ANZA CAPITAL, INC.
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Notice of Exercise and Common Stock Purchase Agreement
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THIS AGREEMENT is dated as of -----------, ----, between Anza Capital, Inc.
(the "Company"), and -----------------("Purchaser").
W I T N E S S E T H:
WHEREAS, the Company and Purchaser are parties to that certain ---
Incentive --- Nonstatutory Stock Option Agreement dated as of -----------, ----
(the "Option Agreement") pursuant to which the Purchaser has the right to
purchase up to ---------- shares of the Company's common stock (the "Option
Shares"); and
WHEREAS, the Option is exercisable with respect to certain of the Option
Shares as of the date hereof; and
WHEREAS, pursuant to the Option Agreement, Purchaser desires to purchase
shares of the Company as herein described, on the terms and conditions set forth
in this Agreement, the Option Agreement and the Anza Capital, Inc. 2003 Omnibus
Securities Plan (the "Plan"). Certain capitalized terms used in this Agreement
are defined in the Plan.
NOW, THEREFORE, it is agreed between the parties as follows:
SECTION 1: PURCHASE OF SHARES.
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(a) Pursuant to the terms of the Option Agreement, Purchaser hereby
agrees to purchase from the Company and the Company agrees to sell and issue to
Purchaser --------- shares of the Company's common stock (the "Stock") for the
Exercise Price per share specified in the Option Agreement payable by personal
check, cashier's check or money order, if permitted by the Option Agreement, as
follows: -------------------------------. Payment shall be delivered at the
Closing, as such term is hereinafter defined.
(b) The closing hereunder (the "Closing") shall occur at the offices of the
Company on ----------,-----, or such other time and place as may be designated
by the Company (the "Closing Date").
SECTION 2: REPURCHASE OPTION
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All unvested shares of the Stock purchased by the Purchaser pursuant to
this Agreement (sometimes referred to as the "Repurchase Option Stock") shall be
subject to the following option (the "Repurchase Option"):
(a) In the event the Purchaser terminates service with the Company
("Service") for any reason, with or without cause, the Company may exercise the
Repurchase Option.
(b) Purchaser understands that the Stock is being sold in order to induce
Purchaser to become and/or remain associated with the Company and to work
diligently for the success of the Company and that the Repurchase Option Stock
will continue to vest in accordance with the schedule set forth in the Option
Agreement. Accordingly, the Company shall have the right at any time within 90
days after the termination of Service to purchase from the Purchaser all shares
of Stock purchased hereunder which have not vested in accordance with the terms
of such vesting schedule in the Option Agreement. The purchase price for such
unvested shares of Repurchase Option Stock shall be the Exercise Price per share
paid by Purchaser for such shares pursuant to the Option (the "Option Price").
The purchase price shall be paid by certified or cashier's check or by
cancellation of any indebtedness of Purchaser to the Company.
(c) Nothing in this Agreement shall be construed as a right by purchaser to
be employed by Company, or a parent or subsidiary of Company.
SECTION 3: EXERCISE OF REPURCHASE OPTION
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The Repurchase Option shall be exercised by written notice signed by an
officer of the Company and delivered or mailed as provided in Section 16 of this
Agreement and to the Escrow Agent as provided in Section 16 of the Joint Escrow
Instructions attached as Exhibit B to the Option Agreement.
SECTION 4: WAIVER, ASSIGNMENT, EXPIRATION OF REPURCHASE OPTION
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If the Company waives or fails to exercise the Repurchase Option as to all
of the shares subject thereto, the Company may, in the discretion of its Board
of Directors, assign the Repurchase Option to any other holder or holders of
preferred or common stock of the Company in such proportions as such Board of
Directors may determine. In the event of such an assignment, the assignee shall
pay to the Company in cash an amount equal to the fair market value of the
Repurchase Option. The Company shall promptly, upon expiration of the 90-day
period referred to in Section 2 above, notify Purchaser of the number of shares
subject to the Repurchase Option assigned to such stockholders and shall notify
both the Purchaser and the assignees of the time, place and date for settlement
of such purchase, which must be made within 90 days from the date of cessation
of continuous employment. In the event that the Company and/or such assignees
do not elect to exercise the Repurchase Option as to all or part of the shares
subject to it, the Repurchase Option shall expire as to all shares which the
Company and/or such assignees have not elected to purchase.
SECTION 5: ESCROW OF SHARES
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(a) As security for Purchaser's faithful performance of the terms of
this Agreement and to ensure the availability for delivery of Purchaser's shares
upon exercise of the Repurchase Option herein provided for, Purchaser agrees at
the Closing hereunder, to deliver to and deposit with the Escrow Agent named in
the Joint Escrow Instructions attached to the Option Agreement as Exhibit B, the
certificate or certificates evidencing the Option Stock subject to the
Repurchase Option and two Assignments Separate from Certificate duly executed
(with date and number of shares in blank) in the form attached to the Option
Agreement as Exhibit D. Such documents are to be held by the Escrow Agent and
delivered by the Escrow Agent pursuant to the Joint Escrow Instructions, which
instructions shall also be delivered to the Escrow Agent at the Closing
hereunder.
(b) Within 30 days after the last day of each successive completed
calendar quarter after the Closing Date, if Purchaser so requests, the Escrow
Agent will deliver to Purchaser certificates representing so many shares of
Stock as are no longer subject to the Repurchase Option (less such shares as
have been previously delivered). Ninety days after cessation of Purchaser's
employment with the Company the Company will direct the Escrow Agent to deliver
to Purchaser a certificate or certificates representing the number of shares not
repurchased by the Company or its assignees pursuant to exercise of the
Repurchase Option (less such shares as have been previously delivered).
SECTION 6: ADJUSTMENT OF SHARES
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Subject to the provisions of the Articles of Incorporation of the Company,
if, from time to time during the term of the Repurchase Option:
(a) there is any stock dividend or liquidating dividend of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Company, or
(b) there is any consolidation, merger or sale of all or substantially all,
of the assets of the Company,
then, in such event, any and all new, substituted or additional securities or
other property to which Purchaser is entitled by reason of Purchaser's ownership
of the shares shall be immediately subject to such Repurchase Option with the
same force and effect as the shares of Option Stock from time to time subject to
the Repurchase Option. While the total Option Price shall remain the same after
each such event, the Option Price per share of Option Stock upon exercise of the
Repurchase Option shall be appropriately and equitably adjusted as determined by
the Board of Directors of the Company.
SECTION 7: THE COMPANY'S RIGHT OF FIRST REFUSAL.
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Before any shares of Stock registered in the name of Purchaser and not
subject to the Repurchase Option may be sold or transferred, such shares shall
first be offered to the Company as set forth in the Option Agreement.
SECTION 8: PURCHASER'S RIGHTS AFTER EXERCISE OF REPURCHASE OPTION OR RIGHT OF
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FIRST REFUSAL.
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If the Company makes available, at the time and place and in the amount and
form provided in this Agreement, the consideration for the Stock to be
repurchased in accordance with the provisions of Sections 2 and 7 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). Such shares shall be deemed to have been repurchased in accordance
with the applicable provisions hereof, whether or not the certificate(s)
therefor have been delivered as required by this Agreement.
SECTION 9: TRANSFER BY PURCHASER TO CERTAIN TRUSTS.
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Purchaser shall have the right to transfer all or any portion of
Purchaser's interest in the shares issued under this Agreement which have been
delivered to Purchaser under the provisions of Section 5 of this Agreement, to a
trust established by Purchaser for the benefit of Purchaser, Purchaser's spouse
or Purchaser's children, without being subject to the provisions of Section 7
hereof, provided that the trustee on behalf of the trust shall agree in writing
to be bound by the terms and conditions of this Agreement. The transferee shall
execute a copy of Exhibit C attached to the Option Agreement and file the same
with the Secretary of the Company.
SECTION 10: LEGEND OF SHARES.
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All certificates representing the Stock purchased under this Agreement
shall, where applicable, have endorsed thereon the legends set forth in the
Option Agreement and any other legends required by applicable securities laws.
SECTION 11: PURCHASER'S INVESTMENT REPRESENTATIONS.
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(a) This Agreement is made with Purchaser in reliance upon Purchaser's
representation to the Company, which by Purchaser's acceptance hereof Purchaser
confirms, that the Stock which Purchaser will receive will be acquired with
Purchaser's own funds for investment for an indefinite period for Purchaser's
own account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and that Purchaser has no present intention of
selling, granting participation in, or otherwise distributing the same, but
subject, nevertheless, to any requirement of law that the disposition of
Purchaser's property shall at all times be within Purchaser's control. By
executing this Agreement, Purchaser further represents that Purchaser does not
have any contract, understanding or agreement with any person to sell, transfer,
or grant participation, to such person or to any third person, with respect to
any of the Stock.
(b) Purchaser understands that the Stock will not be registered or
qualified under federal or state securities laws on the ground that the sale
provided for in this Agreement is exempt from registration or qualification
under federal or state securities laws and that the Company's reliance on such
exemption is predicated on Purchaser's representations set forth herein.
(c) Purchaser agrees that in no event will Purchaser make a disposition of
any of the Stock (including a disposition under Section 9 of this Agreement),
unless and until (i) Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition and (ii) Purchaser shall have
furnished the Company with an opinion of counsel satisfactory to the Company to
the effect that (A) such disposition will not require registration or
qualification of such Stock under federal or state securities laws or (B)
appropriate action necessary for compliance with the federal or state securities
laws has been taken or (iii) the Company shall have waived, expressly and in
writing, its rights under clauses (i) and (ii) of this section.
(d) With respect to a transaction occurring prior to such date as the Plan
and Stock thereunder are covered by a valid Form S-8 or similar federal
registration statement, this subsection shall apply unless the transaction is
covered by the exemption in Nevada General Corporation Law or a similar broad
based exemption. In connection with the investment representations made herein,
Purchaser represents that Purchaser is able to fend for himself or herself in
the transactions contemplated by this Agreement, has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of Purchaser's investment, has the ability to bear the economic
risks of Purchaser's investment and has been furnished with and has had access
to such information as would be made available in the form of a registration
statement together with such additional information as is necessary to verify
the accuracy of the information supplied and to have all questions answered by
the Company.
(e) Purchaser understands that if the Company does not register with the
Securities and Exchange Commission pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or if a registration
statement covering the Stock (or a filing pursuant to the exemption from
registration under Regulation A of the Securities Act of 1933) under the
Securities Act of 1933 is not in effect when Purchaser desires to sell the
Stock, Purchaser may be required to hold the Stock for an indeterminate period.
Purchaser also acknowledges that Purchaser understands that any sale of the
Stock which might be made by Purchaser in reliance upon Rule 144 under the
Securities Act of 1933 may be made only in limited amounts in accordance with
the terms and conditions of that Rule.
SECTION 12: ASSISTANCE TO PURCHASER UNDER RULE 144.
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The Company covenants and agrees that (a) at all times after it first
becomes subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it will use its best efforts to comply with the current public
information requirements of Rule 144(c)(1) under the Securities Act of 1933, and
that if prior to becoming subject to such reporting requirements an
over-the-counter market develops for the Stock, it will make publicly available
the information required by Rule 144(c)(2); (b) it will furnish Purchaser, upon
request, with all information required for the preparation and filing of Form
144; and (c) it will on a timely basis use its best efforts to file all reports
required to be filed and make all disclosures, including disclosures of
materially adverse information, required to permit Purchaser to make the
required representations in Form 144.
SECTION 13: NO DUTY TO TRANSFER IN VIOLATION HEREUNDER.
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The Company shall not be required (a) to transfer on its books any shares
of Stock of the Company which shall have been sold or transferred in violation
of any of the provisions set forth in this Agreement or (b) to treat as owner of
such shares or to accord the right to vote as such owner or to pay dividends to
any transferee to whom such shares shall have been so transferred.
SECTION 14: RIGHTS OF PURCHASER.
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Except as otherwise provided herein, Purchaser shall, during the term of
this Agreement, exercise all rights and privileges of a stockholder of the
Company with respect to the Stock.
SECTION 15: OTHER NECESSARY ACTIONS.
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The parties agree to execute such further instruments and to take such
further action as may reasonably be necessary to carry out the intent of this
Agreement.
SECTION 16: NOTICE.
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Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon the earliest of personal delivery,
receipt or the third full day following deposit in the United States Post Office
with postage and fees prepaid, addressed to the other party hereto at the
address last known or at such other address as such party may designate by 10
days' advance written notice to the other party hereto.
SECTION 17: SUCCESSORS AND ASSIGNS.
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This Agreement shall inure to the benefit of the successors and assigns of
the Company and, subject to the restrictions on transfer herein set forth, be
binding upon Purchaser and Purchaser's heirs, executors, administrators,
successors and assigns. The failure of the Company in any instance to exercise
the Repurchase Option or rights of first offer described herein shall not
constitute a waiver of any other Repurchase Option or right of first offer that
may subsequently arise under the provisions of this Agreement. 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 a like or different nature.
SECTION 18: APPLICABLE LAW.
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This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Nevada, as such laws are applied to contracts entered into
and performed in such state.
SECTION 19: NO STATE QUALIFICATION.
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THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT
BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF NEVADA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM THE QUALIFICATION. THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.
SECTION 20: NO ORAL MODIFICATION.
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No modification of this Agreement shall be valid unless made in writing and
signed by the parties hereto.
SECTION 21: ENTIRE AGREEMENT.
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This Agreement and the Option Agreement constitute the entire complete and
final agreement between the parties hereto with regard to the subject matter
hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ANZA CAPITAL, INC. PURCHASER
By ----------------------------- -----------------------------