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EXHIBIT 4.05
NIKU CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT
This Restricted Stock Purchase Agreement (the "Agreement") is made as of
February 25, 2000 by and between Niku Corporation, a Delaware corporation (the
"Company"), and JOHN DANFORTH ("Purchaser").
1. SALE OF STOCK. Subject to the terms and conditions of this Agreement,
on the Purchase Date (as defined below) the Company will issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company, an aggregate of
Two Hundred Thousand (200,000) shares of the Company's Common Stock (the
"Shares") at a purchase price of $11.00 per Share for a total purchase price of
$2,200,000.00. The term "Shares" refers to the purchased Shares and all
securities received in replacement of or in connection with the Shares pursuant
to stock dividends or splits, all securities received in replacement of the
Shares in a recapitalization, merger, reorganization, exchange or the like, and
all new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser's ownership of the Shares.
2. PURCHASE. The purchase and sale of the Shares under this Agreement
shall occur at the principal office of the Company simultaneously with the
execution of this Agreement by the parties (the " Purchase Date"). On the
Purchase Date, the Company will deliver to Purchaser a certificate representing
the Shares to be purchased by Purchaser (which shall be issued in Purchaser's
name) against payment of the purchase price therefor by Purchaser, by delivery
of $20 as payment of the par value and a Full Recourse Promissory Note, attached
hereto as Exhibit D, in the amount of $2,199,980.
3. LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below). After any Shares have
been released from such Repurchase Option, Purchaser shall not assign, encumber
or dispose of any interest in such Shares except in compliance with the
provisions below and applicable securities laws.
(a) REPURCHASE OPTION.
(i) In the event of the voluntary or involuntary termination of
Purchaser's employment or consulting relationship with the Company for any
reason (including death or disability), with or without cause, the Company shall
upon the date of such termination (the "Termination Date") have an irrevocable,
exclusive option (the "Repurchase Option") for a period of 90 days from such
date to repurchase all or any portion of the Shares held by Purchaser as of the
Termination Date which have not yet been released from the Company's Repurchase
Option at the original purchase price per Share specified in Section 1 (adjusted
for any stock splits, stock dividends and the like). Shares subject to the
Company's Repurchase Option are referred to herein
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as "Unvested Shares" and shares that have been released from the Company's
Repurchase Option are referred to as "Vested Shares".
(ii) The Repurchase Option shall be exercised by the Company by
written notice to Purchaser or Purchaser's executor and, at the Company's
option, (A) by delivery to Purchaser or Purchaser's executor with such notice of
a check in the amount of the purchase price for the Shares being purchased, or
(B) in the event Purchaser is indebted to the Company (whether or not said
indebtedness is then due and payable), by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (C) by a combination of (A) and (B) so that the combined payment
and cancellation of indebtedness equals such purchase price. Upon delivery of
such notice and payment of the purchase price in any of the ways described
above, 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 by the Company, without further action by Purchaser.
(iii) 100% of the Shares shall initially be subject to the
Repurchase Option with one-fourth (1/4th) of the total number of Shares being
released from the Repurchase Option on the one year anniversary of the Vesting
Commencement Date (as set forth on the signature page of this Agreement), and an
additional 1/48th of the total number of Shares shall be released from the
Repurchase Option each month thereafter, so that all shares are fully vested
after four years. Fractional shares shall be rounded to the nearest whole share.
(b) ADJUSTMENTS UPON CHANGE IN CONTROL. In the event of (i) a merger,
reorganization, consolidation or other transaction in which the shareholders of
the Company before such merger, reorganization, consolidation or other
transaction own, as a result of their ownership of the Company's securities,
less than fifty percent (50%) of the outstanding voting equity securities of the
surviving corporation (or in the case of a triangular merger, the parent
corporation of the surviving corporation), (ii) a sale or other transfer of all
or substantially all of the assets of the Company, or (iii) a transfer of more
than fifty percent (50%) of the outstanding voting equity securities of the
Company in one transaction or a series of related transactions, any remaining
Unvested Shares will immediately become Vested Shares.
(c) RIGHT OF FIRST REFUSAL. Before any Vested Shares held by
Purchaser or any transferee of Purchaser (either being sometimes referred to
herein as the "Holder") may be sold or otherwise transferred (including transfer
by gift or operation of law), the Company or its assignee(s) shall have a right
of first refusal to purchase the Shares on the terms and conditions set forth in
this Section 3(c) (the "Right of First Refusal"). Unvested Shares may not be
transferred unless otherwise approved by the Company.
(i) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (A) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (B) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (C) the
number of Shares to be transferred to each Proposed Transferee; and (D) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "Offered Price") and upon the same terms (or
terms as similar as reasonably possible) to the Company or its assignee(s).
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(ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within 30
days after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, 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
(iii) below.
(iii) PURCHASE PRICE. The purchase price ("Purchase Price") for
the Shares purchased by the Company or its assignee(s) under this Section 3(c)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(iv) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within 30 days after receipt of the Notice or in the manner
and at the times set forth in the Notice.
(v) HOLDER'S RIGHT TO TRANSFER. If all 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(s) as provided in this Section 3(c), 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 3 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
and/or its assignees shall again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.
(vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section 3(c) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family (as defined below) or to a trust for
the benefit of Purchaser's Immediate Family shall be exempt from the provisions
of this Section. "Immediate Family" as used herein shall mean spouse, lineal
descendant or antecedent, father, mother, brother or sister. In such case, the
transferee or other recipient shall receive and hold the Shares so transferred
subject to the provisions of this Section, and there shall be no further
transfer of such Shares except in accordance with the terms of this Section.
(d) INVOLUNTARY TRANSFER.
(i) COMPANY'S RIGHT TO PURCHASE UPON INVOLUNTARY TRANSFER. In
the event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including divorce or death, but
excluding, in the event of death, a transfer to Immediate Family as set forth in
Section 3(c)(vi) above) of all or a portion of the Shares by the record holder
thereof, the Company shall have the right to purchase all of the Shares
transferred at the greater of the purchase price paid by Purchaser pursuant to
this Agreement or the fair market value (as determined in good faith by the
Company's Board of Directors) of the Shares on the date
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of transfer. Upon such a transfer, the person acquiring the Shares shall
promptly notify the Secretary of the Company of such transfer. The right to
purchase such Shares shall be provided to the Company for a period of 30 days
following receipt by the Company of written notice by the person acquiring the
Shares.
(ii) PRICE FOR INVOLUNTARY TRANSFER. With respect to any stock to
be transferred pursuant to Section 3(d)(i), the price per Share shall be a price
set by the Board of Directors of the Company that will reflect the current value
of the stock in terms of present revenues, earnings and future prospects of the
Company. The Company shall notify Purchaser or his or her executor of the price
so determined within 30 days after receipt by it of written notice of the
transfer or proposed transfer of Shares. However, if Purchaser does not agree
with the valuation as determined by the Board of Directors of the Company,
Purchaser shall be entitled to have the valuation determined by an independent
appraiser to be mutually agreed upon by the Company and Purchaser and whose fees
shall be borne equally by the Company and Purchaser.
(e) ASSIGNMENT. The right of the Company to purchase any part of the
Shares may be assigned in whole or in part to any stockholder or stockholders of
the Company or other persons or organizations; provided, however, that an
assignee, other than a corporation that is the Parent (defined as a "parent
corporation"; whether now or hereafter existing, as defined in Section 424(e) of
the Internal Revenues Code) or a 100% owned subsidiary of the Company, must pay
the Company, upon assignment of such right, cash equal to the difference between
the original purchase price and Fair Market Value, if the original purchase
price is less than the Fair Market Value of the Shares subject to the
assignment.
(f) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares or
any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Repurchase Option. Any sale or transfer of the Shares shall be void unless the
provisions of this Agreement are satisfied.
(g) TERMINATION OF RIGHTS. The Right of First Refusal and the
Company's right to repurchase the Shares in the event of an involuntary transfer
pursuant to Section 3(d) above shall terminate 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 Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act" ). Upon
termination of the Right of First Refusal and the expiration or exercise of the
Repurchase Option, a new certificate or certificates representing the Shares not
repurchased shall be issued, on request, without the legend referred to in
Section 6(a)(ii) below and delivered to Purchaser.
4. ESCROW OF UNVESTED SHARES. For purposes of facilitating the
enforcement of the provisions of Section 3 above, Purchaser agrees, immediately
upon receipt of the certificate(s) for the Shares subject to the Repurchase
Option, to deliver such certificate(s), together with an Assignment Separate
from Certificate in the form attached to this Agreement as Exhibit A executed by
Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement. Purchaser hereby acknowledges that
the Secretary of the Company, or the Secretary's designee, is so appointed as
the escrow holder with the foregoing authorities as a material inducement to
make this Agreement and that said appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that said escrow holder
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shall not be liable to any party hereof (or to any other party). The escrow
holder may rely upon any letter, notice or other document executed by any
signature purported to be genuine and may resign at any time. Purchaser agrees
that if the Secretary of the Company, or the Secretary's designee, resigns as
escrow holder for any or no reason, the Board of Directors of the Company shall
have the power to appoint a successor to serve as escrow holder pursuant to the
terms of this Agreement.
5. INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the
purchase of the Shares, Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for his or her own 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) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
(c) Purchaser understands that the Shares are "restricted securities"
under applicable U.S. federal and state securities laws and that, pursuant to
these laws, Purchaser must hold the Shares indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of Purchaser's control,
and which the Company is under no obligation and may not be able to satisfy.
(d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.
6. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED
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THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
(b) STOP-TRANSFER NOTICES. Purchaser 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.
(c) REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
7. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.
8. SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Shares and the Fair Market
Value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the Company to buy back the Shares
pursuant to the Repurchase Option set forth in Section 3(a) of this Agreement.
Purchaser understands that Purchaser may elect to be taxed at the time the
Shares are purchased, rather than when and as the Repurchase Option expires, by
filing an election under Section 83(b) (an "83(b) Election") of the Code with
the Internal Revenue Service within 30 days from the date of purchase. Even if
the Fair Market Value of the Shares at the time of the execution of this
Agreement equals the amount paid for the Shares, the election must be made to
avoid income under Section 83(a) in the future. Purchaser understands that
failure to file such an election in a timely manner may result in adverse tax
consequences for Purchaser. Purchaser further understands that an additional
copy of such election form should be filed with his or her federal income tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that the foregoing is only a summary of the effect of
United States federal income taxation with respect to purchase of the Shares
hereunder, and does not purport to be complete. Purchaser further acknowledges
that the Company has directed Purchaser to seek independent advice regarding the
applicable provisions of the Code, the income tax laws of any municipality,
state or foreign country in which Purchaser may reside, and the tax consequences
of Purchaser's death.
Purchaser agrees that he will execute and deliver to the Company with this
executed Agreement a copy of the Acknowledgment and Statement of Decision
Regarding Section 83(b) Election (the "Acknowledgment"), attached hereto as
Exhibit B. Purchaser further agrees that
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Purchaser will execute and submit with the Acknowledgment a copy of the 83(b)
Election, attached hereto as Exhibit C, if Purchaser has indicated in the
Acknowledgment his or her decision to make such an election.
9. MARKET STANDOFF AGREEMENT. In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any Shares (other than those included
in the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the Company's
initial public offering.
10. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
(b) STOCK PLEDGE AGREEMENT. As a condition of entering into this
Agreement, Purchaser agrees to enter into the Stock Pledge Agreement attached as
Exhibit E.
(c) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement and the
Exhibits hereto set forth the entire agreement and understanding of the parties
relating to the subject matter herein and merges all prior discussions between
them. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, shall be effective unless in writing signed by the
parties to this Agreement. The failure by either party to enforce any rights
under this Agreement shall not be construed as a waiver of any rights of such
party.
(d) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(e) CONSTRUCTION. This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.
(f) NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or 48 hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address as set forth below or as subsequently
modified by written notice.
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(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(h) SUCCESSORS AND ASSIGNS. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.
(i) CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
[Signature Page Follows]
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The parties have executed this Agreement as of the date first set forth
above.
NIKU CORPORATION
By:
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Title:
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Address:
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PURCHASER:
JOHN DANFORTH
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(Signature)
Address:
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Vesting Commencement
Date: February 21, 2000
I, ________________________________, spouse of John Danforth, have read and
hereby approve the foregoing Agreement. In consideration of the Company's
granting my spouse the right to purchase the Shares as set forth in the
Agreement, I hereby agree to be irrevocably bound by the Agreement and further
agree that any community property or similar interest that I may have in the
Shares shall be similarly bound by the Agreement. I hereby appoint my spouse as
my attorney-in-fact with respect to any amendment or exercise of any rights
under the Agreement.
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Spouse of John Danforth
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EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement between the undersigned ("Purchaser") and Niku Corporation (the
"Company") dated February 25, 2000 (the "Agreement"), Purchaser hereby sells,
assigns and transfers unto the Company _________________________________
(________) shares of the Common Stock of the Company, standing in Purchaser's
name on the books of the Company and represented by Certificate No. ____, and
hereby irrevocably constitutes and appoints
________________________________________________ to transfer said stock on the
books of the Company with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated:
-------------------------
Signature:
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John Danforth
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Spouse of John Danforth (if applicable)
INSTRUCTION: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. The
purpose of this assignment is to enable the Company to exercise its repurchase
option set forth in the Agreement without requiring additional signatures on the
part of Purchaser.
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EXHIBIT B
ACKNOWLEDGMENT AND STATEMENT OF DECISION
REGARDING SECTION 83(b) ELECTION
The undersigned (which term includes the undersigned's spouse), a purchaser
of 200,000 shares of Common Stock of Niku Corporation, a Delaware corporation
(the "Company") by exercise of stock purchase right (the "Shares") granted to
the undersigned, hereby states as follows:
1. The undersigned has carefully reviewed the stock purchase agreement
pursuant to which the Shares were purchased.
2. The undersigned either [check and complete as applicable]:
(a) ____ has consulted, and has been fully advised by, the
undersigned's own tax advisor, regarding the federal, state
and local tax consequences of purchasing shares under the
Plan, and particularly regarding the advisability of making
elections pursuant to Section 83(b) of the Internal Revenue
Code of 1986, as amended (the "Code") and pursuant to the
corresponding provisions, if any, of applicable state law;
or
(b) ____ has knowingly chosen not to consult such a tax advisor.
3. The undersigned hereby states that the undersigned has decided [check
as applicable]:
(a) ____ to make an election pursuant to Section 83(b) of the Code,
and is submitting to the Company, together with the
undersigned's executed Restricted Stock Purchase Agreement,
an executed form entitled "Election Under Section 83(b) of
the Internal Revenue Code of 1986;" or
(b) ____ not to make an election pursuant to Section 83(b) of the
Code.
4. Neither the Company nor any subsidiary or representative of the
Company has made any warranty or representation to the undersigned with respect
to the tax consequences of the undersigned's purchase of shares under the Plan
or of the making or failure to make an election pursuant to Section 83(b) of the
Code or the corresponding provisions, if any, of applicable state law.
Date:
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John Danforth
Date:
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Spouse of John Danforth
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EXHIBIT C
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, as amended, to include in gross income for the Taxpayer's
current taxable year the excess, if any, of the fair market value of the
property described below at the time of transfer over the amount paid for such
property, as compensation for services:
1. The name, address, taxpayer identification number and taxable year of
the undersigned is as follows:
NAME OF TAXPAYER: JOHN DANFORTH
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ADDRESS:
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IDENTIFICATION NO. OF TAXPAYER:
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TAXABLE YEAR:
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2. The property with respect to which the election is made is described
as follows:
200,000 shares of the Common Stock ($0.0001 par value) of Niku
Corporation, a Delaware corporation (the "Company").
3. The date on which the property was transferred is: _______________
4. The property is subject to the following restrictions:
Repurchase option at cost in favor of the Company upon termination of
taxpayer's employment or consulting relationship.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms
will never lapse, of such property is:
$______________.
6. The amount (if any) paid for such property: $______________
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated:
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John Danforth
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EXHIBIT D
SECURED FULL RECOURSE PROMISSORY NOTE
Redwood City, California
$2,199,980.00 February 25, 2000
1. OBLIGATION. In exchange for the issuance to the undersigned
("Purchaser") of 200,000 shares (the "Shares") of the Common Stock of Niku
Corporation, a Delaware corporation (the "Company"), receipt of which is hereby
acknowledged, Purchaser hereby promises to pay to the order of the Company on
February 25, 2003, or at such earlier dates as provided in Sections 3 and 6
below, at the Company's principal place of business at 305 Main Street, Redwood
City, California, or at such other place as the Company may direct, the
principal sum of Two Million One Hundred Ninety-Nine Thousand Nine Hundred
Eighty Dollars ($2,199,980.00) together with interest compounded annually on the
unpaid principal at the rate of 5.88%, which rate is not less than the minimum
rate established pursuant to Section 1274(d) of the Internal Revenue Code of
1986, as amended, on the earliest date on which there was a binding contract in
writing for the purchase of the Shares; provided, however, that the rate at
which interest will accrue on unpaid principal under this Note will not exceed
the highest rate permitted by applicable law.
2. SECURITY. Payment of this Note is secured by a security interest in
the Shares granted to the Company by Purchaser under a Stock Pledge Agreement
dated of even date herewith between the Company and Purchaser (the "Pledge
Agreement"). This Note is being tendered by Purchaser to the Company as part of
the purchase price of the Shares pursuant to that certain Restricted Stock
Purchase Agreement between Purchaser and the Company dated of even date with
this Note (the "Purchase Agreement").
3. DEFAULT; ACCELERATION OF OBLIGATION. Purchaser will be deemed to be in
default under this Note and the principal sum of this Note, together with all
interest accrued thereon, will immediately become due and payable in full: (a)
upon Purchaser's failure to make any payment when due under this Note; (b) upon
the filing by or against Purchaser of any voluntary or involuntary petition in
bankruptcy or any petition for relief under the federal bankruptcy code or any
other state or federal law for the relief under the federal bankruptcy code or
any other state or federal law for the relief of debtors; or (c) upon the
execution by Purchaser of an assignment for the benefit of creditors or the
appointment of a receiver, custodian, trustee or similar party to take
possession of Purchaser's assets or property. In addition Purchaser will be
deemed to be in default under this Note and the principal and interest will
become due and payable in full (1) thirty (30) days following any transfer of
the Shares (except (A) a transfer to the Company, or (B) a transfer to Immediate
Family as set forth in Section 3(c)(vi) of the Purchase Agreement), (ii) ninety
(90) days following the date Purchaser voluntarily terminates his employment or
consulting relationship with the Company or (iii) six (6) months following the
date Purchaser's employment or consulting relationship with the Company is
terminated (other than voluntarily) for any reason (including death or
disability), with or without cause. Purchaser also agrees that in connection
with any termination of Purchaser's
<PAGE> 14
employment or consulting relationship, for any reason, whether voluntary or
involuntary, if the Company exercises its Repurchase Option to repurchase all or
some of the Shares under the Purchase Agreement, then the Company may cancel the
appropriate amount of indebtedness due under this Note as payment for such
repurchased Shares.
4. REMEDIES ON DEFAULT. Upon any default of Purchaser under this Note,
the Company will have, in addition to its rights and remedies under this Note
and the Pledge Agreement, full recourse against any real, personal, tangible or
intangible assets of Purchaser, and may pursue any legal or equitable remedies
that are available to it.
5. RULE 144 HOLDING PERIOD. PURCHASER UNDERSTANDS THAT THE HOLDING PERIOD
SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE COMMISSION WILL NOT
BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE UNTIL EITHER (A)
THE PURCHASE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR BY OTHER PROPERTY
ACCEPTED BY THE COMPANY, OR (B) THIS NOTE IS SECURED BY COLLATERAL, OTHER THAN
THE SHARES, HAVING A FAIR MARKET VALUE AT LEAST EQUAL TO THE AMOUNT OF
PURCHASER'S THEN OUTSTANDING OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED
INTEREST).
6. PREPAYMENT. Prepayment of principal and/or interest due under this
Note may be made at any time without penalty. Unless otherwise agreed in writing
by the Company, all payments will be made in lawful tender of the United States
and will be applied first to the payment of accrued interest, and the remaining
balance of such payment, if any, will then be applied to the payment of
principal. If Purchaser prepays all or a portion of the principal amount of this
Note, the Shares paid for by the portion of principal so paid will continue to
be held in pledge under the Pledge Agreement to serve as independent collateral
for the outstanding portion of this Note for the purpose of commencing the
holding period under Rule 144(d) of the Securities and Exchange Commission with
respect to other Shares purchased with this Note, unless Purchaser notifies the
Company in writing otherwise and the Company consents to release of the Shares
from the Pledge Agreement.
7. GOVERNING LAW; WAIVER. The validity, construction and performance of
this Note will be governed by the internal laws of the State of California,
excluding that body of law pertaining to conflicts of law. Purchaser hereby
waives presentment, notice of non-payment, notice of dishonor, protest, demand
and diligence.
8. ATTORNEYS' FEES. If suit is brought for collection of this Note,
Purchaser agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection therewith whether or not such suit is
prosecuted to judgment.
9. ENTIRE AGREEMENT. This Note and the Purchase Agreement, together with
all the Exhibits thereto, constitute and contain the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes that certain Promissory Note dated February 21, 2000 by and between
the Purchaser and the Company and any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.
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<PAGE> 15
IN WITNESS WHEREOF, Purchaser has executed this Note as of the date and year
first above written.
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Purchaser's Name: John Danforth Purchaser's Signature
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<PAGE> 16
EXHIBIT E
STOCK PLEDGE AGREEMENT
This Agreement is made and entered into as of February 25, 2000 between
Niku Corporation, a Delaware corporation (the "Company"), and John Danforth
("Pledgor").
R E C I T A L S
A. In exchange for Pledgor's Secured Full Recourse Promissory Note to the
Company of even date herewith (the "Note") and $20.00 in cash, the Company has
issued and sold to Pledgor Two Hundred Thousand (200,000) shares of its Common
Stock , par value $0.0001 per share, (the "Shares") pursuant to the terms and
conditions of that Restricted Stock Purchase Agreement between the Company and
Pledgor of even date herewith (the "Purchase Agreement").
B. Pledgor has agreed that repayment of the Note will be secured by the
pledge of the Shares pursuant to this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. CREATION OF SECURITY INTEREST. Pursuant to the provisions of the
California Commercial Code, Pledgor hereby grants to the Company, and the
Company hereby accepts, a first and present security interest in the Shares as
collateral to secure the payment of Pledgor's obligation to the Company under
the Note. Pledgor herewith delivers to the Company Common Stock certificate(s)
No(s). _________, representing all the Shares, together with one stock power for
each certificate in the form attached as an Exhibit to the Purchase Agreement,
duly executed (with the date and number of shares left blank) by Pledgor and
Pledgor's spouse, if any. For purposes of this Agreement, the Shares pledged to
the Company hereby, together with any additional collateral pledged pursuant to
Section 5 hereof, will hereinafter be collectively referred to as the
"Collateral." Pledgor agrees that the Collateral pledged to the Company will be
deposited with and held by the Escrow Holder (as defined in the Purchase
Agreement) and that, notwithstanding anything to the contrary in the Purchase
Agreement, for purposes of carrying out the provisions of this Agreement, Escrow
Holder will act solely for the Company as its agent.
2. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and warrants
to the Company that Pledgor has good title (both record and beneficial) to the
Collateral, free and clear of all claims, pledges, security interests, liens or
encumbrances of every nature whatsoever, and that Pledgor has the right to
pledge and grant the Company the security interest in the Collateral granted
under this Agreement. Pledgor further agrees that, except for transfers to
Immediate Family as set forth in Section 3(c)(vi) of the Purchase Agreement,
until the entire principal sum and all accrued interest due under the Note has
been paid in full, Purchaser will not, without the Company's prior written
consent, (i) sell, assign or transfer, or attempt to sell, assign or transfer,
any of the Collateral, or (ii) grant or create, or attempt to grant or create,
any security interest, lien, pledge, claim or other encumbrance with respect to
any of the Collateral.
3. RIGHTS ON DEFAULT. In the event of default (as defined in the Note) by
Pledgor under the Note, the Company will have full power to sell, assign and
deliver the whole or
<PAGE> 17
any part of the Collateral at any broker's exchange or elsewhere, at public or
private sale, at the option of the Company, in order to satisfy any part of the
obligations of Pledgor now existing or hereinafter arising under the Note. On
any such sale, the Company or its assigns may purchase all or any part of the
Collateral. In addition, at its sole option, the Company may elect to retain all
the Collateral in full satisfaction of Pledgor's obligation under the Note, in
accordance with the provisions and procedures set forth in the California
Commercial Code.
4. ADDITIONAL REMEDIES. The rights and remedies granted to the Company
herein upon default under the Note will be in addition to all the rights, powers
and remedies of the Company under the California Commercial Code and applicable
law and such rights, powers and remedies will be exercisable by the Company with
respect to all of the Collateral. Pledgor agrees that the Company's reasonable
expenses of holding the Collateral, preparing it for resale or other
disposition, and selling or otherwise disposing of the Collateral, including
attorneys' fees and other legal expenses, will be deducted from the proceeds of
any sale or other disposition and will be included in the amounts Pledgor must
tender to redeem the Collateral. All rights, powers and remedies of the Company
will be cumulative and not alternative. Any forbearance or failure or delay by
the Company in exercising any right, power or remedy hereunder will not be
deemed to be a waiver of any such right, power or remedy and any single or
partial exercise of any such right, power or remedy hereunder will not preclude
the further exercise thereof.
5. DIVIDENDS; VOTING. All dividends hereinafter declared on or payable
with respect to the Collateral during the term of this pledge (excluding only
ordinary cash dividends, which will be payable to Pledgor so long as Pledgor is
not in default under the Note) will be immediately delivered to the Company to
be held in pledge under this Agreement. Notwithstanding this Agreement, so long
as Pledgor owns the Shares and is not in default under the Note, Pledgor will be
entitled to vote any shares comprising the Collateral, subject to any proxies
granted by Pledgor.
6. ADJUSTMENTS. In the event that during the term of this pledge, any
stock dividend, reclassification, readjustment, stock split or other change is
declared or made with respect to the Collateral, or if warrants or any other
rights, options or securities are issued in respect of the Collateral, then all
new, substituted and/or additional shares or other securities issued by reason
of such change or by reason of the exercise of such warrants, rights, options or
securities, will be immediately pledged to the Company to be held under the
terms of this Agreement in the same manner as the Collateral is held hereunder.
7. RIGHTS UNDER PURCHASE AGREEMENT. Pledgor understands and agrees that
the Company's rights to repurchase the Collateral under the Purchase Agreement,
if any, will continue for the periods and on the terms and conditions specified
in the Purchase Agreement, whether or not the Note has been paid during such
period of time, and that to the extent that the Note is not paid during such
period of time, the repurchase by the Company of the Collateral may be made by
way of cancellation of all or any part of Pledgor's indebtedness under the Note.
8. REDELIVERY OF COLLATERAL. Upon payment in full of the entire principal
sum and all accrued interest due under the Note, and subject to the terms and
conditions of the Purchase Agreement, the Company will immediately redeliver the
Collateral to Pledgor and this Agreement will terminate; provided, however, that
all rights of the Company to retain possession of the Shares pursuant to the
Purchase Agreement will survive termination of this Agreement.
9. SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit of
the respective heirs, personal representatives, successors and assigns of the
parties hereto.
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<PAGE> 18
10. GOVERNING LAW; SEVERABILITY. This Agreement will be governed by and
construed in accordance with the internal laws of the State of California,
excluding that body of law relating to conflicts of law. Should one or more of
the provisions of this Agreement be determined by a court of law to be illegal
or unenforceable, the other provisions nevertheless will remain effective and
will be enforceable.
11. MODIFICATION; ENTIRE AGREEMENT. This Agreement will not be amended
without the written consent of both parties hereto. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings related to such
subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
NIKU CORPORATION PLEDGOR
By:
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(Signature)
John Danforth
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(Please print name) (Please print name)
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(Please print title)
[SIGNATURE PAGE TO NIKU CORPORATION STOCK PLEDGE AGREEMENT]
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