ATWOOD MINERALS & MINING CORP. RESTRICTED STOCK AGREEMENT
XXXXXX
MINERALS & MINING CORP.
THIS
RESTRICTED STOCK AGREEMENT (the “Agreement”) is
entered into as of April __, 2010 (the “Effective Date”), by
and between Xxxxxx Minerals & Mining Corp., a Nevada corporation (the “Company”) and GJD
Holdings, LLC, a Delaware limited liability company (the “Stockholder”).
ARTICLE
1
ACQUISITION
OF SHARES
Pursuant
to the terms and conditions of that certain Securities Purchase Agreement, dated
as of the date hereof (the “UDM Purchase
Agreement”), the Stockholder has agreed to exchange Four Thousand
Thirty-Eight (4,038) limited liability company units in Universal Database of
Music USA, LLC, a Nevada limited liability company (“UDM”) for Three
Million Two Hundred Thirty Thousand Four Hundred (3,230,400) shares of common
stock in the Company (the “UDM
Shares”). Additionally, pursuant to the terms and conditions
of that certain Securities Purchase Agreement, dated as of the date hereof, (the
“Phreadz Purchase
Agreement” and together with the UDM Purchase Agreement, the “Purchase
Agreements”), the Stockholder has agreed to exchange Four Thousand
Thirty-Eight (4,038) limited liability company units in Phreadz USA, LLC, a
Nevada limited liability company (“Phreadz”) for Three
Million Two Hundred Thirty Thousand Four Hundred (3,230,400) shares of common
stock in the Company (the “Phreadz Shares” and
together with the UDM Shares, the “Shares”). The
issuance of the Shares to Stockholder is subject to the Stockholder executing
and delivering this Agreement.
ARTICLE
2
TRANSFERS;
RIGHT OF REPURCHASE
2.1. Transfer
Restrictions. In addition to (and without limitation to) any
transfer or other restrictions applicable to the Shares pursuant to the Purchase
Agreements or otherwise, Stockholder shall not, directly or indirectly, sell,
convey, exchange, assign, pledge, encumber, gift, bequest, hypothecate or
otherwise transfer or dispose of all or any portion of the Shares (including,
but not limited to, any assignment of any beneficial, economic or other rights
with respect thereto) (“Transfer”) without
complying with the terms and conditions of this Agreement applicable
thereto. In addition, Stockholder agrees not to Transfer all or any
portion of any Shares while such Shares are considered to be Restricted Shares
(as defined below).
2.2. Scope of Repurchase
Right. All Shares shall initially be Restricted Shares (as
defined below) and shall be initially subject to a right (but not an obligation)
of repurchase in favor of the Company (the “Right of Repurchase”)
pursuant to the terms and conditions of this Agreement. Except as
otherwise set forth herein, the Stockholder shall not, directly or indirectly,
via a sale or other Transfer of the Shares, any interest therein or otherwise,
transfer, assign, encumber or otherwise dispose of any Shares during any period
in which they are considered Restricted Shares and shall not transfer,
assign, encumber or otherwise dispose of any Shares which are no longer
considered Restricted Shares without complying with the terms and conditions of
Article 3 hereof. For purposes of this Agreement, the term “Restricted Shares”
shall refer to Shares that are subject to the Right of Repurchase.
2.3. Condition Precedent to
Exercise of Right of Repurchase. This Agreement is being
entered into in connection with the employment by the Company of Xxxxxxx Xxxx
(“Xxxx”), the
sole member of stockholder, as the Chairman of the Board of Directors and Chief
Executive Officer. The terms of Daou’s employment with the Company
are set forth in that certain Employment Agreement, dated as of even date
hereof, by and between Daou and the Company (as the same may be amended from
time to time, the “Daou Employment
Agreement”). In connection therewith, the Right of Repurchase
may be exercised with respect to the Restricted Shares following either (a) a
termination by Daou of the Daou Employment Agreement; or (b) a termination of
the Daou Employment Agreement for Cause (as such term is defined in the Daou
Employment Agreement) (the “Termination
Event”). Following the occurrence of the Termination Event,
the Company may exercise the Right of Repurchase with respect to any or all of
the Shares that are Restricted Shares at the time of such Termination Event for
a period of ninety (90) days after the date of such Termination Event (the
“Repurchase
Period”).
2.4. Release of Restricted Shares
from the Right of Repurchase. The Right of Repurchase will
lapse as to the Restricted Shares (in which case such Restricted Shares shall
cease to be considered Restricted Shares) in accordance with the vesting
schedule set forth on Exhibit
A, attached hereto, in each case provided there is no intervening
Termination Event.
Except as
otherwise set forth in this Agreement, the Company’s Right of Repurchase shall
lapse and any remaining Restricted Shares shall immediately be released from the
Right of Repurchase, upon the occurrence of a Change of Control transaction (as
defined below), provided that no Termination Event has occurred prior to the
consummation of the Change in Control. For purposes of this
Agreement, “Change of
Control” shall mean, after the date hereof, (i) the consummation of a
merger or consolidation of the Company with or into another entity or any other
corporate reorganization, if persons who were not stockholders of the Company
immediately prior to such merger, consolidation or other reorganization own,
immediately after such merger, consolidation or other reorganization, fifty
percent (50%) or more of the voting power of the outstanding securities of each
of (A) the continuing or surviving entity and (B) any direct or indirect parent
corporation of such continuing or surviving entity; (ii) a stockholder approved
sale, transfer or other disposition of all or substantially all of the assets of
the Company; or (iii) a transaction where the holders of fifty percent (50%) or
more of the capital stock of the Company, on a fully-diluted basis, sell,
transfer or otherwise dispose of the shares of the capital stock of the Company
held by them, in both form and substance, to a third party.
2.5. Exercise of Repurchase
Right. The Right of Repurchase shall be exercisable only by
written notice delivered to the Stockholder prior to the expiration of the
Repurchase Period specified in Subsection 2.3 above (the “Repurchase
Notice”). The Repurchase Notice shall set forth the date on
which the repurchase is to be effected (the “Closing
Date”). The Closing Date shall not be more than thirty (30)
calendar days after the date of the Repurchase Notice. The Company
shall pay to the Stockholder on the Closing Date the purchase price determined
according to Subsection 2.6 below by delivering a cashiers check in the amount
thereof. The Right of Repurchase shall terminate with respect to any
Shares for which it has not been timely exercised pursuant to this Subsection
2.5.
2.6. Repurchase
Price. If the Company exercises the Right of Repurchase with
respect to any of the Restricted Shares, it shall pay the Stockholder an amount
equal to $0.001 per Restricted Share repurchased by the Company.
2.7. Termination for
Cause. Notwithstanding anything contained in this Agreement to
the contrary, following any Termination Event which occurs following an act or
omission by Daou which constitutes Cause, all of the Shares which are then
Restricted Shares, shall, on and as of the date of such Termination Event,
immediately, and without the need for any further action of any of the parties
hereto, be forfeited to the Company and such Shares which are forfeited shall be
of no further force or effect and Stockholder shall no longer have any rights,
privileges or preferences (economic or otherwise) with respect to such forfeited
Shares.
2
2.8. Adjustment of Shares or
Substituted Securities. In the event of the declaration of
stock dividend, the declaration of an extraordinary dividend payable in a form
other than stock, a spin-off, a stock split, an adjustment in conversion ratio,
a recapitalization or a similar transaction affecting the Company’s outstanding
securities without receipt of consideration, any new, substituted or additional
securities or other property (including money paid other than as an ordinary
cash dividend) that by reason of such transaction are distributed with respect
to any Shares or into which such Shares thereby become convertible shall
immediately be subject to the Right of Repurchase. Appropriate
adjustments to reflect the distribution of such securities or property shall be
made to the number and/or class of the Shares. After each such
transaction, appropriate adjustments shall also be made to the price per share
to be paid upon the exercise of the Right of Repurchase in order to reflect any
change in the Company’s outstanding securities effected without receipt of
consideration therefor; provided, however, that the aggregate purchase price
payable for the Shares shall remain the same.
2.9. Termination of Rights as
Stockholder. If the Company makes available, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Restricted Shares to be repurchased in accordance with this Section 2,
then after such time the person or entity from whom such Restricted Shares are
to be repurchased shall no longer have any rights as a holder of such shares
(other than the right to receive payment of such consideration in accordance
with this Agreement). Such Restricted Shares shall be deemed to have
been repurchased in accordance with the applicable provisions
hereof.
ARTICLE
3
STOCKHOLDER
REPRESENTATIONS AND RESTRICTIONS ON TRANSFER
3.1. Stockholder
Representations. In connection with the issuance and purchase
of the Shares under this Agreement, the Stockholder hereby represents and
warrants to the Company as follows:
(a) The
Stockholder is acquiring and will hold the Shares for investment for the
Stockholder’s account only and not with a view to, or for resale in connection
with, any “distribution” thereof with the meaning of the Securities Act of 1933,
as amended (the “Securities
Act”).
(b) The
Stockholder has been furnished with, and has had access to, such information as
the Stockholder considers necessary or appropriate for deciding whether to
invest in the Shares, and the Stockholder has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the issuance of the Shares.
(c) The
Stockholder is aware that the Stockholder’s investment in the Company is a
speculative investment that has limited liquidity and is subject to the risk of
complete loss. The Stockholder is able, without impairing the
Stockholder’s financial condition, to hold the Shares for an indefinite period
and to suffer a complete loss of an investment in the Shares.
(d) The
Stockholder is an “accredited investor” within the meaning of Regulation D
promulgated under the Securities Act.
3.2. Securities Law
Restrictions. Regardless of whether the offering and sale of
Shares under this Agreement have been registered under the Securities Act or
have been registered or qualified under the securities laws of any state, the
Company at its discretion may impose restrictions upon the sale, pledge or other
transfer of the Shares (including the placement of appropriate legends on stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law.
3
3.3. Rights of the
Company. The Company shall not be required to (i) transfer on
its books any Shares that have been sold or transferred in contravention of this
Agreement or (ii) treat as the owner of Shares, or otherwise to accord voting,
dividend or liquidation rights to, any transferee to whom Shares have been
transferred in contravention of this Agreement.
ARTICLE
4
ESCROW
OF COMMON STOCK
4.1. Escrow of Restricted
Shares. As
security for Stockholder’s faithful performance of the terms of this Agreement
and to insure the availability for delivery of Stockholder’s Restricted Shares
upon exercise of the Right of Repurchase herein provided for, Stockholder agrees
to deliver to and deposit with the Secretary of the Company or the Secretary’s
designee (“Escrow
Agent”), as Escrow Agent in this transaction, one (1) stock assignment in
the form attached hereto as Exhibit B duly endorsed (with
date and number of shares blank), together with a certificate or certificates
evidencing all of the Restricted Shares.
4.2. Shares Released from the
Right of Repurchase. At such time as (a) all Shares are
released from the Right of Repurchase, or (b) the Company fails to timely
exercise its Right of Repurchase with respect to any of the Shares, a
certificate in an amount of the Shares released shall be issued and delivered by
the Company to Stockholder within fifteen (15) days after the release of such
Shares. Notwithstanding the foregoing, in the event the Company
elects to exercise its Right of Repurchase with respect to any of the Shares, a
certificate in an amount of those Shares not repurchased by the Company in
connection with the exercise of the Right of Repurchase shall be issued and
delivered by the Company to Stockholder within fifteen (15) days after such
exercise of the Right of Repurchase.
ARTICLE
5
LEGENDS
5.1. Legends. All
certificates evidencing Shares shall bear legends including, without limitation,
the following:
“THE
SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A RESTRICTED
STOCK AGREEMENT, DATED AS OF APRIL __, 2010 AMONG XXXXXX MINERALS & MINING
CORP. AND XXXXXX XXXXXXXXX,. COPIES OF SUCH AGREEMENTS MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF SUCH CORPORATION.”
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”
4
If
required by the authorities of any state in connection with the issuance of the
Shares, the legend or legends required by such state authorities shall also be
endorsed on all such certificates.
ARTICLE
6
MISCELLANEOUS
6.1. Notices. Any
notice required by the terms of this Agreement shall be given in writing and
shall be deemed effective upon personal delivery or upon deposit with the United
States Postal Service, by registered or certified mail, with postage and fees
prepaid. Notice shall be addressed to the Company at its principal
executive office and to the Stockholder at the address that it most recently
provided to the Company.
6.2. Not an Employment
Contract. This Agreement shall not be deemed to be an
agreement to employ Daou for a specific term or to limit in any way the right of
the Company to terminate Daou’s employment pursuant to the terms of the
Employment Agreement.
6.3. Entire
Agreement. This Agreement and the Purchase Agreements
constitute the entire contract between the parties hereto with regard to the
subject matter hereof. It supersedes any other agreements,
representations or understandings (whether oral or written and whether express
or implied) relating to the subject matter hereof.
6.4. Choice of
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and to be performed entirely within such State. Except
for actions seeking injunctive relief (which may be brought in any appropriate
jurisdiction) suit under this Agreement shall only be brought in a court of
competent jurisdiction in the County of San Diego, State of
California. This choice of venue is intended by the parties to be
mandatory and not permissive in nature, and to preclude the possibility of
litigation between the parties with respect to, or arising out of, this
Agreement in any jurisdiction other than that specified in this
Section. Each party waives any right it may have to assert the
doctrine of forum non conveniens or similar doctrine or to object to venue with
respect to any proceeding brought in accordance with this Section.
6.5. Successors and
Assigns. Except as otherwise expressly provided to the
contrary, the provisions of this Agreement shall inure to the benefit of, and be
binding upon, the Company and its successors and assigns and be binding upon the
Stockholder and the Stockholder’s legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person has become a party to this Agreement or has agreed in writing to
join herein and to be bound by the terms, conditions and restrictions
hereof. This Agreement may be assigned by the Company.
6.6. Attorneys’ Fees. In
any dispute arising out of or related to the subject matter of this Agreement,
whether or not resulting in litigation, the prevailing party shall be entitled
to recover from the other party all reasonable costs, including, without
limitation, reasonable attorneys’ fees.
6.7. Further
Assurances. The Stockholder and the Company agree upon request
to execute any further documents or instruments necessary or desirable to carry
out the purposes or intent of this Agreement.
5
6.8. Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together shall constitute one
instrument. This Agreement may be executed via facsimile or pdf with
the same validity as if it were an ink-signed document.
[Remainder
of page intentionally left blank]
6
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date and year
first indicated above.
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“Company
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XXXXXX MINERALS & MINING CORP., | ||
| a Nevada corporation | |||
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By:
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Name:
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Its:
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“Stockholder”
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GJD HOLDINGS LLC | ||
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By:
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Xxxxxxx
X. Xxxx, Manager
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[Signature
page to Restricted Stock Agreement]
7
EXHIBIT
A
VESTING
SCHEDULE
|
Restricted Units to be Released
from
Right of Repurchase
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Release Date
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3,230,400
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October
[__], 2010
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3,230,400
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April
[__], 2011
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Exhibit A
- Page 1
EXHIBIT
B
STOCK
POWER AND ASSIGNMENT
SEPARATE
FROM CERTIFICATE
FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto Xxxxxx Minerals &
Mining Corp. (the “Company”) Six Million
Four Hundred Sixty Thousand Eight Hundred (6,460,800) shares of the Common Stock
of the Company, standing in the undersigned's name on the books of the Company
represented by Certificate No. delivered herewith, and does hereby
irrevocably constitute and appoint the Secretary of the Company as the
undersigned's attorney-in-fact, with full power of substitution, to transfer
said stock on the books of the Company.
Dated:
April __, 2010
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GJD
HOLDINGS, LLC
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Xxxxxxx
X. Xxxx, Manager
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Exhibit B
- Page 1
