Exhibit 10.12
GODIGITAL CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the ___ day of _________, 199__ between
GoDigital Corporation, a California corporation (the "Company") and
__________________ (the "Purchaser").
In consideration of the mutual covenants and representations herein set
forth, the Company and the Purchaser agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser and
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the Purchaser hereby agrees to purchase an aggregate of ____________ shares of
the Company's Common Stock (the "Shares"), at the price of $.001 per Share for
an aggregate purchase price of $_________.
2. Payment of Purchase Price. The purchase price for the Shares shall be
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paid by delivery of a check in the amount thereof to the Company at the time of
execution of this Agreement.
3. Limitations on Transfer. In addition to any other limitation on
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transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option or Right of First Refusal except in
compliance with the provisions of this Section 3.
(a) Repurchase Option. In the event of the voluntary or involuntary
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termination of employment of Purchaser with the Company for any reason, with or
without cause (a "Termination"), the Company shall, upon the date of such
Termination, have an irrevocable, exclusive option (the "Repurchase Option") for
a period of 180 days from such date to repurchase from Purchaser, at the
original purchase price per Share (the "Repurchase Price"), all or any portion
of the Shares held by Purchaser as of such date, to the extent such Shares have
not yet been released from the Company's Repurchase Option. The Repurchase
Option shall be exercised by the Company by written notice to Purchaser or his
executor and, at the Company's option, (i) by delivery to the Purchaser or his
executor, with such notice, of a check in the amount of the purchase price for
the Shares being repurchased, or (ii) in the event the Purchaser is indebted to
the Company, by cancellation by the Company of an amount of such indebtedness
equal to the Repurchase Price for the Shares being repurchased, or (iii) by a
combination of (i) and (ii) so that the combined payment and cancellation of
indebtedness equals such Repurchase Price. Upon delivery of such notice and
payment of the Repurchase Price in any of the ways described above, the Company
shall
become the legal and beneficial owner of the Shares being repurchased and all
rights and interest therein or related thereto, and the Company shall have the
right to transfer to its own name the number of Shares being repurchased by the
Company, without further action by Purchaser.
(i) If a Termination occurs prior to a Change of Control, as defined
below, for any reason at any time after the date hereof and prior to the last
day of__________, 199__, the Repurchase Option shall apply to forty-six
forty-eighths (46/48) of the Shares. On the last day of _________, 199__, three
forty-eighths (3/48) of the Shares shall be released from the Repurchase Option
and one forty-eighth (1/48) of the Shares shall be released from the Repurchase
Option on the last day of each full calendar month thereafter, provided in each
case the Purchaser is an employee of the Company on the date of each said
release. Fractional shares shall be rounded to the nearest whole share.
Notwithstanding the foregoing, in the event of Termination of the Purchaser as a
result of Purchaser's death or total and permanent disability as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
("Disability"), the number of Shares released from the Repurchase Option shall
be that number of Shares which would have been subject to the Repurchase Option
pursuant to this Section 3(a)(i) had the Purchaser continued living or had not
become disabled for twelve (12) months after the date of death or Disability,
and had been continuously employed by the Company for those twelve (12) months.
(ii) If a Termination occurs following a Change of Control, as defined
below, for any reason the number of Shares subject to the Repurchase Option
shall be calculated as follows:
(x) fifteen forty-eighths (15/48) of the Shares shall be released on
_____________, 199__, and
(y) one forty-eighth (1/48) of the Shares shall be released from the
Repurchase Option on the last day of each full calendar month thereafter,
provided in each case the Purchaser is an employee of the Company on the date of
each said release. Fractional shares shall be rounded to the nearest whole
share. Notwithstanding the foregoing, in the event of Termination of the
Purchaser as a result of Purchaser's death or Disability, the number of Shares
released from the Repurchase Option shall be that number of Shares which would
have been subject to the Repurchase Option pursuant to this Section 3(a)(ii) had
the Purchaser continued living or had not become disabled for twelve (12) months
after the date of death or Disability, and had been continuously employed by the
Company for those twelve (12) months.
(iii) For the purposes of the foregoing, a Change of Control shall
occur upon the closing of (A) a merger or consolidation of the Company with or
into any other corporation or other entity, or sale of all or substantially all
of the assets of the Company, unless the stockholders of the Company immediately
prior to such transaction hold at least 50% of the outstanding equity
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securities of the entity surviving such merger or consolidation or the entity
purchasing such assets, or (B) upon a sale or transfer of more than 50% of the
Company's Common Stock to a person or persons acting as a group, who is or are
not controlled directly or indirectly by the Company, in a single transaction or
series of related transactions.
(b) Right of First Refusal. Before any Shares which are not subject
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to the Repurchase Option may be sold or transferred (including transfer by
operation of law), such Shares shall first be offered to the Company (the "Right
of First Refusal").
(i) In the event the Purchaser wishes to sell the Shares,
Purchaser shall deliver a notice ("Notice") to the Company stating (A) his bona
fide intention to sell or transfer such Shares, (B) the number of such Shares to
be sold or transferred, (C) the price for which he proposes to sell or transfer
such Shares, and (D) the name of the proposed purchaser or transferee.
(ii) Within thirty (30) days after receipt of the Notice, the
Company or its assignee may elect to purchase all or none of the Shares to which
the Notice refers, at the price per Share specified in the Notice. The purchase
of the Shares in either such event shall occur at a closing held at the
Company's principal office at a mutually agreed upon time which in no event
shall be more than thirty (30) days following the end of the time period in
which the Company had to elect to purchase such Shares.
(iii) If all of the Shares to which the Notice refers are not
elected to be purchased, as provided in Section 3(c) hereof, Purchaser may sell
the Shares to any person named in the Notice at the price specified in the
Notice or at a higher price, provided that such sale or transfer is consummated
within sixty (60) days of the date of said Notice to the Company, and provided,
further, that any such sale is in accordance with all the terms and conditions
hereof.
(c) Termination of Restrictions. Notwithstanding the provisions of
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Section 3(c) above, the Company's Right of First Refusal shall terminate
immediately as to all Shares upon the occurrence of the first to occur of the
following events:
(i) the acquisition of the Company by another entity by means of
the merger or consolidation of the Company with or into another corporation in
which the shareholders of the Company own less than 50% of the voting securities
of the surviving entity,
(ii) the sale of all or substantially all of the assets of the
Company, or
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(iii) the date upon which a public market exists for the Company's
capital stock (or any other stock issued to purchasers in exchange for the
Shares purchased under this Agreement). For the purpose of this Agreement, a
"Public Market" shall be deemed to exist if (i) such stock is listed on a
national securities exchange (as that term is used in the Securities Exchange
Act of 1934) or (ii) such stock is traded on the over-the-counter market and
prices are published daily on business days in a recognized financial journal.
(d) Assignment. Whenever the Company shall have the right to purchase
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Shares under this Section 3, 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 of the Company's purchase rights under this
Agreement and purchase all of such Shares; provided that if the fair market
value of the Shares to be purchased on the date of such designation or
assignment (the "Repurchase FMV") exceeds the purchase price of the Shares
(determined as described hereinabove) to be purchased, then each such designee
or assignee shall pay the Company cash equal to the difference between the
Repurchase FMV and the purchase price of the Shares which such designee or
assignee shall have the right to purchase.
(e) Exempt Transfers. The provisions of this Section 3 shall not
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apply to a transfer of any Shares by Purchaser, either during his lifetime or on
death by will or intestacy to his ancestors, descendants or spouse, or any
custodian or trustee for the account of Purchaser or Purchaser's ancestors,
descendants or spouse; provided, in each such case that the transferee shall
receive and hold such Shares subject to all of the provisions of this Section 3
and there shall be no further transfer of such Shares except in accordance
herewith.
4. Standoff Agreement. Purchaser agrees, in connection with the
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Company's initial public offering of its equity securities, not to sell, make
any short sale of, loan, grant any option for the purchase of or otherwise
dispose of any Shares (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; provided, that the officers and directors of the
Company who own stock of the Company also agree to such restrictions.
5. No Transfer Except in Compliance with the Restrictions Herein. The
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Company shall not be required (i) to transfer on its books any Shares which
shall have 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 transferee to whom
such Shares shall have been so transferred. Purchaser shall not sell, transfer,
pledge, hypothecate or
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otherwise dispose of any shares which remain subject to the restrictions on
transfer set forth in Section 3 hereof.
6. Legends. All certificates representing any of the Shares subject to
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the provisions of this Agreement shall have endorsed thereon the following
legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER, RIGHTS OF FIRST REFUSAL AND RIGHTS OF REPURCHASE AS
SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION."
(b) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF ANY EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED."
7. Escrow of Shares.
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(a) The Shares issued under this Agreement shall be held by an escrow
holder designated by the Company (the "Escrow Holder"), along with two stock
assignments executed by the Purchaser in blank, until the expiration of the
Company's options and right of first refusal with respect to such Shares as set
forth above.
(b) The Escrow Holder is hereby directed to permit transfer of the
Shares only in accordance with this Agreement or instructions signed by both
parties. In the event further instructions are desired by the Escrow Holder,
he shall be entitled to rely upon directions executed by a majority of the
authorized number of the Company's Board of Directors. The Escrow Holder shall
have no liability for any act or omission hereunder while acting in good faith
in the exercise of his own judgment.
(c) If the Company or any assignee exercises its Repurchase Option or
Right of First Refusal hereunder, the Escrow Holder, upon receipt of written
notice of such exercise from the proposed transferee, shall take all steps
necessary to accomplish such transfer.
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(d) When the Repurchase Option or Right of First Refusal have been
exercised or expire unexercised or a portion of the Shares has been released
from the provisions of Section 3 hereof, upon Purchaser's request the Escrow
Holder shall promptly cause a new certificate to be issued for such released
Shares and shall deliver such certificate to the Purchaser.
(e) Subject to the terms hereof, the Purchaser shall have all the
rights of a shareholder with respect to such Shares while they are held in
escrow, including without limitation, the right to vote the Shares and receive
any cash dividends declared thereon. If, from time to time during the term of
the provisions of Section 3, there is (i) any stock dividend, stock split or
other change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of his ownership of the Shares shall be immediately subject to this
escrow, deposited with the Escrow Holder and included thereafter as "Shares" for
purposes of this Agreement and the Company's Repurchase Option and Right of
First Refusal.
8. Investment Representations. In connection with the purchase of the
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Shares, the Purchaser shall, concurrently with the purchase of the Shares,
deliver to the Company his Investment Representation Statement attached hereto
as Exhibit A.
9. Adjustment for Stock Split. All references to the number of Shares
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and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
10. Tax Consequences. The Purchaser has reviewed with the Purchaser's own
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tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement (including any
tax consequences that may result under recently enacted tax legislation). The
Purchaser is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Purchaser understands
that the Purchaser (and not the Company) shall be responsible for the
Purchaser's own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement. The Purchaser understands that
Section 83 of the Internal Revenue Code, as amended (the "Code"), taxes as
ordinary income both (i) the difference between the fair market value of the
Shares when the Company granted the Purchaser the right to purchase the Shares
and the fair market value of the Shares on the date of this Agreement and (ii)
the difference between the amount paid for the Shares and the fair market value
of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" includes the right of the Company to buy back the Shares
pursuant to certain of its rights under Section 3. In the event the Company has
registered under the Securities Exchange
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Act of 1934, as amended (the "Exchange Act"), "restriction" with respect to
officers, directors and 10% shareholders also means the period after the
purchase of the Shares during which such officers, directors and 10%
shareholders could be subject to suit under Section 16(b) of the Exchange Act.
The Purchaser understands that he may elect to be taxed at the time the Shares
are purchased rather than when and as the Company's repurchase option or 16(b)
period expires by filing an election under Section 83(b) of the Code with the
I.R.S. within 30 days from the date of purchase. However, the changes in tax
rates implemented by the Tax Reform Act of 1986, including the phase-in of new
rates during 1987, necessitate review of an optionee's specific situation to
determine whether the optionee's ultimate tax liability could increase or
decrease as a result of filing an election under Section 83(b).
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE
THIS FILING ON THE PURCHASER'S BEHALF.
11. Termination of Employment.
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Purchaser understands and acknowledges that nothing in this Agreement,
shall confer any right upon Purchaser with respect to continuation of employment
by the Company, nor shall it interfere in any way with his right or the
Company's right to terminate his employment at any time, with or without cause.
12. General Provisions.
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(a) Governing Law. This Agreement shall be governed by the laws of
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the State of California. This Agreement represents the entire agreement between
the parties with respect to the purchase of Common Stock by the Purchaser and
may only be modified or amended in writing signed by both parties.
(b) Notices. Any notice, demand or request required or permitted to
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be given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the
other in writing.
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Any notice to the Escrow Holder shall be sent to the Company's address
with a copy to the other party not sending the notice.
(c) Assignment. The rights and benefits of the Company under this
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Agreement shall be transferable to any one or more persons or entities, and all
covenants and agreements hereunder shall inure to the benefit of, and be
enforceable by the Company's successors and assigns. The rights and obligations
of the Purchaser under this Agreement may only be assigned with the prior
written consent of the Company.
(d) Waiver. Either party's failure to enforce any provision or
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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.
(e) Additional Actions. The Purchaser agrees upon request to execute
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any further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.
(f) Arbitration. At the option of either party, any and all disputes
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or controversies, whether of law or in equity, and of any nature whatsoever
arising from or respecting this Agreement, unless otherwise expressly provided
herein, shall be decided by arbitration by the American Arbitration Association
in accordance with the rules and regulations of that Association.
(i) 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 on independent, qualified
arbitrator and these two arbitrators shall select a third arbitrator. The
Company reserves the right to reject any individual arbitrator who shall be
employed by or affiliated with a competing organization.
(ii) Arbitration shall take place at Palo Alto, California, or
any other location mutually agreeable to the parties. At the request of either
party, arbitration proceedings will be conducted in secrecy. In such case all
documents, testimony, and records shall be received, heard, and maintained by
the arbitrators in secrecy under seal, available for inspection only by the
Company and the 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. The arbitrators, who
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shall act by majority vote, shall be able to decree any and all relief of an
equitable nature, including but not limited to such relief as a temporary
restraining order, a temporary or a permanent injunction, or both, and shall
also be able to award damages (with or without an accounting), costs, and
reasonable attorneys' fees. The decree or judgment of an award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
(iii) 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, in which case such persons or their authorized representatives shall have
the right to attend and participate in all the arbitration hearings to the
extent and in such manner as the law shall require.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first set forth above.
GODIGITAL CORPORATION PURCHASER:
a California corporation
By: __________________________ ______________________________
_____________, Chief Financial Officer ______________________
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CONSENT OF SPOUSE
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I, ____________________, spouse of ______________, have read and approve
the foregoing Restricted Stock Agreement dated as of __________, 199__ (the
"Agreement"). In consideration of GoDigital Corporation granting the right to
my spouse to purchase shares of GoDigital Corporation, 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 pro
visions of the Agreement insofar as I may have any rights in said Agreement or
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 foregoing
Agreement.
Dated: _______________, 199__ Signature:_________________
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, ________________, hereby sell, assign and transfer
unto _________________________________________________________________________
________ (__________) shares of the Common Stock of GoDigital Corporation
standing in my name of the books of said corporation represented by Certificate
No. _____ herewith and do hereby irrevocably constitute and appoint Wilson,
Sonsini, Good rich & Xxxxxx, attorney, to transfer the said stock on the books
of the within named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between GoDigital Corporation and the undersigned dated
as of ______________, 199__.
Dated: _______________, 199__
Signature:______________________________
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________, hereby sell, assign and transfer
unto __________________________________________________________________________
________ (__________) shares of the Common Stock of GoDigital Corporation
standing in my name of the books of said corporation represented by Certificate
No. _____ herewith and do hereby irrevocably constitute and appoint Wilson,
Sonsini, Good rich & Xxxxxx, attorney, to transfer the said stock on the books
of the within named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between GoDigital Corporation and the undersigned dated
as of ____________, 199__.
Dated: _______________, 199__
Signature:______________________________
ELECTION UNDER SECTION 83(b)
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OF THE INTERNAL REVENUE CODE OF 1986
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The undersigned taxpayer hereby elects, pursuant to the above-referenced Federal
Tax Code, to include in his gross income for the current taxable year, the
amount of any compensation taxable to him in connection with his receipt of the
property described below:
The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME: TAXPAYER: ______________ SPOUSE: ________________
ADDRESS: _______________________________________
IDENTIFICATION NO. OF TAXPAYER: ____________ SPOUSE: ___________
TAXABLE YEAR : 199__
2. The property with respect to which the election is made is described as
follows:
_____________ shares (the "Shares") of the Common Stock of GoDigital
Corporation (the "Company").
3. The date on which the property was transferred is: _______________________.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, on certain
events. This right lapses with regard to a portion of the Shares over time.
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: $ .
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6. The amount (if any) paid for such property is: $ .
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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
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except with the consent of the Commissioner.
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Dated: _____________ ___________________________________
_______________, Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: _____________ ___________________________________
Spouse of Taxpayer
EXHIBIT A
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INVESTMENT REPRESENTATION STATEMENT
PURCHASER : ______________________
COMPANY : GODIGITAL CORPORATION
SECURITY : COMMON STOCK
AMOUNT : ______________ SHARES
In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Company the following:
(a) I am sufficiently aware of the Company's business affairs and
financial condition to reach an informed and knowledgeable decision to acquire
the Securities. I am purchasing these Securities for my own account for
investment purposes only and not with a view to, or for the resale in connection
with, any "distribution" thereof for purposes of the Securities Act of 1933, as
amended (the "Securities Act").
(b) I understand that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission (the "SEC"), the statutory
basis for such exemption may be unavailable if my representation was predicated
solely upon a present intention to hold these Securities 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 Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from registration is
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otherwise available (such as Rule 144 or the resale provisions of Rule 701 under
the Securities Act). Moreover, I understand that the Company is under no
obligation to register the Securities. In addition, I understand that the
certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promulgated under
the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, including, among other things: (1)
The availability of certain public information about the Company; (2) the resale
occurring not less than two years after the party has purchased, and made full
payment for, within the meaning of Rule 144, the securities to be sold; and, in
the case of an affiliate, or of a non-affiliate who has held the securities less
than three years, (3) the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker, as said
term is defined under the Securities Exchange Act of 1934 (the "Exchange Act")
and the amount of securities being sold during any three month period not
exceeding the specified limitations stated therein, if applicable. The Purchaser
further understands that the resale provisions of Rule 701 will not apply until
90 days after the Company becomes subject to the reporting obligations under the
Exchange Act (typically upon the effective date of a company's initial public
offerings). There can be no assurances that the requirements of Rule 144 or
Rule 701 will be met, or that the Securities will ever be saleable.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
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, I would be precluded from selling the Securities under Rule 144 even
if the two-year minimum holding period had been satisfied.
(f) I further understand that in the event all of the applicable
requirements of Rule 144 are not satisfied, or that the resale provisions of
Rule 701 are not available, registration under the Securities Act, compliance
with Regulation A, compliance with some other registration exemption or the
notification to the Company of the proposed disposition by me and the furnishing
to the Company of (i) detailed information regarding the disposition, and (ii)
and opinion of my counsel to the effect that such disposition will not require
registration (I understand such counsel's opinion shall concur with the opinion
by counsel for the Company and I shall have been informed of such compliance)
will be required and 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
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securities other than in a registered offering and otherwise than 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) I further understand that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities without the consent of the Commissioner of Corporations of
California. I have read the applicable Commissioner's Rules with respect to
such restriction, a copy of which is attached.
Signature of Purchaser:
________________________________
__________________
Dated as of ___________, 199__
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