Fide Offer at the same price, and upon the same terms
(or terms as similar as reasonably possible) set forth in the Bona Fide Offer.
The right of first refusal shall be provided to the Company for a period of 60
days following receipt by the Company of the Bona Fide Offer. If the Shares are
not purchased by the Company, the selling Shareholder shall have 60 days
following lapse of the period of the right of first refusal provided to the
Company to dispose of the Shares to the transferee identified in the Bona Fide
Offer on terms no more favorable to the transferee than those offered to the
Company. After such 60 day period lapses, the Shares shall once again be subject
to the rights of first refusal herein provided. Notwithstanding the foregoing,
the Shareholder shall have the right to transfer the Shares, in compliance with
applicable federal and state securities laws, to an Affiliate, including,
without limitation, Imperial Bancorp, at any time without notice to the Company
and without compliance with this Section 3. As used herein, "Affiliate" means
the parent company of Holder, a majority-owned subsidiary of Holder, or a
majority-owned subsidiary of Holder's parent company; provided, however, that
such entity is a "qualified institutional buyer" as defined in Rule 144A as
promulgated under the Securities Act of 1933, as amended.
4. Assignment by the Company. The right of the Company to purchase
any part of the Shares may be assigned in whole or in part to any person or
persons designated by the Board of Directors of the Company.
5. Obligations Binding Upon Transferees. All transferees of Shares
or any interest therein will receive and hold such Shares or interests subject
to the provisions of this Agreement. Any sale or transfer of the Shares shall be
void unless the provisions of this Agreement are met.
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6. Termination. This Agreement shall terminate on (i) the effective
date of a registration statement filed by the Company under the Securities Act
of 1933, as amended (the "Act"), with respect to an underwritten public offering
of Common Stock of the Company or (ii) the closing date of a sale of assets or
merger of the Company pursuant to which shareholders of the Company receive
securities of a buyer whose shares are publicly traded.
7. Lock-up Agreement. Shareholder agrees, in connection with an
initial public offering of equity securities by the Company, upon request of the
Company or the underwriters managing such offering, not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
Shares (other than those included in the registration of the offering, if any)
without the prior written consent of the Company or such underwriters, as the
case may be, for the period of time after the offering requested by the
underwriters, which period shall not exceed one year from the effective date of
the registration of the offering. Notwithstanding the foregoing, Shareholder
shall only be subject to the terms of this Section 7 to the extent that all
officers and directors of the Company and all holders of at least one percent
(1%) of the Company's stock are subject to substantially similar restrictions.
8. Transfers in Violation. The Company shall not be required to (a)
transfer on its books any Shares that have been sold or transferred in violation
of any of the provisions set forth in this Agreement, or (b) treat as owner of
such Shares, or accord the right to vote as such owner, or pay dividends to any
transferee to whom such Shares shall have been so transferred.
9. Enforcement. The Company and Shareholder acknowledge that the
other party will suffer irreparable harm if either party fails to comply with
this Agreement, and that monetary damages will be inadequate to compensate the
parties for such failure. Accordingly, the parties agree that this Agreement may
be enforced by specific performance or other injunctive relief, in addition to
any other remedies available at law or in equity.
10. Governing Law. This Agreement shall be governed by, and shall be
construed and enforced in accordance with, the laws of the State of Oregon
exclusive of choice of law or conflicts of law rules, provisions, and
principles.
11. Miscellaneous.
11.1 Shareholder Rights. Subject to the provisions and
limitations hereof, Shareholder may, during the term of this Agreement, exercise
all rights and privileges of a shareholder of the Company with respect to the
Shares.
11.2 Notices. Any notice, demand or request required or
permitted to be given under this Agreement shall be in writing and shall be
deemed given when delivered personally, or three days after being deposited in
the United States mail as certified or registered mail, return receipt
requested, with postage prepaid, or the day following facsimile
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transmission, with confirmed transmission, in either case addressed, if to the
Company, to mHL Development Company, ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
and if to Shareholder at Shareholder's address shown on the stock records of the
Company, or at such other address as any party may designate by 10 days' advance
written notice to the other party.
11.3 Amendment. This Agreement may be amended only by the
written consent of the Company and Shareholder.
11.4 Assignment. The rights and benefits of this Agreement
shall inure to the benefit of and be enforceable by the Company and its
respective successors and assigns. The rights and obligations of Shareholder
under this Agreement may not be assigned without the prior written consent of
the Company.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
IMPERIAL BANK MHL DEVELOPMENT COMPANY
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Venture Banking Officer Title: Chief Executive Officer
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