RESTRICTED STOCK PURCHASE AGREEMENT
Exhibit 10.4
THIS RESTRICTED STOCK PURCHASE AGREEMENT is made as of the «X_day_of_month_200X» (the
“Effective Date”) by and between Reply! Inc., a California corporation (the
“Company”), and «Name» (“Purchaser”).
WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, capital stock of the Company as herein described according to the terms
and subject to the conditions hereinafter set forth; and
WHEREAS, the Purchaser is an Employee of the Company;
NOW, THEREFORE, in consideration for the mutual promises and covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Number of Shares and Price Per Share. The Purchaser hereby agrees to purchase from
the Company and the Company agrees to sell to Purchaser «number» shares of the Company’s Common
Stock (the “Stock”), at a purchase price of $«price» per share, or an aggregate purchase
price of $«total»(the “Purchase Price”). The consideration for the Stock will be the
Purchaser’s prior services to the Company valued at the amount of the Purchase Price (the “Prior
Services”). The closing of such purchase shall occur immediately upon execution of this Agreement.
2. Unvested Share Forfeiture. Upon the termination of the Purchaser’s service to the
Company as an employee, director or consultant, or if the Purchaser or the Purchaser’s legal
representative attempts to transfer any Unvested Shares (as defined below) other than as permitted
in this Agreement, all shares of Stock which have not yet been vested (“Unvested Shares”) shall be
deemed to have been forfeited by Purchaser without any further action of any kind by the Company.
(a) Vesting of Unvested Shares.
(i) Time Based Vesting. The Unvested Shares will 100% vest on «month_day_200X»
subject to the Purchaser’s continuous service to the Company as an employee, director or a
consultant.
(ii) Vesting After Change in Control [or Initial Public Offering]. If the Purchaser’s
service ceases as a result of a Termination after Change in Control [or an Initial Public Offering
(“IPO”)], the Unvested Shares will 100% vest. [If the Purchaser’s service continues after a Change
in Control or an IPO, the Unvested Shares will 100% vest [six (6)] [twelve (12)] months after a
Change in Control or an IPO.]
(iii) Vesting Upon Death or Disability. If the Purchase dies or suffers a Disability,
a portion of the Unvested Shares shall become vested as of the date of death or Disability
determined by multiplying the number of shares of Stock purchased hereunder by a
number equal to (A) the nearest number of whole months that have elapsed since
«month_day_200X» through the date of death or Disability, divided by (B) 48.
(iv) Certain Definitions.
(A) “Termination After Change in Control” shall mean either of the following events
occurring within [six (6)] [twelve (12)] months after a Change in Control: (x) termination by the
Company or a successor corporation or entity of the Purchaser’s service for any reason other than
for Cause; or (y) the Purchaser’s resignation for Good Reason from all capacities in which the
Purchaser is then rendering service within a reasonable period of time following the event
constituting Good Reason. Notwithstanding any provision herein to the contrary, Termination After
Change in Control shall not include any termination of the Purchaser’s service which (1)
is for Cause; (2) is a result of the Purchaser’s death or disability; (3) is a result of the
Purchaser’s voluntary termination of service other than for Good Reason or (4) occurs prior to the
effectiveness of a Change in Control.
(B) “Good Reason” shall mean any of the following actions taken without Cause by the
Company or a successor corporation or entity without Purchaser’s consent: (1) reduction of
Purchaser’s rate of compensation by more than 10% (unless reductions comparable in amount and
duration are concurrently made for all other employees with responsibilities, organizational level
and title comparable to the Purchaser’s); (2) failure or refusal of a successor to the Company to
assume the Company’s obligations under this Agreement in the event of a Change in Control; or (3)
relocation of Purchaser’s principal place of employment to a place greater than 40 miles from
Purchaser’s then current principal place of employment.
(C) “Cause” shall mean any of the following: (1) the Purchaser’s theft, dishonesty, or
falsification of any Company or successor corporation or entity documents or records; (2) the
Purchaser’s improper use or disclosure of the Company’s or successor corporation or entity’s
confidential or proprietary information; (3) any action by the Purchaser which has a material
detrimental effect on the Company’s or successor corporation or entity’s reputation or business;
(4) the Purchaser’s failure or inability to perform any reasonable assigned duties after written
notice from the Company or a successor corporation or entity of, and a reasonable opportunity to
cure, such failure or inability; (5) any material breach by the Purchaser of any employment or
service agreement between the Purchaser and the Company or a successor corporation or entity, which
breach is not cured pursuant to the terms of such agreement; or (6) the Purchaser’s conviction
(including any plea of guilty or nolo contendere) of any criminal act which impairs the Purchaser’s
ability to perform his or her duties with the Company or a successor corporation or entity.
(D) A “Change in Control” shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, a “Transaction”) wherein the shareholders of the
Company immediately before the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting securities of the
Company. For purposes of the preceding sentence, indirect
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beneficial ownership shall include, without limitation, an interest resulting from ownership
of the voting securities of one or more corporations or other business entities which own the
Company or the Transferee, as the case may be, either directly or through one or more subsidiary
corporations or other business entities. The Board shall have the right to determine whether
multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change
Events are related, and its determination shall be final, binding and conclusive.
(E) An “Ownership Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a
single or series of related transactions by the shareholders of the Company of more than fifty
percent (50%) of the voting stock of the Company; (ii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or (iii) a liquidation or dissolution of the
Company. A transaction or series of related transactions where capital raising is the primary
purpose shall not be deemed to be an Ownership Change Event [, other than an Initial Public
Offering of the Company’s shares].
(F) A “Disability” shall mean the permanent and total disability of the Purchaser,
within the meaning of Section 22(e)(3) of the Internal Revenue Code.
(b) Return of Unvested Shares. In the event Purchaser forfeits his Unvested Shares,
the Company shall give written notice to the Escrow Agent (as defined in Section 10 below) who
shall promptly return the Unvested Shares to the Company for cancellation. To the extent that the
payment of the Purchase Price for the Stock was services rendered by the Purchaser, then the cash
amount due upon forfeiture of he Unvested Shares shall be zero and Purchaser shall have no claim of
any kind against the Company for Purchaser’s Prior Services.
(c) Certain Transfers.. Transfers of the Stock to the Purchaser’s ancestors,
descendants or spouse or to a trustee for their benefit or the benefit of the Purchaser are
permitted, provided that such transferee agrees in writing (in a form satisfactory to the Company)
to take the Stock subject to all the terms and conditions of this Section 2.
(d) Legends. The Company may place a legend referencing the vesting terms set forth
in this Section 2 on any certificate representing Stock.
3. Right of First Refusal.
(a) Notice of Transfer. In the event that the Purchaser proposes to sell, assign,
pledge, encumber, transfer or otherwise dispose of (“Transfer”) any of Purchaser’s Stock,
Purchaser shall give the Company written notice of Purchaser’s intention (“Transfer
Notice”), describing the number of shares of Stock offered (“Offered Shares”), the
identity of the prospective transferee and the consideration and the material terms and conditions
upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the
Purchaser has received a firm offer from the prospective transferee and in good faith believes a
binding agreement for Transfer is obtainable on the terms set forth, and shall also include a copy
of any written proposal or letter of intent or other agreement relating to the proposed Transfer.
(b) Right of First Refusal. With respect to any proposed Transfer, the Company shall
have an option to purchase all or none of the Offered Shares (the “Right of First
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Refusal”). To exercise such option, the Company must notify the Purchaser in writing
before the expiration of the thirty (30) day period following the delivery of the Transfer Notice
to the Company. If the Company elects to purchase the Offered Shares, it shall pay consideration
for the Offered Shares no less favorable in price and material terms and conditions than are
described in the Transfer Notice.
(c) Closing Procedures; Subsequent Transfers. If the Company exercises the Right of
First Refusal, the Company and the Purchaser shall consummate the sale of the Offered Shares on the
terms set forth in the Transfer Notice by the date sixty (60) days after the delivery of the
Transfer Notice to the Company; provided, however, that, in the event the Transfer Notice provides
for the payment for the shares of Stock other than in cash, the Company shall have the option to
pay for the shares of Stock by the discounted cash equivalent of the consideration described in the
Transfer Notice as reasonably determined by the Company. If the Company fails to exercise in full
the Right of First Refusal on a timely basis, then the Purchaser may, not later than one hundred
twenty (120) days following delivery to the Company of the Transfer Notice, conclude the Transfer
subject to the Transfer Notice on the terms and conditions described in such notice. Any proposed
transfer on terms and conditions different from those described in the Transfer Notice, as well as
any proposed transfer by the Purchaser more than one hundred twenty (120) days following delivery
of the Transfer Notice, shall again be subject to the Right of First Refusal and shall require the
Purchaser to deliver a new Transfer Notice to the Company and to comply with the procedures
described in this Section 3 with respect to such different or new Transfer.
(d) Condition to Transfer. All transferees of shares of Stock or any interest therein
other than the Company shall be required as a condition of such transfer to agree in writing (in a
form satisfactory to the Company) that they will receive and hold such shares of Stock or interest
subject to the provisions of this Agreement, including the Right of First Refusal.
(e) Termination of Right. The Right of First Refusal shall terminate at such time as
a public market exists for the Company’s Common Stock (or any other stock issued by the Company, or
any successor, in exchange for the Stock). For the purpose of this Agreement, a “public market”
shall be deemed to exist if (i) such stock is listed on a national securities exchange or the
Nasdaq National Market or (ii) such stock is traded on the over-the-counter market and prices
therefor are published daily on business days in a recognized financial journal.
(f) Limitation on Right. Notwithstanding the provisions of this Section 3, the Right
of First Refusal set forth in this Section 3 shall not apply to:
(i) any transfer to the Purchaser’s ancestors or descendants or spouse or to a trustee for
their benefit provided that in any case any such transferee shall agree in writing (in a form
satisfactory to the Company) to take the Stock subject to all the terms of this Agreement,
including the Right of First Refusal.
(ii) any sale or transfer of the Stock in a public offering of securities of the Company
registered under the Securities Act of 1933, as amended (the “Securities Act”).
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4. Assignment of Purchase Rights. The Company shall have the right to assign the
Right of First Refusal to such person or persons as it may select.
5. Restrictions on Transfer. The Purchaser may not sell, transfer, pledge or
otherwise dispose of any Unvested Shares of the Stock still subject to vesting except as provided
in Sections 2(e) and 3.
6. Stock Dividends, Etc. If, from time to time, there is any stock dividend, stock
split or other change in the character or amount of any of the outstanding stock of the Company,
then in such event any and all new substituted or additional securities to which the Purchaser is
entitled by reason of the Purchaser’s ownership of the Stock acquired pursuant to this Agreement
shall be considered Stock and shall be immediately subject to the vesting terms hereof, the Right
of First Refusal and all other terms of this Agreement to the same extent as the Stock owned by the
Purchaser immediately before such event.
7. Legends. All certificates representing any shares of Stock subject to the
provisions of this Agreement shall have endorsed thereon the following legends:
(a) “THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED PURSUANT TO AN
AGREEMENT BETWEEN THE COMPANY AND THE HOLDER OF THESE SHARES, OR HIS OR HER PREDECESSOR IN
INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY.”
(b) “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE
SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.”
(c) Any legend required to be placed thereon under applicable state securities laws.
8. Representations and Warranties. In connection with the proposed purchase of the
Stock, the Purchaser hereby agrees, represents and warrants as follows:
(a) The Purchaser is purchasing the Stock solely for the Purchaser’s own account for
investment and not with a view to, or for resale in connection with, any distribution thereof
within the meaning of the Securities Act.
(b) The 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 Stock. The Purchaser further represents and warrants that
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Purchaser has discussed the Company and its plans, operations and financial condition with its
officers, has received all such information as Purchaser deems necessary and appropriate to enable
Purchaser to evaluate the financial risk inherent in making an investment in the Stock and has
received satisfactory and complete information concerning the business and financial condition of
the Company in response to all inquiries in respect thereof.
(c) The Purchaser realizes that Purchaser’s purchase of the Stock will be a highly speculative
investment, and Purchaser is able, without impairing Purchaser’s financial condition, to hold the
Stock for an indefinite period of time and to suffer a complete loss of Purchaser’s investment.
(d) The Company has disclosed to the Purchaser that:
(i) The sale of the Stock has not been registered under the Securities Act, and the Stock must
be held indefinitely unless a transfer of it is subsequently registered under the Securities Act or
an exemption from such registration is available, and that the Company is under no obligation to
register the Stock;
(ii) The Company will make a notation in its records of the aforementioned restrictions on
transfer and legends.
(e) The Purchaser is aware of the provisions of Rule 144, promulgated under the Securities
Act, which, in substance, permits limited public resale of “restricted securities” acquired,
directly or indirectly, from the issuer thereof (or an affiliate of such issuer), in a non-public
offering subject to the satisfaction of certain conditions, including among other things: the
resale occurring not less than one year from the date the Purchaser has purchased and paid for the
Stock; the availability of certain public information concerning the Company; the sale being
through a broker in an unsolicited “broker’s transaction” or in a transaction directly with a
market maker; and limitations on the amount of Stock that may be sold during any three-month
period. The Purchaser further represents that Purchaser understands that at the time Purchaser
wishes to sell the Stock there may be no public market upon which to make such a sale, and that,
even if such a public market then exists, the Company may not be satisfying the current public
information requirements of Rule 144, and that, in such event, the Purchaser would be precluded
from selling the Stock under Rule 144 even if the one-year minimum holding period had been
satisfied.
(f) Without in any way limiting the Purchaser’s representations and warranties set forth
above, the Purchaser further agrees that the Purchaser shall in no event make any disposition of
all or any portion of the Stock which the Purchaser is purchasing unless and until:
(i) There is then in effect a Registration Statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with said Registration Statement;
or
(ii) The Purchaser shall have (1) notified the Company of the proposed disposition and
furnished the Company with a detailed statement of the circumstances surrounding the proposed
disposition, and (2) if reasonably requested by the Company, furnished
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the Company with an opinion of the Purchaser’s own counsel to the effect that such disposition
will not require registration of such shares under the Securities Act, and such opinion of the
Purchaser’s counsel shall have been concurred in by counsel for the Company, and the Company shall
have advised the Purchaser of such concurrence.
9. “Market Stand-Off” Agreement. Purchaser hereby agrees that in connection with any
underwritten public offering by the Company, during the period of duration (not to exceed 180 days)
specified by the Company and an underwriter of common stock of the Company following the effective
date of the Registration Statement of the Company filed under the Securities Act with respect to
such offering, he will not, to the extent requested by the Company and such underwriter, directly
or indirectly sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase, pledge or otherwise transfer or dispose of (other than to
donees who agree to be similarly bound) any securities of the Company held by him or her at any
time during such period except common stock included in such registration. If requested by such
underwriter, Purchaser agrees to execute a lock-up agreement in such form as the underwriter may
reasonably propose.
10. Escrow. As security for the Purchaser’s faithful performance of the terms of this
Agreement and to insure the availability for delivery of the Stock upon forfeiture of any Unvested
Shares herein provided for, the Purchaser agrees to deliver to and deposit with DLA Piper LLP (US),
counsel to the Company (the “Escrow Agent”), as Escrow Agent in this transaction, a Stock
Assignment duly endorsed (with date and number of shares blank) in the form attached hereto as
Exhibit A, together with the certificate or certificates evidencing the Stock; such
documents are to be held by the Escrow Agent pursuant to the Joint Escrow Instructions of the
Company and the Purchaser set forth in Exhibit B attached hereto and incorporated by this
reference, which instructions shall also be delivered to the Escrow Agent at the closing hereunder.
11. Transfers in Violation of Agreement. The Company shall not be required (i) 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 (ii) 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.
12. Rights as Stockholder. Subject to the provisions of this Agreement, the Purchaser
shall, during the term of this Agreement, exercise all rights and privileges of a stockholder of
the Company with respect to the Stock deposited in escrow.
13. Election Under Section 83(b) of the Code.
(a) The Purchaser understands that, if the Stock is subject to a “substantial risk of
forfeiture,” Section 83 of the Code will tax as ordinary income the difference between the amount
paid for the Stock and the fair market value of the Stock as of the date the risk of forfeiture
lapses. In this context, the Stock may be subject to a substantial risk of forfeiture. The
Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than
when and as the vesting of the Stock is completed by filing an election, in the form attached
hereto as Exhibit C, under Section 83(b) of the Code with the Internal Revenue Service (the
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“IRS”) within 30 days from the date of purchase. Even if the fair market value of the
Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax
consequences in the future. The Purchaser understands that failure to make this filing on a timely
basis will result in the recognition of ordinary income by the Purchaser as the vesting restriction
on the Unvested Shares lapses, based on the difference between the purchase price and the fair
market value of the Stock at the time such restriction lapses.
(b) The Purchaser understands that the Stock has been valued by the Board of Directors and
that the Company believes this valuation represents a fair attempt to appraise it. The Purchaser
understands, however, that if the Purchaser files a Section 83(b) election, the Company can give no
assurances that the purchase price will be accepted by the IRS as the fair market value of the
Stock, and that the IRS could assert that the value of the Stock on the date of purchase was
substantially greater than the purchase price. If the IRS were to successfully argue in a tax
determination that the Stock had value greater than the price paid by the Purchaser, and the
Purchaser has filed a Section 83(b) election, the additional value would constitute ordinary income
as of the date of its receipt. The additional taxes (and interest) due would be payable by the
Purchaser. There is no provision for the Company to reimburse the Purchaser for any potential tax
liability, and the Purchaser assumes all responsibility for it. If the additional value attributed
to the Stock was more than 25 percent of the Purchaser’s gross income for the year in which that
value was taxable, the IRS would have six years from the due date for filing the return (or the
actual filing date of the return if filed thereafter) within which to assess the additional tax and
interest.
(c) AN ELECTION UNDER SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON WHICH THE
PURCHASER PURCHASES STOCK. THIS TIME PERIOD CANNOT BE EXTENDED. THE PURCHASER ACKNOWLEDGES THAT
TIMELY FILING OF A SECTION 83(b) ELECTION IS THE PURCHASER’S SOLE RESPONSIBILITY, EVEN IF THE
PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.
(d) The Purchaser shall notify the Company in writing if Purchaser files an election pursuant
to Section 83(b). The Company intends, in the event it does not receive from Purchaser evidence of
such filing, to claim a tax deduction for any amount which would be taxable to Purchaser in the
absence of such an election.
14. Miscellaneous.
(a) Further Instruments. 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.
(b) Notice. All notices required or permitted hereunder shall be in writing and shall
be deemed effectively given (i) upon personal delivery, (ii) when sent by confirmed facsimile, if
sent during normal business hours of recipient, or if not, then on the next business day, or (iii)
one (1) day after deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent to the party to
be notified at the address as set forth on the signature pages hereof or at such other
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address as such party may designate by ten (10) days advance written notice to the other
parties hereto.
(c) Successors and Assigns. 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 the Purchaser, the Purchaser’s heirs, executors, administrators, successors
and assigns.
(d) Applicable Law; Entire Agreement; Amendments. This Agreement, together with the
exhibits hereto, shall be governed by and construed in accordance with the laws of the State of
California as it applies to agreements between California residents, entered into and to be
performed entirely within California and constitutes the entire agreement of the parties with
respect to the subject matter hereof superseding all prior written or oral agreements, and no
amendment or addition hereto shall be deemed effective unless agreed to in writing by the parties
hereto.
(e) Right to Specific Performance. The Purchaser agrees that the Company shall be
entitled to a decree of specific performance of the terms hereof or an injunction restraining
violation of this Agreement, said right to be in addition to any other remedies available to the
Company.
(f) Severability. If any provision of this Agreement is held by a court to be
invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force
and effect without being impaired or invalidated in any way and shall be construed in accordance
with the purposes and tenor and effect of this Agreement.
(g) Counterparts. This Agreement may be executed in counterparts, each of which shall
be an original, but all of which together shall constitute one instrument.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Purchase Agreement
as of the date first above written.
| “PURCHASER” | “COMPANY” | |||||||
| REPLY! INC. | ||||||||
| By: | ||||||||
| President & Chief Executive Officer | ||||||||
Address:
|
Address: | 00000 Xxxxxxx Xxxx. | ||
| Xxxxx 000 | ||||
| Xxx Xxxxx, XX 00000 |
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EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED,
hereby sells, assigns and transfers unto
shares of the Common Stock of Reply! Inc., a
California corporation (the “Company”), standing in the undersigned’s name on the books of said
Company represented by Certificate No.
herewith, and does hereby irrevocably
constitute and appoint
attorney to transfer the said stock on the
books of the said Company with full power of substitution in the premises.
Dated:
| «Name» |
Instruction: Please sign but do not fill in any other blanks. The purpose of this
assignment is to enable the Company to exercise its repurchase rights as set forth in the Agreement
without requiring additional signatures on the part of the Stockholder.
EXHIBIT B
JOINT ESCROW INSTRUCTIONS
«month_day_200X»
DLA Piper LLP (US)
0000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
0000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Ladies and Gentlemen:
As Escrow Agent for both Reply! Inc., a California corporation (“Company”), and the
undersigned purchaser of Stock (the “Stock”) of the Company (“Purchaser”), you are
hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that
certain Restricted Stock Purchase Agreement (“Agreement”), dated as of the date hereof, to
which a copy of these Joint Escrow Instructions is attached as Exhibit B, in accordance
with the following instructions:
1. In the event the Unvested Shares are deemed to have been forfeited by the Purchaser,
Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction
occasioned by such forfeiture.
2. At the closing of a transaction pursuant to Paragraph 1, you are directed (a) to date the
stock assignment necessary for the transfer in question, (b) to fill in the number of shares of
Stock being transferred, and (c) to deliver same, together with the certificates evidencing the
shares of Stock to be transferred to the Company in connection with the forfeiture of the Unvested
Shares
3. Purchaser irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of Stock to be held by you hereunder and any additions and substitutions to said
shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you
as the Purchaser’s attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all stock certificates, stock assignments, or other documents necessary or
appropriate to make such securities negotiable and complete any transaction herein contemplated.
Subject to the provisions of this paragraph 3, Purchaser shall exercise all rights and privileges
of a stockholder of the Company while the Stock is held by you.
4. This escrow shall terminate at such time as there are no longer any shares of stock subject
to vesting pursuant to the Agreement .
5. If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Purchaser, you shall deliver all of it to
Purchaser and shall be discharged of all further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked only by writing signed
by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith and in
the exercise of your own good judgment, and any act done or omitted by you pursuant to the advice
of your own attorneys shall be conclusive evidence to such good faith.
8. You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or Company, excepting only orders or process of courts of
law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree of any court, you
shall not be liable to any of the parties hereto or to any other person, firm or Company by reason
of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity, authorities or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for hereunder.
10. You shall not be liable for the outlawing of any rights under the statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited with you.
11. You shall be entitled to employ such legal counsel and other experts as you may deem
necessary or proper to advise you in connection with your obligations hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
counsel to the Company or if you shall resign by written notice to each party. In the event of any
such termination, the Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instructions in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.
14. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or rights of possession of the securities held by you hereunder, you are
authorized and directed to retain in your possession without liability to any one all or any part
of said securities until such dispute shall have been settled either by mutual written agreement of
the parties concerned or by a final order, decree, or judgment of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but you shall be under no
duty whatsoever to institute or defend any such proceedings.
15. Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (i) upon personal delivery, (ii) when sent by confirmed facsimile, if sent during
normal business hours of recipient, or if not, then on the next business day, or (iii) one (1) day
after deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent to the party
to be notified at the following address or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.
| Company: | Reply! Inc. | |||
| 00000 Xxxxxxx Xxxx, Xxxxx 000 | ||||
| Xxx Xxxxx, XX 00000 | ||||
| Purchaser: | «Name» | |||
| Address: | ||||
| Escrow Agent: | DLA Piper LLP (US) | |||
| 0000 Xxxxxxxxxx Xxxxxx | ||||
| Xxxx Xxxx Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxx |
16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors and permitted assigns.
| Very truly yours, REPLY! INC. |
||||
| By: | ||||
| Xxxxx Xxxxxx | ||||
| President & Chief Executive Officer | ||||
| PURCHASER | ||
| «Name» |
Accepted and agreed as of the date set forth above:
| DLA PIPER LLP (US) |
|||||
| By: | |||||
| Xxxxx X. Xxxxx, Partner | |||||
