Exhibit 99.2
STOCK RESTRICTION AGREEMENT
Egghead, Inc.
00000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx, Chief Executive Officer
Ladies and Gentlemen:
The undersigned (the "Shareholder") is a holder of Common Stock and/or
Preferred Stock of Surplus Software, Inc., an Oregon corporation (dba Surplus
Direct) (the "Company"), which has entered into that certain Agreement and Plan
of Merger dated as of April 30, 1997, among Egghead, Inc., a Washington
corporation ("Egghead"), North Face Merger Sub, Inc., an Oregon corporation and
a wholly owned subsidiary of Egghead ("Merger Sub"), the Company and certain
shareholders of the Company (the "Merger Agreement"). The Merger Agreement
provides for the merger of Merger Sub with and into the Company subject to the
terms and conditions set forth therein (the "Merger"). Capitalized terms used
in this letter agreement and not otherwise defined shall have the meanings
ascribed to them in the Merger Agreement.
The parties to the Merger Agreement intend that the Merger qualify as a
tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended. In order to provide greater assurance that the Merger will so
qualify, the Company has requested that the Merger Agreement be amended to
provide that the Company will be merged into Merger Sub, with Merger Sub as the
surviving corporation of the Merger. Egghead has agreed to execute such an
amendment in the form of the Amendment to the Agreement and Plan of Merger dated
as of May 23, 1997, on the condition that this letter agreement be executed by
the shareholders of the Company set forth on the attached Exhibit A.
Accordingly, in consideration for Egghead's agreement to amend the Merger
Agreement, the Shareholder agrees as follows:
(a) Such Shareholder will not sell, transfer or otherwise dispose of more
than 45% of the Egghead Common Shares received by such Shareholder
pursuant to the Merger Agreement during a period of one year following
the Effective Time (the "Restricted Period"). The remaining 55% of
such Egghead Common Shares held by such Shareholder shall constitute
restricted shares in accordance with this letter agreement (the "Tax
Restricted Shares") and may not be sold, transferred or otherwise
disposed of during the Restricted Period without the prior written
consent of Egghead, which may be withheld in its sole discretion.
(b) The Tax Restricted Shares shall include the Egghead Common Shares that
constitute Holdback Shares pursuant to the Merger Agreement
(c) Each certificate representing Tax Restricted Shares shall bear the
following legend:
"The shares represented by this certificate are subject to
the terms and conditions of a certain Stock Restriction
Agreement dated as of May 23, 1997, as at any time amended,
and may not be sold, transferred or encumbered except in
accordance with the terms and provisions of such agreement,
a copy of which is on file at the principal offices of
Egghead, Inc. and will be furnished to the holder of this
certificate upon request without charge."
Egghead shall also instruct its transfer agent to place stop transfer
orders on the transfer of any Tax Restricted Shares during the
Restricted Period. After the Restricted Period, Egghead shall
instruct its transfer agent to remove, upon request by the
Shareholder, the legend set forth above.
(d) If the Shareholder is a party to that certain Registration Rights
Agreement dated as of April 30, 1997 between Egghead and certain
Shareholders, such Shareholder agrees not to exercise its rights to
register any Tax Restricted Shares under such agreement during the
Restricted Period.
(e) If the Shareholder is a party to that certain Shareholders Agreement
dated as of April 30, 1997 among Egghead, the Company and certain
Shareholders, the Shareholder acknowledges its representations and
covenants set forth therein and that this letter agreement shall not
constitute a waiver or amendment to such agreement.
(f) During the Restricted Period, the Shareholder shall remain the owner
of the Tax Restricted Shares and shall have the right to vote the Tax
Restricted Shares and to receive any dividends and distributions
thereon.
This letter agreement shall be governed by and construed in accordance with
the laws of the State of Oregon.
Please acknowledge your acceptance of this letter agreement by executing
and returning to the undersigned one of the two enclosed copies hereof.
Effective as of May 23, 1997.
Very truly yours,
Shareholder
XXXXXXX X. XXXX
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(Name of Shareholder)
/s/ Xxxxxxx X. Xxxx
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(Signature)
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(Printed name of person signing
on behalf of Shareholder)
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(Title of person signing on behalf of
Shareholder)
Accepted and Agreed:
EGGHEAD, INC.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: Chief Executive Officer
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