EXHIBIT 4.7
uBID, INC.
STOCK OPTION AGREEMENT
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I. NOTICE OF STOCK OPTION GRANT
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Xxxxx Xxxxxxxx
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You have been granted an option (the "Option") to purchase Common Stock of
uBID, INC. (the "Company"), subject to the terms and conditions of this Option
Agreement, as follows:
Date of Grant December 4, 1998
Vesting Commencement Date December 4, 1998
Exercise Price per Share $15.00
Total Number of Shares Granted 10,000
Total Exercise Price $150,000
Type of Option: Nonstatutory Stock Option
Term/Expiration Date: December 4, 2008
Vesting Schedule:
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This Option shall vest at the rate of 20% per year on each anniversary of
the Vesting Commencement Date shown above. Notwithstanding the foregoing
vesting schedule, this Option shall only be exercisable as to any amount vested
hereunder following the earlier of (i) an underwritten initial public offering
of Capital Stock of the Company ("IPO") or (ii) immediately prior to a Sale or
Merger as defined in Section 11 below. This Option will not become exercisable
in the absence of an IPO or a Sale or Merger, and this Option shall in no way
prevent the Company's parent, Creative Computers, Inc. ("Creative"), from
continuing the Company as a subsidiary of Creative, folding the Company's
ongoing operation into Creative or replacing the Company's management. Optionee
accepts the risk that this Option will not become exercisable as a result of the
Company and Creative pursuing a strategy that does not include an IPO on a Sale
or Merger transaction, and this Option shall not create any obligation on the
Company's or Creative's part to pursue an IPO or a Sale or Merger transaction
involving the Company. In addition to the accelerated vesting provided for in
Section 11 below, the Board of Directors, in its sole discretion, may accelerate
the vesting of all or any part of this Option upon such other events or
circumstances, if any, as it shall determine.
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Creative may determine in the future to spin off all or some of the
Company's outstanding stock to Creative stockholders. In that regard, Creative
may determine to consummate an IPO for less than 20% of the voting power of the
Company and, following the IPO, spin off the remaining shares of the Company to
Creative's stockholders in a tax-free distribution ("Distribution"). In that
event, Optionee agrees that Optionee will not exercise this Option, even if
vested, until the earlier of (i) the day following the consummation of the
Distribution or (ii) 18 months from the closing date of the IPO (the "Exercise
Deferral Period"); provided that, notwithstanding the foregoing, in the event of
a Sale or Merger, this Option may be exercised to the extent provided in Section
11 below.
II. AGREEMENT
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1. Grant of Option. The Company hereby grants to the Optionee named in
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the Notice of Grant (the "Optionee"), this Option to purchase the total number
of shares of Common Stock (the "Shares") set forth in the Notice of Grant, at
the exercise price per share set forth in the Notice of Grant (the "Exercise
Price").
This Option is intended to be a nonstatutory stock option and not an
incentive stock option under Section 422(d) of the Internal Revenue Code, as
amended (the "Code").
2. Exercise of Option. This Option shall be exercised during its term in
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accordance with the Vesting Schedule set out in the Notice of Grant as follows:
(i) Right to Exercise.
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(a) This Option may not be exercised for a fraction of a Share.
(b) In the event of Optionee's death, disability or other
termination of the employment, the exercisability of this Option is governed by
Sections 6, 7 and 8 below, subject to the limitation contained in subsection
2(i)(c).
(c) In no event may this Option be exercised after the
Term/Expiration Date of this Option as set forth in the Notice of Grant.
(ii) Method of Exercise. This Option shall be exercisable by written
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notice (in the form attached as Exhibit A) which shall state the election to
exercise this Option, the number of Shares in respect of which this Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company. Such written notice shall be signed by the Optionee
and shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised upon receipt by the Company
of such written notice accompanied by the Exercise Price.
No Shares will be issued pursuant to the exercise of this Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange or national market system upon
which the Shares may then be listed.
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Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which this Option is exercised with
respect to such Shares.
3. Optionee's Representations. In the event the Shares purchasable
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pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.
4. Method of Payment. Payment of the Exercise Price shall be by any of
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the following, or a combination thereof, at the election of the Optionee:
(i) by cash; or
(ii) by check; or
(iii) following an IPO, by surrender of other shares of Common Stock
of the Company which (A) in the case of Shares acquired pursuant to the exercise
of a Company option, have been owned by the Optionee for more than six (6)
months on the date of surrender, and (B) have a fair market value (as determined
by the Company's Board of Directors) on the date of surrender equal to the
Exercise Price of the Shares as to which this Option is being exercised; or
(iv) following an IPO, by delivery of a properly executed exercise
notice together with such other documentation as the Company's Board of
Directors and the broker, if applicable, shall require to effect an exercise of
this Option and delivery to the Company of the sale or loan proceeds required to
pay the Exercise Price.
5. Restrictions on Exercise. This Option may not be exercised if the
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issuance of the Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
6. Termination of Relationship. In the event the Optionee's employment
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with the Company terminates (other than as a result of Optionee's death or
disability), Optionee may, to the extent otherwise so entitled at the date of
such termination (the "Termination Date"), exercise this Option until the later
of (i) 90 days following the Termination Date or (ii) 30 days after an
applicable Exercise Deferral Period as described in the Vesting Schedule set out
in the Notice of Grant, but in no event later than the Expiration Date of this
Option as described in the Vesting Schedule set out in the Notice of Grant. To
the extent that Optionee was not entitled to exercise this Option at the date of
such termination (other than as a result of an Exercise Deferral Period), or if
the Optionee does not exercise this Option within the time specified herein, the
Option shall terminate.
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7. Disability of Optionee. In the event of termination of Optionee's
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employment with the Company as a result of his or her disability, Optionee may
exercise this Option to the extent otherwise entitled to exercise it at the date
of such termination until the later of (i) twelve (12) months from the date of
such termination or (ii) 30 days after an applicable Exercise Deferral Period
as described in the Vesting Schedule set out in the Notice of Grant, but in no
event later than the Expiration Date of this Option as set forth in the Notice
of Grant. To the extent that Optionee was not entitled to exercise this Option
at the date of termination (other than as a result of an Exercise Deferral
Period), or if Optionee does not exercise this Option to the extent so entitled
within the time specified herein, this Option shall terminate.
8. Death of Optionee. In the event of termination of Optionee's
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employment with the Company as a result of the death of Optionee, this Option
may be exercised, at any time by Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent the Optionee could exercise the Option at the date of death, until the
later of (i) twelve (12) months following the date of death or (ii) 30 days
after an applicable Exercise Deferral Period as described in the Vesting
Schedule set out in the Notice of Grant, but in no event later than the
Expiration Date of this Option as set forth in the Notice of Grant.
9. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
10. Term of Option. This Option may not be exercised after the
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Term/Expiration Date set out in the Notice of Grant, and may be exercised prior
to that date only in accordance with the terms of this Option.
11. Sale or Merger.
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(a) Definition. For purposes of this Option, a "Sale or Merger"
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shall include any of the following stockholder-approved transactions to which
the Company is a party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for (1) a transaction the principal purpose of which is
to change the state of the Company's incorporation, or (2) a transaction in
which the Company's shareholders immediately prior to such merger or
consolidation will hold (by virtue of securities received in exchange for their
shares in the Company) securities of the surviving entity representing more than
fifty percent (50%) of the total voting power of such surviving entity
immediately after such transaction;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (other than by way of a spinoff
of the Company's Capital Stock to stockholders of Creative) unless the Company's
stockholders immediately prior to such sale, transfer or other disposition hold
(by virtue of securities received in exchange for their shares in
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the Company) securities of the purchaser or other transferee representing more
than fifty percent (50%) of the total voting power of such entity immediately
after such transaction; or
(iii) any merger in which the Company is the surviving entity but
in which the Company's shareholders immediately prior to such merger will not
hold (by virtue of their shares in the Company held immediately prior to such
transaction) securities of the surviving entity (by virtue of their shares in
the Company held immediately prior to such transaction) representing more than
fifty percent (50%) of the total voting power of the surviving entity
immediately after such transaction.
(b) Effect. In the event of any Sale or Merger, this Option shall
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terminate upon the effective date of the Sale or Merger; provided that,
immediately prior to the Sale or Merger, this Option shall vest as to the next
20% installment of shares (the "Accelerated Installment") if any, together with
prorated additional vesting of a portion of any other unvested shares covered by
this Option calculated by (x) subtracting the number of full months remaining
until the normal annual vesting date of the Accelerated Installment from 12, (y)
dividing the difference by 12 and multiplying the resulting fraction times the
number of shares, if any, covered by the next 20% installment. The Company shall
give Optionee reasonable notice of a Sale or Merger to enable Optionee to
exercise this Option prior to the effective date of the Sale or Merger to the
extent this Option is then exercisable in accordance with the terms of this
Option.
12. Adjustments for Changes in Stock. If there should be any change in a
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class of stock subject to this option, through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
or other change in the capital structure of the Company (except for a Sale or
Merger described in Section 11), the Company shall make appropriate adjustments
in order to preserve, but not to increase, the benefits to Optionee, including
adjustments in the number of Shares subject to this option and in the price per
share. Any new, substituted or additional securities or property which is
distributed with respect to the Shares ("Additional Securities") shall be
immediately subject to all the restrictions of this Agreement, but only to the
extent the Shares are at such time covered by such provisions. Any adjustment
made pursuant to this Section 12 as a consequence of a change in the capital
structure of the Company shall not entitle Optionee to acquire a number of
shares of such stock of the Company or shares of stock of any successor company
greater than the number of Shares Optionee would receive if, prior to such
change, Optionee had actually held a number of shares of such stock equal to the
number of Shares then subject to this Option. Optionee shall be entitled to
direct the Company to exercise any warrant or option received as Additional
Securities upon supplying the funds necessary to do so, in which event the
securities so purchased shall constitute Additional Securities, but the Optionee
may not direct Company to sell any such warrant or option. If Additional
Securities consist of a convertible security, Optionee may exercise any
conversion right, and any securities so acquired shall be deemed Additional
Securities.
In the event that the Company effects a recapitalization of its Common
Stock into two or more classes in conjunction with an IPO, this Option shall be
converted pursuant to this Section 12 into an identical Option to purchase the
class of Common Stock offered to the public
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in the IPO and references to "Common Stock" and "Shares" hereunder shall be
deemed to be references to such publicly offered class of Common Stock.
13. Tax Consequences. Set forth below is a brief summary as of the date
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of this Option of some of the federal and state tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
(i) Exercise of Nonstatutory Stock Option. There will be regular
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federal income tax liability and state income tax liability upon the exercise of
a Nonstatutory Stock Option. The Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the fair market value of the Shares on the date of exercise over the
Exercise Price. If Optionee is an employee or a former employee of the Company,
the Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.
(ii) Disposition of Shares. If Shares acquired upon exercise of this
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Option are held for at least one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal and state income
tax purposes.
14. Financial Information. The Company shall provide to Optionee, during
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the period for which this Option is outstanding, copies of financial statements
at least annually.
15. Entire Agreement: Governing Law. This agreement constitutes the
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entire agreement of the parties with respect to the subject matter hereof and
supersedes in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by Delaware law
except for that body of law pertaining to conflict of laws.
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IN WITNESS WHEREOF, the Company and Optionee have executed this agreement
as of the Date of Grant shown above in the Notice of Grant.
uBID, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
President
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THIS OPTION IS EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY
(NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN
THIS OPTION GRANT SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE
IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed this Option in its entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Option
and fully understands all provisions of the Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Company's Board of Directors upon any questions arising under this Option.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
Signed: /s/ XXXXX XXXXXXXX
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Optionee
Residence Address:
000 Xxxxxxxxxxx Xxxxxx
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Xxxxxxxxxx, XX 00000
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EXHIBIT A
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EXERCISE NOTICE
uBID, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxx Xxxxxxx, XX 00000
Attention: Secretary
1. Exercise of Option. Effective as of today, ______________, 19__, the
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undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
___________ shares of the Common Stock (the "Shares") of uBID, Inc. (the
"Company") under the Nonstatutory Stock Option Agreement dated ______________,
19__ (the "Option Agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee has
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received, read and understood the Option Agreement and agrees to abide by and be
bound by their terms and conditions.
3. Rights as Shareholder. Until the stock certificate evidencing such
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Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 12 of the Option Agreement.
Optionee shall enjoy rights as a shareholder until such time as
Optionee disposes of the Shares.
4. Tax Consultation. Optionee understands that there are tax consequences
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as a result of Optionee's purchase or disposition of the Shares. Optionee
represents that Optionee has consulted with any tax consultants Optionee deems
advisable in connection with the purchase or disposition of the Shares and that
Optionee is not relying on the Company for any tax advice.
5. Restrictive Legends and Stop-Transfer Orders.
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(a) Legends. Optionee understands and agrees that the Company shall
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cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
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(THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
IN COMPLIANCE THEREWITH.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON
TRANSFER FOR A PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE OF THE
COMPANY'S INITIAL UNDERWRITTEN PUBLIC OFFERING AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT THE CONSENT OF THE COMPANY
OR THE MANAGING UNDERWRITER.
(b) Stop-Transfer Notices. Optionee 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.
6. Market Standoff. Optionee hereby agrees that if so requested by the
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Company or any representative of the underwriters in connection with any
registration of the offering of the securities of the Company under the
Securities Act of 1933, as amended (the "Act"), Optionee shall not sell or
otherwise transfer the Shares for a period of 180 days following the effective
date of a Registration filed under the Act; provided, that such restriction
shall apply only to the first registration statement of the Company to become
effective under the Act which include securities to be sold on behalf of the
Company in an underwritten offering under the Act. The Company may impose stop-
transfer instructions with respect to the Shares subject to the foregoing
restrictions until the end of each such 180-day period.
7. Successors and Assigns. The Company may assign any of its rights
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under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.
8. Interpretation. Any dispute regarding the interpretation of this
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Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular
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meeting. The resolution of such a dispute by the Board or committee shall be
final and binding on the Company and on Optionee.
9. Governing Law; Severability. This Agreement shall be governed by and
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construed in accordance with the laws of the State of California excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
10. Notices. Any notice required or permitted hereunder shall be given in
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writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
11. Further Instruments. The parties agree to execute such further
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instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
12. Delivery of Payment. Optionee herewith delivers to the Company the
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full Exercise Price for the Shares.
13. Entire Agreement. The Notice of Grant/Option Agreement are
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incorporated herein by reference. This Agreement, the Option Agreement and the
Investment Representation Statement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Purchaser with
respect to the subject matter hereof, and may not be modified adversely to the
Purchaser's interest except by means of a writing signed by the Company and
Purchaser.
Submitted by: Accepted by:
OPTIONEE: uBID, Inc.
By:
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Its:
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(Signature)
Address: Address:
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0000 Xxxxx Xxxx
------------------------------ Elk Xxxxx Xxxxxxx, Xxxxxxxx 00000
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EXHIBIT B
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INVESTMENT REPRESENTATION STATEMENT
OPTIONEE:
COMPANY: uBID, INC.
SECURITY: COMMON STOCK
AMOUNT:
DATE:
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee 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 Securities. Optionee is
acquiring these Securities for investment for Optionee's 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 of 1933, as amended (the "Securities
Act").
(b) Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon among other things, the bona fide nature of Optionee's
investment intent as expressed herein. Optionee further acknowledges and
understands that the Company is under no obligation to register the Securities.
Optionee understands that the certificate evidencing the Securities will be
imprinted with a legend which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of
counsel satisfactory to the Company, a legend prohibiting their transfer without
the consent of the Commissioner of Corporations of the State of California and
any other legend required under applicable state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. Rule 701 provides that if the issuer qualifies under Rule
701 at the time of the grant of the Option to the Optionee, the exercise will be
exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer
period as any market stand-off agreement may require) the Securities exempt
under Rule 701 may be resold, subject to the satisfaction of certain of the
conditions specified by Rule 144, including: (1) the resale being made through a
broker in an unsolicited "broker's transaction" or in transactions directly with
a market maker (as said term
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is defined under the Securities Exchange Act of 1934); and, in the case of an
affiliate, (2) the availability of certain public information about the Company,
(3) the amount of Securities being sold during any three month period not
exceeding the limitations specified in Rule 144(e), and (4) the timely filing of
a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time
of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to occur not less than one year after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the conditions set forth in
sections (1), (2), (3) and (4) of the paragraph immediately above.
(d) Optionee hereby agrees that if so requested by the Company or any
representative of the underwriters in connection with any registration of the
offering of any securities of the Company under the Securities Act, Optionee
shall not sell or otherwise transfer any Shares or other securities of the
Company during the 180-day period following the effective date of a registration
statement of the Company filed under the Securities Act; provided, however, that
such restriction shall only apply to the first registration statement of the
Company become effective under the Securities which includes securities to be
sold on behalf of the Company to the public in an underwritten public offering
under the Securities Act. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such 180-day period.
(e) Optionee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
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Date: ,
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