EXHIBIT 10.6
RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of July 24, 2002 by and between FS2 Limited, a limited company
registered in England and Wales under Registration # 4102584 ("Company"), and
Red Sky Holdings LLC, a California limited liability company ("Purchaser"). This
Agreement is entered into to memorialize an allotment of the ordinary shares
((pound)1.00 par value) of the capital stock of Company, made and agreed upon on
April 15, 2002 by and among Company, Purchaser and others.
THE PARTIES AGREE AS FOLLOWS:
1. Purchase of Shares.
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Company hereby sells to Purchaser, and Purchaser hereby buys from Company,
One Thousand Nine Hundred Ninety Nine (1,999) shares (the "Shares") of the
ordinary shares ((pound)1.00 par) of capital stock of Company on the terms and
conditions set forth herein.
2. Purchase Price.
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Purchaser shall purchase the Shares from Company, and Company shall sell
the Shares to Purchaser, at a price of (pound)1.00 per share, for a total
purchase price of (pound)1,999 (the "Purchase Price"). Purchaser shall pay the
full amount of the Purchase Price in cash to Company upon execution of this
Agreement.
3. Right of Company to Repurchase Shares.
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3.1 Repurchase Right.
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The Shares shall be subject to a fully assignable right (but not
obligation) of repurchase by Company (the "Right of Repurchase"), at the
repurchase price of (pound)1.00 per Share (the "Repurchase Price"), if the
contractual relationship between the Company and Cornerstone Alliance LLC, a
California limited liability company which is related to and under common
control with Purchaser, terminates for any reason whatsoever (including death,
disability, involuntary termination by Company for cause or without cause,
voluntary termination by Purchaser, or expiration according to the contract's
terms without a renewal or replacement of the contract) (in any event, the
"Termination"). The Right of Repurchase shall apply during the period beginning
on the date of this Agreement and continuing for the term specified on Schedule
1 to this Agreement (the "Repurchase Period"). Company's rights under this
Section 3.1 shall be freely assignable to any other third party, in whole or in
part, and may be exercised as to all or any portion of the Shares subject to the
Right of Repurchase at the election of Company. The Right of Repurchase set
forth in this Section 3.1 shall lapse and shall cease to apply according to the
schedule set forth in Schedule 1 and attached to this Agreement.
3.2 Repurchase Procedure.
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The Right of Repurchase shall terminate if not exercised by written notice
from Company (or the assignee) to Purchaser within ninety (90) days after the
date on which Company receives notice of the Termination. If the Right of
Repurchase is exercised, Purchaser shall endorse and deliver to the exercising
party the certificates representing the Shares being repurchased, and such party
shall then promptly pay the total Repurchase Price to the Purchaser in cash or
by check.
3.3 Binding Effect.
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The Right of Repurchase shall inure to the benefit of the successors,
assigns, representatives, executors, administrators, heirs and legatees of
Company and shall be binding upon any representative, executor, administrator,
heir, legatee or permitted assignee of Purchaser. The restrictions imposed on
the Shares under this Agreement, including without limitation the Right of
Repurchase, shall continue to apply to any consideration received by Purchaser
with respect to the Shares during the Repurchase Period, and Purchaser shall
cooperate with any reasonable request of Company to confirm that the terms of
this Agreement are applicable to any such consideration, including by placing
legends upon any stock certificates Purchaser may receive in exchange for the
Shares.
4. Restrictions on Transfer; Share Certificate Restrictive Legends.
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During the Repurchase Period, no Shares which remain subject to the Right
of Repurchase shall be transferred by Purchaser to any other person without the
written consent of Company. To assure compliance with this restriction, in
addition to any other restrictive legends required to appear on the certificates
evidencing Shares, such certificates shall bear the following restrictive
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER, INCLUDING A RIGHT OF REPURCHASE, PURSUANT TO THE
PROVISIONS OF THE AGREEMENT RELATING TO THE ACQUISITION OF SUCH SHARES.
Upon the lapse of the Right of Repurchase with respect to a portion of the
Shares, Purchaser may submit the Share certificates to Company with a request
for removal of the above legend, and Company shall, within a reasonable time
after such request, reissue certificates for those Shares which are no longer
subject to the Right of Repurchase without the above legend.
5. Representations, Warranties, Covenants, and Acknowledgments of
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Purchaser.
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Purchaser hereby represents, warrants, covenants, acknowledges and agrees
that:
5.1 Investment.
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Purchaser is acquiring the Shares for Purchaser's own account, and not for
the account of any other person. Purchaser is acquiring the Shares for
investment and not with a view to distribution or resale thereof except in
compliance with applicable laws regulating securities.
5.2 Business Experience.
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Purchaser is capable of evaluating the merits and risks of Purchaser's
investment in Company evidenced by the purchase of the Shares.
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5.3 Relation of Company.
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Purchaser is currently a consultant, service provider or supplier of
Company and in such capacity has become personally familiar with the business,
affairs, financial conditions, and results of operations of Company. There have
been no representations or warranties by Company or any other person or entity,
upon which Purchaser is relying in connection with the transactions contemplated
by this Agreement, which are not fully set forth in this Agreement.
5.4 Access to Information.
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Purchaser has had the opportunity to ask questions of, and to receive
answers from the Company's Directors and management with respect to the terms
and conditions of the transactions contemplated hereby and with respect to the
business, affairs, financial conditions, and results of operations of Company.
Purchaser has had access to such financial and other information as is necessary
in order for Purchaser to make a fully-informed decision as to investment in
Company by way of purchase of the Shares, and has had the opportunity to obtain
any additional information necessary to verify any of such information to which
Purchaser has had access.
5.5 Speculative Investment.
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Purchaser's investment in Company represented by the Shares is highly
speculative in nature and is subject to a high degree of risk of loss in whole
or in part. The amount of such investment is within Purchaser's risk capital
means and is not so great in relation to Purchaser's total financial resources
as would jeopardize the personal financial needs of Purchaser or Purchaser's
family in the event such investment were lost in whole or in part.
5.6 Tax Advice.
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Company has made no warranties or representations to Purchaser with respect
to the income tax consequences of the transactions contemplated by this
Agreement and Purchaser is in no manner relying on Company or its
representatives for an assessment of such tax consequences.
6. Sale of Business.
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In the event Company determines to sell all or substantially all of its
assets, or to enter into a merger, reorganization, consolidation or other sale
of its business (regardless of form), or if Company's shareholders determine to
sell more than 50% of the shares of Company owned by them at the time of such
determination to a third party, then in any such case, Purchaser shall (i) at
Company's request, sell or transfer all (or such portion as requested by
Company) of the Shares to the acquiring person or entity at the same per share
purchase price and on the same terms received by the Company's other
shareholders for their shares, and (ii) at Company's request, take such other
action, and execute such documents and instruments, as are necessary or
appropriate to cooperate with Company and to facilitate such transaction.
7. No Contract of Employment, Partnership or Joint Venture.
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Purchaser acknowledges and agrees that this Agreement does not create any
contract of employment, partnership, joint venture and that the existing terms
of Purchaser's contractual relationship with Company are not modified by this
Agreement, except with respect to the treatment of the Shares and the rights of
Purchaser and Company with respect to the Shares
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8. Binding Effect.
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Subject to the limitations set forth in this Agreement, this Agreement
shall be binding upon, and inure to the benefit of, the executors,
administrators, heirs, legal representatives, successors and assigns of the
parties hereto.
9. Governing Law:
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This Agreement shall be construed and governed in accordance with English
law. In any arbitration or legal action brought to enforce the provisions
hereof, the prevailing party in such action shall be entitled to have its
reasonable attorney's fees, arbitration costs, and litigation expenses paid by
the non-prevailing party.
10. Notices.
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All notices and other communications under this Agreement shall be in
writing. Unless and until Purchaser is notified in writing to the contrary, all
notices, communications and documents directed to Company and related to the
Agreement, if not delivered by hand, shall be mailed, addressed as follows:
FS2 Limited
Fifth Floor Carlton Tower
00 Xx. Xxxxx Xxxxxx
Xxxxx XX0 0XX, Xxxxxxx
Attention: Corporate Secretary
Unless and until Company is notified in writing to the contrary, all notices,
communications and documents intended for Purchaser and related to this
Agreement, if not delivered by hand, shall be mailed to Purchaser's last known
address as shown on Company's books. Notices and communications shall be mailed
by registered mail, return receipt requested, postage prepaid. All mailings and
deliveries related to this Agreement shall be deemed received only when actually
received.
11. Entire Agreement.
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This Agreement constitutes the entire agreement of the parties and
supersedes any and all prior and contemporaneous negotiations, correspondence,
understandings and agreements between the parties respecting the subject matter
hereof. This Agreement may only be amended by a written instrument signed by the
parties hereto. In the event of any legal or equitable action or arbitration
arising our of this Agreement, the prevailing party shall be entitled to
attorneys' fees and costs in addition to any other relief to which the
prevailing party may be entitled.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY: FS2 LIMITED
By:
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Its:
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PURCHASER: Red Sky Holdings LLC, a California limited
liability company
By:
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F Xxxxxxx Xxxxxx, Manager
By:
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Xxxxxxx St. Xxxxxx Xxxxxx, Manager
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SCHEDULE 1
RIGHT OF REPURCHASE
Schedule for Lapse of Right of Repurchase
Repurchase Period: Pursuant to Section 3.1 of the Agreement, the Repurchase
Period shall commence on July 24, 2002 and continue until the close of business
(GMT) on October 23, 2004.
Schedule for Lapse of Right of Repurchase: Pursuant to Section 3.1 of the
Agreement, the Right of Repurchase shall lapse, and thereafter Purchaser's
Shares shall be free from the Right of Repurchase, according to the following
schedule:
(i) with respect to thirty-four percent (34%) of the Shares on the date of
this Agreement;
(ii) with respect to an additional sixteen and one-half percent (16.5%) of
the Shares on January 24, 2003;
(iii) with respect to an additional sixteen and one-half percent (16.5%) of
the Shares on July 24, 2003
(iv) with respect to an additional sixteen and one-half percent (16.5%) of
the Shares on January 24, 2004; and
(v) with respect to the final sixteen and one-half percent (16.5%) of the
Shares on July 24, 2004.
All references to Shares in this schedule and to percentages of Shares refers to
the total number of Shares originally purchased under the Agreement.
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