RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement ("Agreement") is entered into
as of December 2, 1996 between DP Applications, Inc., an Oregon corporation
(the "Company") and Xxxx X. Xxxxxx, Xx. ("Purchaser"), an employee, officer,
or director of Sequent Computer Systems, Inc. ("Sequent").
In consideration of the mutual promises set forth in this Agreement, the
parties agree as follows:
1. Sale of Shares. Purchaser agrees to purchase from the Company,
and the Company agrees to sell to Purchaser, 100,000 shares of common stock of
the Company (the "Shares") at a price of $0.15 per share, for a total purchase
price of $15,000, payable in cash or by the execution and delivery of a
promissory note in the form of Exhibit A (the "Note"). In addition to terms
and conditions set forth in this Agreement, the Shares shall be subject to the
restrictions on transfer contained in Article VII of the Company's Bylaws. To
secure its rights under the Repurchase Option described in Section 2, the
Company will retain the certificate or certificates representing the Shares.
Purchaser will deliver to the Company executed blank stock powers covering the
Shares subject to the Repurchase Option. The closing of this sale shall occur
upon receipt by the Company from Purchaser of an executed copy of this
Agreement, full payment of the purchase price for the Shares, and executed
blank stock powers covering the Shares.
2. Repurchase Option.
2.1 Option on Termination of Employment Initiated by
Purchaser. If Purchaser voluntarily leaves employment of Sequent (a
"Voluntary Termination"), then the Company shall have an irrevocable,
exclusive option (the "Repurchase Option") for a period of 60 days from the
date of Voluntary Termination to repurchase at the original price per Share
set forth in Section 1 all of the Shares held by Purchaser on the date of the
Voluntary Termination that have not been released from the Repurchase Option
as provided in Section 2.4. If Purchaser ceases to be an employee of Sequent
for any reason other than Voluntary Termination, including termination with or
without cause or by reason of death or disability (an "Involuntary
Termination"), the Repurchase Option shall not apply to the Shares, but shall
terminate as to all of the Shares as of the date of the Involuntary
Termination.
2.2 Exercise of Option. The Repurchase Option shall be
exercised by the Company within 60 days of the date of Voluntary Termination
(such 60-day period, the "Exercise Period") by delivering to the Purchaser a
written notice of exercise of the Repurchase Option and a check in the amount
of the purchase price (or, if applicable, by a reduction in the outstanding
principal of the Note equal to the purchase price). Upon delivery of such
notice and payment of the purchase price, the Company shall become the legal
and beneficial owner of the Shares being repurchased and all rights and
interest therein or related thereto, and the Company shall have the right to
transfer to its own name the number of Shares being repurchased without
further action by Purchaser.
2.3 Termination of Repurchase Option. If the Company does
not exercise the Repurchase Option before the end of the Exercise Period, the
Repurchase Option shall terminate.
2.4 Release from Repurchase Option. The Shares shall be
released from the Repurchase Option over a period of four years and two months
commencing December 2, 1996 (the "Vesting Reference Date"). One hundred
percent (100%) of the Shares shall initially be subject to the Repurchase
Option. None of the Shares shall be released from the Repurchase Option until
the first anniversary of the Vesting Reference Date, on which date twenty-four
percent (24%) of the shares shall be released from the Repurchase Option.
Thereafter, two percent (2%) of the Shares shall be released from the
Repurchase Option for each month of service completed after the first
anniversary of the Vesting Reference Date, so that all of the Shares will be
released from the Repurchase Option 50 months after the Vesting Reference
Date. No fractional shares shall be released from the Repurchase Option until
a number of such fractional shares accumulate to equal one share. Subject to
the provisions of Section 3 regarding escrow of the Shares, as soon as
practicable after the end of each one-year period from the Vesting Reference
Date, the Company will deliver to Purchaser a certificate or certificates
representing the Shares released from the Repurchase Option during that year.
2.4.1 Accelerated Release From Repurchase Option Upon
Sequent Change of Control. If at any time before all of the Shares have been
released from the Repurchase Option, there is a Change in Control with respect
to Sequent, all Shares then subject to the Repurchase Option shall immediately
be released from the Repurchase Option, and the Repurchase Option shall
terminate as of the date of the Change of Control. As used in this Agreement,
the term "Change of Control" means the occurrence of any one of the following
events:
(a) The shareholders of Sequent approve one of the
following transactions:
(i) any consolidation, merger, or plan of exchange
involving Sequent pursuant to which Sequent's Common Stock would be converted
into cash; or
(ii) any sale, lease, exchange, or other transfer
(in one transaction or in a series of related transactions) of all or
substantially all of the assets of Sequent or the adoption of any plan or
proposal for the liquidation or dissolution of Sequent; or
(b) a tender or exchange offer, other than one by
Sequent, is made for Sequent's Common Stock (or securities convertible into
Sequent Common Stock) and such offer results in a portion of those securities
being purchased and the offeror after consummation of the offer is the
beneficial owner (as determined pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), directly or
indirectly, of at least 20 percent of Sequent's outstanding Common Stock; or
(c) Sequent receives a report on Schedule 13D under the
Exchange Act reporting beneficial ownership by any person of 20 percent or
more of Sequent's outstanding Common Stock, except that if such receipt occurs
during a tender offer or exchange offer by any person other than Sequent or a
wholly owned subsidiary of Sequent, then the accelerated release from the
Repurchase Option provided for this Section 2.4.1 shall not occur until the
conclusion of such offer; or
(d) During any period of 12 months or less, individuals
who at the beginning of such period constituted a majority of Sequent's Board
of Directors cease for any reason to constitute a majority thereof unless the
nomination or election of such new directors was approved by a vote of at
least two-thirds of the directors then still in office who were directors at
the beginning of such period.
3. Limitations on Transfer. Without the written consent of the
Company, Purchaser shall not sell, assign, encumber, dispose of or transfer
(including transfer by operation of law) any interest in any Shares that have
not been released from the Repurchase Option. In addition, if Purchaser
purchased the Shares by execution and delivery of the Note, Purchaser shall
not sell, assign, encumber, dispose of or transfer (including transfer by
operation of law) any interest in any Shares until the Note has been repaid in
full with respect to such Shares. The Company shall hold in escrow all Shares
(including those not subject to the Repurchase Option) with respect to which
the Note has not been repaid, and shall release Shares not subject to the
Repurchase Option only upon Purchaser's full repayment of the all outstanding
principal and interest on the Note relating to the purchase price for those
Shares. Upon payment of principal of the Note at any time, the Company shall
release from escrow and deliver to Purchaser a number of Shares equal to the
amount of the repayment (less accrued interest) divided by the purchase price
for such Shares as set forth in Section 1 hereof. To the extent that the
Company exercises the Repurchase Option as to any Shares, the principal amount
of the Note shall be reduced by the amount of the purchase price therefor.
4. Lock-up Period. Purchaser hereby agrees that if so requested by
the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act of 1933, as amended (the
"Securities Act"), Purchaser shall not sell, make short sale of, loan, grant
any option for the purchase of, or otherwise transfer any Shares or other
securities of the Company during the 180-day period (or such longer period as
may be requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the "Market Standoff Period") following the effective
date of a registration statement of the Company filed under the Securities
Act; provided, however, that such restriction shall apply only to the first
registration statement of the Company to become effective under the Securities
Act that includes securities to be sold on behalf of the Company to the public
in an underwritten public offering under the Securities Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period.
5. Stock Certificate Legends. All certificates representing any of
the Shares shall contain the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN A
RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED
HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION."
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
"THE CORPORATION IS AUTHORIZED TO ISSUE DIFFERENT CLASSES OF SHARES OR
DIFFERENT SERIES WITHIN A CLASS. THE CORPORATION WILL FURNISH TO ANY
SHAREHOLDER ON REQUEST AND WITHOUT CHARGE A FULL STATEMENT OF THE
DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF EACH CLASS OF
SHARES AUTHORIZED TO BE ISSUED AND THE VARIATIONS IN THE RIGHTS, PREFERENCES
AND LIMITATIONS BETWEEN THE SHARES OF EACH SERIES SO FAR AS THEY HAVE BEEN
DETERMINED. THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE THE RELATIVE
RIGHTS AND PREFERENCES OF A SERIES BEFORE THE ISSUANCE OF ANY SHARES OF THAT
SERIES."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND
TRANSFERABLE ONLY UPON COMPLIANCE WITH THE TERMS AND CONDITIONS CONTAINED IN
ARTICLE VII OF THE COMPANY'S BYLAWS, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE CORPORATION."
6. Assignment by the Company. The right of the Company under the
Repurchase Option to purchase any part of the Shares may be assigned in whole
or in part to any person or persons designated by the Board of Directors of
the Company.
7. Transfer on Books of Company. The Company shall not be required
(a) to transfer on its books any of the Shares which have been sold or
transferred in violation of any of the provisions set forth in this Agreement
or the Company's Bylaws, or (b) to treat as owner of such Shares or to accord
the right to vote as such owner or to pay dividends to any transferee to whom
such Shares shall have been so transferred.
8. Restricted Securities. Purchaser understands and acknowledges
that the sale of the Shares has not been registered under the Securities Act,
or applicable state securities laws, that the Shares must be held indefinitely
unless subsequently registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration requirement is
available, that the Company is under no obligation to register the Shares, and
that the certificate representing the Shares will be stamped with the legends
specified in Section 5 of this Agreement. The Purchaser agrees to comply with
the transfer restrictions specified in the legends set forth in Section 5.
9. Investment Representations and Warranties. Purchaser warrants
and represents to the Company as follows:
9.1 Purchase Entirely for Own Account. The Shares will be
acquired for investment for Purchaser's own account and not with a view to the
resale or distribution of any part thereof, and Purchaser has no intention of
selling, granting any participation in, or otherwise distributing the same.
9.2 Investment Experience. Purchaser is experienced in
evaluating and investing in companies in the development stage, can bear the
economic risk of an investment in the Shares, and has enough knowledge and
experience in financial and business matters to evaluate the merits and risks
of the investment in the Shares.
9.3 Qualifications as an Accredited Investor. Purchaser is an
accredited investor, as that term is defined in Rule 501(a) under the
Securities Act.
9.4 Opportunity to Review Documents and Ask Questions. The
Company has made available to Purchaser all documents and information
requested by Purchaser relating to an investment in the Company. In addition,
Purchaser has had adequate opportunity to ask questions and to receive answers
from the management of the Company covering the terms and conditions of the
purchase and sale of the Shares and the Company's business, management, and
financial affairs.
10. Miscellaneous.
10.1 Entire Agreement; Amendment. This Agreement constitutes
the entire agreement of the parties with regard to the subjects hereof and may
be amended only by written agreement between the Company and the Purchaser.
10.2 Notices. Any notice required or permitted under this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally to the party to whom it is addressed or when deposited into the
United States Mail as registered or certified mail, return receipt requested,
postage prepaid, addressed to the Company at its address shown below its
signature or to the Purchaser at the address shown below the Purchaser's
signature, or at such other address as such party may designate by ten (10)
days' advance written notice to the other party.
10.3 Rights and Benefits. The rights and benefits of this
Agreement shall inure to the benefit of and be enforceable by the Company's
successors and assigns and, subject to the restrictions on transfer of this
Agreement, be binding upon the Purchaser's heirs, executors, administrators,
successors and assigns.
10.4 Further Action. The parties agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
10.5 Applicable Law; Attorneys' Fees. The terms and
conditions of this Agreement shall be governed by the laws of the State of
Oregon. In the event either party institutes litigation hereunder, the
prevailing party shall be entitled to reasonable attorneys' fees to be set by
the trial court and, upon any appeal, the appellate court.
10.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE COMPANY: DP APPLICATIONS, INC.
By: ___/c/_Bruce Love_________
XXXXX LOVE
Title: President
Address:
PURCHASER: ____/c/Xxxx X. Xxxxxx, Xx.___
Xxxx X. Xxxxxx, Xx.
Address:
EXHIBIT A
FORM OF PROMISSORY NOTE
$15,000 San Bruno, California
December 2, 1996
For value received the undersigned promises to pay to the order of
DP Applications, Inc. (the "Company") at its principal offices in San Bruno,
California, the principal sum of fifteen thousand dollars ($15,000) in lawful
money of the United States of America, with interest thereon from the date
hereof until paid at the rate of ___ percent per annum. Interest shall be due
and payable annually. The entire principal and all accrued interest shall be
due and payable in full on the fifth anniversary of the date written above.
Payments of principal and interest shall be made in lawful money of the
United States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Restricted Stock Purchase
Agreement, dated as of December 2, 1996. This Note is secured in part by a
pledge of the Company's Common Stock under the terms of a Security Agreement
of even date herewith and is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event of institution of suit or action for the collection of this
note or any portion hereof the undersigned hereby promises and agrees to pay,
in addition to the costs and disbursements which may be provided by statute,
such sum as the court may adjudge reasonable to be allowed to plaintiff
therein for its attorneys' fees at trial, appeal, or for any petition for
appeal.
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