EXHIBIT 10.31
AVENUE A, INC.
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") made as of February 3, 2000,
between AVENUE A, INC., a Washington corporation (the "Company"), and the
undersigned ("Purchaser").
1. Sale of Stock
1.1 Purchase. Purchaser hereby purchases 75,000 shares of Common Stock
(the "Shares") at the purchase price of $8.00 per share, pursuant to the terms
herein. The Shares are being issued pursuant to the Company's 1998 Stock
Incentive Compensation Plan.
1.2 Payment. The aggregate purchase price for the Shares is being paid
concurrently with the parties entrance into this Agreement.
2. Securities Law Compliance
2.1 Purchaser represents and warrants that (a) Purchaser has been
furnished with all information which Purchaser deems necessary to evaluate the
merits and risks of the purchase of the Shares; (b) Purchaser has had the
opportunity to ask questions and receive answers concerning the information
received about the Shares and the Company; and (c) Purchaser has been given the
opportunity to obtain any additional information Purchaser deems necessary to
verify the accuracy of any information obtained concerning the Shares and the
Company.
2.2 Purchaser hereby confirms that Purchaser has been informed that the
Shares have not been registered under the federal Securities Act of 1933, as
amended (the "Securities Act"), or any state securities laws pursuant to
exemptions from registration. Purchaser further confirms that Purchaser
understands that the reliance by the Company on such exemptions is predicated in
part upon the truth and accuracy of the statements by Purchaser in this
Agreement.
2.3 Purchaser hereby represents and warrants that Purchaser is purchasing
the Shares for Purchaser's own account, for investment purposes only, and not
with a view towards the distribution or public offering of all or any part of
the Shares.
2.4 Purchaser hereby confirms that Purchaser understands that because the
Shares have not been registered under the Securities Act, Purchaser must
continue to bear the economic risk of the investment for an indefinite time and
the Shares cannot be sold unless the Shares are subsequently registered or an
exemption from registration is available.
2.5 Purchaser hereby agrees that Purchaser shall in no event sell or
distribute all or any part of the Shares unless (a) there is an effective
registration statement under the
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Securities Act and applicable state securities laws covering any such
transaction involving the Shares or (b) the Company receives an opinion of
Purchaser's legal counsel (concurred in by legal counsel for the Company)
stating that such transaction is exempt from registration or the Company
otherwise satisfies itself that such transaction is exempt from registration.
2.6 Purchaser hereby consents to the placing of a legend on Purchaser's
certificate(s) as substantially set forth in Section 5 hereof and to the placing
of a stop-transfer order on the books of the Company and with any transfer
agents against the Shares until the Shares may be legally resold or distributed.
2.7 Purchaser hereby confirms that Purchaser understands that at the
present time Rule 144 of the Securities and Exchange Commission (the "SEC") may
not be relied on for the resale or distribution of the Shares by Purchaser.
Purchaser understands that the Company has no obligation to Purchaser to
register the Shares with the SEC and has not represented to Purchaser that it
will register the Shares.
2.8 Purchaser confirms that Purchaser has been advised, prior to
Purchaser's purchase of the Shares, that neither the offering of the Shares nor
any offering materials have been reviewed by any administrator under the
Securities Act, the Washington State Securities Act or any other applicable
securities act (the "Acts") and that the Shares have not been registered under
any of the Acts and therefore cannot be resold unless they are registered under
the Acts or unless an exemption from such registration is available.
2.9 Purchaser hereby agrees to indemnify the Company and hold it harmless
from and against any loss, claim or liability, including attorneys' fees or
legal expenses, incurred by the Company as a result of any breach by Purchaser
of, or any inaccuracy in, any representation, warranty or statement by Purchaser
in this Agreement or the breach by Purchaser of any of the terms or conditions
of this Agreement.
3. Transfer Restrictions
3.1 Restrictions on Transfer. Shares shall not be sold, transferred,
assigned, pledged, encumbered or otherwise of disposed of in contravention of
the market standoff provisions of Section 3.3 hereof or the right of first
refusal under Section 4 hereof. Except as otherwise provided herein, such
restrictions on transfer, however, shall not apply to (a) a gratuitous transfer
of the Shares, provided, and only if, Purchaser obtains the Company's prior
written consent to such transfer, (b) a transfer of title to the Shares effected
pursuant to Purchaser's will or the laws of intestate succession, or (c) a
transfer to the Company in pledge as security for any purchase-money
indebtedness incurred by Purchaser in connection with the acquisition of the
Shares.
3.2 Transferee Obligations. Each person (other than the Company) to whom
the Shares are transferred by means of one of the permitted transfers specified
in Section 3.1 hereof 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 Agreement and that the
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transferred shares are subject to the market standoff provisions of Section 3.3
hereof and the right of first refusal under Section 4 hereof, to the same extent
such shares would be so subject if retained by Purchaser.
3.3 Market Standoff. 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, Purchaser or any transferee (either being sometimes referred to herein
as the "Holder") shall not sell, make any short sale of, loan, hypothecate,
pledge, assign, grant any option for the purchase of, or otherwise dispose or
transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to, any Shares without the prior written consent of
the Company or its underwriters. Such limitations shall be in effect for such
period of time as may be requested by the Company or such underwriters and
agreed to by the Company's officers and directors with respect to their shares
(other than any of their shares being sold pursuant to the registration
statement for the underwritten public offering); provided, however, that in no
event shall such period exceed 180 days. Holder shall be subject to the market
standoff provisions of this Section 3.3 only if and to the same extent that the
officers and directors of the Company are also subject to similar arrangements.
4. Company's Right of First Refusal
Before any Shares held by the Holder may be sold or otherwise transferred
(including any assignment, pledge, encumbrance or other disposition of the
Shares, but not including a permitted transfer under Section 3.1 hereof), the
Company or its assignee shall have an assignable right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section 4 (the
"Right of First Refusal").
4.1 Notice of Proposed Transfer. In the event any Holder of the Shares
desires to accept a bona fide third-party offer for the sale or transfer of any
or all of the Shares, the Holder shall promptly deliver to the Company a written
notice (the "Notice") stating the terms and conditions of any proposed sale or
transfer, including: (a) the Holder's bona fide intention to sell or otherwise
transfer such Shares; (b) the name of each proposed purchaser or other
transferee (the "Proposed Transferee"); (c) the number of Shares to be
transferred to each Proposed Transferee; and (d) the bona fide cash price or
other consideration for which the Holder proposes to transfer the Shares (the
"Offered Price"). The Holder shall provide satisfactory proof that the
disposition of such shares to such Proposed Transferee would not be in
contravention of the provisions of Section 3 hereof and the Holder shall offer
to sell the Shares at the Offered Price to the Company.
4.2 Exercise of Right of First Refusal. At any time within 30 days after
receipt of the Notice, the Company or its assignee may, by giving written notice
to the Holder, elect to purchase all or any portion of the Shares proposed to be
transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with subsection 4.3 below.
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4.3 Purchase Price. The purchase price for the Shares purchased under
this Section 4 shall be the Offered Price. If the Offered Price includes
consideration other than cash, the cash equivalent value of the noncash
consideration shall be determined by the Board of Directors of the Company in
good faith.
4.4 Payment. Payment of the purchase price shall be made, at the option
of the Company or its assignee, either (a) in cash (by check), by cancellation
of all or a portion of any outstanding indebtedness of the Holder to the Company
or such assignee, or by any combination thereof within 30 days after receipt of
the Notice or (b) in the manner and at the time(s) set forth in the Notice.
4.5 Holder's Right to Transfer. If any of the Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee as provided in this Section 4, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 60 days after the date of the Notice and provided further
that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section 4 shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are
not transferred to the Proposed Transferee within such period, or if the Holder
proposes to change the price or other terms to make them more favorable to the
Proposed Transferee, a new Notice shall be given to the Company, and the Company
or its assignee shall again be offered the Right of First Refusal before any
Shares held by the Holder may be sold or otherwise transferred.
4.6 Termination of Right of First Refusal. The Right of First Refusal
under this Section 4 shall terminate as to any Shares upon 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 (other than a
registration statement solely covering an employee benefit plan or corporate
reorganization).
5. Legends
Purchaser understands and agrees that the Shares are subject to
restrictions as substantially set forth herein. Purchaser understands that the
certificate(s) representing the Shares shall bear legends in substantially the
following forms:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON PUBLIC RESALE AND TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY
THE ISSUER AND/OR ITS ASSIGNEE(S) AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY WAY DISPOSED OF EXCEPT AS SET FORTH IN THE CERTAIN
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
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TRANSFER RESTRICTIONS AND RIGHTS OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE 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 THE PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS."
6. Stop-Transfer Notices
Purchaser understands and 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. The Company shall not be required to (a) transfer on
its books any Shares that have been sold or transferred in violation of the
provisions of this Agreement or (b) treat as the owner of the Shares, or
otherwise accord voting, dividend or liquidation rights to, any transferee to
whom the Shares have been transferred in contravention of this Agreement.
7. Independent Tax Advice
Purchaser acknowledges that determining the actual tax consequences to each
particular Purchaser of purchasing or disposing of the Shares may be
complicated. These tax consequences will depend, in part, on Purchaser's
specific situation, the resolution of currently uncertain tax law, and other
variables not within the control of the Company. Purchaser is aware that
Purchaser should consult a competent and independent tax advisor for a full
understanding of the specific tax consequences to Purchaser prior to purchasing
or disposing of the Shares. Prior to purchasing shares, Purchaser either has
consulted with a competent tax advisor independent of the Company to obtain tax
advice concerning the purchase of the Shares in light of Purchaser's specific
situation or has had the opportunity to consult with such a tax advisor but
chose not to do so.
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8. General Provisions
8.1 Assignment. The Company may assign its rights hereunder to any person
or entity selected by the Company's Board of Directors, including, without
limitation, one or more shareholders of the Company.
8.2 Notices. Any notice required in connection with the Company's
exercise of its rights hereunder shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit in the U.S. mail, registered or
certified, postage prepaid and addressed to the party entitled to such notice at
the address indicated below such party's signature line on this Agreement or at
such other address as such party may designate by 10 days' advance written
notice under this Section 8.2 to all other parties to this Agreement.
8.3 No Waiver. No waiver of any provision of this Agreement shall be
valid unless in writing, signed by the person against whom such waiver is sought
to be enforced, nor shall failure to enforce any right hereunder constitute a
continuing waiver of the same or a waiver of any other right hereunder.
8.4 Cancellation of Shares. If the Company (or its assignees) shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be purchased by the Company
pursuant to the exercise of its rights hereunder, then, from and after such
time, the person from whom such shares are to be repurchased shall no longer
have any rights as a holder of such shares (other than the right to receive
payment of such consideration in accordance with this Agreement, as the case may
be). The Company (or its assignees) shall be deemed the owner and holder of
such shares, whether or not the certificates therefor have been delivered.
8.5 Purchaser Undertaking. Purchaser hereby agrees to take whatever
additional action and execute whatever additional documents the Company may deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Purchaser or the Shares pursuant
to the express provisions of this Agreement.
8.6 Agreement Is Entire Contract. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof,
and no modification of any provision hereof shall be binding upon either
Purchaser or the Company unless in writing and signed by the party against whom
such modification is sought to be enforced.
8.7 Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the Company and its successors and
assigns and Purchaser and Purchaser's legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person shall have become a party to this Agreement and agreed in writing to
join herein and be bound by the terms and conditions hereof.
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8.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which, upon
execution, shall constitute one and the same instrument.
8.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
AVENUE A, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Title: Vice President
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Address: 000 0xx Xxx.
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Xxxxxxx, XX 00000
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PURCHASER
/s/ Xxxxx X. Xxxxxx
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Printed Name: Xxxxx X. Xxxxxx
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Address: 0 Xxxxxxxx Xxxxxx
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Xxxxxxxxx, XX 00000
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By his or her signature below, the spouse of the Purchaser, if such
Purchaser is legally married as of the date of his or her execution of this
Agreement, acknowledges that he or she has read this Agreement and is familiar
with the terms and provisions hereof and thereof, and agrees to be bound by all
the terms and conditions of this Agreement.
Dated: 2/3/00 /s/ Xxxxxxxxx Xxxxxx
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Spouse's Signature
Xxxxxxxxx Xxxxxx
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Printed Name
By his or her signature below, the Purchaser represents that he or she is
not legally married as of the date of executing this Agreement.
Dated:
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Purchaser's Signature
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