F5 NETWORKS, INC.
EARLY EXERCISE STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made by and between F5 Networks, Inc. a Washington
corporation with principal offices located at 000 Xxxxx Xxxxxx Xxxx, Xxxxx
000, Xxxxxxx, XX 00000 ("Company"), and Xxxxxx Xxxxxxxxxxx, 0000 00xx Xxx.
XX, Xxxxxxx, XX 00000 ("Purchaser").
BACKGROUND
The Company has two plans, the Amended and Restated 1996 Stock Option Plan
("1996 Plan") and the 1998 Equity Incentive Plan ("1998 Plan") pursuant to which
the Company may grant options to purchase shares of the Company's common stock
("Common Stock"). Purchaser holds an option dated March 2, 1999 to purchase
50,000 shares of Common Stock of the Company pursuant to the 1996 Plan ("1996
Option") and an option to purchase 100,000 shares of Common Stock pursuant to
the 1998 Plan ("1998 Option"). Each of the 1996 and 1998 Options consist of a
Stock Option Grant Notice, a Stock Option Exercise Notice and a Stock Option
Agreement ("Option Documents"). Each of the 1996 and the 1998 Plans may be
referred to herein as the "Plan."
Purchaser wishes to exercise the 1996 Option and the 1998 Option on the
terms and conditions contained herein; to take advantage of the early exercise
provisions of the respective Stock Option Agreements and therefore to enter into
this Agreement.
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. INCORPORATION OF PLAN AND OPTION DOCUMENTS BY REFERENCE. For the
1996 Option, this Agreement is subject to all of the terms and conditions
contained in the 1996 Plan and the applicable Option Documents. For the 1998
Option, this Agreement is subject to all of the terms and conditions contained
in the 1998 Plan and the applicable Option Documents. If there is a conflict
between the terms of this Agreement and the applicable Option Documents and the
terms of the applicable Plan, the terms of the applicable Plan will control. If
there is a conflict between the terms of this Agreement and the terms of the
applicable Option Documents, the terms of the Option will control. Defined
terms not explicitly defined in this Agreement but defined in the applicable
Plan will have the same definitions as in that Plan. Defined terms not
explicitly defined in this Agreement or the applicable Plan but defined in the
Option will have the same definitions as in the Option.
2. PURCHASE AND SALE OF COMMON STOCK.
(a) AGREEMENT TO PURCHASE AND SELL COMMON STOCK. Purchaser hereby
agrees to purchase from the Company, and the Company hereby agrees to sell to
Purchaser, an aggregate of One Hundred Fifty Thousand (150,000) shares of Common
Stock at $5.00 per share, pursuant to the Exercise Notices executed by
Purchaser in the form included with the Option Documents, for an aggregate
purchase price of $750,000 payable by a Promissory Note in the form attached to
this Agreement as Exhibit A (the "Note"), and subject to a pledge in the form
attached to this Agreement as Exhibit B.
(b) CLOSING. The closing for this purchase, including payment for and
delivery of the Common Stock, will occur at the offices of the Company
immediately following the execution of this Agreement, or at such other time and
place as the parties may mutually agree.
Xxxxxxxxxxx
Early exercise
March 8, 1999
3. UNVESTED SHARE REPURCHASE OBLIGATION
(a) REPURCHASE OBLIGATION. In the event Purchaser's Continuous
Employment, as defined in the 1996 Plan, or Continuous Service, as defined in
the 1998 Plan, as applicable, terminates, then the Company will have an
obligation (the "Repurchase Obligation") to, within 30 days of such
termination, repurchase from Purchaser or Purchaser's personal representative,
as the case may be, those shares that Purchaser received pursuant to the
exercise of the Option that have not as yet vested as of such termination date
in accordance with the Vesting Schedule indicated on Purchaser's respective
Stock Option Grant Notices (the "Unvested Shares"). The Repurchase Obligation
does not apply to any shares that have vested, and the Company will have no
right to repurchase any such vested shares.
(b) SHARES REPURCHASABLE AT PURCHASER'S ORIGINAL EXERCISE PRICE.
The Company will repurchase all or any of the Unvested Shares at a price
("Option Price") equal to the Purchaser's Exercise Price for such shares as
indicated on Purchaser's Stock Option Grant Notices.
4. REPURCHASE. The Company will be entitled to pay for any shares of
Common Stock purchased pursuant to its Repurchase Obligation at the Company's
option in cash or by offset against any indebtedness owing to the Company by
Purchaser (including without limitation any Note given in payment for the Common
Stock), or by a combination of both. Upon payment of the purchase price in any
of the ways described above, the Company will become the legal and beneficial
owner of the Common Stock being repurchased, and will have the right to transfer
to its own name the Common Stock being repurchased, without further action by
Purchaser.
5. CAPITALIZATION ADJUSTMENTS TO COMMON STOCK. In the event of a
"Capitalization Adjustment" affecting the Company's outstanding Common Stock as
a class as designated in the Plan, then any and all new, substituted or
additional securities or other property to which Purchaser is entitled by reason
of Purchaser's ownership of Common Stock will be immediately subject to the
Repurchase Obligation and be included in the word "Common Stock" for all
purposes of the Repurchase Obligation with the same force and effect as the
shares of the Common Stock presently subject to the Repurchase Obligation, but
only to the extent the Common Stock is, at the time, covered by such Repurchase
Obligation. While the total Option Price will remain the same after each such
event, the Option Price per share of Common Stock upon repurchase pursuant to
the Repurchase Obligation will be appropriately adjusted.
6. CHANGE IN CONTROL. In the event of a "Change in Control" as
designated in the applicable Plan, then the Repurchase Obligation may be
assigned by the Company to the successor of the Company (or such successor's
parent company), if any, in connection with such Change in Control. To the
extent the Repurchase Obligation remains in effect following such Change in
Control, it will apply to the new capital stock or other property received in
exchange for the Common Stock in consummation of the Change in Control, but only
to the extent the Common Stock was at the time covered by such right.
Appropriate adjustments will be made to the price per share payable upon
repurchase pursuant to the Repurchase Obligation to reflect the Change in
Control upon the Company's capital structure; provided, however, that the
aggregate Option Price will remain the same.
7. DELIVERY OF STOCK ASSIGNMENTS AND CERTIFICATES. As security for
Purchaser's performance under the terms of this Agreement and to insure the
availability for delivery of Purchaser's Common Stock upon repurchase pursuant
to the Repurchase Obligation, Purchaser agrees, at the closing described in
Section 2(b) above, to deliver to the Company three (3) signed stock assignments
(with date and number of shares blank) in the form attached to this Agreement as
Exhibit C, together with a certificate or certificates evidencing all of the
Common Stock subject to the Repurchase Obligation; such documents are to be held
by the Company until the possibility of any Repurchase Obligation has lapsed,
provided however, that if Purchaser makes payments on the Promissory Note of
even date herewith in an amount equal to the Option Price for any number of
vested shares, the Company will provide Purchaser with certificates evidencing
any such shares at the time such payments are made.
8. RIGHTS OF PURCHASER. Subject to the provisions of the applicable
Option Documents, Purchaser will exercise all rights and privileges of a
shareholder of the Company with respect to the shares held by the Company.
Purchaser will be deemed to be the holder of the shares for purposes of
receiving any dividends that may be paid with respect to such shares and for
purposes of exercising any voting rights relating to such shares, even if some
or all of such shares have not yet vested and been released from the Company's
Repurchase Obligation.
9. LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser will not sell,
assign, hypothecate, donate, encumber or otherwise dispose of any interest in
the Common Stock while the Common Stock is subject to the Repurchase
Obligation except for transfers to a trust for the benefit of Purchaser's
minor children provided that the trust will be subject to the terms of this
Agreement. After any Common Stock has been released from the Repurchase
Obligation, Purchaser and such trust will not sell, assign, hypothecate,
donate, encumber or otherwise dispose of any interest in the Common Stock
except in compliance with the provisions of this Agreement and applicable
securities laws.
10. RESTRICTIVE LEGENDS. All certificates representing the Common Stock
will be endorsed with legends in substantially the following forms :
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
REPURCHASE OBLIGATION SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
REGISTERED HOLDER, OR SUCH HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY. ANY TRANSFER OR ATTEMPTED
TRANSFER OF ANY SHARES SUBJECT TO SUCH OBLIGATION IS VOID WITHOUT THE PRIOR
EXPRESS WRITTEN CONSENT OF THE COMPANY."
(b) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED. 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 AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
(c) Any legend required by appropriate blue sky officials.
11. INVESTMENT REPRESENTATIONS. In connection with the purchase of the
Common Stock, Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Common Stock.
Purchaser is acquiring the Common Stock for investment for Purchaser'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.
(b) Purchaser understands that the Common Stock has not been
registered under the Securities Act by reason of a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of
Purchaser's investment intent as expressed herein.
(c) Purchaser further acknowledges and understands that the Common
Stock must be held indefinitely unless the Common Stock is subsequently
registered under the Securities Act or an exemption from such registration is
available. Purchaser further acknowledges and understands that the Company is
under no obligation to register the Common Stock. Purchaser understands that
the certificate evidencing the Common Stock will be imprinted with a legend that
prohibits the transfer of the Common Stock unless the Common Stock is registered
or such registration is not required in the opinion of counsel for the Company.
(d) Purchaser is familiar with the provisions of Rules 144 and 701,
under the Securities Act, as in effect from time to time, which, in substance,
permit limited public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof (or from an affiliate of such issuer), 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 issuance of
the securities, such issuance 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, the
securities exempt under Rule 701 may be sold by Purchaser ninety (90) days
thereafter, subject to the satisfaction of certain of the conditions specified
by Rule 144 and the market stand-off provision described in Section 12 below. In
the event that the sale of the Common Stock does not qualify under Rule 701 at
the time of purchase, then the Common Stock may be resold by Purchaser in
certain limited circumstances subject to the provisions of Rule 144, which
requires, among other things: (i) the availability of certain public information
about the Company and (ii) the resale occurring following the required holding
period under Rule 144 after the Purchaser has purchased, and made full payment
of (within the meaning of Rule 144), the securities to be sold.
(e) Purchaser further understands that at the time Purchaser wishes
to sell the Common 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 current information requirements of Rule 144 or
701, and that, in such event, Purchaser would be precluded from selling the
Common Stock under Rule 144 or 701 even if the minimum holding period
requirement had been satisfied.
12. MARKET STAND-OFF AGREEMENT. By exercising the Option Purchaser agrees
that the Company (or a representative of the underwriters) may, in connection
with any underwritten registration of the offering of any securities of the
Company under the Securities Act, require that the Purchaser not sell, dispose
of, transfer, make any short sale of, grant any option for the purchase of, or
enter into any hedging or similar transaction with the same economic effect as a
sale, any shares of Common Stock or other securities of the Company held by
Purchaser, for a period of time specified by the underwriter(s) (not to exceed
one hundred eighty (180) days) following the effective date of the registration
statement of the Company filed under the Securities Act. Purchaser further
agrees to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) that are consistent with the
foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to Purchaser's Common Stock until the end of such
period.
13. SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of
the Code, taxes as ordinary income the difference between the amount paid for
the Common Stock and the fair market value of the Common Stock as of the date
any restrictions on the Common Stock lapse. In this context, "restriction"
includes the right of the Company to buy back the Common Stock pursuant to the
Repurchase Obligation set forth above. Purchaser understands that Purchaser may
elect to be taxed at the time the Common Stock is purchased, rather than when
and as the Repurchase Obligation expires, by filing an election under Section
83(b) (an "83(b) Election") of the Code with the Internal Revenue Service
within thirty (30) days from the date of purchase. Even if the fair market
value of the Common Stock at the time of the execution of this Agreement
equals the amount paid for the Common Stock, the 83(b) Election must be made
to avoid income under Section 83(a) in the future. Purchaser understands
that failure to file such an 83(b) Election in a timely manner may result in
adverse tax consequences for Purchaser. Purchaser further understands that
Purchaser must file an additional copy of such 83(b) Election with his or her
federal income tax return for the calendar year in which the date of this
Agreement falls. Purchaser acknowledges that the foregoing is only a summary
of the effect of United States federal income taxation with respect to
purchase of the Common Stock hereunder, and does not purport to be complete.
Purchaser further acknowledges that the Company has directed Purchaser to
seek independent advice regarding the applicable provisions of the Code, the
income tax laws of any municipality, state or foreign country in which
Purchaser may reside, and the tax consequences of Purchaser's death.
Purchaser assumes all responsibility for filing an 83(b) Election and paying
all taxes resulting from such election or the lapse of the restrictions on
the Common Stock.
14. REFUSAL TO TRANSFER. The Company will not be required (a) to transfer
on its books any shares of Common Stock of the Company which have been
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 will have been
so transferred.
15. NO EMPLOYMENT RIGHTS. This Agreement is not an employment contract
and nothing in this Agreement will affect in any manner whatsoever the right or
power of the Company (or a parent or subsidiary of the Company) to terminate
Purchaser's employment for any reason at any time, with or without cause and
with or without notice.
16. MISCELLANEOUS.
(a) NOTICES. Any notice required or permitted hereunder will be
given in writing and will be deemed effectively given upon personal delivery or
sent by telegram or fax or upon deposit in the United States Post Office, by
registered or certified mail with postage and fees prepaid, addressed to the
other party at such party's address as first written above, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other party.
(b) SUCCESSORS AND ASSIGNS. This Agreement will 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, Purchaser's successors,
and assigns. The Company may assign the Repurchase Obligation hereunder at any
time or from time to time, in whole or in part.
(c) ATTORNEYS' FEES; SPECIFIC PERFORMANCE. Purchaser will reimburse
the Company for all costs incurred by the Company in enforcing the performance
of, or protecting its rights under, any part of this Agreement, including
reasonable costs of investigation and attorneys' fees. It is the intention of
the parties that the Company, upon exercise of the Repurchase Obligation and
payment of the Option Price, pursuant to the terms of this Agreement, will be
entitled to receive the Common Stock, in specie, in order to have such Common
Stock available for future issuance without dilution of the holdings of other
shareholders. Furthermore, it is expressly agreed between the parties that
money damages are inadequate to compensate the Company for the Common Stock and
that the Company will, upon proper exercise of the Repurchase Obligation, be
entitled to specific enforcement of its rights to purchase and receive said
Common Stock.
(d) GOVERNING LAW; VENUE. This Agreement will be governed by and
construed in accordance with the laws of the State of Washington. The parties
agree that any action brought by either party to interpret or enforce any
provision of this Agreement will be brought in, and each party agrees to,
and does hereby, submit to the jurisdiction and venue of, the appropriate
state or federal court for the district encompassing the Company's principal
place of business.
(e) FURTHER EXECUTION. The parties agree to take all such further
action(s) as may reasonably be necessary to carry out and consummate this
Agreement as soon as practicable, and to take whatever steps may be necessary to
obtain any governmental approval in connection with or otherwise qualify the
issuance of the securities that are the subject of this Agreement.
(f) REVIEW BY COUNSEL. Purchaser has been provided with an
opportunity to consult with Purchaser's own counsel with respect to this
Agreement.
(g) ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes and merges all prior agreements or understandings, whether
written or oral. This Agreement may not be amended, modified or revoked, in
whole or in part, except by an agreement in writing signed by each of the
parties hereto.
(h) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision will be excluded from this Agreement, (ii) the balance of the
Agreement will be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement will be enforceable in accordance with its terms.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all of which together
will constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
March 10, 1999.
F5 NETWORKS, INC.
By /s/ Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxx
President and Chief Executive Officer
PURCHASER
/s/ Xxxxxx Xxxxxxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxxxxxx
EXHIBIT A
PROMISSORY NOTE
PROMISSORY NOTE
$750,000 Seattle, WA
March 10, 1999
FOR VALUE RECEIVED, the undersigned hereby unconditionally promises to pay
to the order of F5 Networks, Inc, a Washington corporation (the "Company"), at
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000, or at such other place as
the holder hereof may designate in writing, in lawful money of the United States
of America and in immediately available funds, the principal sum of Seven
Hundred Fifty Thousand Dollars ($750,000) together with interest accrued from
the date hereof on the unpaid principal at the rate of 4.83% per annum, or the
maximum rate permissible by law (which under the laws of the State of Washington
will be deemed to be the laws relating to permissible rates of interest on
commercial loans), whichever is less, as follows:
PRINCIPAL REPAYMENT. The outstanding principal amount hereunder will be
due and payable in full on March 9, 2003.
INTEREST PAYMENTS. Interest will be payable quarterly in arrears and
will be calculated on the basis of a 360-day year for the actual number of
days elapsed;
PROVIDED, HOWEVER, that in the event that the undersigned's employment by or
association with the Company or its Affiliate is terminated for any reason prior
to payment in full of this Note, this Note will be accelerated and all remaining
unpaid principal and interest will become due and payable within 30 days after
such termination.
If the undersigned fails to pay any of the principal and accrued interest
when due, the Company, at its sole option, will have the right to accelerate
this Note, in which event the entire principal balance and all accrued interest
will become immediately due and payable, and immediately collectible by the
Company pursuant to applicable law.
This Note may be prepaid at any time without penalty. All money paid
toward the satisfaction of this Note will be applied first to the payment of
interest as required hereunder and then to the retirement of the principal.
The full amount of this Note is secured by a pledge of shares of Common
Stock of the Company, and is subject to all of the terms and provisions of the
Early Exercise Stock Purchase Agreement and Stock Pledge Agreement of even date
herewith between the undersigned and the Company. The Company will have
recourse against such Common Stock for the entire principal amount of this
Note and against the undersigned for the first 20% of the principal amount
due and for all interest accrued under this Note. The Company will have no
recourse against the undersigned for the last 80% of the principal amount due
under this Note.
The undersigned hereby represents and agrees that the amounts due under
this Note are not consumer debt, and are not incurred primarily for personal,
family or household purposes, but are for business and commercial purposes
only.
-1-
The undersigned hereby waives presentment, protest and notice of protest,
demand for payment, notice of dishonor and all other notices or demands in
connection with the delivery, acceptance, performance, default or endorsement of
this Note.
The holder hereof will be entitled to recover, and the undersigned agrees
to pay when incurred, all costs and expenses of collection of this Note,
including without limitation, reasonable attorneys' fees.
This Note will be governed by, and construed, enforced and interpreted in
accordance with, the laws of the State of Washington, excluding conflict of laws
principles that would cause the application of laws of any other jurisdiction.
Signed /s/ Xxxxxx Xxxxxxxxxxx
--------------------------------
XXXXXX XXXXXXXXXXX
-2-
EXHIBIT B
PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Pledge Agreement") is made by Xxxxxx
Xxxxxxxxxxx, 0000 00xx Xxx XX, Xxxxxxx, XX 00000 ("Pledgor"), in favor of F5
Networks, Inc. a Washington corporation with its principal place of business at
000 Xxxxx Xxxxxx, Xxxx, Xxxxxxx, XX 00000 ("Pledgee").
WHEREAS, Pledgor has concurrently herewith executed that certain Promissory
Note (the "Note") in favor of Pledgee in the amount of Seven Hundred Fifty
Thousand Dollars ($750,000) in payment of the purchase price of One Hundred
Fifty Thousand (150,000) shares of the Common Stock of Pledgee; and
WHEREAS, Pledgee is willing to accept the Note from Pledgor, but only upon
the condition, among others, that Pledgor will have executed and delivered to
Pledgee this Pledge Agreement and the Collateral (as defined below):
NOW, THEREFORE, in consideration of the foregoing recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, Pledgor hereby agrees as
follows:
1. As security for the full, prompt and complete payment and
performance when due (whether by stated maturity, by acceleration or
otherwise) of all indebtedness of Pledgor to Pledgee created under the Note
(all such indebtedness being the "Liabilities"), together with, without
limitation, the prompt payment of all expenses, including, without
limitation, reasonable attorneys' fees and legal expenses, incidental to the
collection of the Liabilities and the enforcement or protection of Pledgee's
lien in and to the collateral pledged hereunder, Pledgor hereby pledges to
Pledgee, and grants to Pledgee, a first priority security interest in the
following collateral ("Pledged Collateral"): One Hundred Fifty Thousand
(150,000) shares of Common Stock of Pledgee represented by Certificate number
_______________ (the "Pledged Shares"), and all dividends, cash, instruments,
and other property or proceeds from time to time received, receivable, or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Shares;
The term "indebtedness" is used herein in its most comprehensive
sense and includes any and all advances, debts, obligations and Liabilities
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether recovery upon such
indebtedness may be or hereafter becomes unenforceable.
2. At any time, without notice, and at the expense of Pledgor, Pledgee
in its name or in the name of its nominee or of Pledgor may, but will not be
obligated to: (1) collect by legal proceedings or otherwise all dividends
(except cash dividends other than liquidating dividends), interest, principal
payments and other sums now or hereafter payable upon or on account of said
Pledged Collateral; (2) enter into any extension, reorganization, deposit,
merger or consolidation agreement, or any agreement in any wise relating to
or affecting the Pledged Collateral, and in connection therewith may deposit
or surrender control of such Pledged Collateral thereunder, accept other
property in exchange for such Pledged Collateral and do and perform such acts
and things as it may deem proper, and any money or property received in
exchange for such Pledged Collateral will be applied to the indebtedness or
thereafter held by it pursuant to the provisions hereof; (3) insure, process
and preserve the Pledged Collateral;
(4) cause the Pledged Collateral to be transferred to its name or to the name
of its nominee; (5) exercise as to such Pledged Collateral all the rights,
powers and remedies of an owner, except that so long as no default exists
under the Note or hereunder Pledgor will retain all voting rights as to the
Pledged Shares.
3. Pledgor agrees to pay prior to delinquency all taxes, charges, liens
and assessments against the Pledged Collateral, and upon the failure of
Pledgor to do so, Pledgee at its option may pay any of them and will be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same.
4. At the option of Pledgee and without necessity of demand or notice,
all or any part of the indebtedness of Pledgor will immediately become due and
payable irrespective of any agreed maturity, upon the happening of any of the
following events: (1) failure to keep or perform any of the terms or provisions
of this Pledge Agreement; (2) failure to pay any installment of principal or
interest on the Note when due; (3) the levy of any attachment, execution or
other process against the Pledged Collateral; or (4) the insolvency, commission
of an act of bankruptcy, general assignment for the benefit of creditors, filing
of any petition in bankruptcy or for relief under the provisions of Title 11 of
the United States Code of, by, or against Pledgor.
5. In the event of the nonpayment of any indebtedness when due, whether
by acceleration or otherwise, or upon the happening of any of the events
specified in the last preceding section, Pledgee may then, or at any time
thereafter, at its election, apply, set off, collect or sell in one or more
sales, or take such steps as may be necessary to liquidate and reduce to cash in
the hands of Pledgee in whole or in part, with or without any previous demands
or demand of performance or notice or advertisement, the whole or any part of
the Pledged Collateral in such order as Pledgee may elect, and any such sale may
be made either at public or private sale at its place of business or elsewhere,
or at any broker's board or securities exchange, either for cash or upon credit
or for future delivery; provided, however, that if such disposition is at
private sale, then the purchase price of the Pledged Collateral will be equal to
the public market price then in effect, or, if at the time of sale no public
market for the Pledged Collateral exists, then, in recognition of the fact that
the sale of the Pledged Collateral would have to be registered under the
Securities Act of 1933 and that the expenses of such registration are
commercially unreasonable for the type and amount of collateral pledged
hereunder, Pledgee and Pledgor hereby agree that such private sale will be at a
purchase price mutually agreed to by Pledgee and Pledgor or, if the parties
cannot agree upon a purchase price, then at a purchase price established by a
majority of three independent appraisers knowledgeable of the value of such
collateral, one named by Pledgor within ten (10) days after written request by
the Pledgee to do so, one named by Pledgee within such 10-day period, and the
third named by the two appraisers so selected, with the appraisal to be rendered
by such body within thirty (30) days of the appointment of the third appraiser.
The cost of such appraisal, including all appraiser's fees, will be charged
against the proceeds of sale as an expense of such sale. Pledgee may be the
purchaser of any or all Pledged Collateral so sold and hold the same thereafter
in its own right free from any claim of Pledgor or right of redemption. Demands
of performance, notices of sale, advertisements and presence of property at sale
are hereby waived, and Pledgee is hereby authorized to sell hereunder any
evidence of debt pledged to it. Any officer or agent of Pledgee may conduct any
sale hereunder.
6. The proceeds of the sale of any of the Pledged Collateral and all sums
received or collected by Pledgee from or on account of such Pledged Collateral
will be applied by Pledgee to the payment of expenses incurred or paid by
Pledgee in connection with any sale, transfer or delivery of the Pledged
Collateral, to the payment of any other costs, charges, attorneys' fees or
expenses mentioned herein, and to the payment of the indebtedness or any part
hereof, all in such order and manner as Pledgee in its discretion may
determine. Pledgee will then pay any balance to Pledgor.
7. Upon the transfer of all or any part of the indebtedness Pledgee may
transfer all or any part of the Pledged Collateral and will be fully discharged
thereafter from all liability and responsibility with respect to such Pledged
Collateral so transferred, and the transferee will be vested with all the rights
and powers of Pledgee hereunder with respect to such Pledged Collateral so
transferred; but with respect to any Pledged Collateral not so transferred
Pledgee will retain all rights and powers hereby given.
8. Until all indebtedness will have been paid in full the power of sale
and all other rights, powers and remedies granted to Pledgee hereunder will
continue to exist and may be exercised by Pledgee at any time and from time to
time irrespective of the fact that the indebtedness or any part thereof may have
become barred by any statute of limitations, or that the personal liability of
Pledgor may have ceased.
9. Pledgee agrees that so long as no default exists under the Note or
hereunder, the Pledged Shares will, upon the request of Pledgor, be released
from pledge as the indebtedness is paid. Such releases will be at the rate of
one share for each Five Dollars ($5.00) of principal amount of indebtedness
paid.
10. Pledgee may at any time deliver the Pledged Collateral or any part
thereof to Pledgor and the receipt of Pledgor will be a complete and full
acquittance for the Pledged Collateral so delivered, and Pledgee will thereafter
be discharged from any liability or responsibility therefor.
11. The rights, powers and remedies given to Pledgee by this Pledge
Agreement will be in addition to all rights, powers and remedies given to
Pledgee by virtue of any statute or rule of law. Any forbearance or failure or
delay by Pledgee in exercising any right, power or remedy hereunder will not be
deemed to be a waiver of such right, power or remedy, and any single or partial
exercise of any right, power or remedy hereunder will not preclude the further
exercise thereof; and every right, power and remedy of Pledgee will continue in
full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by Pledgee.
12. If any provision of this Pledge Agreement is held to be unenforceable
for any reason, it will be adjusted, if possible, rather than voided in order to
achieve the intent of the parties to the extent possible. In any event, all
other provisions of this Pledge Agreement will be deemed valid and enforceable
to the full extent possible.
13. This Pledge Agreement will be governed by, and construed in accordance
with, the laws of the State of Washington as applied to contracts made and
performed entirely within the State of Washington by residents of such State.
Dated: March 10, 1999 PLEDGOR
/s/ Xxxxxx Xxxxxxxxxxx
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Xxxxxx Xxxxxxxxxxx
EXHIBIT C
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, Xxxxxx Xxxxxxxxxxx hereby sells, assigns and transfers
unto F5 Networks, Inc., a Washington corporation (the "Company"), pursuant to
the Repurchase Obligation under that certain Early Exercise Stock Purchase
Agreement, dated March 10, 1999 by and between the undersigned and the Company
(the "Agreement"), _______________ (_______________) shares of Common Stock of
the Company standing in the undersigned's name on the books of the Company
represented by Certificate No(s). _______________ and does hereby irrevocably
constitute and appoint the Company's Secretary attorney to transfer such Common
Stock on the books of the Company with full power of substitution in the
premises. This Assignment may be used only in accordance with and subject to
the terms and conditions of the Agreement, in connection with the repurchase of
shares of Common Stock issued to the undersigned pursuant to the Agreement, and
only to the extent that such shares remain subject to the Company's Repurchase
Obligation under the Agreement.
Dated: _______________
/s/ Xxxxxx Xxxxxxxxxxx
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Xxxxxx Xxxxxxxxxxx
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