Execution Copy
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RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT (this "Agreement")
has been executed and delivered effective as of December 4, 1998, by and between
Accom, Inc., a Delaware corporation (the "Company"), and Xxxxxxx Xxxxxxx, an
individual residing in California (the "Purchaser"), for the purpose of sale by
the Company to the Purchaser of 750,000 shares (the "Shares") of the Company's
Common Stock (the "Common Stock") on the terms and conditions in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements of the
Company and the Purchaser, and intending to be legally bound, the Company and
the Purchaser agree as follows:
1. Purchase and Sale of the Shares
1.1 Cash Purchase. Concurrently with execution of this Agreement, the
Purchaser will purchase, by delivery of cash or a personal check and the Company
will sell, by delivery of an appropriate stock certificate to the Purchaser,
100,000 shares of Common Stock at a purchase price of $0.50 per share (the "Cash
Shares") for the aggregate consideration of fifty thousand dollars ($50,000).
1.2 Note Purchase. Concurrently with execution of this Agreement, the
Purchaser will purchase, by delivery of a promissory note issued by the
Purchaser in favor of the Company and dated as of even date herewith in the form
attached hereto as Exhibit A (the "Promissory Note"), and the Company will sell,
by delivery of an appropriate stock certificate to the Purchaser, 300,000 shares
of Common Stock at a purchase price of $0.50 per share (the "First Note Shares")
and 350,000 shares of Common Stock at a purchase price of $1.00 per share (the
"Second Note Shares", and collectively the "Note Shares") for the aggregate
consideration of five hundred thousand dollars ($500,000).
1.3 Closing. The closing of the purchase of the Cash Shares and the
Note Shares shall take place at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP at
0000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000, or at such other place as may be
agreed upon by the parties.
2. Right of Repurchase - Cessation of Association
2.1 The Repurchase Option. In the event that the Purchaser voluntarily
or involuntarily ceases to be an officer or director of the Company, the Company
shall have the option under this Section 2 (the "Repurchase Option"), but not
the obligation, to repurchase all, but not a portion of, the Note Shares then
subject to the Repurchase Option purchased by the Purchaser pursuant to this
Agreement from the Purchaser, or from the Purchaser's estate or personal
representative, and from each transferee to whom the Purchaser has transferred
any of the Shares (the "Transferees"), as the case may be.
2.2 Exercise of the Repurchase Option. The Company shall exercise the
Repurchase Option by giving to the Purchaser, or to the Purchaser's estate or
personal representative, and to any Transferees of whom the Company has
previously received written notice, written notice of the Company's intention to
exercise the Repurchase Option (the "Notice of Repurchase") before the
Repurchase Option lapses in accordance with Section 2.5 of this Agreement, and
in such Notice agreeing to tender to the Purchaser, or to the Purchaser's estate
or personal representative, and to any Transferees, as the case may be, the
amount specified in Section 2.3, against delivery of the certificates
representing the Shares to be repurchased, duly endorsed, free and clear of any
and all liens, charges or encumbrances. In exercising the Repurchase Option, the
Company may also designate one or more nominees to purchase some or all of the
Note Shares instead of purchasing all of them itself, provided that the Shares
to be purchased by the Company and by such nominees shall in any event
constitute all of the Shares that could then be purchased from the Purchaser, or
the Purchaser's estate or personal representative, and from any Transferees, as
the case may be.
2.3 Repurchase Option Price. The purchase price for the First Note
Shares upon exercise of the Repurchase Option shall be $0.50 for each First Note
Share repurchased pursuant to this Section 2. The purchase price for the Second
Note Shares upon exercise of the Repurchase Option shall be $1.00 for each
Second Note Share repurchased pursuant to this Section 2 (the aggregate purchase
for the First Note Shares and the Second Note Shares, the "Purchase Price").
2.4 Option Exercise; Closing. The closing with respect to exercise of
the Repurchase Option shall occur not more than 30 days after the date on which
the Notice of Repurchase is given, on such date and time and at such location as
shall be specified by the Company, and in the absence of the specification of
another site, at the Company's principal offices. At such closing, (a) the
Company shall deliver to the Purchaser, or to the Purchaser's estate or personal
representative, and to any Transferees, as the case may be, a check in the
amount of the Purchase Price, or the Company may, in its sole discretion, cancel
or forgive indebtedness of such party in the amount of the Purchase Price; and
(b) the Purchaser, or the Purchaser's estate or personal representative, and any
Transferees, as the case may be, shall deliver to the Company the certificates
representing the Note Shares, duly endorsed, free and clear of any and all
liens, charges or encumbrances.
2.5 Lapse of Repurchase Option. Notwithstanding any other provision of
this Section 2, certain of the Note Shares shall cease to be subject to the
Repurchase Option as follows:
(a) On the first day of each month following the date of this
Agreement, 8,333 First Note Shares shall cease to be subject to the Repurchase
Option (except that on the first day of the thirty-sixth month following the
date of this Agreement, 8,345 First Note Shares shall cease to be subject to the
Repurchase Option); such that after the first day of the thirty-sixth month
following the date of this Agreement, all of the First Note Shares shall be free
of the Repurchase Option provided in this Section 2, except those First Note
Shares as to which the Repurchase Option has been exercised by the Company prior
to such date. Those First Note Shares which cease to be subject to the
Repurchase Option are referred to herein as the "First Note Vested Shares."
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(b) In addition, on the first day of each month following the date of
this Agreement, 9,722 Second Note Shares shall cease to be subject to the
Repurchase Option (except that on the first day of the thirty-sixth month
following the date of this Agreement, 9,730 Second Note Shares shall cease to be
subject to the Repurchase Option); such that after the first day of the
thirty-sixth month following the date of this Agreement, all of the Second Note
Shares shall be free of the Repurchase Option provided in this Section 2, except
those Second Note Shares as to which the Repurchase Option has been exercised by
the Company prior to such date. Those Second Note Shares which cease to be
subject to the Repurchase Option are referred to herein as the "Second Note
Vested Shares." the First Note Vested Shares and the Second Note Vested Shares
are together referred to herein as the "Vested Shares."
2.6 Termination of Repurchase Option. In the event that there is a
Change in Control (as defined below) of the Company, all of the Shares held
subject to a Repurchase Option shall immediately upon such Change in Control
become Vested Shares and shall cease to be subject to the Repurchase Option. For
this Agreement, a "Change of Control" includes the sale or other disposition of
substantially all of the assets of the Company, any reorganization,
consolidation, or merger of the Company where the Company is not the surviving
corporation and where the Company's securities outstanding immediately before
the transaction represent less than 50% of the beneficial ownership of the new
entity immediately after the transaction, or a change in a majority of the
members of the Board of Directors of the Company (the "Board") which is not
voted upon by the current members of the Board.
2.7 Section 83 Stock. The Purchaser acknowledges that such Purchaser
has been advised that the Repurchase Option contained in this Section 2 will
cause the purchase of the Shares to fall within the provisions of Section 83 of
the Internal Revenue Code of 1986, as amended (the "Code"), which provides for
the recognition of ordinary income (as distinguished from capital gain) by the
purchaser of Shares based on the difference between the purchase price of the
Shares and their fair market value at the time restrictions with respect to the
Shares (for example, the "Repurchase Option") "lapse", regardless whether the
Shares are then (or could be then) sold. However, Section 83 of the Code permits
the filing of an election within 30 days after the Purchaser's purchase of the
Shares pursuant to this Agreement, whereby the Purchaser may elect to be taxed
on the difference, if any, between the purchase price of the Shares and their
fair market value at the time of purchase, with the result that if such election
is validly made, future gain, if any, realized upon disposition of the Shares
would in general be treated as capital gain. Purchaser acknowledges receipt from
the Company of a copy of Sections 83(a) and (b) of the Code and a portion of the
IRS Regulations thereunder, to which the foregoing discussion is subject. The
Purchaser should consult with his tax adviser concerning whether to make such
election and its consequences. In the event of any IRS audit or investigation of
the Purchaser or the transactions contemplated by this Agreement, the Purchaser
shall not seek reimbursement or indemnification from the Company for any
assessment or penalty resulting from an IRS determination that the purchase
price of the Shares is lower than the fair market value thereof as of the date
of issuance.
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3. Effect of Tender of Purchase Price
Notwithstanding the failure of the holder of any Certificates
evidencing all or any portion of the Shares subject to repurchase under Section
2 to deliver the same to the Company, upon tender by the Company of the purchase
price for any such Shares in accordance with the terms of this Agreement, such
Shares and the Certificates representing same shall forthwith and without
further action be deemed to have been transferred to the Company and no longer
to be outstanding for any purpose, except receipt of the price payable by the
Company, without interest, upon proper tender of the Certificates to the Company
in accordance with this Agreement.
4. Restrictions on Transfer
Except as otherwise may be permitted by this Agreement, the Purchaser
shall not dispose of or otherwise alienate any of, or any interest in, the
Shares that at any time would be subject to repurchase by the Company under
Section 2 of this Agreement, and any attempt to effect any such transaction
shall be null and void ab initio and of no force and effect.
5. Investment Representations of the Purchaser
The Purchaser represents to the Company and agrees with the Company as
follows:
5.1 The Purchaser is acquiring the Shares for private personal
investment for his own account and not for the account of any other person, and
has no present intention of reselling the Securities to others. None of the
Shares or any interest therein will be sold, transferred or otherwise disposed
of (except for sale to the Company) unless registered under the Securities Act
of 1933, or similar successor law ("the Act"), and applicable securities or
"blue sky laws" of any state ("State Securities Laws") or unless subject to
exemptions from the Act and State Securities Laws.
5.2 Accordingly, to implement the Purchaser's representations and
agreements, the Purchaser agrees to authorize the Company to place substantially
the following legends, and any legend required by applicable State Securities
Laws, on each Certificate issued to the Purchaser to evidence the Shares, and to
place a stop order against further transfer of the Shares except in compliance
with the Act and applicable State Securities Laws.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED AND
TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND UNDER STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF
UNLESS SO REGISTERED OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE."
"RESTRICTIONS ON THE OWNERSHIP RIGHTS OF THE STOCK REPRESENTED BY THIS
CERTIFICATE HAVE BEEN IMPOSED PURSUANT TO A RESTRICTED STOCK PURCHASE AGREEMENT
[DATED DECEMBER 4, 1998]. A COPY OF THE RESTRICTED STOCK PURCHASE AGREEMENT IS
ON FILE AT THE PRINCIPAL
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OFFICE OF THE COMPANY AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS
CERTIFICATE UPON RECEIPT BY THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR
REGISTER OFFICE OF A WRITTEN REQUEST FROM THE HOLDER REQUESTING SUCH COPY."
6. General Provisions
6.1 Construction. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware.
6.2 Entire Agreement. This Agreement contains the entire understanding
of the parties and supersedes all prior agreements and understandings relating
to the subject matter hereof.
6.3 Modification. This Agreement may be modified, amended or waived
only by a writing executed by the Company and the Purchaser.
6.4 Waivers. Any party to this Agreement may waive any right, provided
that such waiver will not be effective against the waiving party unless it is in
writing and signed by the waiving party. No waiver will be deemed to be a waiver
of any same, similar, or dissimilar matter.
6.5 Notice. All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered to the party to whom addressed or when sent
by telecopy (as indicated by a telecopy confirmation and if promptly confirmed
by registered or certified mail, return receipt requested, prepaid and
addressed) to the parties, their successors in interest, or their assignees at
the following addresses, or at such other addresses as the parties may designate
by written notice in the manner aforesaid:
If to Buyer: Accom, Inc.
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: President
Fax: 000-000-0000
With copies to: Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
If to Purchaser: Xxxxxxx Xxxxxxx
c/o Accom, Inc.
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Fax: (000) 000-0000
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6.6 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, and upon any transferee of Shares, and upon
their respective successors, assigns, executors, administrators and legal
representatives. This Agreement may not be assigned by any Purchaser without the
express written consent of the Company.
6.7 Section Headings. The headings of each Section, subsection or other
subdivision of this Agreement are for reference only and shall not limit or
control the meaning thereof.
6.8 Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but both counterparts shall together constitute but one and the same
instrument.
6.9 Attorneys' Fees. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the parties to such action,
proceeding or arbitration may receive as part of any award, judgment, decision
or other resolution of such action, proceeding or arbitration their costs and
reasonable attorneys' fees as determined by the person or body making such
award, judgment, decision or resolution. Should any claim hereunder be settled
short of the commencement of any such action or proceeding, including
arbitration, the parties in such settlement shall be entitled to include as part
of the damages alleged to have been incurred reasonable costs of attorneys or
other professionals in investigation or counseling on such claim.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
ACCOM, INC.
By: /s/ XXXXXX XXXXXX
------------------------------------------
Name: Xxxxxx Xxxxxx
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Title: Chief Executive Officer
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XXXXXXX XXXXXXX
/s/ XXXXXXX XXXXXXX
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Execution Copy
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NON-RECOURSE PROMISSORY NOTE
$500,000 December 4, 1998
FOR VALUE RECEIVED, Xxxxxxx Xxxxxxx ("Maker"), promises to pay to
Accom, Inc., a Delaware corporation ("Payee"), in lawful money of the United
States of America, the principal sum of Five Hundred Thousand ($500,000)
together with interest in arrears on the unpaid principal balance at a variable
annual rate equal to the prime rate of Comerica Bank which rate shall be
established and adjusted as necessary at the beginning of each calendar quarter
during the term of this Note. Interest shall be calculated on the basis of a
year of 365 or 366 days, as applicable, and charged for the actual number of
days elapsed.
1. PAYMENTS.
1.1 Principal and Interest. Subject to Section 1.3, the
principal amount of this Note then outstanding shall be due and payable three
years from the date of execution of this Note. Accrued, unpaid interest on the
unpaid principal balance of this Note shall be due and payable together with the
payment of principal as described above.
1.2 Manner of Payment. All payments of principal and interest
on this Note shall be made by wire transfer to such accounts as specified by
Payee, promptly upon request of Maker, or by check at 0000 X'Xxxxx Xxxxx, Xxxxx
Xxxx, XX 00000, or at such other place in the United States of America as Payee
shall designate to Maker in writing. If any payment of principal or interest on
this Note is due on a day which is not a Business Day, such payment shall be due
on the next succeeding Business Day, and such extension of time shall be taken
into account in calculating the amount of interest payable under this Note.
"Business Day" means any day other than a Saturday, Sunday or legal holiday in
the State of California.
1.3 Optional Prepayment. Maker may, without premium or
penalty, at any time and from time to time, prepay all or any portion of the
outstanding principal balance due under this Note, provided that each such
prepayment is accompanied by accrued interest on the amount of principal prepaid
calculated to the date of such prepayment. Any partial prepayments shall be
applied to installments of principal in inverse order of their maturity.
2. DEFAULTS.
2.1 Events of Default. The occurrence of any one or more of
the following events with respect to Maker shall constitute an event of default
hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of
principal or interest on this Note and such failure continues for five (5)
Business Days after Payee notifies Maker thereof writing.
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to insolvency or
relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary
case or proceeding; (ii) consent to the entry of an order for relief against it
in an involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; or (iv) make an assignment for the
benefit of its creditors.
(c) If a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that (i) is for relief against Maker in an
involuntary case; (ii) appoints a trustee, receiver, assignee, liquidator or
similar official for Maker or substantially all of Maker's properties; or (iii)
orders the liquidation of Maker, and in each case the order or decree is not
dismissed within 120 days.
(d) Upon the death of the Maker.
2.2 Remedies. Subject to Section 2.3, upon the occurrence of
an Event of Default hereunder (unless all Events of Default have been cured or
waived by Payee), Payee may, at its option, (i) by written notice to Maker,
declare the entire unpaid principal balance of this Note, together with all
accrued interest thereon, immediately due and payable regardless of any prior
forbearance, and (ii) exercise any and all rights and remedies available to it
under applicable law, including, without limitation, the right to collect from
Maker all sums due under this Note. Maker shall pay all reasonable attorneys'
fees incurred by or on behalf of Payee in connection with Payee's exercise of
any or all of its rights and remedies under this Note.
2.3 Non-Recourse Limitation on Remedies. Notwithstanding
anything to the contrary contained in this Note, Payee's recovery against Maker
under this Note upon an Event of Default shall be limited solely to the shares
of common stock of Payee purchased by Maker in the Restricted Stock Purchase
Agreement dated as of even date herewith between Maker and Payee. Maker shall
not be liable or have any personal liability in any other respect for the
payment of any amount due under this Note.
3. MISCELLANEOUS.
3.1 Waiver. The rights and remedies of Payee under this Note
shall be cumulative and not alternative. No waiver by Payee of any right or
remedy under this Note shall be effective unless in a writing signed by Payee.
Neither the failure nor any delay in exercising any right, power or privilege
under this Note will operate as a waiver of such right, power or privilege and
no single or partial exercise of any such right, power or privilege by Payee
will preclude any other or further exercise of such right, power or privilege or
the exercise of any other right, power or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right of Payee arising out of this
Note can be discharged by Payee, in whole or in part, by a waiver or
renunciation of the claim or right unless in a writing, signed by Payee; (b) no
waiver that may be given by Payee will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on Maker will be
deemed to be a waiver of any obligation of Maker or of the right of Payee to
take further action without notice or demand as provided in this Note.
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3.2 Notices. All notices, requests, demands and other
communications called for or contemplated hereunder shall be in writing and
shall be deemed to have been duly given when delivered to the party to whom
addressed or when sent by telecopy (as indicated by a telecopy confirmation and
if promptly confirmed by registered or certified mail, return receipt requested,
prepaid and addressed) to the parties, their successors in interest, or their
assignees pursuant to the terms of Section 6.5 of the Restricted Stock Purchase
Agreement.
3.3 Severability. Any provision of this Note which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Note invalid,
illegal or unenforceable in any other jurisdiction.
3.4 Governing Law. This Note shall be construed and enforced
in accordance with and governed by the laws of the State of Delaware.
3.5 Parties In Interest. This Note shall bind Maker and its
successors and assigns. This Note shall not be assigned or transferred by Maker
or Payee without the express prior written consent of Maker, except by operation
of law or in connection with the sale of all or substantially all of the stock
or assets of Maker or Payee (as applicable).
3.6 Section Headings, Construction. The headings of each
Section, subsection or other subdivision of this Note are for reference only and
shall not limit or control the meaning thereof. All references to "Section" or
"Sections" refer to the corresponding Section or Sections of this Note unless
otherwise specified. All words used in this Note will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the words "hereof" and "hereunder" and similar references refer to
this Note in its entirety and not to any specific section or subsection hereof.
3.7 No Usury. It is the intent of the parties that the rate of
interest and other charges to the Maker shall be lawful. If for any reason the
interest or other charges payable hereunder are found by a court of competent
jurisdiction, in a final determination, to exceed the limit which the Payee may
lawfully charge the Maker, then the obligation to pay interest or other charges
shall automatically be reduced to such limit and, if any amount in excess of
such limit shall have been paid, then such amount shall be refunded to the
Maker.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the date first stated above.
/s/ XXXXXXX XXXXXXX
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Xxxxxxx Xxxxxxx
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