RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement ("Agreement") is entered
into as of November 18, 1997 between DP Applications, Inc., an Oregon
corporation (the "Company"), and The Xxxxxx X. Xxxxxx and Xxxx X.
Xxxxxx, trustees of the Xxxxxx Living Trust U/D/T dated April 18th 1995
("Purchaser"), in connection with the performance of consulting services
to the Company by Xxxxxx X. Xxxxxx ("Xxxxxx").
In consideration of the mutual promises set forth in this
Agreement, the parties agree as follows:
1. Sale of Shares. Purchaser agrees to purchase from the
Company, and the Company agrees to sell to Purchaser, 180,000 shares of
common stock of the Company (the "Shares") at a price of $0.15 per
share, for a total purchase price of $27,000, payable in cash. In
addition to terms and conditions set forth in this Agreement, the Shares
shall be subject to the restrictions on transfer contained in Article
VII of the Company's Bylaws. To secure its rights under the Repurchase
Option described in Section 2, the Company will retain the certificate
or certificates representing the Shares. Purchaser will deliver to the
Company executed blank stock powers covering the Shares subject to the
Repurchase Option. The closing of this sale shall occur upon receipt by
the Company from Purchaser of an executed copy of this Agreement, full
payment of the purchase price for the Shares, and executed blank stock
powers covering the Shares.
2. Repurchase Option.
2.1 Termination of Consulting Services. If Xxxxxx
ceases to be a consultant to DP for any reason other than death, then
the Company shall have an irrevocable, exclusive option (the "Repurchase
Option") for a period of 60 days from the date the consulting services
ended (the "Termination Date") to repurchase at the original price per
Share set forth in Section 1 all of the Shares held by Purchaser on such
date that have not been released from the Repurchase Option as provided
in Section 2.4. If Xxxxxx ceases to be a consultant to DP by reason of
death, the Repurchase Option shall not apply to the Shares, but shall
terminate as to all of the Shares as of the date of death. It is
understood that termination of consulting services may be effected by
either party for any reason with or without cause upon 30 days written
notice.
2.2 Exercise of Option. The Repurchase Option shall be
exercised by the Company within 60 days of the Termination Date (such
60-day period, the "Exercise Period") by delivering to Purchaser a
written notice of exercise of the Repurchase Option and a check in the
amount of the purchase price. Upon delivery of such notice and payment
of the purchase price, 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 without
further action by Purchaser.
2.3 Termination of Repurchase Option. If the Company
does not exercise the Repurchase Option before the end of the Exercise
Period, the Repurchase Option shall terminate.
2.4 Release from Repurchase Option. Twenty-five
percent (25%) of the Shares shall be immediately released from the
Repurchase Option on the date of this Agreement. The balance of the
Shares shall be released from the Repurchase Option over a period of
three years, subject to continuous consulting service to the Company by
Xxxxxx. For each month of service beginning on August 1, 1997, 3,750
shares shall be released from the Repurchase Option on the last day of
the month. If Xxxxxx performs continuous consulting services for the
Company through July 31, 2000, all Shares shall have been released from
the Repurchase Option by such date. At the request of Purchaser, the
Company will deliver to Purchaser a certificate or certificates
representing the Shares released from the Repurchase Option.
2.4.1 Accelerated Release From Repurchase Option
Upon Sequent Change of Control. If at any time before all of the Shares
have been released from the Repurchase Option, there is a Change of
Control of the Company, all Shares then subject to the Repurchase Option
shall immediately be released from the Repurchase Option, and the
Repurchase Option shall terminate as of the date of the Change of
Control.
As used in this Agreement, the term "Change of Control
of the Company" means the occurrence either of the following events:
(a) Any "person" (as such term is defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
other than Sequent or its subsidiaries is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act ), directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
total voting power represented by the Company's then outstanding voting
securities; or
(b) A merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
the majority of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
3. Limitations on Transfer. Without the written consent of
the Company, Purchaser shall not sell, assign, encumber, dispose of or
transfer (including transfer by operation of law) any interest in any
Shares that have not been released from the Repurchase Option. The
Company shall hold in escrow all Shares subject to the Repurchase
Option.
4. Lock-up Period. Purchaser hereby agrees that if so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the
offering of any securities of the Company under the Securities Act of
1933, as amended (the "Securities Act"), Purchaser shall not sell, make
short sale of, loan, grant any option for the purchase of, or otherwise
transfer any Shares or other securities of the Company during the 180-
day period (or such longer period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the
"Market Standoff Period") following the effective date of a registration
statement of the Company filed under the Securities Act; provided,
however, that such restriction shall apply only to the first
registration statement of the Company to become effective under the
Securities Act that 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 Market Standoff Period.
5. Stock Certificate Legends. All certificates representing
any of the Shares shall contain the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO
CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH
IN A RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE CORPORATION AND THE
REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THE CORPORATION."
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED."
"THE CORPORATION IS AUTHORIZED TO ISSUE DIFFERENT CLASSES OF
SHARES OR DIFFERENT SERIES WITHIN A CLASS. THE CORPORATION WILL FURNISH
TO ANY SHAREHOLDER ON REQUEST AND WITHOUT CHARGE A FULL STATEMENT OF
THE DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF EACH
CLASS OF SHARES AUTHORIZED TO BE ISSUED AND THE VARIATIONS IN THE
RIGHTS, PREFERENCES AND LIMITATIONS BETWEEN THE SHARES OF EACH SERIES SO
FAR AS THEY HAVE BEEN DETERMINED. THE BOARD OF DIRECTORS IS AUTHORIZED
TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF A SERIES BEFORE THE
ISSUANCE OF ANY SHARES OF THAT SERIES."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND
TRANSFERABLE ONLY UPON COMPLIANCE WITH THE TERMS AND CONDITIONS
CONTAINED IN ARTICLE VII OF THE COMPANY'S BYLAWS, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION."
6. Assignment by the Company. The right of the Company under
the Repurchase Option to purchase any part of the Shares may be assigned
in whole or in part to any person or persons designated by the Board of
Directors of the Company.
7. Transfer on Books of Company. The Company shall not be
required (a) to transfer on its books any of the Shares which have been
sold or transferred in violation of any of the provisions set forth in
this Agreement or the Company's Bylaws, 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.
8. Restricted Securities. Purchaser understands and
acknowledges that the sale of the Shares has not been registered under
the Securities Act, or applicable state securities laws, that the Shares
must be held indefinitely unless subsequently registered under the
Securities Act and applicable state securities laws or unless an
exemption from such registration requirement is available, that the
Company is under no obligation to register the Shares, and that the
certificate representing the Shares will be stamped with the legends
specified in Section 5 of this Agreement. The Purchaser agrees to
comply with the transfer restrictions specified in the legends set forth
in Section 5.
9. Investment Representations and Warranties. Purchaser
warrants and represents to the Company as follows:
9.1 Purchase Entirely for Own Account. The Shares will
be acquired for investment for Purchaser's own account and not with a
view to the resale or distribution of any part thereof, and Purchaser
has no intention of selling, granting any participation in, or otherwise
distributing the same.
9.2 Investment Experience. Purchaser is experienced in
evaluating and investing in companies in the development stage, can bear
the economic risk of an investment in the Shares, and has enough
knowledge and experience in financial and business matters to evaluate
the merits and risks of the investment in the Shares.
9.3 Qualifications as an Accredited Investor.
Purchaser is an accredited investor, as that term is defined in Rule
501(a) under the Securities Act.
9.4 Opportunity to Review Documents and Ask Questions.
The Company has made available to Purchaser all documents and
information requested by Purchaser relating to an investment in the
Company. In addition, Purchaser has had adequate opportunity to ask
questions and to receive answers from the management of the Company
covering the terms and conditions of the purchase and sale of the Shares
and the Company's business, management, and financial affairs.
10. Miscellaneous.
10.1 Entire Agreement; Amendment. This Agreement
constitutes the entire agreement of the parties with regard to the
subjects hereof and may be amended only by written agreement between the
Company and the Purchaser.
10.2 Notices. Any notice required or permitted under
this Agreement shall be in writing and shall be deemed sufficient when
delivered personally to the party to whom it is addressed or when
deposited into the United States Mail as registered or certified mail,
return receipt requested, postage prepaid, addressed to the Company at
its address shown below its signature or to the Purchaser at the address
shown below the Purchaser's signature, or at such other address as such
party may designate by ten (10) days' advance written notice to the
other party.
10.3 Rights and Benefits. The rights and benefits of
this Agreement shall inure to the benefit of and be enforceable by the
Company's successors and assigns and, subject to the restrictions on
transfer of this Agreement, be binding upon the Purchaser's heirs,
executors, administrators, beneficiaries, successors and assigns.
10.4 Further Action. 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.
10.5 Applicable Law; Attorneys' Fees. The terms and
conditions of this Agreement shall be governed by the laws of the State
of Oregon. In the event either party institutes litigation hereunder,
the prevailing party shall be entitled to reasonable attorneys' fees to
be set by the trial court and, upon any appeal, the appellate court.
10.6 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
THE COMPANY: DP APPLICATIONS, INC.
By: /s/Xxxxxx X. Xxxxx
Title: President
PURCHASER: THE XXXXXX X. XXXXXX AND XXXX X.
XXXXXX, TRUSTEES OF THE XXXXXX
LIVING TRUST U/D/T DATED APRIL 18TH
1995
By: /s/Xxxxxx X. Xxxxxx, Trustee
By: /s/Xxxx X. Xxxxxx, Trustee
Address:
00000 Xx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
