EXHIBIT 10.5
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
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This Restricted Stock Purchase Agreement (the "Agreement") is made as of
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7/23/98, by and between ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Purchaser").
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1. SALE OF STOCK. Subject to the terms and conditions of this Agreement,
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on the Purchase Date (as defined below) the Company will issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company, 1,260,000 shares
of the Company's Common Stock (the "Shares") at a purchase price of $0.04 per
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Share for a total purchase price of $50,400.00. The term "Shares" refers to the
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purchased Shares and all securities received in replacement of or in connection
with the Shares pursuant to stock dividends or splits, all securities received
in replacement of the Shares in a recapitalization, merger, reorganization,
exchange or the like, and all new, substituted or additional securities or other
properties to which Purchaser is entitled by reason of Purchaser's ownership of
the Shares.
2. PURCHASE. The purchase and sale of the Shares under this Agreement
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shall occur at the principal office of the Company simultaneously with the
execution of this Agreement by the parties, or on such other date as the Company
and Purchaser shall agree (the "Purchase Date"). On the Purchase Date, the
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Company will deliver to Purchaser a certificate representing the Shares to be
purchased by Purchaser (which shall be issued in Purchaser's name) against
payment of the purchase price therefor by Purchaser by (a) check made payable to
the Company, (b) cancellation of indebtedness of the Company to Purchaser, or
(c) by a combination of the foregoing.
3. LIMITATIONS ON TRANSFER. In addition to any other limitation on
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transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below). After any Shares have
been released from such Repurchase Option, Purchaser shall not assign, encumber
or dispose of any interest in such Shares except in compliance with the
provisions below and applicable securities laws.
(a) REPURCHASE OPTION.
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(i) If Purchaser voluntarily terminates his employment
relationship with the Company or if the Company terminates Purchaser's
employment relationship with the Company for Cause (as defined below), the
Company shall upon the date of such termination (the "Termination Date") have an
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irrevocable, exclusive option (the "Repurchase Option") for a period of 60 days
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from such date to repurchase all or any portion of the Shares held by Purchaser
as of the Termination Date which have not yet been released from the Company's
Repurchase Option at the original purchase price per share specified in Section
1 (adjusted for any stock splits, stock dividends and the like).
(ii) The Repurchase Option shall be exercised by the Company by
written notice to Purchaser or Purchaser's executor and, at the Company's
option, (A) by delivery to Purchaser or Purchaser's executor with such notice of
a check in the amount of the purchase price for the Shares being purchased, or
(B) in the event Purchaser is indebted to the Company, by cancellation by the
Company of an amount of such indebtedness equal to the purchase price for the
Shares being repurchased, or (C) by a combination of (A) and (B) so that the
combined payment and cancellation of indebtedness equals such purchase price.
Upon delivery of such notice and payment of the purchase price in any of the
ways described above, the Company shall become the legal and beneficial owner of
the Shares being repurchased and all rights and interest therein or related
thereto, and the Company shall have the right to transfer to its own name the
number of Shares being repurchased by the Company, without further action by
Purchaser.
(iii) 75% of the Shares shall initially be subject to the
Repurchase Option. 1/48 of the total number of Shares shall be released from the
Repurchase Option on each monthly anniversary of the Vesting Commencement Date
(as set forth on the signature page of this Agreement), until all Shares are
released from the Repurchase Option. Fractional shares shall be rounded to the
nearest whole share. Notwithstanding the foregoing:
(A) If the Company terminates Purchaser's employment with the
Company other than for Cause, then 236,250 of the Shares that are subject
to the Repurchase Option as of such date shall be immediately released from
the Repurchase Option on the effective date of such termination in addition
to any Shares previously released from the Repurchase Option as of such
date in accordance with the second sentence of this Section 3(a)(iii).
(B) In the event of a Change of Control (as defined below)
during the term of Purchaser's employment with the Company and (a)
Purchaser is not offered a position with similar responsibilities (at the
same or greater base salary and bonus potential) by the surviving
corporation or (b) Purchaser's principal office after the Change of Control
is located more than 50 miles from your residence, 100% of the Shares shall
be released from the Repurchase Option on the effective date of the
transaction. For purposes of the foregoing sentence, it is agreed that
managing the online division of a major drugstore chain will not constitute
a position with similar responsibilities. Subject to such exception,
however, Purchaser and the Company agree that a position with similar
responsibilities will include any position in which Purchaser continues to
run the operations of the Company with full executive responsibility for
strategic and business planning, profit and loss, marketing, pricing and
sales. Purchaser further agrees that Purchaser's responsibilities at the
surviving corporation shall not be considered to be dissimilar solely
because the acquiring company combines and operates warehousing,
distribution and other similar operations.
(iv) The following terms referred to in this Section 3 shall
have the following meanings:
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(A) "Cause" means (1) willful and repeated failure to comply
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with the lawful directions of the Company's board of directors, (2) gross
negligence or willful misconduct in the performance of duties to the
Company which is demonstrably and materially injurious to the business or
reputation of the Company or its subsidiaries; (3) commission of any act of
fraud against, or the misappropriation of material property belonging to,
the Company; or (4) conviction of a felony or a crime that is demonstrably
and materially injurious to the business or reputation of the Company, in
each case as determined in good faith by the Board of Directors.
(B) "Change of Control" means (1) the consummation of a
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merger or consolidation of the Company with or into another entity or any
other corporate reorganization, if persons who were not stockholders of the
Company immediately before the merger, consolidation or other
reorganization own immediately after the merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding
securities of each of (i) the continuing or surviving entity and (ii) any
direct or indirect parent corporation of the continuing or surviving
entity; or (2) the sale, transfer or other disposition of all or
substantially all of the Company's assets. A transaction does not
constitute a Change of Control if its sole purpose is to change the state
of the Company's incorporation or to create a holding company that will be
owned in substantially the same proportions by the persons who held the
Company's securities immediately before the transaction.
(b) RIGHT OF FIRST REFUSAL. Before any Shares held by Purchaser or
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any transferee of Purchaser (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
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operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(b) (the "Right of First Refusal").
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(i) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
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deliver to the Company a written notice (the "Notice") stating: (A) the
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Holder's bona fide intention to sell or otherwise transfer such Shares; (B) the
name of each proposed purchaser or other transferee ("Proposed Transferee"); (C)
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the number of Shares to be transferred to each Proposed Transferee; and (D) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "Offered Price") and upon the same terms (or
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terms as similar as reasonably possible) to the Company or its assignee(s).
(ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
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30 days after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection
(iii) below.
(iii) PURCHASE PRICE. The purchase price ("Purchase Price") for
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the Shares purchased by the Company or its assignee(s) under this Section 3(b)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of
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the non-cash consideration shall be determined by the Board of Directors of the
Company in good faith.
(iv) PAYMENT. Payment of the Purchase Price shall be made, at
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the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(v) HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed
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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 3(b), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 60 days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section 3 shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, or if the Holder
proposes to change the price or other terms to make them more favorable to the
Proposed Transferee, a new Notice shall be given to the Company, and the Company
and/or its assignees shall again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.
(vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
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contrary contained in this Section 3(b) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family (as defined below) or a trust, limited
partnership or limited liability company for the benefit of Purchaser's
Immediate Family shall be exempt from the provisions of this Section 3(b).
"Immediate Family" as used herein shall mean spouse, lineal descendant or
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antecedent, father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section 3.
(c) INVOLUNTARY TRANSFER.
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(i) COMPANY'S RIGHT TO PURCHASE UPON INVOLUNTARY TRANSFER. In
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the event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including divorce or death, but
excluding, in the event of death, a transfer to Immediate Family as set forth in
Section 3(b)(vi) above) of all or a portion of the Shares by the record holder
thereof, the Company shall have the right to purchase all of the Shares
transferred at the greater of the purchase price paid by Purchaser pursuant to
this Agreement or the Fair Market Value of the Shares on the date of transfer.
Upon such a transfer, the person acquiring the Shares shall promptly notify the
Secretary of the Company of such transfer. The right to purchase such Shares
shall be provided to the Company for a period of 30 days following receipt by
the Company of written notice by the person acquiring the Shares.
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(ii) PRICE FOR INVOLUNTARY TRANSFER. With respect to any stock
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to be transferred pursuant to Section 3(c)(i), the price per Share shall be a
price set by the Board of Directors of the Company that will reflect the current
value of the stock in terms of present earnings and future prospects of the
Company. The Company shall notify Purchaser or his or her executor of the price
so determined within 30 days after receipt by it of written notice of the
transfer or proposed transfer of Shares. However, if Purchaser does not agree
with the valuation as determined by the Board of Directors of the Company,
Purchaser shall be entitled to have the valuation determined by an independent
appraiser to be mutually agreed upon by the Company and Purchaser and whose fees
shall be borne equally by the Company and Purchaser.
(d) ASSIGNMENT. The right of the Company to purchase any part of the
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Shares may be assigned in whole or in part to any stockholder or stockholders of
the Company or other persons or organizations; provided, however, that an
assignee, other than a corporation that is the Parent or a 100% owned Subsidiary
of the Company, must pay the Company, upon assignment of such right, cash equal
to the difference between the original purchase price and Fair Market Value, if
the original purchase price is less than the Fair Market Value of the Shares
subject to the assignment.
(e) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares or
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any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Repurchase Option. Any sale or transfer of the Shares shall be void unless the
provisions of this Agreement are satisfied.
(f) TERMINATION OF RIGHTS. The Right of First Refusal and the
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Company's right to repurchase the Shares in the event of an involuntary transfer
pursuant to Section 3(c) above shall terminate upon 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 Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"). Upon
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termination of the Right of First Refusal and the expiration or exercise of the
Repurchase Option, a new certificate or certificates representing the Shares not
repurchased shall be issued, on request, without the legend referred to in
Section 6(a)(ii) below and delivered to Purchaser.
4. ESCROW OF UNVESTED SHARES. For purposes of facilitating the
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enforcement of the provisions of Section 3 above, Purchaser agrees, immediately
upon receipt of the certificate(s) for the Shares subject to the Repurchase
Option, to deliver such certificate(s), together with an Assignment Separate
from Certificate in the form attached to this Agreement as Exhibit A executed by
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Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement. Purchaser hereby acknowledges that
the Secretary of the Company, or the Secretary's designee, is so appointed as
the escrow holder with the foregoing authorities as a material inducement to
make this Agreement and that said appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that said escrow holder shall not be
liable to any party hereof (or to any other party). The escrow holder may rely
upon any letter, notice or other document
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executed by any signature purported to be genuine and may resign at any time.
Purchaser agrees that if the Secretary of the Company, or the Secretary's
designee, resigns as escrow holder for any or no reason, the Board of Directors
of the Company shall have the power to appoint a successor to serve as escrow
holder pursuant to the terms of this Agreement.
5. INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the
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purchase of the Shares, Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.
(b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
(c) Purchaser understands that the Shares are "restricted securities"
under applicable U.S. federal and state securities laws and that, pursuant to
these laws, Purchaser must hold the Shares indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of Purchaser's control,
and which the Company is under no obligation and may not be able to satisfy.
(d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants 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.
6. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
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(a) LEGENDS. The certificate or certificates representing the Shares
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shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR THE
SECURITIES LAW OF ANY STATE AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR
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IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES
ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
(b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure
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compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) REFUSAL TO TRANSFER. The Company shall not be required (i) to
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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 shall have been so transferred.
(d) REMOVAL OF LEGEND. When all of the following events have
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occurred, the Shares then held by Purchaser will no longer be subject to the
legend referred to in Section 6(a)(ii): (i) the termination of the Right of
First Refusal; (ii) the expiration or termination of the market standoff
provisions of Section 9 (and of any agreement entered pursuant to Section 9, and
(iii) the expiration or exercise in full of the Repurchase Option. After such
time, and upon Purchaser's request, a new certificate or certificates
representing the Shares not repurchased shall be issued without the legend
referred to in Section 6(a)(ii), and delivered to Purchaser.
7. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
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manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.
8. SECTION 83(B) ELECTION. Purchaser understands that Section 83(a) of
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the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
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income the difference between the amount paid for the Shares and the Fair Market
Value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the Company to buy back the Shares
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pursuant to the Repurchase Option set forth in Section 3(a) of this Agreement.
Purchaser understands that Purchaser may elect to be taxed at the time the
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Shares are purchased, rather than when and as the Repurchase Option expires, by
filing an election under Section 83(b) (an "83(b) Election") of the Code with
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the Internal Revenue Service within 30 days from the date of purchase. Even if
the Fair Market Value of the Shares at the time of the execution of this
Agreement equals the amount paid for the Shares, the election must be made to
avoid income under Section 83(a) in the future. Purchaser understands that
failure to file such an election in a timely manner may result in adverse tax
consequences for Purchaser. Purchaser further understands that an additional
copy of such election form should be filed with his federal income tax return
for the calendar year in which the date of this Agreement falls. Purchaser
acknowledges that the foregoing is only a summary of the effect of United States
federal income taxation with respect to purchase of the Shares hereunder, and
does not purport to be complete. Purchaser further acknowledges that the
Company has directed Purchaser to seek independent advice regarding the
applicable provisions of the Code, the income tax laws of any municipality,
state or foreign country in which Purchaser may reside, and the tax consequences
of Purchaser's death.
Purchaser agrees that he will execute and deliver to the Company with
this executed Agreement a copy of the Acknowledgment and Statement of Decision
Regarding Section 83(b) Election (the "Acknowledgment"), attached hereto as
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Exhibit B. Purchaser further agrees that Purchaser will execute and submit with
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the Acknowledgment a copy of the 83(b) Election, attached hereto as Exhibit C,
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if Purchaser has indicated in the Acknowledgment his decision to make such an
election.
9. MARKET STANDOFF AGREEMENT. In connection with the initial public
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offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
Purchaser agrees 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) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the Company's
initial public offering.
10. MISCELLANEOUS.
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(a) GOVERNING LAW. This Agreement and all acts and transactions
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pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.
(b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement sets
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forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement. The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.
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(c) SEVERABILITY. If one or more provisions of this Agreement are
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held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(d) CONSTRUCTION. This Agreement is the result of negotiations
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between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.
(e) NOTICES. Any notice required or permitted by this Agreement
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shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or fax or 48 hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address as set forth below or as subsequently
modified by written notice.
(f) COUNTERPARTS. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(g) SUCCESSORS AND ASSIGNS. The rights and benefits of this
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Agreement shall inure to the benefit of, and be enforceable by the Company's
successors and assigns. The rights and obligations of Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.
[Signature Page Follows]
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The parties have executed this Agreement as of the date first set forth
above.
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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PURCHASER:
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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(Signature)
Address: ▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR
CONSULTANT AT THE WILL OF THE COMPANY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON PURCHASER ANY RIGHT WITH
RESPECT TO CONTINUATION OF SUCH EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH PURCHASER'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP
AT ANY TIME, WITH OR WITHOUT CAUSE.
Vesting Commencement
Date: June 27, 1999
I, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, spouse of ▇▇▇▇▇ ▇▇▇▇▇▇▇, have read and hereby approve the
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foregoing Agreement. In consideration of the Company's granting my spouse the
right to purchase the Shares as set forth in the Agreement, I hereby agree to be
irrevocably bound by the Agreement and further agree that any community property
or similar interest that I may have in the Shares shall be similarly bound by
the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to
any amendment or exercise of any rights under the Agreement.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Spouse of ▇▇▇▇▇ ▇▇▇▇▇▇▇
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EXHIBIT B
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ACKNOWLEDGMENT AND STATEMENT OF DECISION
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REGARDING SECTION 83(B) ELECTION
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The undersigned has entered a stock purchase agreement with ▇▇▇▇▇▇▇▇▇.▇▇▇,
Inc., a Delaware corporation (the "Company"), pursuant to which the undersigned
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is purchasing 1,260,000 shares of Common Stock of the Company (the "Shares").
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In connection with the purchase of the Shares, the undersigned hereby represents
as follows:
1. The undersigned has carefully reviewed the stock purchase agreement
pursuant to which the undersigned is purchasing the Shares.
2. The undersigned either [check and complete as applicable]:
(a) ____ has consulted, and has been fully advised by, the undersigned's
own tax advisor, __________________________, whose business address is
_____________________________, regarding the federal, state and local
tax consequences of purchasing shares under the Plan, and particularly
regarding the advisability of making elections pursuant to Section
83(b) of the Internal Revenue Code of 1986, as amended (the "Code")
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and pursuant to the corresponding provisions, if any, of applicable
state law; or
(b) X has knowingly chosen not to consult such a tax advisor.
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3. The undersigned hereby states that the undersigned has decided [check
as applicable]:
(a) X to make an election pursuant to Section 83(b) of the Code, and is
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submitting to the Company, together with the undersigned's executed
Restricted Stock Purchase Agreement, an executed form entitled
"Election Under Section 83(b) of the Internal Revenue Code of 1986;"
or
(b) ____ not to make an election pursuant to Section 83(b) of the Code.
4. Neither the Company nor any subsidiary or representative of the
Company has made any warranty or representation to the undersigned with respect
to the tax consequences of the undersigned's purchase of shares under the Plan
or of the making or failure to make an election pursuant to Section 83(b) of the
Code or the corresponding provisions, if any, of applicable state law.
Date: 7/23/98 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: 7/23/98 /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Spouse of ▇▇▇▇▇ ▇▇▇▇▇▇▇
-2-
EXHIBIT A
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ASSIGNMENT SEPARATE FROM CERTIFICATE
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FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement between the undersigned ("Purchaser") and ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. (the
"Company") dated ____________, 1998 (the Agreement"), Purchaser hereby sells,
assigns and transfers unto the Company ________________________________________
(____________) shares of the Common Stock of the Company, standing in
Purchaser's name on the books of the Company and represented by Certificate No.
____, and hereby irrevocably constitutes and appoints
________________________________________ to transfer said stock on the books of
the Company with full power of substitution in the premises. THIS ASSIGNMENT MAY
ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.
Dated: __________________
Signature:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Spouse of ▇▇▇▇▇ ▇▇▇▇▇▇▇ (if applicable)
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 repurchase
option set forth in Agreement without requiring additional signatures on the
part of Purchaser.
EXHIBIT C
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ELECTION UNDER SECTION 83(b)
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OF THE INTERNAL REVENUE CODE OF 1986
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The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in taxpayer's gross income for the current
taxable year, the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME OF TAXPAYER: ▇▇▇▇▇ ▇▇▇▇▇▇▇
NAME OF SPOUSE: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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ADDRESS: ▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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IDENTIFICATION NO. OF TAXPAYER: ###-##-####
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IDENTIFICATION NO. OF SPOUSE: ###-##-####
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TAXABLE YEAR: 1998
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2. The property with respect to which the election is made is described as
follows:
945,000 shares of the Common Stock (the "Shares"), $0.001 par value, of
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▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the "Company").
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3. The date on which the property was transferred is: 7/23/98
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4. The property is subject to the following restrictions:
Repurchase option at cost in favor of the Company upon termination of
taxpayer's employment or consulting relationship.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is: $37,800.00.
6. The amount (if any) paid for such property: $37,800 .
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The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
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except with the consent of the Commissioner.
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Dated: 7/23/98 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Dated: 7/23/98 /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Spouse of ▇▇▇▇▇ ▇▇▇▇▇▇▇
RECEIPT AND CONSENT
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The undersigned hereby acknowledges receipt of a photocopy of Certificate
No. ______ for 1,260,000 shares of Common Stock of ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. (the
"Company").
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The undersigned further acknowledges that the Secretary of the Company, or
his or her designee, is acting as escrow holder pursuant to the Restricted Stock
Purchase Agreement Purchaser has previously entered into with the Company. As
escrow holder, the Secretary of the Company, or his or her designee, holds the
original of the aforementioned certificate issued in the undersigned's name.
Dated: _____________________
_____________________________
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