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EXHIBIT 10.3
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN
EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,
OR SUCH EXEMPTION BEING AVAILABLE.
STOCK PURCHASE AND RESTRICTION AGREEMENT
This Stock Purchase and Restriction Agreement (the "Agreement") is
made and entered into as of the eighteenth day of September, 1996 (the
"Effective Date",) by and between Internet Access Financial Corporation, a
California corporation (the "Company") and Xxxxxxx Xxxxxxxx ("Employee").
THE PARTIES agree as follows:
1. Purchase of Stock.
a. Contemporaneously herewith, the Company agrees to issue and sell
to Employee, and Employee hereby agrees to purchase one hundred and five
thousand (105,000) shares (the "Shares") of the Company's authorized but
unissued common stock for a cash purchase price of $.02 per Share.
b. Such sale by the Company is being made in reliance upon the
following representations and warranties of Employee, which by Employee's
execution hereof Employee hereby confirms:
i. The Shares are being acquired by Employee for investment for
Employee's own account (not as a nominee or agent) and not with a view to the
sale or distribution of any part thereof, and Employee has no present intention
of selling or engaging in any public distribution of the same
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except pursuant to a registration or exemption therefrom under applicable
federal and state securities laws.
ii. Employee has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
Employee's investment in the Shares.
iii. Employee understands that the Shares have not been and are
not, in the foreseeable future, likely to be registered under the Securities Act
of 1933, as amended (the "Securities Act"), or qualified under applicable state
securities laws on the ground that the issuance of Shares will be exempt from
the registration and qualification requirements thereof.
iv. Employee has the ability to bear the economic risks of
Employee's investment in the Shares. Employee is able, without materially
impairing Employee's financial condition, to hold Employee's investment in the
Company for an indefinite period of time and to suffer a complete loss on
Employee's investment. Employee understands and has fully considered for
purposes of Employee's investment the risks of Employee's investment and
understands that (1) an investment in the Company is suitable only for an
investor who is able to bear the economic consequences of losing Employee's
entire investment, (2) the Company has no financial or operating history, (3) an
investment in the Company represents an extremely speculative investment which
involves a high degree of risk of loss, (4) there are substantial restrictions
on the transferability of, and there will be no public market for, the Company's
securities, (5) there have been no representations as to the possible future
value, if any, of the Company's securities, and (6) Employee has received all
the information Employee has requested from the Company and considers necessary
or appropriate for deciding whether to purchase Company securities.
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v. Employee understands that the Shares Employee is receiving
will be "restricted securities" under the federal securities laws inasmuch as
they are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may
be resold without registration under the Securities Act only in certain limited
circumstances. Employee is familiar with Rule 144, as amended, promulgated under
the Securities Act and understands the resale limitations imposed thereby and by
the Securities Act. Employee acknowledges that the certificate or certificates
for the Shares will have a restrictive legend fixed upon it or them which
expresses the limitations set forth herein.
vi. Employee's principal place of business and residency is in
California.
vii. Employee understands that the Company is entering into this
Agreement, and is willing to issue the Shares, only in reliance upon the
foregoing representations and warranties for the benefit of the Company, its
successors and assigns.
2. Vested and Unvested Shares. The parties agree that the Shares shall be
deemed "Vested" and "Unvested" as follows:
a. Ten percent (10%) of the Shares shall be deemed "Vested" as of
the Effective Date.
b. Ninety percent (90%) of the Shares shall be deemed "Unvested" as
of the Effective Date. The Unvested Shares shall vest biannually over a four
year period, based on biannual anniversaries from the Effective Date. Eleven and
one quarter per cent (11.25%) of the Shares shall Vest on each such biannual
anniversary following the Effective Date until all of the shares of Shares have
become Vested, except as otherwise provided herein.
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3. Continued Retention by Company as Condition to Further Vesting.
Notwithstanding Section 2, no Shares will Vest as of a date set for further
Vesting pursuant to Section 2 unless Employee shall have been continuously
retained by the Company (and/or its affiliates) as an employee from the
Effective Date through and including such Vesting date.
3a. Acceleration. Fifty per cent (50%) of Employee's Unvested Shares shall
immediately become Vested, in the event that Employee's employment with the
Company is terminated without Cause as herein defined. The term "Cause," solely
as used for the purposes of this Agreement, means the commission of a criminal
act related and detrimental to the Company; actions by Employee in bad faith and
to the detriment of the Company; failure of the Employee to perform competently
Employee's duties in connection with Employee's employment by the Company (or
its affiliates) following written notice and twenty (20) business days to cure
such failure; or the Employee remaining in breach of a material provision of
this or any other agreement with or obligation to the Company ten (10) business
days after receiving detailed written notice of such breach from the Company.
4. Company Right to Repurchase. At such time as Employee becomes
unemployed by the Company or any of its affiliates for any reason whatsoever
(whether due to death, Total Disability, voluntary resignation, involuntary
termination or any other reason) , the Company will have an assignable right,
but not an obligation, to repurchase any Unvested Shares owned by Employee at
the time of termination for a price equal to two cents ($.02) per share, subject
to appropriate adjustment for stock splits and combinations.
5. Right of First Refusal. In addition to any other limitation on transfer
created by applicable securities laws, while Employee holds any Shares, Employee
will not assign, encumber or dispose of any interest in the Shares except as
provided below:
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a. If Employee intends (or is required by operation of law or other
involuntary transfer) to sell or transfer in any manner any Shares, whether
Vested or Unvested, Employee first will offer to sell the same number (but not
less) of such Shares to the Company at the same price, and upon the same terms
(or terms as similar as reasonably possible) as Employee is proposing to
dispose, or is to dispose, of said Shares; provided, however, that if such
transfer does not establish a price, then the price will be fair market value as
determined by the Board of Directors of the Company. The Company (or its
assignee) may elect to purchase all (but not less than all) of such Shares upon
such terms within a period of thirty (30) days following receipt by the Company
of written notice from Employee of the terms and conditions of said proposed
sale or transfer. In the event the Shares are not disposed of by Employee upon
terms not substantially the same as offered to the Company within sixty (60)
days following expiration of the thirty (30) day period of the Company's right
of first refusal, such Shares will once again be subject to the right of first
refusal as herein provided.
b. In the event of a transfer by operation of law or other
involuntary transfer, the person acquiring such Shares will promptly notify the
Secretary of the Company of such transfer and the Company's right of first
refusal will commence upon receipt by the Company of written notice by the
person acquiring such Shares. The Company's right of first refusal, in such
circumstances, shall be at a price per share determined, in the reasonable
judgment of the Board of Directors of the Company, to be the fair market value
of such shares.
c. The rights of first refusal contained in this Paragraph 5 will
terminate upon the effectiveness of a registration statement covering Company
equity securities as filed with the Securities and Exchange Commission under the
Securities Act (a "Public Offering").
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6. Escrow. Unless and until a Public Offering, the Shares shall be held by
the Secretary of the Company as escrow agent (the "Escrow Agent"). The
certificate or certificates representing such Shares, along with executed stock
powers therefor shall be delivered to the Escrow Agent by Employee.
7. Miscellaneous. This Agreement will be governed by and construed under
the substantive laws of the State of California. This Agreement may be amended
only in writing. The waiver by a party of a breach hereof will not operate or be
construed as a waiver of any subsequent breach. This Agreement will inure to the
benefit of the successors and assigns of the parties hereof. This Agreement may
be entered into in counterparts.
IN WITNESS WHEREOF, the parties have entered into this Agreement.
/s/ XXXXXXX XXXXXXXX /s/ XXXXXX X. XXXX
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XXXXXXX COLTREL INTERNET ACCESS FINANCIAL
CORPORATION
By: XXXXXX X. XXXX
Its: Chief Executive Officer
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ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY IN GROSS INCOME IN YEAR OF
TRANSFER UNDER CODE SECTION 83(b)
The undersigned hereby elects pursuant to Section 83(b) of the Internal
Revenue Code with respect to the property described below and supplies the
following information in accordance with the regulations promulgated thereunder.
1. THE NAME, ADDRESS, AND SOCIAL SECURITY NUMBER OF THE UNDERSIGNED ARE:
Xxxxxxx Xxxxxxxx
____________________________
____________________________
Social Security Number:___________________
2. DESCRIPTION OF PROPERTY WITH RESPECT TO WHICH THE ELECTION IS BEING MADE:
105,000 shares of common stock in Internet Access Financial Corporation,
a California corporation.
3. THE DATE ON WHICH THE PROPERTY WAS TRANSFERRED WAS ____________ 1996.
The taxable year to which this election relates is calendar year 1996.
4. THE NATURE OF THE RESTRICTIONS TO WHICH THE PROPERTY IS SUBJECT IS:
The property is subject to certain restrictions set forth in a Stock
Purchase and Restriction Agreement by and between the electing taxpayer and
Internet Access Financial Corporation (the "Agreement"). Briefly, the Agreement
provides substantial restrictions on the transferability of the property and a
period over which the taxpayer's rights in the property vest. Ninety percent
(90%) of the property will be deemed "unvested" on the date the property is
transferred to the undersigned and is subject to substantial risk of forfeiture.
5. FAIR MARKET VALUE:
The fair market value at the time of transfer (determined without regard
to any restrictions, other than those which by their terms will never lapse) of
the property with respect to which this election is made is two cents ($0.02)
per share.
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6. AMOUNT PAID FOR THE PROPERTY:
The undersigned paid $2,100 for the property.
7. FURNISHING STATEMENT TO EMPLOYER:
A copy of this statement has been furnished to Internet Access Financial
Corporation.
Dated: October __, 1996
______________________________________
Xxxxxxx Xxxxxxxx
