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EXHIBIT 10.38
WINK COMMUNICATIONS, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of November 3, 1997 between Wink
Communications, Inc., a California corporation (the "Company"), and Xxxxxxxx X.
Xxxxxx ("Purchaser").
WHEREAS Purchaser is an employee of or consultant to the Company whose
continued affiliation with the Company is considered to be important for the
Company's continued growth; and
WHEREAS in order to provide Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for Purchaser to continue to
participate in the affairs of the Company, the Company is willing to sell to
Purchaser and Purchaser desires to purchase shares of Common Stock according to
the terms and conditions hereof;
THEREFORE, the parties agree as follows:
1. PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of
this Agreement, the Company hereby agrees to sell to Purchaser and Purchaser
agrees to purchase from the Company 215,000 shares of the Company's Common Stock
(the "Stock") at a price of $2.00 per share, for an aggregate purchase price of
$430,000.00. The purchase price for the Stock shall be paid by a full recourse
promissory note in substantially the form attached hereto as Exhibit A (the
"Note"). Purchaser shall be required to execute and deliver a Security Agreement
in the form attached hereto as Exhibit B. The Note shall be secured by a pledge
of the Stock purchased by the Note pursuant to the Security Agreement. Upon such
payment, the Company shall issue a duly executed certificate evidencing the
Stock in the name of Purchaser to be held pursuant to the escrow described in
Section 7 hereof.
2. REPURCHASE OPTION AND RELEASE OF SHARES.
(a) REPURCHASE OPTION.
(i) In the event of any voluntary or involuntary
termination of Purchaser's employment by or consulting services to the Company
(including as a result of death or disability) before all shares of the Stock
are released from the Company's repurchase option under Section 2(b) below, the
Company shall, upon the date of such termination (as reasonably fixed and
determined by the Company) have an irrevocable, exclusive option for a period of
twenty-four (24) months from such date to repurchase all or any portion of the
Stock which has not been released from the repurchase option described in this
Section 2 (the "Repurchase Option") at the time of such termination at the
original purchase price per share. The Repurchase Option shall be exercised by
the Company by written notice to Purchaser or his/her executor (with a copy to
the Escrow Agent described in Section 7 hereof) and, at the Company's option,
(A) by delivery to Purchaser or his/her executor with such notice of a check in
the amount of the aggregate repurchase price for the Stock being repurchased,
(B) by cancellation by the Company of an amount of Purchaser's indebtedness to
the Company equal to the aggregate
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repurchase price for the Stock being repurchased, or (C) by a combination of (A)
and (B) so that the combined payment and cancellation of indebtedness equals
such aggregate repurchase price. Upon delivery of such notice and the payment of
the aggregate repurchase price in any of the ways described above, the Company
shall become the legal and beneficial owner of the Stock being repurchased and
all rights and interests therein or relating thereto, and the Company shall have
the right to retain and transfer to its own name the number of shares of the
Stock being repurchased by the Company.
(ii) Whenever the Company shall have the right to
repurchase shares of the Stock hereunder, the Company may designate and assign
one or more employees, officers, directors or shareholders of the Company or
other persons or organizations to exercise all or a part of the Company's
repurchase rights under this Agreement and to purchase all or a part of such
Stock; provided that if the aggregate fair market value of the Stock to be
repurchased on the date of such designation or assignment ("Repurchase FMV")
exceeds the aggregate repurchase price of the Stock to be repurchased, then each
such designee or assignee shall pay the Company cash equal to the difference
between the Repurchase FMV and the aggregate repurchase price of the Stock which
such designee or assignee shall have the right to repurchase.
(b) RELEASE OF SHARES FROM REPURCHASE OPTION.
(i) 1/48th of the Stock shall be released from the
Company's Repurchase Option on each monthly anniversary of November 3, 1997
until all shares of the Stock have been released; provided in each case that
there has not been any voluntary or involuntary termination prior to each such
date of release.
(ii) This Agreement shall not confer upon Purchaser any
right with respect to employment by the Company, nor shall it interfere with or
affect in any manner the right or power of the Company, or a parent or
subsidiary of the Company, to terminate Purchaser's employment or consulting
relationship with the Company, which right is hereby reserved.
3. STOCK SPLITS, ETC. If, from time to time during the term of this
Agreement:
(a) There is any stock dividend or liquidating dividend of cash
and/or property, stock split or other change in the character or amount of any
of the outstanding securities of the Company; or
(b) Subject to Section 13 hereof, there is any consolidation,
merger or sale of all, or substantially all, of the assets of the Company;
then, in such event, any and all new, substituted or additional securities or
other property to which Purchaser is entitled by reason of Purchaser's ownership
of the Stock shall be immediately subject to this Agreement and be included in
the word "Stock" for all purposes with the same force and effect as the shares
of Stock currently subject to the Repurchase Option and other terms of this
Agreement. While the aggregate repurchase price payable upon execution of the
Repurchase Option shall remain the same after each such event, the repurchase
price per share of Stock shall be appropriately adjusted.
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4. RESTRICTION ON TRANSFER. Purchaser shall not sell, transfer, pledge,
hypothecate or otherwise dispose of any shares of the Stock which remain subject
to the Repurchase Option. The Company shall not be required (i) to transfer on
its books any shares of Stock which shall have purportedly been sold or
transferred in violation of any of the provisions set forth in this Agreement,
or (ii) to treat as owner of such shares or to accord the right to vote as such
owner or to pay dividends to any purported transferee to whom such shares shall
have been purportedly transferred.
5. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. The share certificate evidencing the Stock issued
hereunder shall be endorsed with the following legends (in addition to any
legends required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
(b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
6. PURCHASER'S REPRESENTATIONS AND COVENANTS. In connection with the
purchase of the Stock, Purchaser hereby represents and warrants to the Company
as follows:
(a) INVESTMENT INTENT; CAPACITY TO PROTECT INTERESTS. Purchaser
is purchasing the Stock solely for Purchaser's own account for investment and
not with a view to or for sale in connection with any distribution of the Stock
or any portion thereof and not with any present intention of selling, offering
to sell or otherwise disposing of or distributing the Stock or any portion
thereof. Purchaser also represents that the entire legal and beneficial interest
of the Stock is being purchased, and will be held, for Purchaser's account only,
and neither in whole or in part for any other person. Purchaser either (i) has a
pre-existing business or personal relationship with the Company or at least one
of its officers, directors or controlling persons, or (ii) by reason of
Purchaser's business or financial experience (or the business or financial
experience of Purchaser's professional advisors who are unaffiliated with and
who
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are not compensated by the Company or any affiliate or selling agent of the
Company, directly or indirectly), can be reasonably assumed to have the capacity
to evaluate the merits and risks of an investment in the Company and to protect
Purchaser's own interests in connection with this transaction.
(b) RESIDENCE. Purchaser's principal residence is within the
State of California and is located at the address indicated beneath Purchaser's
signature below.
(c) INFORMATION CONCERNING COMPANY. Purchaser has discussed the
Company and its plans, operations and financial condition with the Company's
officers and has received all such information as Purchaser has deemed necessary
and appropriate to enable Purchaser to evaluate the financial risk inherent in
making an investment in the Stock. Purchaser has received satisfactory and
complete information concerning the business and financial condition of the
Company in response to all inquiries in respect thereof.
(d) ECONOMIC RISK. Purchaser realizes that the purchase of the
Stock will be a highly speculative investment and involves a high degree of
risk. Purchaser is able, without impairing Purchaser's financial condition, to
hold the Stock for an indefinite period of time and to suffer a complete loss on
Purchaser's investment.
(e) RESTRICTED SECURITIES. Purchaser understands and acknowledges
that:
(i) The Stock has not been registered under the Securities
Act of 1933, as amended, in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein. In this connection, Purchaser understands
that, in the view of the Securities and Exchange Commission ("SEC"), the
statutory basis for such exemption may be unavailable if Purchaser's
representation was predicated solely upon a present intention to hold the Stock
for the minimum capital gains period specified under tax statutes, for a
deferred sale, for or until an increase or decrease in the market price of the
Stock, or for a period of one year or any other fixed period in the future.
(ii) The Stock must be held indefinitely unless it is
subsequently registered under the Securities Act or unless an exemption from
such registration is otherwise available. Purchaser further acknowledges and
understands that the Company is under no obligation to register the Stock. In
addition, Purchaser understands that the certificate evidencing the Stock will
be imprinted with a legend which prohibits the transfer of the Stock unless it
is registered or such registration is not required in the opinion of counsel
satisfactory to the Company.
(f) DISPOSITION UNDER RULE 144. Purchaser understands that:
(i) The shares of Stock are restricted securities within
the meaning of Rule 144 promulgated under the Securities Act; that the exemption
from registration under Rule 144 will not be available in any event for at least
one (1)) year from the date of purchase and payment of the Stock, and even then
will not be available unless (i) a public trading market then exists for the
Common
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Stock of the Company, (ii) adequate information concerning the Company is then
available to the public, and (iii) other terms and conditions of Rule 144 are
complied with; and that any sale of the Stock may be made only in limited
amounts in accordance with such terms and conditions of Rule 144;
(ii) That at the time Purchaser wishes to sell the Stock
there may be no public market upon which to make such a sale; that, even if such
a public market then exists, the Company may not be satisfying the current
public information requirements of Rule 144; and that, in such event, Purchaser
would be precluded from selling the Stock under Rule 144 even if the one (1)
year minimum holding period had been satisfied; and
(iii) In the event all of the requirements of Rule 144 are
not satisfied, registration under the Securities Act or compliance with
Regulation A or another registration exemption will be required; that,
notwithstanding the fact that Rule 144 is not exclusive, the Staff of the SEC
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering or pursuant to Rule 144 will have
a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales; and that such persons and
their respective brokers who participate in such transactions do so at their own
risk.
(g) FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting Purchaser's representations set forth above, Purchaser further agrees
that Purchaser shall in no event make any disposition of all or any portion of
the Stock unless and until:
(i) Either:
(A) There is then in effect a Registration
Statement under the Securities Act covering such proposed disposition, and such
disposition is made in accordance with said Registration Statement; or
(B) (1) Purchaser shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition; (2)
Purchaser shall have furnished the Company with an opinion of Purchaser's
counsel to the effect that such disposition will not require registration of
such shares under the Securities Act; and (3) such opinion of Purchaser's
counsel shall have been concurred in by counsel for the Company, and the Company
shall have advised Purchaser of such concurrence; and,
(ii) The shares of Stock proposed to be transferred are no
longer subject to the Repurchase Option set forth in Section 2 hereof, and
Purchaser shall have complied with the Standoff Agreement set forth in Section 9
hereof.
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(h) VALUATION OF COMMON STOCK.
(i) Purchaser understands that the Stock has been valued
by the Company's Board of Directors and that the Company believes this valuation
represents a fair attempt at reaching an accurate appraisal of its worth.
Purchaser understands, however, that the Company can give no assurances that
such price is in fact the fair market value of the Stock, and that it is
possible that, with the benefit of hindsight, the Internal Revenue Service would
successfully assert that the value of the Stock on the date of purchase is
substantially greater than so determined.
(ii) If the Internal Revenue Service were to succeed in a
tax determination that the Stock had a value greater than that upon which this
transaction is based, the additional value would constitute ordinary income to
Purchaser as of the date of its receipt. The additional taxes (and interest) due
would be payable by Purchaser. There is no provision for the Company to
reimburse Purchaser for that tax liability, and Purchaser assumes all
responsibility therefor. Furthermore, in the event such additional value
represents more than twenty-five percent (25%) of Purchaser's gross income for
the year in which the value of the shares would be taxable, the Internal Revenue
Service would have six (6) years from the due date for filing the return for
such year (or the actual filing date of the return if filed thereafter) within
which to assess Purchaser the additional tax and interest which would then be
due.
(iii) The Company would have the benefit, in any such
transaction, if a determination was made prior to the three (3) year statute of
limitations period affecting the Company, of an increase in its deduction for
compensation paid, which would offset its operating profits, or, if the Company
were not profitable at such time, would create net operating loss carry-forwards
arising from operations in that year.
(i) SECTION 83(b) ELECTION.
(i) Purchaser understands that Purchaser (and not the
Company) is responsible for Purchaser's own federal, state, local or foreign tax
liability and any other tax consequences that may arise as a result of the
transactions contemplated by this Agreement. Purchaser agrees to rely solely on
the determinations of Purchaser's tax advisors or Purchaser's own
determinations, and not on any statements or representations by the Company or
any of its attorneys or agents, with regard to all tax matters.
(ii) Purchaser understands that Section 83 of the Internal
Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the
difference between the amount paid for the Stock and the fair market value of
the Stock as of the date any restrictions on the Stock lapse. In this context,
"restriction" includes the right of the Company to buy back the Stock pursuant
to the Repurchase Option. (In the event the Company has registered any of its
shares under the Securities Exchange Act of 1934, "restriction" with respect to
officers, directors and ten percent (10%) shareholders also means the period
after the purchase of the Stock during which such officer, director and ten
percent (10%) shareholders could be subject to suit under Section 16(b) of the
Securities Exchange Act.)
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(iii) Purchaser understands that Purchaser may elect to be
taxed at the time the Stock is purchased rather than when and as the Repurchase
Option (or Section 16(b) restrictions) lapse by filing an election under Section
83(b) of the Code with the Internal Revenue Service within thirty (30) days
after the date of purchase of the Stock. The form for making this election is
attached hereto as Exhibit C. PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b) OF THE CODE, EVEN IF PURCHASER REQUESTS THAT THE COMPANY OR ITS
REPRESENTATIVES MAKE THIS FILING ON PURCHASER'S BEHALF.
7. ESCROW. As security for the faithful performance of the terms of this
Agreement and to ensure the availability for delivery of the Stock upon exercise
of the Repurchase Option, Purchaser agrees to deliver to and deposit with the
Secretary of the Company, or such other person designated by the Company, as
escrow agent in this transaction ("Escrow Agent"), two Stock Assignments duly
endorsed (with date and number of shares blank) in the form attached hereto as
Exhibit D, together with the certificate or certificates evidencing the Stock.
Such documents are to be held by the Escrow Agent and delivered by the Escrow
Agent pursuant to the Joint Escrow Instructions of the Company and Purchaser set
forth in Exhibit E attached hereto and incorporated by this reference, which
instructions shall also be delivered to the Escrow Agent upon execution hereof.
8. ARBITRATION.
(a) ELECTION OF ARBITRATION. At the option of either party, any
and all disputes or controversies whether of law or fact and of any nature
whatsoever arising from or respecting this Agreement shall be decided by
arbitration by the American Arbitration Association in accordance with the rules
and regulations of that Association.
(b) SELECTION OF ARBITRATORS. The arbitrators shall be selected
as follows: In the event the Company and Purchaser agree on one arbitrator, the
arbitration shall be conducted by such arbitrator. In the event the Company and
Purchaser do not so agree, the Company and Purchaser shall each select one
independent, qualified arbitrator, and the two arbitrators so selected shall
select the third arbitrator. The Company reserves the right to object to any
individual arbitrator who shall be employed by or affiliated with a competing
organization.
(c) CONDUCT OF ARBITRATION. Arbitration shall take place in San
Francisco, California or any other location mutually agreeable to the parties.
Reasonable notice of the time and place of arbitration shall be given to all
persons other than the parties as shall be required by law, and such persons or
their authorized representatives shall have the right to attend and/or
participate in all the arbitration hearings in such manner as the law shall
require.
(d) SECRECY OF PROCEEDINGS. At the request of either party,
arbitration proceedings will be conducted in the utmost secrecy; in such case
all documents, testimony and records shall be received, heard and maintained by
the arbitrators in secrecy under seal, available for the inspection only
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of the Company or Purchaser and their respective attorneys and their respective
experts, who shall agree in advance and in writing to receive all such
information confidentially and to maintain such information in secrecy until
such information shall become generally known.
(e) RELIEF. The arbitrators, who shall act by majority vote,
shall be able to decree any and all relief of an equitable nature (including
without limitation such relief as temporary restraining orders or temporary
and/or permanent injunctions), and shall also be able to award damages, with or
without an accounting and costs. The decree or judgment of an award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
9. STANDOFF AGREEMENT. Purchaser agrees, in connection with an initial
public offering of the Company's equity securities, upon request of the Company
or the underwriters managing such offering, (i) not to sell, make any short sale
of, loan, grant any option for the purchase of or otherwise dispose of any
shares of Stock (other than those included in the registration, if any) without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed one hundred eighty (180) days) from
the effective date of such registration) as may be requested by the Company or
such underwriters, and (ii) to execute any agreement regarding (i) above as may
be requested by the Company or underwriters at the time of the public offering;
provided, that the officers and directors of the Company who own stock of the
Company also agree to such restrictions.
10. RIGHT OF FIRST REFUSAL.
(a) RIGHT. Purchaser hereby grants the Company a right of first
refusal (the "First Refusal Right") in connection with any proposed sale or
other transfer of Stock which is no longer subject to the Repurchase Option. For
purposes of this Section 10, the term "transfer" shall include any assignment,
pledge, encumbrance or other disposition for the value of Stock intended to be
made by Purchaser. Nothing in this Section 10 shall be construed to confer upon
Purchaser the right to transfer any shares that remain subject to the Repurchase
Option.
(b) NOTICE OF DISPOSITION. In the event Purchaser desires to
accept a bona fide third-party offer for any or all Stock which is no longer
subject to the Repurchase Option (the shares subject to such offer to be
hereinafter called, for the purpose of this Section 10, the "Target Shares"),
Purchaser shall promptly (i) deliver to the Secretary of the Company written
notice (the "Disposition Notice") of the offer, which notice shall describe the
basic terms and conditions thereof, including the proposed purchase price, and
(ii) provide satisfactory proof that the disposition of the Target Shares to the
third-party offeror would not be in contravention of the provisions of this
Agreement, including without limitation, Section 6 hereof.
(c) EXERCISE OF RIGHT. The Company (or its assignees) shall, for
a period of thirty (30) days following receipt of the Disposition Notice, have
the right to repurchase all, but not less than all, of the Target Shares upon
substantially the same terms and conditions specified therein. Such right shall
be exercisable by written notice (the "Exercise Notice") delivered to Purchaser
prior to the expiration of the thirty day exercise period. If such right is
exercised with respect to the Target Shares,
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then the Company (or its assignees) shall effect the repurchase of the Target
Shares, including payment of the purchase price, not more than five (5) business
days after the delivery of the Exercise Notice; and at such time Purchaser shall
deliver to the Company the certificates representing the Target Shares to be
repurchased, each certificate properly endorsed for transfer. To the extent any
of the Target Shares are at the time remain in escrow under Section 7 even
though they are not longer subject to the Repurchase Option, the certificates
for such shares shall automatically be released from escrow and surrendered to
the Company for cancellation. The Target Shares so purchased shall thereupon be
cancelled and cease to be issued and outstanding shares of the Company's Common
Stock.
(d) NON-CASH CONSIDERATION. Should the purchase price specified
in the Disposition Notice be payable in property other than cash or evidences of
indebtedness, the Company (or its assignees) shall have the right to pay the
purchase price in the form of cash equal in amount to the value of such
property. If Purchaser and the Company (or its assignees) cannot agree on such
cash value within ten (10) days after the Company's receipt of the Disposition
Notice, the valuation shall be made by an appraiser of recognized standing
selected by Purchaser and the Company (or its assignees). If Purchaser and the
Company cannot agree on an appraiser within twenty (20) days after the Company's
receipt of the Disposition Notice, each shall select an appraiser of recognized
standing, and the two appraisers shall designate a third appraiser of recognized
standing, whose appraisal shall be determinative of such value. The cost of such
appraisal shall be shared equally by Purchaser and the Company. The closing of
the purchase of the Targeted Shares by the Company shall then be held on the
later of (i) the fifth business day following delivery of the Exercise Notice,
or (ii) the 15th day after such cash valuation shall have been made.
(e) DISPOSITION OF TARGET SHARES. In the event an Exercise Notice
is not given to Purchaser within thirty (30) days following the date of the
Company's receipt of the Disposition Notice, Purchaser shall have a period of
thirty (30) days thereafter, in which to sell or otherwise dispose of the Target
Shares upon terms and conditions (including the purchase price) no more
favorable to a third-party purchaser than those specified in the Disposition
Notice; provided, however, that any such sale or disposition must not be
effected in contravention of the provisions of this Agreement, including without
limitation, Section 6 hereof. In the event Purchaser does not sell or otherwise
dispose of all Target Shares within the specified thirty (30) day period, the
First Refusal Right shall continue to be applicable to any subsequent
disposition of the Target Shares by Purchaser until such right lapses in
accordance with Section 10(g).
(f) STOCK SPLITS, ETC. In the event of any stock dividend, stock
split, recapitalization or other transaction affecting the Company's outstanding
Common Stock as a class effected without receipt of consideration, then any new,
substituted or additional securities or other property which is by reason of
such transaction distributed with respect to the Stock shall be immediately
subject to the First Refusal Right.
(g) LAPSE OF RIGHT. The First Refusal Right shall lapse and cease
to have effect upon the occurrence of a firm commitment underwritten public
offering pursuant to an effective registration
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statement under the Securities Act, covering the offer and sale of the Company's
Common Stock in the aggregate amount of at least $10,000,000.
11. GOVERNING LAW. This Agreement shall be governed and construed by the
laws of the State of California as applied to agreements made and performed in
California by residents of the State of California.
12. MISCELLANEOUS.
(a) RIGHTS AS SHAREHOLDER. Subject to the provisions and
limitations hereof, Purchaser may, during the term of this Agreement, exercise
all rights and privileges of a shareholder of the Company with respect to the
Stock deposited in escrow pursuant to Section 7 hereof.
(b) FURTHER ASSURANCES. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
(c) NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery
(including by express courier) or upon deposit in the United States Post Office,
by First Class mail with postage and fees prepaid, addressed to Purchaser at
his/her address shown on the Company's employment records and to the Company at
the address of its principal corporate offices (attention: President) or at such
other address as such party may designate by ten (10) days' advance written
notice to the other party.
(d) ASSIGNMENT. The Company may assign its rights and delegate
its duties under this Agreement, including Section 2 hereof. This Agreement
shall inure to the benefit of the successors and assigns of the Company and,
subject to the restrictions on transfer herein set forth, be binding upon
Purchaser, his/her heirs, executors, administrators, successors and assigns. The
rights of Purchaser under this Agreement may be assigned only with the prior
written consent of the Company.
(e) AUTHORIZATION OF TRANSFER. Purchaser hereby authorizes and
directs the Secretary or transfer agent of the Company to transfer the Stock as
to which the Repurchase Option has been exercised from Purchaser to the Company
or the Company's assignees.
(f) NO EFFECT ON EMPLOYMENT/CONSULTING RELATIONSHIP. PURCHASER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREUNDER DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS EMPLOYEE OR CONSULTANT OF THE COMPANY FOR ANY PERIOD OR AT ALL.
NOTHING IN THIS AGREEMENT SHALL AFFECT IN ANY MANNER WHATSOEVER OR INTERFERE
WITH THE RIGHT OR POWER OF THE COMPANY, OR A PARENT OR SUBSIDIARY OF THE
COMPANY, TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE
COMPANY AT ANY TIME, FOR ANY OR NO REASON, WITH OR WITHOUT CAUSE.
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(g) WAIVER. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights granted
both parties herein are cumulative and shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.
(h) ADVICE OF COUNSEL. Purchaser has reviewed this Agreement in
its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions hereof.
(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
(i) ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties with respect to the purchase of Common Stock by
Purchaser, may be modified or amended only in writing signed by both parties,
and satisfies all of the Company's obligations to Purchaser with regard to the
issuance or sale of securities.
13. SPECIAL TERMINATION OF REPURCHASE OPTION. In the event of any of the
following transactions (a "Corporate Transaction"):
(a) A merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated;
(b) The sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(c) Any reverse merger in which the Company is the surviving
entity but in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred to holders different from those who held the stock
immediately prior to such merger,
then the Repurchase Option shall automatically lapse as to 50% of the number of
shares then still subject to the Repurchase Option, and Purchaser shall acquire
a vested interest in such Shares, effective upon the consummation of such
Corporate Transaction; provided, however, that Purchaser's employment or
consulting services shall not have terminated prior to the consummation of such
Corporate Transaction.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
WINK COMMUNICATIONS, INC., XXXXXXXX X. XXXXXX
a California corporation
By: /s/ Xxxxxx Xxxxxxxxxxx /s/ Xxxxxxxx X. Xxxxxx
------------------------------ -----------------------------------
(Signature)
Title: President
---------------------------
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CONSENT OF SPOUSE
I, Xxxx X. Xxxxxx, spouse of Xxxxxxxx Xxxxxx, have read and approve the
foregoing Agreement. In consideration of the granting to my spouse of the right
to purchase shares of Wink Communications, Inc., as set forth in the Agreement,
I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of
any rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in the Agreement or in any shares
issued pursuant thereto under the community property laws of the State of
California or similar laws relating to marital property in effect in the state
of our residence as of the date of the signing of the Agreement.
Dated: November 3, 1997
/s/ Xxxx X. Xxxxxx
-------------------------------------
(Signature of Spouse)
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EXHIBIT A
PROMISSORY NOTE
$430,000.00 Alameda, California
November 3, 1997
FOR VALUE RECEIVED, Xxxxxxxx X. Xxxxxx promises to pay to Wink
Communications, Inc., a California corporation (the "Company"), or order, the
principal sum of Four Hundred Thirty Thousand Dollars ($430,000.00), together
with interest on the unpaid principal hereof from the date hereof at the rate of
6.42% per annum, compounded annually.
Principal and interest shall be due and payable on November 3, 2007.
Should the undersigned fail to make full payment of principal or interest for a
period of 10 days or more after the due date thereof, the whole unpaid balance
on this Note of principal and interest shall become immediately due at the
option of the holder of this Note. Payments of principal and interest shall be
made in lawful money of the United States of America.
The undersigned may at any time prepay without penalty all or any
portion of the principal or interest owing hereunder.
This Note is subject to the terms of the Restricted Stock Purchase
Agreement, dated as of November 3, 1997. This Note is secured by a pledge of the
Company's Common Stock under the terms of a Security Agreement of even date
herewith and is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned. This Note shall be governed and construed in accordance with the
laws of the State of California.
/s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxx
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EXHIBIT B
SECURITY AGREEMENT
This Security Agreement is made as of November 3, 1997 between Wink
Communications, Inc., a California corporation ("Pledgee"), and Xxxxxxxx X.
Xxxxxx ("Pledgor").
Recitals
Pursuant to Pledgor's purchase of Stock under the Restricted Stock
Purchase Agreement dated November 3, 1997, between Pledgor and Pledgee, and
Pledgor's election to pay for such Stock with her promissory note (the "Note"),
Pledgor has purchased 215,000 shares of Pledgee's Common Stock (the "Shares") at
a price of $2.00 per share, for a total purchase price of $430,000.00. The Note
and the obligations thereunder are as set forth in Exhibit B to the Restricted
Stock Purchase Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of
the transfer of the Shares to Pledgor under the Restricted Stock Purchase
Agreement, Pledgor, pursuant to the California Commercial Code, hereby pledges
all of such Shares (herein sometimes referred to as the "Collateral")
represented by certificate number ______, duly endorsed in blank or with
executed stock powers, and herewith delivers said certificate to the Secretary
of Pledgee ("Pledgeholder"), who shall hold said certificate subject to the
terms and conditions of this Security Agreement.
The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and the Pledgeholder shall not
encumber or dispose of such Shares except in accordance with the provisions of
this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
a. Payment of Indebtedness. Pledgor will pay the principal sum of
the Note secured hereby, together with interest thereon, at the time and in the
manner provided in the Note.
b. Encumbrances. The Shares are free of all other encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
c. Margin Regulations. In the event that Pledgee's Common Stock
is now or later becomes margin-listed by the Federal Reserve Board and Pledgee
is classified as a "lender" within the meaning of the regulations under Part 207
of Title 12 of the Code of Federal Regulations ("Regulation G"), Pledgor agrees
to cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.
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3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. Stock Adjustments. In the event that during the term of the pledge
any stock dividend, reclassification, readjustment or other changes are declared
or made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this
pledge, subscription options or other rights or options shall be issued in
connection with the pledged Shares, such rights and options shall be the
property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
a. Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
b. Pledgor fails to perform any of the covenants set forth in the
Restricted Stock Purchase Agreement or contained in this Security Agreement for
a period of 10 days after written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the California
Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules
under Regulation G, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
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9. Term. The within pledge of Shares shall continue until the payment
of all indebtedness secured hereby, at which time the remaining pledged stock
shall be promptly delivered to Pledgor, subject to the provisions for prior
release of a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"PLEDGOR" By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxxx X. Xxxxxx
Address:
------------------------------------
------------------------------------
"PLEDGEE" WINK COMMUNICATIONS, INC.
a California corporation
By: Xxxxxx Xxxxxxxxxxx
---------------------------------
Title: President
------------------------------
"PLEDGEHOLDER" /s/ Xxxx Xxxxxx
------------------------------------
Secretary of
Wink Communications, Inc.
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EXHIBIT C
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
The undersigned taxpayer hereby elects, pursuant to the above-referenced
Internal Revenue Code Section, to include in his/her gross income for the
current taxable year, the amount of any compensation taxable to him/her in
connection with his/her receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME :TAXPAYER: Xxxxxxxx X. Xxxxxx SPOUSE: ______________
ADDRESS :TAXPAYER: 00 Xxxxx Xxxx Xxxxx XXXXXX: ______________
Xxxxxxx, XX 00000
IDENTIFICATION # :TAXPAYER: ________________ SPOUSE: ______________
TAXABLE YEAR :TAXPAYER: ________________ SPOUSE: ______________
2. The property with respect to which the election is made is described as
follows:
215,000 shares of Common Stock of Wink Communications, Inc., a California
corporation (the "Company").
3. The date on which the property was transferred is: November 3, 1997.
4. The property is subject to the following restrictions:
Restriction on sale or transfer of the stock in accordance with Common
Stock Purchase Agreement with the Company dated November 3, 1997.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is: $430,000.00.
6. The amount (if any) paid for such property: $430,000.00.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated: __________________, 19___ ___________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: __________________, 19___ ___________________________________
Spouse of Taxpayer
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EXHIBIT D
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Purchase Agreement dated as of November 3, 1997 (the "Agreement"), Xxxxxxxx X.
Xxxxxx ("Purchaser") hereby sells, assigns and transfers unto _________________
__________________________ (________________) shares of the Common Stock of Wink
Communications, Inc., a California corporation, standing in the undersigned's
name on the books of said corporation represented by certificate no. _______
herewith, and does hereby irrevocably constitute and appoint _________________
attorney to transfer the said stock on the books of the said corporation with
full power of substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS
AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.
Dated ________________ XXXXXXXX X. XXXXXX
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Signature
Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the corporation to exercise its
"Repurchase Option" set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock
Purchase Agreement dated as of November 3, 1997 (the "Agreement"), Xxxxxxxx X.
Xxxxxx ("Purchaser") hereby sells, assigns and transfers unto _________________
__________________________ (________________) shares of the Common Stock of Wink
Communications, Inc., a California corporation, standing in the undersigned's
name on the books of said corporation represented by certificate no. _______
herewith, and does hereby irrevocably constitute and appoint __________________
attorney to transfer the said stock on the books of the said corporation with
full power of substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS
AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.
Dated ________________ XXXXXXXX X. XXXXXX
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------------
Signature
Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the corporation to exercise its
"Repurchase Option" set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
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EXHIBIT E
JOINT ESCROW INSTRUCTIONS
November 3, 1997
Secretary
Wink Communications, Inc.
0000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Dear Sir:
As Escrow Agent for both Wink Communications, Inc., California
corporation ("Company"), and the undersigned purchaser of stock of the Company
("Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Purchase
Agreement ("Agreement") between the Company and the undersigned, to which a copy
of these Joint Escrow Instructions is attached as Exhibit C, in accordance with
the following instructions:
1. In the event the Company and/or any assignee of the Company (referred
to collectively for convenience herein as the "Company") exercises the
Repurchase Option set forth in the Agreement, the Company shall give to
Purchaser and you a written notice specifying the number of shares of stock to
be purchased, the purchase price, and the time for a closing such purchase at
the principal office of the Company. Purchaser and the Company hereby
irrevocably authorize and direct you to close the transaction contemplated by
such notice in accordance with the terms of such notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, in accordance with the Agreement, against the simultaneous delivery to
you of the purchase price (by check, wire transfer or promissory note) for the
number of shares of stock being purchased pursuant to the exercise of the
Repurchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser hereby irrevocably constitutes and appoints you as Purchasers
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with the Department of Corporations of
the State of California of an Application for Consent to Transfer Securities
Subject to Legend or Escrow Condition pursuant to Section 25151 of the
California Corporation Securities Law of 1968. Subject to the provisions of this
paragraph 3, Purchaser shall exercise all rights and privileges of a shareholder
of the Company while the stock is held by you.
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4. Upon written request of Purchaser, but no more than once per calendar
year, unless the Repurchase Option has been exercised, you will deliver to
Purchaser a certificate or certificates representing so many shares of stock as
are not then subject to the Repurchase Option. Within two months after the
Company's Repurchase Option expires, you will deliver to Purchaser a certificate
or certificates representing the aggregate number of shares sold and issued
pursuant to the Agreement and not purchased by the Company or its assignees
pursuant to exercise of the Repurchase Option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely, and shall be protected in relying or
refraining from acting, on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and of any arbitrator provided
for in the Agreement, and are hereby expressly authorized to comply with and
obey orders, judgments or decrees of any court and of any such arbitrator. In
case you obey or comply with any such order, judgment or decree, you shall not
be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
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12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer of the Company or if you shall resign by
written notice to each party. In the event of any such termination, the Company
shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of any
arbitrator provided for in the Agreement or of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but you
shall be under no duty whatsoever to institute or defend any such proceedings.
15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery (including by
express courier) or upon deposit in the United States Post Office, by First
Class mail with postage and fees prepaid, addressed to each of the other parties
thereunto entitled at the following addresses, or at such other addresses as a
party may designate by ten days' advance written notice to each of the other
parties hereto.
COMPANY: Wink Communications, Inc.
0000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: President
PURCHASER: Xxxxxxxx X. Xxxxxx
00 Xxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
ESCROW AGENT: Secretary
Wink Communications, Inc.
0000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions. You do not become
a party to the Agreement.
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17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
Very truly yours,
WINK COMMUNICATIONS, INC.
a California corporation
By: /s/ Xxxxxx Xxxxxxxxxxx
------------------------------------
Its: President
-----------------------------------
XXXXXXXX X. XXXXXX
/s/ Xxxxxxxx X. Xxxxxx
---------------------------------------
(Signature)
ESCROW AGENT:
/s/ Xxxx Xxxxxx
-------------------------------------
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