DIRECTORS STOCK PURCHASE AGREEMENT
Exhibit
10.9
THIS
DIRECTORS STOCK PURCHASE AGREEMENT
is entered into as of _____________, 2007, by CleanTech Biofuels, Inc. (the
“Company”) and _____________ (the “Director”).
ARTICLE
1
ACQUISITION
OF SHARES
1.1 Sale
and Purchase. On the terms and conditions set forth in this Agreement, the
Company agrees to sell to the Director, and Director agrees to purchase, 150,000
Shares. The sale and purchase shall occur at the offices of the Company on
the
date set forth above or at such other place and time as the parties may
agree.
1.2 Consideration.
The Director agrees to pay $0.15 for each Purchased Share, which may be paid
pursuant to a note in a form satisfactory to the Company.
1.3 Defined
Terms. Capitalized terms not defined above are defined in Section 11 of this
Agreement.
ARTICLE
2
RIGHT
OF
REPURCHASE
2.1 Scope
of Repurchase Right. All Purchased Shares initially shall be Restricted Shares
and shall be subject to a right (but not an obligation) of repurchase by the
Company. The Director shall not transfer, assign, encumber or otherwise dispose
of any Restricted Shares, except as provided in the following sentence. The
Director may transfer Restricted Shares (i) by beneficiary designation, will
or
intestate succession or (ii) to the Director’s spouse, children or grandchildren
or to a trust established by the Director for the benefit of the Director or
the
Director’s spouse, children or grandchildren, provided in either case that the
Transferee agrees in writing on a form prescribed by the Company to be bound
by
all provisions of this Agreement. If the Director transfers any Restricted
Shares, then this Section 2 shall apply to the Transferee to the same extent
as
to the Director.
2.2 Condition
Precedent to Exercise. The Right of Repurchase shall be exercisable only during
the 60-day period next following the date when the Director’s Service terminates
for any reason, with or without cause, including (without limitation) death
or
disability.
2.3 Lapse
of Repurchase Right. During the first year after the date hereof, the Right
of
Repurchase shall lapse with respect to 8,333 of the Purchased Shares for each
month of continuous Service completed by the Director following the date of
this
Agreement. During the second year after the date hereof the Right of Repurchase
shall lapse with respect to an additional 4,167 of the Purchased Shares when
the
Director completes each month of continuous Service thereafter until such Right
of Repurchase has elapsed with respect to all of the Purchased Shares. The
Right
of Repurchase shall lapse and all of the remaining Restricted Shares shall
become vested if (i) the Company is subject to a Change in Control and (ii)
the
Right of Repurchase is not assigned to the entity that employs the Director
immediately after the Change in Control or to its parent or
subsidiary.
2.4 Repurchase
Cost. If the Company exercises the Right of Repurchase, it shall pay the
Director an amount in cash or cash equivalents equal to the Purchase Price
for
each of the Restricted Shares being repurchased.
2.5 Exercise
of Repurchase Right. The Right of Repurchase shall be exercisable only by
written notice delivered to the Director prior to the expiration of the 60-day
period specified in Subsection 2.2 above. The notice shall set forth the date
on
which the repurchase is to be effected. Such date shall not be more than 30
days
after the date of the notice. The certificate(s) representing the Restricted
Shares to be repurchased shall, prior to the close of business on the date
specified for the repurchase, be delivered to the Company properly endorsed
for
transfer. The Company shall. concurrently with the receipt of such
certificate(s), pay to the Director the purchase price determined according
to
Subsection 2.4 above. Payment shall be made in cash or cash equivalents or
by
canceling indebtedness to the Company incurred by the Director in the purchase
of the Restricted Shares. The Right of Repurchase shall terminate with respect
to any Restricted Shares for which it has not been timely exercised pursuant
to
this Subsection 2.5.
2.6 Additional
Shares or Substituted Securities. In the event of the declaration of a stock
dividend, the declaration of an extraordinary dividend payable in a form other
than stock, a spin-off, a stock split, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding
securities without receipt of consideration, any new, substituted or additional
securities or other property (including money paid other than as an ordinary
cash dividend) that by reason of such transaction are distributed with respect
to any Restricted Shares or into which such Restricted Shares thereby become
convertible shall immediately be subject to the Right of Repurchase. Appropriate
adjustments to reflect the distribution of such securities or property shall
be
made to the number and/or class of the Restricted Shares. After each such
transaction, appropriate adjustments shall also be made to the price per share
to be paid upon the exercise of the Right of Repurchase in order to reflect
any
change in the Company’s outstanding securities effected without receipt of
consideration therefor; provided, however, that the aggregate purchase price
payable for the Restricted Shares shall remain the same.
2.7 Termination
of Rights as Stockholder. If the Company makes available, at the time and place
and in the amount and form provided in this Agreement, the consideration for
the
Restricted Shares to be repurchased in accordance with this Section 2, then
after such time the person from whom such Restricted Shares are to be
repurchased shall, no longer have any rights as a holder of such Restricted
Shares’ ‘(other than the right to receive payment of such consideration in
accordance with this Agreement). Such Restricted Shares shall be deemed to
have
been repurchased in accordance with the applicable provisions hereof, whether
or
not the certificate(s) therefor have been delivered as required by this
Agreement.
2.8 Escrow.
Upon issuance, the certificates for Restricted Shares shall be deposited in
escrow with the Company to be held in accordance with the provisions of this
Agreement. Any new, substituted or additional securities or other property
described in Subsection 2.6 above shall immediately be delivered to the Company
to be held in escrow, but only to the extent the Purchased Shares are at the
time Restricted Shares. All regular cash dividends on Restricted Shares (or
other securities at the time held in escrow) shall be paid directly to the
Director and shall not be held in escrow. Restricted Shares, together with
any
other assets or securities held in escrow hereunder, shall be (i) surrendered
to
the Company for repurchase and cancellation upon the Company’s exercise of its
Right of Repurchase or Right of First Refusal or (ii) released to the Director
upon the Director’s request to the extent the Purchased Shares are no longer
Restricted Shares (but not more frequently than once every six months). In
any
event, all Purchased Shares that have vested (and any other vested assets and
securities attributable thereto) shall be released within 60 days after the
earlier of (i) the Director’s cessation of Service or (ii) the lapse of the
Right of First Refusal.
ARTICLE
3
OTHER
RESTRICTIONS ON TRANSFER
3.1 Director
Representations. In connection with the issuance and acquisition of Shares
under
this Agreement, the Director hereby represents and warrants to the Company
as
follows:
(a) The
Director is acquiring and will hold the Purchased Shares for investment for
his
or her account only and not with a view to, or for resale in connection with,
any “distribution” thereof within the meaning of the Securities
Act.
(b) The
Director understands that the Purchased Shares have not been registered under
the Securities Act by reason of a specific exemption therefrom and that the
Purchased Shares must be held indefinitely, unless they are subsequently
registered under the Securities Act or the Director obtains an opinion of
counsel, in form and substance satisfactory to the Company and its counsel,
that
such registration is not required. The Director further acknowledges and
understands that the Company is under no obligation to register the Purchased
Shares.
(c) The
Director is aware of the adoption of Rule 144 by the Securities and Exchange
Commission under the Securities Act, which permits limited public resales of
securities acquired in a nonpublic offering, subject only to the satisfaction
of
certain conditions. The Director acknowledges and understands that the
conditions for resale set forth in Rule 144 have not been satisfied and that
the
Company has no plans to satisfy these conditions in the foreseeable
future.
(d) The
Director will not sell, transfer or otherwise dispose of the Purchased Shares
in
violation of the Securities Act, the Securities Exchange Act of 1934, or the
rules promulgated thereunder, including Rule 144 under the Securities Act.
The
Director agrees that he or she will not dispose of the Purchased Shares unless
and until he or she has complied with all requirements of this Agreement
applicable to the disposition of Purchased Shares and he or she has provided
the
Company with written assurances, in substance and form satisfactory to the
Company, that (A) the proposed disposition does not require registration of
the
Purchased Shares under the Securities Act or all appropriate action necessary
for compliance with the registration requirements of the Securities Act or
with
any exemption from registration available under the Securities Act (including
Rule 144) has been taken and (B) the proposed disposition will not result in
the
contravention of any transfer restrictions applicable to the
Purchased.
(e) The
Director has been furnished with, and has had access to, such information as
he
or she considers necessary or appropriate for deciding whether to invest in
the
Purchased Shares, and the Director has had an opportunity to ask questions
and
receive answers from the Company regarding the terms and conditions of the
issuance of the Purchased Shares.
(f) The
Director is aware that his or her investment in the Company is a speculative
investment that has limited liquidity and is subject to the risk of complete
loss. The Director is able, without impairing his or her financial condition,
to
hold the Purchased Shares for an indefinite period and to suffer a complete
loss
of his or her investment in the Purchased Shares.
3.2 Securities
Law Restrictions. Regardless of whether the offering and sale of Shares under
this Agreement have been registered under the Securities Act or have been
registered or qualified under the securities laws of any state, the Company
at
its discretion may impose restrictions upon the sale, pledge or other transfer
of the Purchased Shares (including the placement of appropriate legends on
stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law.
3.3 Market
Stand-Off. In connection with any underwritten public offering by the Company
of
its equity securities pursuant to an effective registration statement filed
under the Securities Act, including the Company’s initial public offering, the
Director shall not, without the prior written consent of the Company’s managing
underwriter, (i) lend, offer, pledge, sell, contract to sell, sell any option
or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly
or
indirectly, any shares of Stock or any securities convertible into or
exercisable or exchangeable for Stock (whether such shares or any such
securities are then owned by the Director or are thereafter acquired), or (ii)
enter into any swap or other arrangement that transfers to another, in whole
or
in part, any of the economic consequences of ownership of the Stock, whether
any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Stock or such other securities, in cash or otherwise. Such
restriction (the “Market Stand-Off”) shall be in effect for such period of time
following the date of the final prospectus for the offering as may be requested
by the Company or such underwriters. In no event, however, shall such period
exceed 180 days. The Market Stand-Off shall in any event terminate-two years
after the date of the Company’s initial public offering. In the event of the
declaration of a stock dividend, a spin-off, a stock split. an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company’s outstanding securities without receipt of consideration, any new,
substituted or additional securities that are by reason of such transaction
distributed with respect to any Shares subject to the Market Stand-Off, or
into
which such Shares thereby become convertible, shall immediately be subject
to
the Market Stand-Off. In order to enforce the Market Stand-Off, the Company
may
impose stop-transfer instructions with respect to the Purchased Shares until
the
end of the applicable stand-off period. The Company’s underwriters shall be
beneficiaries of the agreement set forth in this Subsection 3.3. This Subsection
3.3 shall not apply to Shares registered in the public offering under the
Securities Act, and the Director shall be subject to this Subsection 3.3 only
if
the directors and officers of the Company are subject to similar
arrangements.
3.4 Rights
of the Company. The Company shall not be required to (i) transfer on its books
any Purchased Shares that have been sold or transferred in contravention of
this
Agreement or (ii) treat as the owner of Purchased Shares, or otherwise to accord
voting, dividend or liquidation rights to, any transferee to whom Purchased
Shares have been transferred in contravention of this Agreement.
ARTICLE
4
SUCCESSORS
AND ASSIGNS
Except
as otherwise expressly provided
to the contrary, the provisions of this Agreement shall inure to the benefit
of,
and be binding upon, the Company and its successors and assigns and be binding
upon the Director and the Director’s legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person has become a party to this Agreement or has agreed in writing to
join herein and to be bound by the terms, conditions and restrictions
hereof
ARTICLE
5
NO
RETENTION RIGHTS
Nothing
in this Agreement shall confer
upon the Director any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any Parent or Subsidiary employing or retaining the Director) or
of
the Director, which rights are hereby expressly reserved by each, to terminate
his or her Service at any time and for any reason, with or without
cause.
ARTICLE
6
TAX
ELECTION
The
acquisition of the Purchased Shares
may result in adverse tax consequences that may be avoided or mitigated by
filing an election under Code Section 83(b). Such election may be filed only
within 30 days after the date of purchase. The form for making the Code Section
83(b) election is attached to this Agreement as an Exhibit. The Director should
consult with his or her tax advisor to determine the tax consequences of
acquiring the Purchased Shares and the advantages and disadvantages of filing
the Code Section 83(b) election. The Director acknowledges that it is his or
her
sole responsibility, and not the Company’s, to file a timely election under Code
Section 83(b), even if the Director requests the Company or its representatives
to make this filing on his or her behalf.
ARTICLE
7
LEGENDS
Legends.
All certificates evidencing
Purchased Shares shall bear the following legends:
“THE
SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED
OR
IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND
CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY THE
SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE. “
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”
If
required by the authorities of any
state in connection with the issuance of the Purchased Shares, the legend or
legends required by such state authorities shall also be endorsed on all such
certificates.
ARTICLE
8
NOTICE
Any
notice required by the terms of
this Agreement shall be given in writing and shall be deemed effective upon
personal delivery or upon deposit with the United States Postal Service, by
registered or certified mail, with postage and fees prepaid. Notice shall be
addressed to the Company at its principal executive office and to the Director
at the address that he or she most recently provided to the
Company.
ARTICLE
9
ENTIRE
AGREEMENT
This
Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
It
supersedes any other agreements, representations or understandings (whether
oral
or written and whether express or implied) relating to the subject matter
hereof.
ARTICLE
10
CHOICE
OF
LAW
This
Agreement shall be governed by,
and construed in accordance with, the laws of the State of Missouri, as such
laws are applied to contracts entered into and to be performed entirely within
such State.
ARTICLE
11
DEFINITIONS
11.1 “Agreement”
shall
mean this Stock Purchase Agreement.
11.2 “Board
of Directors”
shall mean the Board of Directors of the Company, as constituted from time
to
time.
11.3 “Change
in Control”
shall mean:
(a) The
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned
by
persons who were not stockholders of the Company immediately prior to such
merger, consolidation or other reorganization; or
(b) The
sale, transfer or other disposition of all or substantially all of the Company’s
assets.
A
transaction shall not constitute a
Change in Control if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities
immediately before such transaction.
11.4 “Code”
shall
mean the
Internal Revenue Code of 1986, as amended.
11.5 “Company”
shall
mean
CleanTech Biofuels, Inc., a Delaware corporation.
11.6 “Consultant”
shall
mean an individual who performs bona fide services for the Company, a Parent
or
a Subsidiary as a consultant or advisor, excluding Employees and Outside
Directors,
11.7 “Employee”
shall
mean
any individual who is a common law employee of the Company, a Parent or a
Subsidiary.
11.8 “Fair
Market Value”
shall mean the fair market value of a Share, as determined by the Board of
Directors in good faith. Such determination shall be conclusive and binding
on
all persons.
11.9 “Outside
Director”
shall mean a member of the Board of Directors who is not an
Employee.
11.10 “Parent”
shall
mean
any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company, if each of the corporations other than the Company
owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
11.11 “Purchased
Shares”
shall mean the Shares purchased by the Director pursuant to this
Agreement.
11.12 “Purchase
Price”
shall mean the amount for which one Share may be purchased pursuant to this
Agreement, as specified in Subsection 1.2.
11.13 “Restricted
Share”
shall mean a Purchased Share that is subject to the Right of
Repurchase.
11.14 “Right
of First
Refusal” shall mean the Company’s right of first refusal described in Section
3.
11.15 “Right
of Repurchase”
shall mean the Company’s right of repurchase described in Section
2.
11.16 “Securities
Act”
shall mean the Securities Act of 1933, as amended.
11.17 “Service”
shall
mean
service as an Employee, Outside Director or Consultant.
11.18 “Share”
shall
mean
one share of Stock.
11.19 “Stock”
shall
mean
the Common Stock of the Company, with a par value of $0.001 per
Share.
11.20 “Subsidiary”
shall
mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other
than
the last corporation in the unbroken chain owns stock possessing 50% or more
of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
11.21 “Transferee”
shall
mean any person to whom the Director has directly or indirectly transferred
any
Purchased Share.
11.22 “Transfer
Notice”
shall mean the notice of a proposed transfer of Purchased Shares described
in
Section 3.
|
DIRECTOR:
|
||
|
Print
Name:
|
||
