EXHIBIT 10.13
ATRIEVA CORPORATION
STOCK SUBSCRIPTION AGREEMENT
This Stock Subscription Agreement (this "Agreement") is entered into as of
May 21, 1999 by and between Atrieva Corporation, a Delaware corporation (the
"Company"), and Larry Barels (the "Shareholder").
RECITALS
A. In connection with the completion of the Series B Preferred Stock
financing, the Company desires to issue to the Shareholder as of the date hereof
2,130,000 shares of common stock of the Company (the "Shares").
B. In order to induce the Company to issue the Shares, the Shareholder
has entered into an Employment Agreement with the Company on March 10, 1999 and
this Agreement.
AGREEMENTS
In consideration of the foregoing and the other provisions set forth
herein, the parties hereby agree as follows:
1. Share Subscription and Shareholder Representations
The Shareholder hereby subscribes for and agrees to purchase the Shares at
a purchase price of $0.10 per share, or an aggregate of $213,000. Concurrent
with the delivery of this Agreement, the Shareholder has delivered a promissory
note substantially in the form attached hereto as Exhibit A as payment of the
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Purchase Price and a Pledge Agreement to Promissory Note substantially in the
form attached hereto as Exhibit B. For purposes of complying with applicable
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securities laws in connection with such purchase, the Shareholder represents and
warrants to the Company as follows:
(a) I am a resident of the State of California and qualify as an
"accredited investor" as that term is defined by the Securities and Exchange
Commission (the "SEC").
(b) I am familiar with the Company's business, financial condition
and prospects and have had access to and have acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Shares. I possess sufficient business and financial experience to protect my
interests in connection with the purchase of the Shares. I am aware that the
Shares have not been registered under the Securities Act of 1933 (the "1933
Act") or any state securities laws pursuant to exemption(s) from registration. I
understand that the reliance by the Company on such exemption(s) is
CONFIDENTIAL TREATMENT **Confidential treatment has been
HAS BEEN REQUESTED FOR requested with respect to the
CERTAIN PORTIONS OF THIS information contained within the
DOCUMENT "[**]" markings. Such marked portions
have been omitted from this filing and
have been filed separately with the
Securities and Exchange Commission
predicated in part upon the truth and accuracy of the representations contained
in this Section.
(c) I am purchasing the Shares for my own personal account for
investment and not with a view to the sale or distribution of any or all of the
Shares. I agree that I will in no event sell or distribute any or all of the
Shares unless (1) there is an effective registration statement under the 1933
Act and applicable state securities laws covering any such transaction or (2)
the Company receives an opinion of my 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.
(d) I consent to the placing of a legend on my certificate(s) for the
Shares stating that the Shares have not been registered under the 1933 Act or
any state securities law and setting forth the restriction on transfer
contemplated hereby 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. Transfer Restrictions
(a) Without the prior written consent of the Company, none of the
Shares may be transferred by the Shareholder under any circumstances,
voluntarily or involuntarily; provided, however, that the Shares may be
transferred without such prior written consent if and only if either (i) the
Shares are no longer subject to the pledge pursuant to the Pledge Agreement to
Promissory Note or (ii) the Shareholder shall be transferring the Shares to the
Company pursuant to Section 2 of that certain Services Agreement, of even date
herewith, between the Shareholder and the Company.
(b) Any purported Transfer without compliance with this Section 2
shall be void. The Company may place a legend on the certificate or
certificates evidencing the Shares referencing the restrictions on transfer set
forth in this Agreement.
3. Legend
All certificates representing any of the Shares shall have endorsed thereon
the following legend, in addition to any other legend required by the Company
respecting the restricted nature of the Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A CERTAIN STOCK SUBSCRIPTION AGREEMENT, INCLUDING CERTAIN
RESTRICTIONS ON TRANSFER."
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4. Rights as Shareholder
Subject to the terms hereof and except as otherwise provided in Sections 4
and 10 of the Pledge Agreement to Promissory Note, the Shareholder shall have
all the rights of a shareholder with respect to the Shares during the term of
this Agreement, including without limitation the right to vote and receive any
dividends or other distributions declared thereon.
5. Adjustments for Stock Splits, Recapitalizations and Similar Events
If, at any time or from time to time, there is (1) a dividend of any
security, stock split or other change in the character or amount of any of the
outstanding securities of the Company, or (2) any consolidation, merger or
similar event, then, in such event, any and all new, substituted or additional
securities or other property to which the Shareholder is entitled by reason of
his ownership of the Shares at the time of effectiveness of such event shall be
immediately included in the definition of "Shares" under this Agreement and
shall be subject to the pledge provisions of Section 1 with the same force and
effect as the Shares currently subject to this Agreement.
6. Termination
This Agreement shall terminate in its entirety at such time as none of the
Shares remain subject to the provisions of Section 2.
7. Tax Matters
The Shareholder acknowledges that he has considered and analyzed the
appropriate treatment by him of the transactions contemplated hereby under the
Internal Revenue Code of 1986, as amended (the "Code"), including without
limitation Section 83 thereof. The Shareholder agrees that any decision as to
whether to file an election relating thereto, and the due and proper filing of
any such election, are solely the Shareholder's responsibilities.
8. Cooperation
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.
9. Specific Enforcement
Each party expressly agrees that the other party would be irreparably
damaged if this Agreement were not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement by
any party, the other party shall, in addition to all other remedies, each be
entitled to a temporary or permanent injunction, without showing any actual
damage, and/or a decree for specific performance, in accordance with the
provisions of this Agreement.
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10. Notices
All notices and other communications required or permitted hereunder shall
be in writing and shall be mailed by first class mail, postage prepaid, or
otherwise delivered by hand or by messenger, facsimile or courier, addressed (a)
if to the Shareholder, at the Shareholder's then current address on the
Company's books or at such other address as the Shareholder shall have furnished
to the Company in writing, or (b) if to the Company, at its principal executive
office, attention Chief Executive Officer and Chief Financial Officer, with a
copy to David McShea, Perkins Coie LLP, 1201 Third Avenue, 40th Floor, Seattle,
WA 98101. If notice is provided by mail, it shall be deemed to be given three
(3) business days after proper deposit in the U.S. Mail, and if notice is given
by hand or by messenger, facsimile or courier, it shall be deemed to be given
upon receipt.
11. Entire Agreement
This Agreement (including the Attachment and Exhibits attached hereto)
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both oral
and written, among such parties, or any of them, with respect to such subject
matter.
12. Amendment and Waiver
Neither this Agreement nor any provision hereof may be modified, amended or
terminated except by a written agreement signed by the parties hereto, and no
waiver of any provision of this Agreement shall be effective unless in writing
and signed by or on behalf of the party to be bound by such waiver.
13. Governing Law
This Agreement shall be governed by and construed under the laws of the
state of Washington as applied to agreements among Washington residents, made
and to be performed entirely within Washington.
14. Successors and Assigns
The provisions hereof shall inure to the benefit of, and be binding upon,
the successors, permitted assigns, heirs, executors, administrators and personal
representatives of the parties hereto. Notwithstanding anything to the contrary
contained in this Agreement, no Shares may be transferred by the Shareholder
under any circumstances, without the prior written consent of the Company which
may be withheld for any reason, so long as such Shares are subject to the pledge
pursuant to the Pledge Agreement to Promissory Note. Any transfer or purported
transfer in violation of this Section 2 shall be void.
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15. Headings
The headings of the sections and paragraphs of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
16. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
17. Severability
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provisions shall be excluded from this Agreement and
the balance of this Agreement shall be interpreted as if such provisions were so
excluded and shall be enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ATRIEVA CORPORATION
By: /s/ Kern F. Maresca
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Name: Kern F. Maresca
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Title: V.P. Finance
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Address:
One Union Square
600 University Street, Suite 911
Seattle, Washington 98101
SHAREHOLDER
/s/ Larry Barels
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Larry Barels
Address:
[*]
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EXHIBIT A
PROMISSORY NOTE
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$213,000 Seattle, Washington
May 21, 1999 (the "Date of Issuance")
FOR VALUE RECEIVED, the undersigned promises to pay in lawful money of the
United States to the order of Atrieva Corporation. (the "Company") at its
principal place of business or at such other place as the holder hereof from
time to time may designate in writing, the principal sum of two hundred and
thirteen thousand dollars ($213,000) with interest on the principal balance from
the date hereof at the rate of five and twenty-two hundredths percent (5.22%)
compounded annually.
The principal on this note shall be due and payable on the first to occur
of: (a) January 1, 2006, (b) an IPO (as such term is defined in the Stock
Subscription Agreement, dated as of the date hereof, between the Company and the
holder hereof (the "Stock Subscription Agreement")) and (c) a Sale of the
Company (as defined below) (the "Maturity Date"). Twenty percent of all unpaid
interest that accrues annually on the principal balance shall be due and payable
annually on the anniversary of the Date of Issuance. All accrued but unpaid
interest as of the Maturity Date shall be due and payable on the Maturity Date.
If default be made in the payment of any principal or interest when due, then as
long as this note is in default, without prior notice, this note shall
thereafter bear interest at the lesser of (a) one and one-half percent (1.5%)
per month or (b) the maximum rate permitted by law.
"Sale of the Company" shall mean a merger, consolidation, recapitalization
or other business combination or transaction pursuant to which either (1) the
holders of the outstanding voting power of the Company immediately prior to the
transaction would not hold at least 50% of the outstanding voting power of the
surviving corporation in the transaction, or its parent, immediately after the
transaction or (2) substantially all of the assets of the Company would be
transferred or controlled by a third party not affiliated with the Company,
except that excluded from the definition of "Sale of the Company" are a merger
effected exclusively for the purpose of changing the domicile of the Company and
a merger, consolidation, recapitalization or other business combination or
similar transaction effected for the purpose of reorganizing the Company into a
holding company structure.
If suit is brought on this note after any default in any payment, the
undersigned promises and agrees to pay reasonable attorneys' fees incurred
thereby by the Company.
This note is to be construed in all respects and enforced according to the
laws of the State of Washington. This note is a full recourse note and is
secured by a Pledge Agreement to Promissory Note, of even date with the Date of
Issuance of this note, between the
undersigned and the Company. Presentment, notice of dishonor, and protest are
waived by the undersigned.
This note shall be fully binding on and inure to the benefit of the
successors, heirs, legal representatives, and assigns of the parties hereto.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
By /s/ Larry Barels
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Larry Barels
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EXHIBIT B
PLEDGE AGREEMENT TO PROMISSORY NOTE
THIS PLEDGE AGREEMENT, dated as of May 21, 1999, is given by Larry Barels
("Grantor") to Atrieva Corporation, a Delaware corporation ("Grantee").
GRANTOR HEREBY REPRESENTS, COVENANTS AND AGREES WITH GRANTEE AS FOLLOWS:
RECITALS
A. Grantee has made a loan to Grantor in the amount of $213,000 (the
"Loan").
B. Grantor has executed a promissory note with a Date of Issuance that is
of even date with this Agreement, in the principal amount of $213,000 payable
to Grantee (the "Note") in connection with the Loan.
C. Grantor has agreed to pledge certain shares of common stock (the
"Stock") to Grantee to secure the payment and performance in full of his
obligations under the Note.
D. The parties desire to set forth the terms and conditions of the pledge
of the Stock in this Agreement.
AGREEMENTS
Section 1. Pledge of the Collateral
Grantor hereby pledges to Grantee the following-described property (the
"Collateral"), together with all proceeds thereof:
No. of
Shares Title of Class Issuer
--------- -------------- ----------------------------------
2,130,000 Common Atrieva Corporation.
[* * *]
This pledge is given to secure (a) the due and timely payment of all
amounts due under the Note to Grantee by Grantor and (b) the performance by
Grantor of his obligations under this Agreement (together, the "Obligations").
Section 2. Representations and Warranties
Grantor hereby represents and warrants to Grantee as follows:
2.1 Binding Effect
This Agreement constitutes the valid obligation of Grantor which is binding
and enforceable against him in accordance with its terms.
2.2 Title to Collateral
Grantor is the legal and beneficial owner of the Collateral free and clear
of any lien, claim, security interest, option, encumbrance or right of any
other, except the security interest created by this Agreement.
2.3 Security Interest
When this Agreement is duly executed and delivered by Grantor and Grantee
has possession of the Collateral, this Agreement will constitute and Grantee
will have a valid and perfected first priority security interest in and to the
Collateral, effective against all third parties.
Section 3. Delivery of Certificate
Concurrently herewith, Grantor shall deliver to Grantee the stock
certificate(s) representing all of the Collateral, together with appropriate
assignments separate from certificate naming Grantee as assignee, duly endorsed
by Grantor for transfer in blank, in the form and substance of Attachment A-1,
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attached hereto.
Section 4. Handling of Collateral
Grantee shall not be required, except at its sole option, to realize upon
the Collateral, collect dividends thereon, exercise any rights or options of the
Grantor pertaining thereto, to keep the Collateral insured, or do any other
thing for the protection, enforcement or collection of the Collateral. Under no
circumstances shall Grantee in any way be responsible for failure to act on
Grantor's behalf nor shall it be in any way responsible for any negligent act
with respect to the Collateral. Grantee shall not exercise voting rights or
collect cash dividends with respect to the Collateral unless and until the
occurrence of an Event of Default, as defined in Section 9 hereof, and such
rights may be exercised by Grantor prior to any such occurrence. Upon an Event
of Default (as defined below), Grantee shall be authorized to transfer to itself
or to any other person all or any of the Collateral, and may fill in blanks in
any transfers or other documents delivered to it, provided that any surplus of
the proceeds of the Collateral after payment in full of all obligations secured
hereby shall be paid over to Grantor.
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Section 5. Holder of Record
So long as an Event of Default which has not been cured does not exist
hereunder, Grantor shall remain the holder of record of the Collateral.
Section 6. Stock Dividends and Recapitalizations
In the event any issuer of the Collateral shall declare a stock dividend or
any stock split with respect to the Collateral, or in the event the Collateral
shall be replaced as a result of any dissolution, merger, consolidation,
reorganization, recapitalization or other similar proceeding involving an issuer
of the Collateral, or in the event there shall be a distribution of assets or
securities with respect to the Collateral, all such distributed assets, shares
or other securities to which Grantor is entitled as a result of any such
transactions shall be delivered to Grantee and shall automatically become
subject to all of the terms and conditions of this Agreement to the same extent
as though they had been included as, and shall be deemed to be, a part of the
Collateral from the date hereof.
Section 7. Substitutions, Extension
The obligations of Grantor hereunder shall not be affected by the release
or substitution of any other security for the Obligations secured hereby or by
any release, waiver, renewal, extension of time or compromise given to Grantor
with regard to any of the Obligations or for any other reason other than the
full payment or satisfaction by Grantor of the Obligations.
Section 8. Termination
This Agreement shall terminate upon the earlier of (a) Grantor's payment or
satisfaction in full of all of the Obligation or (b) the closing of the sale of
the Shares by Grantor to the Grantee pursuant to the Section 2 of the Services
Agreement, of even date herewith, between Grantor and Grantee (the "Services
Agreement").
Section 9. Events of Default
9.1 Events of Default
The failure by Grantor (a) to pay any portion of principal of or interest
on the Note when due or (b) to perform his obligations under this Agreement
which, in the case of either (a) or (b), Grantor fails to cure within 20 days of
written notice from Grantee shall constitute Events of Default under this
Agreement.
9.2 Effect
Upon the occurrence of any Event of Default, the Obligations secured hereby
shall then or at any time thereafter, at the option of Grantee, become
immediately due and payable
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without notice or demand, and Grantee shall have an immediate right to pursue
the remedies provided herein.
Section 10. Remedies
If an Event of Default occurs, Grantee shall have all remedies provided by
law, including, without limitation, all rights of a secured party under the
Washington Uniform Commercial Code (the "UCC"), whether or not this Agreement
and the transactions contemplated hereby are determined to be governed by the
UCC. Without limiting the generality of the foregoing, Grantee shall be
entitled to exercise all voting rights connected with the Collateral and to
transfer all right, title and interest in and to the Collateral to be
transferred to Grantee or to any purchaser acceptable to Grantee upon terms and
conditions acceptable to Grantee; provided that any surplus of the proceeds of
the Collateral after payment in full of all obligations secured hereby shall be
paid over to Grantor.
Section 11. Cumulative Rights
The security and the rights and remedies provided for in this Agreement are
cumulative, and are in addition to any rights or security or remedies of Grantee
under any other instruments or agreements, or under applicable law.
Section 12. Expenses
Grantor shall pay on demand the costs of all filings and recordings deemed
desirable by Grantee, and all expenses, including reasonable attorneys' fees,
which Grantee may incur in protecting, defending or realizing on any part of the
Collateral, or in protecting or defending the priority of the security interest
created hereby, whether or not a lawsuit be involved, all such sums to be deemed
secured by this pledge.
Section 13. Notices
Notices to Grantee and Grantor shall be sent as follows:
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TO GRANTEE:
(a) Atrieva Corporation
One Union Square
600 University Street, Suite 911
Seattle, Washington 98101
Attn: Ken Maraca
Facsimile: (206) 382-6615
with a copy to:
Perkins Coie LLP
1201 Third Avenue, 40th Floor
Seattle, WA 98101
Attn: David McShea
Facsimile: (206) 583-8500
TO GRANTOR:
(b) Larry Barels
[*]
or to such other address as Grantor or Grantee, as the case may be, may give the
other party notice of in accordance with this Section 1.3.
If notice is provided by mail, it shall be deemed to be given three (3)
business days after proper deposit in the U.S. Mail, and if notice is given by
hand or by messenger, facsimile or courier, it shall be deemed to be given upon
receipt.
Section 14. Modifications, Consents and Waivers
No failure or delay on the part of Grantee in exercising any power or right
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of such right or power preclude any other or further exercise
thereof or the exercise of any other right or power. No amendment, modification
or waiver of any provision of this Agreement, nor consent to any departure
therefrom, shall be effective unless in writing and consented to by Grantee.
Section 15. Additional Documents
Grantor shall at Grantee's request, from time to time, at Grantor's sole
cost and expense, execute, reexecute, deliver and redeliver any and all
documents, and do and perform such other and further acts as may reasonably be
required by Grantee to enable Grantee to
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perfect, preserve and protect its security interest in the Collateral and its
rights and remedies under this Agreement or granted by law and to carry out and
effect the intents and purposes of this Agreement.
Section 16. Miscellaneous
16.1 Amendment
Neither this Agreement nor any provision hereof may be amended, modified,
waived, discharged or terminated other than by an instrument in writing signed
by the party to be bound.
16.2 Binding Agreement
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
16.3 Headings
Paragraph headings in this Agreement are for convenience only and shall not
affect the construction of this Agreement.
16.4 Severability
Any provision hereof which is invalid or prohibited by law shall be
inoperative and all other provisions hereof shall remain effective.
16.5 Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original if fully executed, but all of which together
shall constitute one and the same instrument.
16.6 Applicable Law
This Agreement shall be construed in accordance with and governed by the
laws of the state of Washington. Grantor hereby irrevocably submits to the
exclusive jurisdiction and venue of the Superior Court of the State of
Washington for King County and the United States Federal District Court for the
Western District of Washington for the purposes of proceedings arising out of or
relating to this Agreement and hereby waives and agrees irrevocably not to
assert any claim that he is not personally subject to the jurisdiction of the
above-named courts.
IN WITNESS WHEREOF, Grantor has executed this Pledge Agreement as of the
date first written above.
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/s/ Larry Barels
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Name: Larry Barels
/s/ Wendy Barels
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Spouse
ACCEPTED:
ATRIEVA CORPORATION
By: /s/ Kern F. Maresca
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Name: Kern F. Maresca
----------------------------------------
Title: V.P. Finance
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Dated:
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ATTACHMENT A-1
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, Larry Barels, hereby assigns and
transfers unto Atrieva Corporation, a Delaware corporation, ________ shares of
the Common Stock of Atrieva Corporation standing in its name on the books of
said corporation.
The undersigned hereby irrevocably constitutes and appoints Perkins Coie
LLP to transfer said shares on the books of said corporation with full power of
substitution in the premises.
DATED: May __, 1999
By:
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Name: Larry Barels
In Presence of:
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Name:
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