Execution Copy
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RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT (this "Agreement") has been
executed and delivered effective as of December 7, 1998, by and among Accom,
Inc., a Delaware corporation (the "Company"), Xxxxx X. Xxxxx, an individual
residing in California (the "Purchaser"), and EOS Capital Profit Sharing Plan
(the "Plan," and together with the Purchaser, the "Holders," and each a
"Holder"), for the purpose of sale by the Company to the Purchaser of 100,000
shares (the "Shares") of the Company's Common Stock (the "Common Stock") on the
terms and conditions in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements of the
Company and the Purchaser, and intending to be legally bound, the Company and
the Purchaser agree as follows:
1. Purchase and Sale of the Shares
Concurrently with execution of this Agreement, the Purchaser will
purchase, by delivery of a promissory note issued by the Purchaser in favor of
the Company and dated as of even date herewith in the form attached hereto as
Exhibit A (the "Promissory Note"), and the Company will sell, by delivery of an
appropriate stock certificate to the Purchaser, the Shares at a purchase price
of $0.65 per Share for the aggregate consideration of sixty five thousand
dollars ($65,000). The closing of the purchase of the Shares shall take place at
the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP at 0000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX
00000, or at such other place as may be agreed upon by the parties.
2. Right of Repurchase - Cessation of Association
2.1 The Repurchase Option. In the event that the Purchaser voluntarily
or involuntarily ceases to be a director of the Company, the Company shall have
the option under this Section 2 (the "Repurchase Option"), but not the
obligation, to repurchase all, but not a portion of, the Shares then subject to
the Repurchase Option purchased by the Purchaser pursuant to this Agreement from
the Purchaser, or from the Purchaser's estate or personal representative, and
from each transferee to whom the Purchaser has transferred any of the Shares
(the "Transferees"), as the case may be.
2.2 Exercise of the Repurchase Option. The Company shall exercise the
Repurchase Option by giving to the Purchaser, or to the Purchaser's estate or
personal representative, and to any Transferees of whom the Company has
previously received written notice, written notice of the Company's intention to
exercise the Repurchase Option (the "Notice of Repurchase") before the
Repurchase Option lapses in accordance with Section 2.5 of this Agreement, and
in such Notice agreeing to tender to the Purchaser, or to the Purchaser's estate
or personal representative, and to any Transferees, as the case may be, the
amount specified in Section 2.3, against delivery
of the certificates representing the Shares to be repurchased, duly endorsed,
free and clear of any and all liens, charges or encumbrances. In exercising the
Repurchase Option, the Company may also designate one or more nominees to
purchase some or all of the Shares instead of purchasing all of them itself,
provided that the Shares to be purchased by the Company and by such nominees
shall in any event constitute all of the Shares that could then be purchased
from the Purchaser, or the Purchaser's estate or personal representative, and
from any Transferees, as the case may be.
2.3 Repurchase Option Price. The purchase price for the Shares upon
exercise of the Repurchase Option shall be $0.65 for each Share repurchased
pursuant to this Section 2 (in the aggregate referred to in this Section 2 as
the "Purchase Price").
2.4 Option Exercise; Closing. The closing with respect to exercise of
the Repurchase Option shall occur not more than 30 days after the date on which
the Notice of Repurchase is given, on such date and time and at such location as
shall be specified by the Company, and in the absence of the specification of
another site, at the Company's principal offices. At such closing, (a) the
Company shall deliver to the Purchaser, or to the Purchaser's estate or personal
representative, and to any Transferees, as the case may be, a check in the
amount of the Purchase Price, or the Company may, in its sole discretion, cancel
or forgive indebtedness of such party in the amount of the Purchase Price; and
(b) the Purchaser, or the Purchaser's estate or personal representative, and any
Transferees, as the case may be, shall deliver to the Company the certificates
representing the Shares, duly endorsed, free and clear of any and all liens,
charges or encumbrances.
2.5 Lapse of Repurchase Option. Notwithstanding any other provision of
this Section 2, certain of the Shares shall cease to be subject to the
Repurchase Option as follows:
(a) On the first anniversary of this Agreement, one-third (1/3) of the
Shares, or 33,333 shares, shall cease to be subject to the Repurchase Option;
and
(b) On the first day of each month following the first anniversary, one
thirty-sixth (1/36) of the original number of Shares, or 2,778 shares, shall
cease to be subject to the Repurchase Option (except that on the day of the
third anniversary 2,773 shares shall cease to be subject to the Repurchase
Option); such that on the third anniversary of this Agreement, all of the Shares
shall be free of the Repurchase Option provided in this Section 2, except those
Shares as to which the Repurchase Option has been exercised by the Company prior
to such third anniversary. Those shares which cease to be subject to the
Repurchase Option are referred to herein as the "Vested Shares."
2.6 Termination of Repurchase Option. In the event that there is a
Change in Control (as defined below) of the Company, all of the Shares held
subject to a Repurchase Option shall immediately upon such Change in Control
become Vested Shares and shall cease to be subject to the Repurchase Option. For
this Agreement, a "Change of Control" includes the sale or other disposition of
substantially all of the assets of the Company, any reorganization,
consolidation, or merger of the Company where the Company is not the surviving
corporation and where the Company's securities outstanding immediately before
the transaction represent less than 50% of
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the beneficial ownership of the new entity immediately after the transaction, or
a change in a majority of the members of the Board of Directors of the Company
(the "Board") which is not voted upon by the current members of the Board.
2.7 Section 83 Stock. The Purchaser acknowledges that such Purchaser
has been advised that the Repurchase Option contained in this Section 2 will
cause the purchase of the Shares to fall within the provisions of Section 83 of
the Internal Revenue Code of 1986, as amended (the "Code"), which provides for
the recognition of ordinary income (as distinguished from capital gain) by the
purchaser of Shares based on the difference between the purchase price of the
Shares and their fair market value at the time restrictions with respect to the
Shares (for example, the "Repurchase Option") "lapse", regardless whether the
Shares are then (or could be then) sold. However, Section 83 of the Code permits
the filing of an election within 30 days after the Purchaser's purchase of the
Shares pursuant to this Agreement, whereby the Purchaser may elect to be taxed
on the difference, if any, between the purchase price of the Shares and their
fair market value at the time of purchase, with the result that if such election
is validly made, future gain, if any, realized upon disposition of the Shares
would in general be treated as capital gain. Purchaser acknowledges receipt from
the Company of a copy of Sections 83(a) and (b) of the Code and a portion of the
IRS Regulations thereunder, to which the foregoing discussion is subject. The
Purchaser should consult with his tax adviser concerning whether to make such
election and its consequences. In the event of any IRS audit or investigation of
the Purchaser or the transactions contemplated by this Agreement, the Purchaser
shall not seek reimbursement or indemnification from the Company for any
assessment or penalty resulting from an IRS determination that the purchase
price of the Shares is lower than the fair market value thereof as of the date
of issuance.
3. Effect of Tender of Purchase Price
Notwithstanding the failure of the holder of any Certificates
evidencing all or any portion of the Shares subject to repurchase under Section
2 to deliver the same to the Company, upon tender by the Company of the purchase
price for any such Shares in accordance with the terms of this Agreement, such
Shares and the Certificates representing same shall forthwith and without
further action be deemed to have been transferred to the Company and no longer
to be outstanding for any purpose, except receipt of the price payable by the
Company, without interest, upon proper tender of the Certificates to the Company
in accordance with this Agreement.
4. Restrictions on Transfer
Except as otherwise may be permitted by this Agreement, no Holder shall
dispose of or otherwise alienate any of, or any interest in, the Shares that at
any time would be subject to repurchase by the Company under Section 2 of this
Agreement, and any attempt to effect any such transaction shall be null and void
ab initio and of no force and effect.
5. Investment Representations of the Purchaser
The Purchaser represents to the Company and agrees with the Company as
follows:
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5.1 The Purchaser is acquiring the Shares for private personal
investment for his own account and not for the account of any other person, and
has no present intention of reselling the Shares to others. None of the Shares
or any interest therein will be sold, transferred or otherwise disposed of
(except for the original issuance in the name of the Plan in accordance with
Section 6 of this Agreement and except for sale to the Company) unless
registered under the Securities Act of 1933, or similar successor law ("the
Act"), and applicable securities or "blue sky laws" of any state ("State
Securities Laws") or unless subject to exemptions from the Act and State
Securities Laws.
5.2 Accordingly, to implement the Purchaser's representations and
agreements, the Purchaser agrees to authorize the Company to place substantially
the following legends, and any legend required by applicable State Securities
Laws, on each Certificate issued to the Purchaser to evidence the Shares, and to
place a stop order against further transfer of the Shares except in compliance
with the Act and applicable State Securities Laws.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED AND
TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND UNDER STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF
UNLESS SO REGISTERED OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE."
"RESTRICTIONS ON THE OWNERSHIP RIGHTS OF THE STOCK REPRESENTED BY THIS
CERTIFICATE HAVE BEEN IMPOSED PURSUANT TO A RESTRICTED STOCK PURCHASE AGREEMENT
DATED DECEMBER 7, 1998. A COPY OF THE RESTRICTED STOCK PURCHASE AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED WITHOUT CHARGE
TO THE HOLDER OF THIS CERTIFICATE UPON RECEIPT BY THE COMPANY AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTER OFFICE OF A WRITTEN REQUEST FROM THE HOLDER
REQUESTING SUCH COPY."
6. Share Issuance.
The Shares shall be issued in the name of the Plan. The Plan agrees
that the Shares shall remain subject to repurchase by the Company under Section
2 of this Agreement.
7. General Provisions
7.1 Construction. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware.
7.2 Entire Agreement. This Agreement contains the entire understanding
of the parties and supersedes all prior agreements and understandings relating
to the subject matter hereof.
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7.3 Modification. This Agreement may be modified, amended or waived
only by a writing executed by the Company and the Purchaser.
7.4 Waivers. Any party to this Agreement may waive any right, provided
that such waiver will not be effective against the waiving party unless it is in
writing and signed by the waiving party. No waiver will be deemed to be a waiver
of any same, similar, or dissimilar matter.
7.5 Notice. All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered to the party to whom addressed or when sent
by telecopy (as indicated by a telecopy confirmation and if promptly confirmed
by registered or certified mail, return receipt requested, prepaid and
addressed) to the parties, their successors in interest, or their assignees at
the following addresses, or at such other addresses as the parties may designate
by written notice in the manner aforesaid:
If to Buyer: Accom, Inc.
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: President
Fax: 000-000-0000
With copies to: Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
If to Purchaser: Xxxxx X. Xxxxx
c/o EOS Capital, Inc.
0000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
If to the Plan: EOS Capital Profit Sharing Plan
0000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
7.6 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, and upon any transferee of Shares, and upon
their respective successors, assigns, executors, administrators and legal
representatives. This Agreement may not be assigned by any Purchaser without the
express written consent of the Company.
7.7 Section Headings. The headings of each Section, subsection or other
subdivision of this Agreement are for reference only and shall not limit or
control the meaning thereof.
7.8 Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but both counterparts shall together constitute but one and the same
instrument.
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7.9 Attorneys' Fees. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the parties to such action,
proceeding or arbitration may receive as part of any award, judgment, decision
or other resolution of such action, proceeding or arbitration their costs and
reasonable attorneys' fees as determined by the person or body making such
award, judgment, decision or resolution. Should any claim hereunder be settled
short of the commencement of any such action or proceeding, including
arbitration, the parties in such settlement shall be entitled to include as part
of the damages alleged to have been incurred reasonable costs of attorneys or
other professionals in investigation or counseling on such claim.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
ACCOM, INC.
By: /S/ XXXXXX XXXXXX
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Name: Xxxxxx Xxxxxx
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Title: Chief Executive Officer
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XXXXX X. XXXXX
/S/ XXXXX X. XXXXX
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EOS CAPITAL PROFIT SHARING PLAN
By: /S/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
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Title: Trustee
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Execution Copy
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NON-RECOURSE PROMISSORY NOTE
$65,000 December 7, 1998
FOR VALUE RECEIVED, Xxxxx X. Xxxxx ("Maker"), promises to pay to Accom,
Inc., a Delaware corporation ("Payee"), in lawful money of the United States of
America, the principal sum of Sixty-Five Thousand ($65,000) together with
interest in arrears on the unpaid principal balance at a variable annual rate
equal to the prime rate of Comerica Bank which rate shall be established and
adjusted as necessary at the beginning of each calendar quarter during the term
of this Note. Interest shall be calculated on the basis of a year of 365 or 366
days, as applicable, and charged for the actual number of days elapsed.
1. PAYMENTS.
1.1 Principal and Interest. Subject to Section 1.3, the principal
amount of this Note then outstanding shall be due and payable three years from
the date of execution of this Note. Accrued, unpaid interest on the unpaid
principal balance of this Note shall be due and payable together with the
payment of principal as described above.
1.2 Manner of Payment. All payments of principal and interest on this
Note shall be made by wire transfer to such accounts as specified by Payee,
promptly upon request of Maker, or by check at 0000 X'Xxxxx Xxxxx, Xxxxx Xxxx,
XX 00000, or at such other place in the United States of America as Payee shall
designate to Maker in writing. If any payment of principal or interest on this
Note is due on a day which is not a Business Day, such payment shall be due on
the next succeeding Business Day, and such extension of time shall be taken into
account in calculating the amount of interest payable under this Note. "Business
Day" means any day other than a Saturday, Sunday or legal holiday in the State
of California.
1.3 Optional Prepayment. Maker may, without premium or penalty, at any
time and from time to time, prepay all or any portion of the outstanding
principal balance due under this Note, provided that each such prepayment is
accompanied by accrued interest on the amount of principal prepaid calculated to
the date of such prepayment. Any partial prepayments shall be applied to
installments of principal in inverse order of their maturity.
2. DEFAULTS.
2.1 Events of Default. The occurrence of any one or more of the
following events with respect to Maker shall constitute an event of default
hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for five (5) Business Days
after Payee notifies Maker thereof writing.
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to insolvency or
relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary
case or proceeding; (ii) consent to the entry of an order for relief against it
in an involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; or (iv) make an assignment for the
benefit of its creditors.
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an involuntary
case; (ii) appoints a trustee, receiver, assignee, liquidator or similar
official for Maker or substantially all of Maker's properties; or (iii) orders
the liquidation of Maker, and in each case the order or decree is not dismissed
within 120 days.
(d) Upon the death of the Maker.
2.2 Remedies. Subject to Section 2.3, upon the occurrence of an Event
of Default hereunder (unless all Events of Default have been cured or waived by
Payee), Payee may, at its option, (i) by written notice to Maker, declare the
entire unpaid principal balance of this Note, together with all accrued interest
thereon, immediately due and payable regardless of any prior forbearance, and
(ii) exercise any and all rights and remedies available to it under applicable
law, including, without limitation, the right to collect from Maker all sums due
under this Note. Maker shall pay all reasonable attorneys' fees incurred by or
on behalf of Payee in connection with Payee's exercise of any or all of its
rights and remedies under this Note.
2.3 Non-Recourse Limitation on Remedies. Notwithstanding anything to
the contrary contained in this Note, Payee's recovery against Maker under this
Note upon an Event of Default shall be limited solely to the shares of common
stock of Payee purchased by Maker in the Restricted Stock Purchase Agreement
dated as of even date herewith between Maker, Payee and EOS Capital Profit
Sharing Plan. Maker shall not be liable or have any personal liability in any
other respect for the payment of any amount due under this Note.
3. MISCELLANEOUS.
3.1 Waiver. The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any right or remedy under
this Note shall be effective unless in a writing signed by Payee. Neither the
failure nor any delay in exercising any right, power or privilege under this
Note will operate as a waiver of such right, power or privilege and no single or
partial exercise of any such right, power or privilege by Payee will preclude
any other or further exercise of such right, power or privilege or the exercise
of any other right, power or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right of Payee arising out of this Note can be
discharged by Payee, in whole or in part, by a waiver or renunciation of the
claim or right unless in a writing, signed by Payee; (b) no waiver that may be
given by Payee will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on Maker will be deemed to be a waiver
of any obligation of Maker or of the right of Payee to take further action
without notice or demand as provided in this Note.
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3.2 Notices. All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered to the party to whom addressed or when sent
by telecopy (as indicated by a telecopy confirmation and if promptly confirmed
by registered or certified mail, return receipt requested, prepaid and
addressed) to the parties, their successors in interest, or their assignees
pursuant to the terms of Section 7.5 of the Restricted Stock Purchase Agreement.
3.3 Severability. Any provision of this Note which is invalid, illegal
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Note invalid,
illegal or unenforceable in any other jurisdiction.
3.4 Governing Law. This Note shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware.
3.5 Parties In Interest. This Note shall bind Maker and its successors
and assigns. This Note shall not be assigned or transferred by Maker or Payee
without the express prior written consent of Maker, except by operation of law
or in connection with the sale of all or substantially all of the stock or
assets of Maker or Payee (as applicable).
3.6 Section Headings, Construction. The headings of each Section,
subsection or other subdivision of this Note are for reference only and shall
not limit or control the meaning thereof. All references to "Section" or
"Sections" refer to the corresponding Section or Sections of this Note unless
otherwise specified. All words used in this Note will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the words "hereof" and "hereunder" and similar references refer to
this Note in its entirety and not to any specific section or subsection hereof.
3.7 No Usury. It is the intent of the parties that the rate of interest
and other charges to the Maker shall be lawful. If for any reason the interest
or other charges payable hereunder are found by a court of competent
jurisdiction, in a final determination, to exceed the limit which the Payee may
lawfully charge the Maker, then the obligation to pay interest or other charges
shall automatically be reduced to such limit and, if any amount in excess of
such limit shall have been paid, then such amount shall be refunded to the
Maker.
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IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the date first stated above.
/S/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx
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