EXHIBIT 10.9
AMERICAN TONERSERV CORP.
STOCK REPURCHASE RIGHT AGREEMENT
This Stock Repurchase Right Agreement (this "Agreement") is effective
this 7th day of July, 2006, by and between American TonerServ Corp., a
Delaware corporation (the "Company") and Xxxx Vice ("Purchaser").
R E C I T A L S
A. WHEREAS, the Company and the Purchaser have entered into a certain
agreement, pursuant to which the Company sold, and the Purchaser purchased,
100,000 shares of the Company's Common Stock (the "Shares").
B. WHEREAS, the Company and the Purchaser now desire to establish
certain repurchase rights in favor of the Company in connection with the
Shares.
Now, therefore, in consideration of the mutual promises herein, the
parties hereto agree as follows:
A G R E E M E N T
1. Repurchase Right.
(a) Grant. The Company is hereby granted the right (the "Repurchase
Right"), exercisable at any time during the ninety (90)-day period (the
"Repurchase Period") following the date (the "Termination Date") Purchaser
ceases to provide services to the Company as an employee, director or
consultant (a "Service Provider") for any reason (including voluntary or
involuntary termination, death or disability), if said Termination Date is
within two years of the date of this Agreement, to repurchase at the per
share exercise price paid (the "Repurchase Price"), any or all of the Shares
purchased by Purchaser.
(b) Exercise of the Repurchase Right. The Repurchase Right shall be
exercisable by written notice (the "Repurchase Notice") delivered to the
Purchaser (or the respective owner of the Shares) prior to the expiration of
Repurchase Period. The Repurchase Notice shall indicate the number of Shares
to be repurchased and the date on which the repurchase is to be effected,
such date to be not more than thirty (30) days after the date of such notice.
The certificates representing the Shares to be repurchased shall be delivered
to the Company on the closing date specified for the repurchase.
Concurrently with the receipt of such stock certificates, the Company shall
pay to the Purchaser (or the respective owner of the Shares), in cash or cash
equivalents (including the cancellation of any purchase-money indebtedness),
an amount equal to the Repurchase Price for the Shares which are to be
repurchased.
(c) Termination of the Repurchase Right. The Repurchase Right shall
terminate with respect to any Shares for which it is not timely exercised
under Section 1(b) above.
(d) Escrow. To insure the availability for delivery of the Shares upon
the Company's exercise of the Repurchase Right, the Purchaser hereby appoints
the Secretary of the Company or any other person designated by the Company as
escrow agent (the "Escrow Agent") as its attorney-in-fact to sell, assign and
transfer unto the Company, such Shares, if any, repurchased by the Company
pursuant to the Repurchase Right and shall, upon execution of this Agreement,
deliver and deposit with the Escrow Agent the share certificates representing
the Shares, together with the stock assignment duly endorsed in blank,
attached hereto as Exhibit 1. The Shares and stock assignment shall be held
by the Escrow Agent in escrow, pursuant to the Joint Escrow Instructions of
the Company and Purchaser attached hereto as Exhibit 2, until the Company
exercises its Repurchase Right or until such time as this Agreement no longer
is in effect. Upon expiration of this Agreement or termination of the
Repurchase Right, the Escrow Agent shall promptly deliver to the Purchaser
the certificates representing such Shares in the Escrow Agent's possession
belonging to the Purchaser, and the Escrow Agent shall be discharged of all
further obligations hereunder; provided, however, that the Escrow Agent shall
nevertheless retain such certificate or certificates as Escrow Agent if so
required pursuant to other restrictions imposed pursuant to this Agreement.
(e) The Company, the Escrow Agent, or their designees, shall not be
liable for any act it may do or omit to do with respect to holding the Shares
in escrow and while acting in good faith and in the exercise of its judgment.
(f) Transfer or sale of the Shares is subject to restrictions on
transfer imposed by any applicable state and federal securities laws. Any
transferee shall hold such Shares subject to all the provisions hereof
executed by the Purchaser with respect to the Shares purchased by Purchaser
and shall acknowledge the same by signing a copy of this Agreement.
2. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Purchaser understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the
Shares together with any other legends that may be required by the Company or
by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND RIGHTS OF REPURCHASE HELD BY THE ISSUER
OR ITS ASSIGNEE(S) AS SET FORTH IN THAT CERTAIN STOCK REPURCHASE RIGHT
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 TRANSFER RESTRICTIONS AND RIGHT OF REPURCHASE ARE BINDING ON
TRANSFEREES OF THESE SHARES.
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE EFFECTIVE
DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY'S SECURITIES
AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT
THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.
(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall 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 Agreement or the legends set
forth above; 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 shall have been so transferred.
3. Successors and Assigns. The Company may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Agreement shall be
binding upon Purchasers and his or her heirs, executors, administrators,
successors and assigns.
4. Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California as applied to agreements among California
residents, made and to be performed entirely within the State of California.
5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6. Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
7. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed effectively given (i) upon
personal delivery to the party to be notified; (ii) when sent by confirmed
facsimile if sent during normal business hours of the recipient; if not, then
on the next business day; (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(iv) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt.
All communications shall be sent to the respective parties at the addresses
set forth below.
If to the Company:
______________________
______________________
Attn: _________________
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With a copy to:
Xxxxxx Xxxxxxxx, Esq.
Xxxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxxxx Xxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
If to Lenders:
At the addresses shown on the signature pages hereto.
8. Entire Agreement: Amendments and Waivers. This Agreement constitutes
the full and entire understanding and agreement between the parties with
regard to the subject matter hereof and thereof. Any term of this Agreement
may be amended, and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively
or prospectively), with the written consent of the Company and the Purchaser
(or the respective owner of the Shares).
9. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with
its terms.
* * * * *
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
COMPANY:
American TonerServ Corp.
By: /s/ Xxxxxx X. Xxxxxxx
Title: President and CEO
PURCHASER:
Print Name: Xxxx Vice
Signature: /s/ Xxxx Vice
Address: 0000 00xx Xxxx Xxxxx
Xxxxxxx, XX 00000
[SIGNATURE PAGE TO STOCK REPURCHASE RIGHT AGREEMENT]
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EXHIBIT 1
STOCK POWER AND
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________________________________,
hereby sell, assign and transfer unto American TonerServ Corp. (the
"Company") or its assigns ______________________________________________
(_________________) shares of the Common Stock of the Company standing in my
name of the books of said Company represented by Certificate No. ___________
herewith and do hereby irrevocably constitute and appoint __________________
___________________________________________ 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 Stock
Repurchase Right Agreement between the Company and the undersigned dated
__________________, 2006.
Dated: ________________, ______ Signature: ______________________________
Print Name:______________________________
Spouse's
Signature:_______________________________
Spouse's
Name:____________________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase right," as set forth in the Stock Repurchase Right Agreement,
without requiring additional signatures on the part of the Purchaser.
EXHIBIT 2
JOINT ESCROW INSTRUCTIONS
[Name and Address of Escrow Agent]
M__. __________________:
Effective this _____ day of __________, 2006 (the "Effective Date"), as
Escrow Agent for both American TonerServ Corp., a Delaware corporation (the
"Company") and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Stock Repurchase Right
Agreement (the "Agreement") between the Company and the Purchaser, in
accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company (referred to
collectively for convenience herein as the "Company") exercises the Company's
repurchase right set forth in the Agreement (the "Repurchase Right"), the
Company shall give to Purchaser and you a written notice specifying the
number of shares of stock to be repurchased, the repurchase price, and the
time for a closing hereunder at the principal office of the Company.
Purchaser and the Company hereby irrevocably authorize and direct you to
close the transaction contemplated by such notice in accordance with the
terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver the stock assignments, together with
the certificate evidencing the shares of stock to be transferred, to the
Company or its assignee, against the simultaneous delivery to you of the
purchase price (by cash, a check, or some combination thereof) for the number
of shares of stock being purchased pursuant to the exercise of the Company's
Repurchase Right.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent, with full power of substitution, for the term of
this escrow to execute with respect to such securities all documents
necessary or appropriate to make such securities negotiable and to complete
any transaction herein contemplated, including but not limited to the filing
with any applicable state blue sky authority of any required applications for
consent to, or notice of transfer of, the securities. Subject to the
provisions of this paragraph 3, Purchaser shall exercise all rights and
privileges of a stockholder of the Company while the stock is held by you.
4. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to
Purchaser, you shall deliver all of the same to Purchaser and shall be
discharged of all further obligations hereunder.
5. Your duties hereunder may be altered, amended, modified or revoked only
by a writing signed by all of the parties hereto.
6. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties.
You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting
in good faith, and any act done or omitted by you pursuant to the advice of
your own attorneys shall be conclusive evidence of such good faith.
7. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In case you obey or comply with any such order, judgment or decree, you shall
not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
8. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or
called for hereunder.
9. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
10. You shall be entitled to employ such legal counsel and other experts as
you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefore.
11. Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
12. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
13. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities
held by you hereunder, you are authorized and directed to retain in your
possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written
agreement of the parties concerned or by a final order, decree or judgment of
a court of competent jurisdiction after the time for appeal has expired and
no appeal has been perfected, but you shall be under no duty whatsoever to
institute or defend any such proceedings.
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14. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage
and fees prepaid, addressed to each of the other parties thereunto entitled
at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
15. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.
16. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.
17. This Agreement shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents, made
and to be performed entirely within the State of California. If one or more
provisions of this Agreement are held to be unenforceable under applicable
law, such provision shall be excluded from this Agreement and the balance of
the Agreement shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
18. This instrument constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements between you, the Company and the Purchaser
with respect to the subject matter hereof, and may not be modified except by
means of a writing signed by the Company and Purchaser.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Joint Escrow
Instructions as of the Effective Date.
PURCHASER AMERICAN TONERSERV CORP.
___________________________________ _____________________________________
Signature Signature
___________________________________ _____________________________________
Print Name Print Name and Title
Address: Address:
___________________________________ ______________________________________
___________________________________ ______________________________________
ESCROW AGENT
__________________________________
Signature
__________________________________
Print Name
Address:
__________________________________
__________________________________
[SIGNATURE PAGE TO JOINT ESCROW INSTRUCTIONS]
