1
EXHIBIT 99.6
FORM OF STOCK OPTION EXERCISE AGREEMENT-IMMEDIATELY EXERCISABLE OPTION
2
FIBEX SYSTEMS
1997 STOCK OPTION PLAN
STOCK OPTION EXERCISE AGREEMENT
(IMMEDIATELY EXERCISABLE OPTION)
This Exercise Agreement (this "EXERCISE AGREEMENT") is made and
entered into as of _____________, 1998 (the "EFFECTIVE DATE") by and between
Fibex Systems, a California corporation (the "COMPANY"), and the purchaser named
below (the "PURCHASER"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company's 1997 Stock Option Plan (the "PLAN").
PURCHASER: <> <>
SOCIAL SECURITY NUMBER: ____________________________________
ADDRESS: ____________________________________
____________________________________
TOTAL NUMBER OF SHARES: ____________________________________
EXERCISE PRICE PER SHARE: $<>
TOTAL EXERCISE PRICE: ____________________________________
DATE OF GRANT: <>
TYPE OF OPTION:
1. EXERCISE OF OPTION.
1.1 Exercise. Pursuant to exercise of that certain option
("OPTION") granted to Purchaser under the Plan and subject to the terms and
conditions of this Exercise Agreement, Purchaser hereby purchases from the
Company, and the Company hereby sells to Purchaser, the Total Number of Shares
set forth above ("SHARES") of the Company's Common Stock at the Exercise Price
Per Share set forth above ("EXERCISE PRICE"). As used in this Agreement, the
term "SHARES" refers to the Shares purchased under this Exercise Agreement and
includes all securities received (a) in replacement of the Shares, (b) as a
result of stock dividends or stock splits with respect to the Shares, and (c)
all securities received in replacement of the Shares in a merger,
recapitalization, reorganization or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s)
under which Purchaser will take title to the Shares is:
___________________________________________________________________
___________________________________________________________________
Purchaser desires to take title to the Shares as follows:
[ ] Individual, as separate property
[ ] Husband and wife, as community property
[ ] Joint Tenants
[ ] Alone or with spouse as trustee(s) of the following trust
(including date):
_______________________________________________________________
_______________________________________________________________
[ ] Other; please specify:_________________________________________
_______________________________________________________________
1.3 Payment. Purchaser hereby delivers payment of the
Exercise Price in the manner permitted in the Stock Option Agreement as follows
(check and complete as appropriate):
[ ] in cash in the amount of $____________, receipt of which is
acknowledged by the Company;
3
[ ] by cancellation of indebtedness of the Company to Purchaser in
the amount of $__________;
[ ] by delivery of _________ fully-paid, nonassessable and vested
shares of the Common Stock of the Company owned by Purchaser
for at least six (6) months prior to the date hereof which have
been paid for within the meaning of SEC Rule 144, (if purchased
by use of a promissory note, such note has been fully paid with
respect to such vested shares), or obtained by Purchaser in the
open public market, and owned free and clear of all liens,
claims, encumbrances or security interests, valued at the
current Fair Market Value of $___________ per share;
[ ] by tender of a Full Recourse Promissory Note in the principal
amount of $__________, having such terms as may be approved by
the Committee and bearing interest at a rate sufficient to
avoid imputation of income under Sections 483 and 1274 of the
Code and secured by a Pledge Agreement herewith; provided,
however, that Participants who are not employees or directors
of the Company shall not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by
collateral other than the Shares;
[ ] by the waiver hereby of compensation due or accrued for
services rendered in the amount of $_________.
2. DELIVERY.
2.1 Deliveries by Purchaser. Purchaser hereby delivers to
the Company (i) this Exercise Agreement, (ii) two (2) copies of a blank Stock
Power and Assignment Separate from Stock Certificate in the form of Exhibit 1
attached hereto (the "STOCK POWERS"), both executed by Purchaser (and
Purchaser's spouse, if any), (iii) if Purchaser is married, a Consent of Spouse
in the form of Exhibit 2 attached hereto (the "SPOUSE CONSENT") executed by
Purchaser's spouse, and (iv) the Exercise Price together with a promissory note
and pledge agreement ("PLEDGE AGREEMENT"), if applicable, in the forms of
Exhibits 3 and 5 attached hereto, respectively, and (v) provision for any
required tax withholding by cash, check or an agreement by Purchaser (in a form
acceptable to the Company) to a reduction of Purchaser's future compensation to
pay for any required tax withholding.
2.2 Deliveries by the Company. Upon its receipt of the
Exercise Price and all the documents to be executed and delivered by Purchaser
to the Company under Section 2.1, the Company will issue a duly executed stock
certificate evidencing the Shares in the name of Purchaser, to be placed in
escrow as provided in Section 11 until expiration or termination of the
Company's Repurchase Option for Unvested Shares described in Section 8.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Company that:
3.1 Agrees to Terms of the Plan. Purchaser has received a
copy of the Plan and the Stock Option Agreement, has read and understands the
terms of the Plan, the Stock Option Agreement and this Exercise Agreement, and
agrees to be bound by their terms and conditions. Purchaser acknowledges that
there may be adverse tax consequences upon exercise of the Option or disposition
of the Shares, and that Purchaser should consult a tax adviser prior to such
exercise or disposition.
3.2 Purchase for Own Account for Investment. Purchaser is
purchasing the Shares for Purchaser's own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Shares within the meaning of the Securities Act of 1933, as amended (the
"SECURITIES ACT"). Purchaser has no present intention of selling or otherwise
disposing of all or any portion of the Shares and no one other than Purchaser
(and his or her spouse, if any) has any beneficial ownership of any of the
Shares.
3.3 Access to Information. Purchaser has had access to all
information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser
-2-
4
reasonably considers important in making the decision to purchase the Shares,
and Purchaser has had ample opportunity to ask questions of the Company's
representatives concerning such matters and this investment.
3.4 Understanding of Risks. Purchaser is fully aware of:
(i) the highly speculative nature of the investment in the Shares; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Shares and the
restrictions on transferability of the Shares (e.g., that Purchaser may not be
able to sell or dispose of the Shares or use them as collateral for loans); (iv)
the qualifications and backgrounds of the management of the Company; and (v) the
tax consequences of investment in the Shares. Purchaser is capable of evaluating
the merits and risks of this investment, has the ability to protect Purchaser's
own interests in this transaction and is financially capable of bearing a total
loss of this investment.
3.5 No General Solicitation. At no time was Purchaser
presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in
connection with the offer, sale and purchase of the Shares.
4. COMPLIANCE WITH SECURITIES LAWS.
4.1 Compliance with Federal Securities Laws. Purchaser
understands and acknowledges that the Shares have not been registered with the
SEC under the Securities Act and that, notwithstanding any other provision of
the Stock Option Agreement to the contrary, the exercise of any rights to
purchase any Shares is expressly conditioned upon compliance with the Securities
Act and all applicable state securities laws. Purchaser agrees to cooperate with
the Company to ensure compliance with such laws. The Shares are being issued
under the Securities Act pursuant to the exemption provided by SEC Rule 701.
4.2 Compliance with California Securities Laws. The Plan,
The stock option agreement, and this EXERCISE Agreement are intended to comply
with Section 25102(o) of the California Corporations Code. Any provision of this
exercise Agreement which is inconsistent with Section 25102(o) shall, without
further act or amendment by the Company or the Board, be reformed to comply with
the requirements of Section 25102(o). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.
5. RESTRICTED SECURITIES.
5.1 No Transfer Unless Registered or Exempt. Purchaser
understands that Purchaser may not transfer any Shares unless such Shares are
registered under the Securities Act or qualified under applicable state
securities laws or unless, in the opinion of counsel to the Company, exemptions
from such registration and qualification requirements are available. Purchaser
understands that only the Company may file a registration statement with the SEC
and that the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2 SEC Rule 144. In addition, Purchaser has been advised
that SEC Rule 144 promulgated under the Securities Act, which permits certain
limited sales of unregistered securities, is not presently available with
respect to the Shares and, in any event, requires that the Shares be held for a
minimum of two years, and in certain cases three years, after they have been
purchased and paid for (within the meaning of Rule 144). Purchaser understands
that Shares paid for with a Note may not be deemed to be fully "paid for" within
the meaning of Rule 144 unless certain conditions are met and that, accordingly,
the Rule 144 holding period of such Shares may not begin to run until such
Shares are fully paid for within the meaning of Rule 144. Purchaser understands
that
-3-
5
Rule 144 may indefinitely restrict transfer of the Shares so long as Purchaser
remains an "affiliate" of the Company or if "current public information" about
the Company (as defined in Rule 144) is not publicly available.
5.3 SEC Rule 701. The Shares are issued pursuant to SEC
Rule 701 promulgated under the Securities Act and may become freely tradeable by
non-affiliates (under limited conditions regarding the method of sale) 90 days
after the first sale of Common Stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
SEC, subject to the lengthier market standoff agreement contained in Section 7
of this Exercise Agreement or any other agreement entered into by Purchaser.
Affiliates must comply with the provisions (other than the holding period
requirements) of Rule 144.
6. RESTRICTIONS ON TRANSFERS.
6.1 Disposition of Shares. Purchaser hereby agrees that
Purchaser shall make no disposition of the Shares (other than as permitted by
this Agreement) unless and until:
(a) Purchaser shall have notified the Company of the
proposed disposition and provided a written summary of the terms and conditions
of the proposed disposition;
(b) Purchaser shall have complied with all
requirements of this Exercise Agreement applicable to the disposition of the
Shares;
(c) Purchaser shall have provided the Company with
written assurances, in form and substance satisfactory to counsel for the
Company, that (i) the proposed disposition does not require registration of the
Shares under the Securities Act or (ii) all appropriate action necessary for
compliance with the registration requirements of the Securities Act or of any
exemption from registration available under the Securities Act (including Rule
144) has been taken; and
(d) Purchaser shall have provided the Company with
written assurances, in form and substance satisfactory to the Company, that the
proposed disposition will not result in the contravention of any transfer
restrictions applicable to the Shares pursuant to the provisions of the
Commissioner Rules identified in Section 4.2.
6.2 Restriction on Transfer. Purchaser shall not transfer,
assign, xxxxx x xxxx or security interest in, pledge, hypothecate, encumber or
otherwise dispose of any of the Shares which are subject to the Company's
Repurchase Option for Unvested Shares or the Company's Right of First Refusal,
except as permitted by this Exercise Agreement.
6.3 Transferee Obligations. Each person (other than the
Company) to whom the Shares are transferred by means of one of the permitted
transfers specified in this Exercise Agreement must, as a condition precedent to
the validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Exercise Agreement and that the
transferred Shares are subject to (i) both the Company's Repurchase Option for
Unvested Shares and the Company's Right of First Refusal granted hereunder and
(ii) the market stand-off provisions of Section 7, to the same extent such
Shares would be so subject if retained by the Purchaser.
7. MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with
any registration of the Company's securities that, upon the request of the
Company or the underwriters managing any public offering of the Company's
securities, Purchaser will not sell or otherwise dispose of any Shares without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed 180 days) after the effective date of
such registration requested by such managing underwriters and subject to all
restrictions as the Company or the underwriters may specify. Purchaser further
agrees to enter into any agreement reasonably required by the underwriters to
implement the foregoing.
8. COMPANY'S REPURCHASE OPTION FOR UNVESTED SHARES. The Company or
its assignee, shall have the option to repurchase Purchaser's Unvested Shares
(as defined in Section 2.2 of the Stock Option Agreement) on the terms and
conditions set forth in this Section (the "REPURCHASE OPTION FOR UNVESTED
SHARES") if
-4-
6
Purchaser is Terminated (as defined in the Plan) for any reason, or no reason,
including without limitation Purchaser's death, Disability (as defined in the
Plan), voluntary resignation or termination by the Company with or without
Cause. Notwithstanding the foregoing, the Company shall retain the Repurchase
Option for Unvested Shares only as to that number of Unvested Shares (whether or
not exercised) that exceeds the number of shares which remain exercisable.
8.1 Termination and Termination Date. In case of any
dispute as to whether Purchaser is Terminated, the Committee shall have
discretion to determine whether Purchaser has been Terminated and the effective
date of such Termination (the "TERMINATION DATE").
8.2 Exercise of Repurchase Option for Unvested Shares. At
any time within ninety (90) days after the Purchaser's Termination Date, the
Company, or its assignee, may elect to repurchase the Purchaser's Unvested
Shares by giving Purchaser written notice of exercise of the Repurchase Option
for Unvested Shares.
8.3 Calculation of Repurchase Price for Unvested Shares.
The Company or its assignee shall have the option to repurchase from Purchaser
(or from Purchaser's personal representative as the case may be) the Unvested
Shares at the Purchaser's Exercise Price, proportionately adjusted for any stock
split or similar change in the capital structure of the Company as set forth in
Section 2.2 of the Plan.
8.4 Payment of Repurchase Price. The repurchase price shall
be payable, at the option of the Company or its assignee, by check or by
cancellation of all or a portion of any outstanding indebtedness of Purchaser to
the Company or such assignee, or by any combination thereof. The repurchase
price shall be paid without interest within sixty (60) days after exercise of
the Repurchase Option for Unvested Shares.
8.5 Right of Termination Unaffected. Nothing in this
Exercise Agreement shall be construed to limit or otherwise affect in any manner
whatsoever the right or power of the Company (or any Parent or Subsidiary of the
Company) to terminate Purchaser's employment or other relationship with the
Company (or the Parent or Subsidiary of the Company) at any time, for any reason
or no reason, with or without cause.
9. COMPANY'S RIGHT OF FIRST REFUSAL. Unvested Shares may not be
sold or otherwise transferred by Purchaser without the Company's prior written
consent. Before any Vested Shares held by Purchaser or any transferee of such
Vested Shares (either being sometimes referred to herein as the "HOLDER") may be
sold or otherwise transferred (including without limitation a transfer by gift
or operation of law), the Company and/or its assignee(s) shall have an
assignable right of first refusal to purchase the Vested Shares to be sold or
transferred (the "OFFERED SHARES") on the terms and conditions set forth in this
Section (the "RIGHT OF FIRST REFUSAL").
9.1 Notice of Proposed Transfer. The Holder of the Offered
Shares shall deliver to the Company a written notice (the "Notice") stating: (i)
the Holder's bona fide intention to sell or otherwise transfer the Offered
Shares; (ii) the name of each proposed bona fide purchaser or other transferee
("PROPOSED TRANSFEREE"); (iii) the number of Offered Shares to be transferred to
each Proposed Transferee; (iv) the bona fide cash price or other consideration
for which the Holder proposes to transfer the Offered Shares (the "OFFERED
PRICE"); and (v) that the Holder will offer to sell the Offered Shares to the
Company and/or its assignee(s) at the Offered Price as provided in this Section.
9.2 Exercise of Right of First Refusal. At any time within
thirty (30) days after the date of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase the
Offered Shares proposed to be transferred to any one or more of the Proposed
Transferees named in the Notice, at the purchase price determined as specified
below.
9.3 Purchase Price. The purchase price for the Offered
Shares purchased under this Section will be the Offered Price. If the Offered
Price includes consideration other than cash, then the cash equivalent value of
the non-cash consideration shall conclusively be deemed to be the value of such
non-cash consideration as determined in good faith by the Company's Board of
Directors.
-5-
7
9.4 Payment. Payment of the purchase price for Offered
Shares will be payable, at the option of the Company and/or its assignee(s) (as
applicable), by check or by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or to such assignee, in the case of a
purchase of Offered Shares by such assignee) or by any combination thereof. The
purchase price will be paid without interest within sixty (60) days after the
Company's receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
9.5 Holder's Right to Transfer. If all of the Offered
Shares proposed in the Notice to be transferred to a given Proposed Transferee
are not purchased by the Company and/or its assignee(s) as provided in this
Section, then the Holder may sell or otherwise transfer such Offered Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided
that such sale or other transfer is consummated within 120 days after the date
of the Notice, and provided further, that (i) any such sale or other transfer is
effected in compliance with all applicable securities laws and (ii) the Proposed
Transferee agrees in writing that the provisions of this Section will continue
to apply to the Offered Shares in the hands of such Proposed Transferee. If the
Offered Shares described in the Notice are not transferred to the Proposed
Transferee within such 120 day period, then a new Notice must be given to the
Company, and the Company will again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.
9.6 Exempt Transfers. Notwithstanding anything to the
contrary in this Section, the following transfers of Vested Shares will be
exempt from the Right of First Refusal: (i) the transfer of any or all of the
Vested Shares during Purchaser's lifetime by gift or on Purchaser's death by
will or intestacy to Purchaser's "immediate family" (as defined below) or to a
trust for the benefit of Purchaser or Purchaser's immediate family, provided
that each transferee or other recipient agrees in a writing satisfactory to the
Company that the provisions of this Section will continue to apply to the
transferred Vested Shares in the hands of such transferee or other recipient;
(ii) any transfer of Shares made pursuant to a statutory merger or statutory
consolidation of the Company with or into another corporation or corporations
(except that the Right of First Refusal and Repurchase Option for Unvested
Shares will continue to apply thereafter to such Shares, in which case the
surviving corporation of such merger or consolidation shall succeed to the
rights of the Company under this Section unless the agreement of merger or
consolidation expressly otherwise provides); or (iii) any transfer of Vested
Shares pursuant to the winding up and dissolution of the Company. As used
herein, the term "immediate family" will mean Purchaser's spouse, the lineal
descendant or antecedent, father, mother, brother or sister, adopted child,
grandchild or adopted grandchild of the Purchaser or the Purchaser's spouse, or
the spouse of any child, adopted child, grandchild or adopted grandchild of
Purchaser or the Purchaser's spouse.
9.7 Termination of Right of First Refusal. The Company's
Right of First Refusal will terminate when the Company's securities become
publicly traded.
10. RIGHTS AS SHAREHOLDER. Subject to the terms and conditions of
this Exercise Agreement from and after the date that Purchaser delivers payment
of the Exercise Price until such time as Purchaser disposes of the Shares or the
Company and/or its assignee(s) exercise(s) the Repurchase Option for Unvested
Shares or Right of First Refusal, Purchaser will have all of the rights of a
shareholder of the Company with respect to the Shares. Upon an exercise of the
Repurchase Option for Unvested Shares or the Right of First Refusal, Purchase
will have no further rights as a holder of the Shares so purchased upon such
exercise, except the right to receive payment for the Shares so purchased in
accordance with the provisions of this Exercise Agreement, and Purchase will
promptly surrender the stock certificate(s) evidencing the Shares so purchased
to the Company for transfer or cancellation.
11. ESCROW. As security for Purchaser's faithful performance of
this Exercise Agreement and the Pledge Agreement, if applicable, Purchaser
agrees, immediately upon receipt of the stock certificate(s) evidencing the
Shares, to deliver such certificate(s), together with the Stock Powers executed
by Purchaser and by Purchaser's spouse, if any (with the date and number of
Shares left blank), to the Secretary of the Company or other designee of the
Company ("ESCROW HOLDER"), who is hereby appointed to hold such certificate(s)
and Stock Powers in escrow and to take all such actions and to effectuate all
such transfers and/or releases of such Shares as are in accordance with the
terms of this Exercise Agreement. Purchaser and the Company agree that Escrow
Holder will not be liable to any party to this Exercise Agreement (or to any
other party) for any actions or omissions unless Escrow Holder is grossly
negligent or intentionally fraudulent in carrying out the duties of Escrow
Holder under this Exercise Agreement. Escrow Holder may rely upon any letter,
notice or other document executed by any signature
-6-
8
purported to be genuine and may rely on the advice of counsel and obey any order
of any court with respect to the transactions contemplated by this Exercise
Agreement. The Shares will be released from escrow upon termination of the
Repurchase Option for Unvested Shares provided, however, that the Shares will be
retained in escrow so long as they are subject to the Pledge Agreement.
12. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
11.1 Legends. Purchaser understands and agrees that the
Company will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the Shares, together with any other legends that may
be required by state or federal securities laws, the Company's Articles of
Incorporation or Bylaws, any other agreement between Purchaser and the Company
or any agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON PUBLIC RESALE, TRANSFER, RIGHT OF REPURCHASE AND
RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER AND/OR ITS
ASSIGNEE(S) AS SET FORTH IN A STOCK OPTION EXERCISE AGREEMENT
BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY
OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS AND THE RIGHT OF
REPURCHASE AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES.
12.2 Stop-Transfer Instructions. Purchaser agrees that, to
ensure compliance with the restrictions imposed by this Exercise Agreement, the
Company may issue appropriate "stop-transfer" instructions to its transfer
agent, if any, and if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
12.3 Refusal to Transfer. The Company will not be required
(i) to transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Exercise Agreement or
(ii) to treat as owner of such Shares, or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares have been so
transferred.
13. TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY
SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR
DISPOSITION OF THE SHARES. PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED
WITH ANY TAX ADVISER PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE
OR DISPOSITION OF THE SHARES AND THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. IN PARTICULAR, IF UNVESTED SHARES ARE SUBJECT TO REPURCHASE
BY THE COMPANY, PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED WITH
PURCHASER'S TAX ADVISER CONCERNING THE ADVISABILITY OF FILING AN 83(b) ELECTION
WITH THE INTERNAL REVENUE SERVICE. Set forth below is a brief summary as of
January 22, 1998 of some of the federal and California tax consequences of
exercise of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
-7-
9
CHANGE. PURCHASER SHOULD CONSULT A TAX ADVISER BEFORE EXECUTING THIS OPTION OR
DISPOSING OF THE SHARES.
13.1 Exercise of Incentive Stock Option. If the Option
qualifies as an incentive stock option, there will be no regular federal income
tax liability or California income tax liability upon the exercise of the
Option, although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as a tax preference
item for federal alternative minimum income tax purposes and may subject
Purchaser to the alternative minimum tax in the year of exercise.
13.2 Exercise of Nonqualified Stock Option. If the Option
does not qualify as an ISO, there may be a regular federal income tax liability
and a California income tax liability upon the exercise of the Option. Purchaser
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value of the
Shares on the date of exercise over the Exercise Price. If Purchaser is a
current or former employee of the Company, the Company will be required to
withhold from Purchaser's compensation or collect from Purchaser and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
13.3 Disposition of Shares. If the Shares are held for more
than one year after the date of the acquisition of the Shares pursuant to the
exercise of the Option as to Vested Shares (or for more than one year after the
date of transfer of the Shares pursuant to the exercise of an Option as to
Unvested Shares for which a Section 83(b) election has been made), and, in the
case of an ISO, are disposed of more than two years after the Date of Grant, any
gain realized on disposition of the Shares will be treated as long term capital
gain for federal and California income tax purposes. The long-term capital gain
will be taxed for federal income tax and alternative minimum tax purposes at a
maximum rate of 28% if the Shares are held more than one year but less than 18
months after exercise and at 20% if the Shares are held more than 18 months
after exercise. If shares purchased under an ISO are disposed of within the
applicable one year or two year period, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price. The Company may be required to withhold
from Purchaser's compensation or collect from Purchaser and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
13.4 Section 83(b) Election for Unvested Shares. With
respect to Unvested Shares, which are subject to the Repurchase Option for
Unvested Shares, unless an election is filed by the Purchaser with the Internal
Revenue Service (and, if necessary, the proper state taxing authorities), within
30 days of the purchase of the Unvested Shares, electing pursuant to Section
83(b) of the Internal Revenue Code (and similar state tax provisions, if
applicable) to be taxed currently on any difference between the Exercise Price
of the Unvested Shares and their Fair Market Value on the date of purchase,
there may be a recognition of taxable income (including, where applicable,
alternative minimum taxable income) to the Purchaser, measured by the excess, if
any, of the Fair Market Value of the Unvested Shares at the time they cease to
be Unvested Shares, over the Exercise Price of the Unvested Shares.
14. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer
of the Shares will be subject to and conditioned upon compliance by the Company
and Purchaser with all applicable state and federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company's Common Stock may be listed or quoted at the time
of such issuance or transfer.
15. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Exercise Agreement, including its rights to repurchase Shares
under the Repurchase Option for Unvested Shares and the Right of First Refusal.
This Exercise Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth, this Exercise Agreement will be binding upon Purchaser and
Purchaser's heirs, executors, administrators, legal representatives, successors
and assigns.
16. GOVERNING LAW; SEVERABILITY. This Exercise Agreement shall be
governed by and construed in accordance with the internal laws of the State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within California. If any provision of
this
-8-
10
Exercise Agreement is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent
possible and the other provisions will remain fully effective and enforceable.
17. NOTICES. Any notice required to be given or delivered to the
Company shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices. Any notice required to be given or
delivered to Purchaser shall be in writing and addressed to Purchaser at the
address indicated above or to such other address as Purchaser may designate in
writing from time to time to the Company. All notices shall be deemed
effectively given upon personal delivery, three (3) days after deposit in the
United States mail by certified or registered mail (return receipt requested),
one (1) business day after its deposit with any return receipt express courier
(prepaid), or one (1) business day after transmission by rapifax or telecopier.
18. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Exercise Agreement.
19. HEADINGS. The captions and headings of this Exercise Agreement
are included for ease of reference only and will be disregarded in interpreting
or construing this Exercise Agreement. All references herein to Sections will
refer to Sections of this Exercise Agreement.
20. ENTIRE AGREEMENT. The Plan, the Stock Option Agreement and this
Exercise Agreement, together with all its Exhibits, constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof.
21. COUNTERPARTS This Exercise Agreement may be executed in two
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Exercise Agreement
to be executed in duplicate by its duly authorized representative and Purchaser
has executed this Exercise Agreement in duplicate as of the Effective Date.
-9-
11
FIBEX SYSTEMS PURCHASER
By:
-------------------------------- -----------------------------------
(Signature)
-----------------------------------
(Please print Name) -----------------------------------
(Please print name)
-----------------------------------
(Please print title)
SIGNATURE PAGE TO FIBEX SYSTEMS STOCK OPTION EXERCISE AGREEMENT BETWEEN FIBEX
SYSTEMS AND PURCHASER UNDER FIBEX SYSTEMS' 1997 STOCK OPTION PLAN
-10-
12
LIST OF EXHIBITS
Exhibit 1: Stock Power and Assignment Separate from Stock Certificate
Exhibit 2: Spouse Consent
Exhibit 3: Copy of Purchaser's Check and/or Secured Full Recourse Promissory
Note
Exhibit 4: Section 83(b) Election and Acknowledgment and Statement of Decision
Regarding Section 83(b) Election
Exhibit 5: Stock Pledge Agreement
13
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Stock Option
Exercise Agreement No. ___ dated as of _______________, 19___, (the "EXERCISE
AGREEMENT"), the undersigned hereby sells, assigns and transfers unto
_______________________________, shares of the Common Stock of Fibex Systems, a
California corporation (the "COMPANY"), standing in the undersigned's name on
the books of the Company represented by Certificate No(s). ______ delivered
herewith, and does hereby irrevocably constitute and appoint the Secretary of
the Company as the undersigned's attorney-in-fact, with full power of
substitution, to transfer said stock on the books of the Company. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS
THERETO.
Dated: _______________, 19____
PURCHASER
-----------------------------------
(Signature)
-----------------------------------
(Please Print Name)
-----------------------------------
(Spouse's Signature, if any)
-----------------------------------
(Please Print Spouse's Name)
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this Stock Power and Assignment is to enable the Company to
acquire the shares upon exercise of its Repurchase Option for Unvested Shares
set forth in the Exercise Agreement or pursuant to the Pledge Agreement without
requiring additional signatures on the part of the Purchaser or Purchaser's
Spouse.
14
SPOUSE CONSENT
The undersigned spouse of Purchaser has read, understands, and
hereby approves the Stock Option Exercise Agreement between Purchaser and the
Company (the "Agreement"). In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, the undersigned
hereby agrees to be irrevocably bound by the Agreement and further agrees that
any community property interest shall similarly be bound by the Agreement. The
undersigned hereby appoints Purchaser as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.
Date:
-------------------- -----------------------------------
Signature of Purchaser's Spouse
Address:
-----------------------------------
-----------------------------------
15
SECURED FULL RECOURSE PROMISSORY NOTE
Petaluma, California
$__________________ __________________, 1998
1. OBLIGATION. In exchange for the issuance to the undersigned
("Purchaser") of ______________ shares (the "SHARES") of the Common Stock of
Fibex Systems, a California corporation (the "COMPANY"), receipt of which is
hereby acknowledged, Purchaser hereby promises to pay to the order of the
Company on or before _______________, 2003, at the Company's principal place of
business at Fibex Systems, 0000 Xxx Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000,
or at such other place as the Company may direct, the principal sum of
________________________ Dollars ($__________) together with interest compounded
semi-annually on the unpaid principal at the rate of _________ percent (___%),
which rate is not less than the minimum rate established pursuant to Section
1274(d) of the Internal Revenue Code of 1986, as amended, on the earliest date
on which there was a binding contract in writing for the purchase of the Shares;
provided, however, that the rate at which interest will accrue on unpaid
principal under this Note will not exceed the highest rate permitted by
applicable law.
2. SECURITY. Payment of this Note is secured by a security interest
in the Shares granted to the Company by Purchaser under a Stock Pledge Agreement
dated of even date herewith between the Company and Purchaser (the "Pledge
Agreement"). This Note is being tendered by Purchaser to the Company as the
Exercise Price of the Shares pursuant to that certain Stock Option Exercise
Agreement between Purchaser and the Company dated of even date with this Note
(the "Purchase Agreement").
3. DEFAULT; ACCELERATION OF OBLIGATION. Purchaser will be deemed to
be in default under this Note and the principal sum of this Note, together with
all interest accrued thereon, will immediately become due and payable in full:
(a) upon Purchaser's failure to make any payment when due under this Note; (b)
in the event Purchaser is Terminated (as defined in the Company's 1997 Stock
Option Plan) for any reason; (c) upon any transfer of any of the Shares (except
a transfer to the Company); (d) upon the filing by or against Purchaser of any
voluntary or involuntary petition in bankruptcy or any petition for relief under
the federal bankruptcy code or any other state or federal law for the relief of
debtors; or (e) upon the execution by Purchaser of an assignment for the benefit
of creditors or the appointment of a receiver, custodian, trustee or similar
party to take possession of Purchaser's assets or property.
4. REMEDIES ON DEFAULT. Upon any default of Purchaser under this
Note, the Company will have, in addition to its rights and remedies under this
Note and the Pledge Agreement, full recourse against any real, personal,
tangible or intangible assets of Purchaser, and may pursue any legal or
equitable remedies that are available to it.
5. PREPAYMENT. Prepayment of principal and/or interest due under
this Note may be made at any time without penalty. Unless otherwise agreed in
writing by the Company, all payments will be made in lawful tender of the United
States and will be applied first to the payment of accrued interest, and the
remaining balance of such payment, if any, will then be applied to the payment
of principal. If Purchaser prepays all or a portion of the principal amount of
this Note, the Shares paid for by the portion of principal so paid will continue
to be held in pledge under the Pledge Agreement to serve as independent
collateral for the outstanding portion of this Note for the purpose of
commencing the holding period under Rule 144(d) of the Securities and Exchange
Commission with respect to other Shares purchased with this Note unless
Purchaser notifies the Company in writing otherwise and the Company consents to
release of the Shares from the Pledge Agreement.
6. GOVERNING LAW; WAIVER. The validity, construction and
performance of this Note will be governed by the internal laws of the State of
California, excluding that body of law pertaining to conflicts of law. Purchaser
hereby waives presentment, notice of non-payment, notice of dishonor, protest,
demand and diligence.
16
7. ATTORNEYS' FEES. If suit is brought for collection of this Note,
Purchaser agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection therewith whether or not such suit is
prosecuted to judgment.
8. RULE 144 HOLDING PERIOD. PURCHASER UNDERSTANDS THAT THE HOLDING
PERIOD SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE COMMISSION
WILL NOT BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE UNTIL
EITHER (A) THE EXERCISE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR BY OTHER
PROPERTY ACCEPTED BY THE COMPANY, OR (B) THIS NOTE IS SECURED BY COLLATERAL,
OTHER THAN THE SHARES THAT HAVE NOT BEEN FULLY PAID FOR IN CASH, HAVING A FAIR
MARKET VALUE AT LEAST EQUAL TO THE AMOUNT OF PURCHASER'S THEN OUTSTANDING
OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED INTEREST).
IN WITNESS WHEREOF, Purchaser has executed this Note as of the date
and year first above written.
----------------------------------- -----------------------------------
Purchaser's Name [type or print] Purchaser's Signature
SIGNATURE PAGE TO FIBEX SYSTEMS SECURED FULL
RECOURSE PROMISSORY NOTE
-2-
17
ELECTION UNDER SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include the excess, if any, of the
fair market value of the property described below at the time of transfer over
the amount paid for such property, as compensation for services in the
calculation of: (1) regular gross income; (2) alternative minimum taxable income
or (3) disqualifying disposition gross income, as the case may be:
1. TAXPAYER'S NAME: _____________________________________________
TAXPAYER'S ADDRESS: _____________________________________________
_____________________________________________
SOCIAL SECURITY NUMBER: _____________________________________________
2. The property with respect to which the election is made is described as
follows: ___________ shares of Common Stock of Fibex Systems, a
California corporation which were transferred upon exercise of an option
(the "COMPANY"), which is Taxpayer's employer or the corporation for
whom the Taxpayer performs services.
3. The date on which the shares were transferred pursuant to the exercise
of the option was __________, 199___ and this election is made for
calendar year 199___.
4. The shares received upon exercise of the option are subject to the
following restrictions: The Company may repurchase all or a portion of
the shares at the Taxpayer's original purchase price under certain
conditions at the time of Taxpayer's termination of employment or
services.
5. The fair market value of the shares (without regard to restrictions
other than restrictions which by their terms will never lapse) was
$_____ per share at the time of exercise of the option.
6. The amount paid for such shares upon exercise of the option was $____
per share.
7. The Taxpayer has submitted a copy of this statement to the Company.
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE ("IRS"), AT THE
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS AFTER
THE DATE OF TRANSFER OF THE SHRES, AND MUST ALSO BE FILED WITH THE TAXPAYER'S
INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE ELECTION CANNOT BE REVOKED WITHOUT
THE CONSENT OF THE IRS.
Dated: _______________ ___________________________________
Taxpayer's Signature
Dated: _______________ ___________________________________
Taxpayer's Spouse Signature
18
ACKNOWLEDGMENT AND STATEMENT OF DECISION
REGARDING SECTION 83(b) ELECTION
The undersigned (which term includes the undersigned's spouse), a
purchaser of ___________ shares of Common Stock of Fibex Systems, a California
corporation (the "Company") by exercise of an option (the "Option") granted
pursuant to the Company's 1997 Stock Option Plan (the "Plan"), hereby states as
follows:
1. The undersigned acknowledges receipt of a copy of the Plan relating
to the offering of such shares. The undersigned has carefully reviewed the Plan
and the option agreement pursuant to which the Option was granted.
2. The undersigned either [check and complete as applicable]:
(a) ____ has consulted, and has been fully advised by, the
undersigned's own tax advisor, _________________________________,
whose business address is ______________________________,
regarding the federal, state and local tax consequences of
purchasing shares under the Plan, and particularly regarding the
advisability of making elections pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended (the "Code") and
pursuant to the corresponding provisions, if any, of applicable
state law; or
(b) ____ has knowingly chosen not to consult such a tax advisor.
3. The undersigned hereby states that the undersigned has decided [check
as applicable]:
(a) ____ to make an election pursuant to Section 83(b) of the Code,
and is submitting to the Company, together with the undersigned's
executed Stock Option Exercise Agreement and related documents,
an executed form entitled "Election Under Section 83(b) of the
Internal Revenue Code of 1986"; or
(b) ____ not to make an election pursuant to Section 83(b) of the Code.
4. Neither the Company nor any subsidiary or representative of the
Company has made any warranty or representation to the
undersigned with respect to the tax consequences of the
undersigned's purchase of shares under the Plan or of the making
or failure to make an election pursuant to Section 83(b) of the
Code or the corresponding provisions, if any, of applicable state
law.
Dated: _______________ ___________________________________
Taxpayer
Dated: _______________ ___________________________________
Spouse of Taxpayer
19
STOCK PLEDGE AGREEMENT
This Agreement is made and entered into as of ___________, 1998, between
Fibex Systems, a California corporation (the "COMPANY"), and
_________________________ ("Pledgor").
R E C I T A L S
A. In exchange for Pledgor's Secured Full Recourse Promissory Note
to the Company of even date herewith (the "Note"), the Company has issued and
sold to Pledgor __________ shares of its Common Stock (the "SHARES") pursuant to
the terms and conditions of that Stock Option Exercise Agreement between the
Company and Pledgor of even date herewith (the "PURCHASE AGREEMENT").
B. Pledgor has agreed that repayment of the Note will be secured by
the pledge of the Shares pursuant to this Exercise Agreement.
NOW, THEREFORE, the parties agree as follows:
1. CREATION OF SECURITY INTEREST. Pursuant to the provisions of the
California Commercial Code, Pledgor hereby grants to the Company, and the
Company hereby accepts, a first and present security interest in the Shares as
collateral to secure the payment of Pledgor's obligation to the Company under
the Note. Pledgor herewith delivers to the Company Common Stock certificate(s)
No(s). _________, representing all the Shares, together with one stock power for
each certificate in the form attached as an Exhibit to the Purchase Agreement,
duly executed (with the date and number of shares left blank) by Pledgor and
Pledgor's spouse, if any. For purposes of this Exercise Agreement, the Shares
pledged to the Company hereby, together with any additional collateral pledged
pursuant to Sections 5 and 6 hereof, will hereinafter be collectively referred
to as the "COLLATERAL." Pledgor agrees that the Collateral pledged to the
Company will be deposited with and held by the Escrow Holder (as defined in the
Purchase Agreement) and that, notwithstanding anything to the contrary in the
Purchase Agreement, for purposes of carrying out the provisions of this Exercise
Agreement, Escrow Holder will act solely for the Company as its agent.
2. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and
warrants to the Company that Pledgor has good title (both record and beneficial)
to the Collateral, free and clear of all claims, pledges, security interests,
liens or encumbrances of every nature whatsoever, and that Pledgor has the right
to pledge and grant the Company the security interest in the Collateral granted
under this Exercise Agreement. Pledgor further agrees that, until the entire
principal sum and all accrued interest due under the Note has been paid in full,
Purchaser will not, without the Company's prior written consent, (i) sell,
assign or transfer, or attempt to sell, assign or transfer, any of the
Collateral, or (ii) grant or create, or attempt to grant or create, any security
interest, lien, pledge, claim or other encumbrance with respect to any of the
Collateral.
3. RIGHTS ON DEFAULT. In the event of default (as defined in the
Note) by Pledgor under the Note, the Company will have full power to sell,
assign and deliver the whole or any part of the Collateral at any broker's
exchange or elsewhere, at public or private sale, at the option of the Company,
in order to satisfy any part of the obligations of Pledgor now existing or
hereinafter arising under the Note. On any such sale, the Company or its assigns
may purchase all or any part of the Collateral. In addition, at its sole option,
the Company may elect to retain all the Collateral in full satisfaction of
Pledgor's obligation under the Note, in accordance with the provisions and
procedures set forth in the California Commercial Code.
4. ADDITIONAL REMEDIES. The rights and remedies granted to the
Company herein upon default under the Note will be in addition to all the
rights, powers and remedies of the Company under the California Commercial Code
and applicable law and such rights, powers and remedies will be exercisable by
the Company with respect to all of the Collateral. Pledgor agrees that the
Company's reasonable expenses of holding the Collateral, preparing it for resale
or other disposition, and selling or otherwise disposing of the Collateral,
including attorneys' fees and other legal expenses, will be deducted from the
proceeds of any sale or other disposition and will be included in the amounts
Pledgor must tender to redeem the Collateral. All rights, powers and remedies of
the Company will be cumulative and not alternative. Any forbearance or failure
or delay by the Company in exercising
20
any right, power or remedy hereunder will not be deemed to be a waiver of any
such right, power or remedy and any single or partial exercise of any such
right, power or remedy hereunder will not preclude the further exercise thereof.
5. DIVIDENDS; VOTING. All dividends hereinafter declared on or
payable with respect to the Collateral during the term of this pledge (excluding
only ordinary cash dividends, which will be payable to Pledgor so long as
Pledgor is not in default under the Note) will be immediately delivered to the
Company to be held in pledge under this Exercise Agreement. Notwithstanding this
Exercise Agreement, so long as Pledgor owns the Shares and is not in default
under the Note, Pledgor will be entitled to vote any shares comprising the
Collateral, subject to any proxies granted by Pledgor.
6. ADJUSTMENTS. In the event that during the term of this pledge,
any stock dividend, reclassification, readjustment, stock split or other change
is declared or made with respect to the Collateral, or if warrants or any other
rights, options or securities are issued in respect of the Collateral, then all
new, substituted and/or additional shares or other securities issued by reason
of such change or by reason of the exercise of such warrants, rights, options or
securities, will be immediately pledged to the Company to be held under the
terms of this Agreement in the same manner as the Collateral is held hereunder.
7. RIGHTS UNDER PURCHASE AGREEMENT. Pledgor understands and agrees
that the Company's rights to repurchase the Collateral under the Purchase
Agreement, if any, will continue for the periods and on the terms and conditions
specified in the Purchase Agreement, whether or not the Note has been paid
during such period of time, and that to the extent that the Note is not paid
during such period of time, the repurchase by the Company of the Collateral may
be made by way of cancellation of all or any part of Pledgor's indebtedness
under the Note.
8. REDELIVERY OF COLLATERAL. Upon payment in full of the entire
principal sum and all accrued interest due under the Note, and subject to the
terms and conditions of the Purchase Agreement, the Company will immediately
redeliver the Collateral to Pledgor and this Exercise Agreement will terminate;
provided, however, that all rights of the Company to retain possession of the
Shares pursuant to the Purchase Agreement will survive termination of this
Exercise Agreement.
9. SUCCESSORS AND ASSIGNS. This Exercise Agreement will inure to
the benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto.
10. GOVERNING LAW; SEVERABILITY. This Exercise Agreement will be
governed by and construed in accordance with the internal laws of the State of
California, excluding that body of law relating to conflicts of law. Should one
or more of the provisions of this Exercise Agreement be determined by a court of
law to be illegal or unenforceable, the other provisions nevertheless will
remain effective and will be enforceable.
11. MODIFICATION; ENTIRE AGREEMENT. This Exercise Agreement will
not be amended without the written consent of both parties hereto. This Exercise
Agreement constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings
related to such subject matter.
21
IN WITNESS WHEREOF, the parties hereto have executed this Exercise
Agreement as of the date and year first above written.
FIBEX SYSTEMS PLEDGOR
By:________________________________ ___________________________________
(Signature)
___________________________________ ___________________________________
(Please print name) (Please print name)
___________________________________
(Please print title)
SIGNATURE PAGE TO FIBEX SYSTEMS STOCK PLEDGE AGREEMENT
