Document:

QuickLinks
 -- Click here to rapidly navigate through this document
  

Exhibit 10.30  

  
 

    eSoft, Inc.
  Restricted Stock Award
  Grant Notice
  (eSoft, Inc. Equity Compensation Plan, as amended through May 20, 1999)    
  

        eSoft, Inc. (the "Company"), pursuant to its eSoft, Inc. Equity Compensation Plan (the "Plan"), hereby grants to Participant the right to purchase
the number of shares of the Company's Common Stock set forth below ("Award"). This Award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Purchase
Agreement, the Plan, the Promissory Note and Pledge Agreement and the form of Joint Escrow Instructions, all of which are attached hereto and incorporated herein in their entirety. 

	Participant:	 	Amy Beth Hansman
	Date of Grant:	 	6/15/01
	Number of Shares Subject to Award:	 	50,000
	Purchase Price per Share:	 	$1.05
	Total Purchase Price:	 	52,500
	Closing Date:	 	6/15/01

        Vesting Schedule:    Immediately vested on Date of Grant. 

        Payment:    By deferred payment (described in the Restricted Stock Purchase Agreement): 

        Additional Terms/Acknowledgements:    The undersigned Participant acknowledges receipt of, and understands and agrees to, this
Grant Notice, the Restricted Stock Purchase Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Grant Notice, the Restricted Stock Purchase Agreement and the
Plan set forth the entire understanding between Participant and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with
the exception of (i) Awards previously granted and delivered to Participant under the Plan, and (ii) the following agreements only: 

	 	 	Other Agreements:	 	

	 	 	 	 	

	eSoft, Inc.	 	Participant:
	

By:	
 	

/s/  JEFFREY FINN      
 Signature	
 	

By:	
 	

/s/  AMY BETH HANSMAN      
 Signature
	

Title:	
 	

CEO
	
 	

Date:	
 	

06/16/01

	Date:	 	06/15/01
	 	 	 	 

        Attachments:    Restricted Stock Purchase Agreement, eSoft, Inc. Equity Compensation Plan, form of Joint Escrow
Instructions, Promissory Note, and Pledge Agreement. 

1

 
Attachment I

Restricted Stock Purchase Agreement  

2

 
eSOFT, INC.

EQUITY COMPENSATION PLAN

Restricted Stock Purchase

Agreement  

        eSoft, Inc. (the "Company") wishes to sell to you, and you wish to purchase, shares of Common Stock from the Company, pursuant to the provisions of the
Company's Equity Compensation Plan (the "Plan"). 

        Therefore,
pursuant to the terms of the Restricted Stock Award Grant Notice ("Grant Notice") and this Restricted Stock Purchase Agreement ("Agreement") (collectively, the "Award"), the
Company grants you right to purchase the number of shares of Common Stock indicated in the Grant Notice. Defined terms not explicitly defined in this Agreement but defined in the Plan shall have the
same definitions as in the Plan. 

        The
details of your Award are as follows: 

        1.    Agreement to Purchase. You hereby agree to purchase from the Company, and the Company hereby agrees to sell to you, the
aggregate number of shares of Common Stock specified in your Grant Notice at the specified Purchase Price per Share. You may not purchase less than the aggregate number of shares specified in the
Grant Notice. 

        2.    Closing. The purchase and sale of the shares shall be consummated as follows: 

        (a)  You
may purchase the shares by delivering the Total Purchase Price specified in your Grant Notice to the Secretary of the Company, or to such other person as the Company
may designate, during regular business hours, on the Closing Date specified in the Grant Notice (or at such other time and
place as you and the Company may mutually agree upon in writing) along with such additional documents as the Company may then require. 

        (b)  If
payment is to be made in whole or in part by promissory note, you agree to execute a Promissory Note in the form of Attachment IV to the Grant Notice and to execute a
pledge agreement in the form of Attachment V to the Grant Notice (the "Pledge Agreement") and to deliver the same to the Company on the Closing Date, along with the certificate or certificates
evidencing the shares, for use by the Escrow Agent pursuant to the terms of the Joint Escrow Instructions. 

        3.    Method of Payment. You may make payment of the Purchase Price pursuant to the following deferred payment alternative: 

        (a)  Not
less than one hundred percent (100%) of the aggregate Purchase Price, plus accrued interest, shall be due four (4) years from date of purchase or, at the
Company's election, upon termination of your Continuous Service. 

        (b)  Interest
shall be compounded at least annually and shall be charged at the minimum rate of interest that is necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any portion of any amounts other than amounts stated to be interest under the deferred payment arrangement. 

        (c)  Payment
of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall be made in cash and not by deferred payment. 

        4.    Vesting. Subject to the limitations contained herein, the shares you purchase will vest as provided in the Grant Notice,
provided that vesting will cease upon the termination of your Continuous Service. 

3

 

        5.    Number of Shares and Purchase Price. The number of shares subject to your Award and your Purchase Price may be adjusted
from time to time for Capitalization Adjustments, as provided in the Plan. 

        6.    Securities Law Compliance. You will not be issued any shares under your Award unless the shares are either (a) then
registered under the Securities Act or (b) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award must
also comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with
such laws and regulations. 

        7.    Restrictions on Transfer. You agree that the Company (or a representative of the underwriters) may, in connection with the
first underwritten registration of the offering of any securities of the Company under the Securities Act, require that you not sell, dispose of, transfer, make any short sale of, grant any option for
the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you under the Award,
for a period of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days) following the effective date of the registration statement of the Company filed under the
Securities Act. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that
are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your Common Stock until the end
of such period. 

        8.    Right of First Refusal. Shares that are received under your Award are subject to any right of first refusal that may be
described in the Company's bylaws in effect at such time the Company elects to exercise its right. 

        9.    Restrictive Legends. The shares issued under your Award shall be endorsed with appropriate legends determined by the
Company. 

        10.  Award not a Service Contract. Your Award is not an employment or service contract, and nothing in your Award shall be
deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or on the part of the Company or an Affiliate to continue your employment.
In addition, nothing in your Award shall obligate the Company or an Affiliate, their respective shareholders, boards of directors, Officers or Employees to continue any relationship that you might
have as a Director or Consultant for the Company or an Affiliate. 

        11.  Withholding Obligations. 

        (a)  At
the time your Award is made, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to
you, and otherwise agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which
arise in connection with your Award. 

        (b)  Unless
the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have no obligation to issue a certificate for such shares or
release such shares from any escrow provided for herein. 

        12.  Tax Consequences. The acquisition and vesting of the shares may have adverse tax consequences to you that may avoided or
mitigated by filing an election under Section 83(b) of the Code. Such election must be filed within thirty (30) days after the date your purchase the shares pursuant to your
Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, 

4

 

AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY TO MAKE THE FILING ON YOUR BEHALF. 

        13.  Notices. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively
given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you
provided to the Company. 

        14.  Miscellaneous. 

        (a)  The
rights and obligations of the Company under your Award shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall
inure to the benefit of, and be enforceable by the Company's successors and assigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Company. 

        (b)  You
agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or
intent of your Award. 

        (c)  You
acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting
your Award and fully understand all provisions of your Award. 

        15.  Governing Plan Document. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made
a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any
conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control. 

5

 
Attachment II

eSoft, Inc. Equity Compensation Plan

[Intentionally omitted—See Exhibit 4.15]  

6

 
Attachment III

Form of Joint Escrow Instructions  

7

 
JOINT ESCROW INSTRUCTIONS  

June 15,
2001 

Corporate
Secretary

eSoft, Inc.

295 Interlocken Blvd. Suite 500

Broomfield, Colorado 80021 

Dear
Sir/Madam: 

        As
Escrow Agent for both eSoft, Inc., a Delaware corporation (the "Company"), and the undersigned recipient of stock of the Company ("Recipient"), you are hereby authorized and
directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Award Grant Notice (the "Grant Notice"), dated June 15,
2001 to which a copy of these Joint Escrow Instructions is attached as Attachment IV, and pursuant to the terms of that certain Restricted Stock Purchase Agreement
("Agreement"), which is Attachment I to the Grant Notice, in accordance with the following instructions: 

        1.    In
the event Recipient ceases to render services to the Company or an affiliate of the Company during the vesting period set forth in the Grant Notice, the Company or its
assignee will give to Recipient and you a written notice specifying that the shares of stock shall be transferred to the Company. Recipient and the Company hereby irrevocably authorize and direct you
to close the transaction contemplated by such notice in accordance with the terms of said notice. 

        2.    At
the closing you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of shares being
transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company. 

        3.    Recipient
irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and
substitutions to said shares as specified in the Grant Notice. Recipient does hereby irrevocably constitute and appoint you as Recipient's attorney-in-fact and agent for the
term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities
negotiable and complete any transaction herein contemplated. 

        4.    This
escrow shall terminate upon repayment of the promissory note between the Company and Recipient dated June 15,
2001, or upon the earlier return of the shares to the Company. 

        5.    If
at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Recipient, you shall deliver all
of same to any pledgee entitled thereto or, if none, to Recipient and shall be discharged of all further obligations hereunder. 

        6.    Your
duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 

        7.    You
shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from
acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees. You shall not be personally liable for any act
you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice of
your own attorneys shall be conclusive evidence of such good faith. 

8

 

        8.    You
are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or
process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of
any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 

        9.    You
shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the
Grant Notice or any documents or papers deposited or called for hereunder. 

        10.  You
shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with
you. 

        11.  You
shall be entitled to employ such legal counsel, including but not limited to Cooley Godward LLP, and other experts as you may deem necessary properly to advise you
in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. 

        12.  Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if you shall resign by written notice to each party.
In the event of any such termination, the Company may appoint any officer or assistant officer of the Company as successor Escrow Agent and Recipient hereby confirms the appointment of such successor
or successors as his attorney-in-fact and agent to the full extent of your appointment. 

        13.  If
you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto
shall join in furnishing such instruments. 

        14.  It
is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you may (but are not
obligated to) retain in your possession without liability to anyone all or any part of said securities until such dispute shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever
to institute or defend any such proceedings. 

        15.  Any
notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in any United States
Post Box, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties hereunto entitled at 

9

 

the following addresses, or at such other addresses as a party may designate by ten (10) days' written notice to each of the other parties hereto: 

	Company:	 	eSoft, Inc.

295 Interlocken Blvd. Suite 500

Broomfield, CO 80021

Attn: VP Finance
	
Recipient:	
 	

	

Escrow Agent:	
 	

eSoft, Inc.

295 Interlocken Blvd. Suite 500

Attn: Corporate Secretary

        16.  By
signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Grant
Notice. 

        17.  This
instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. It is understood and agreed
that references to "you" or
"your" herein refer to the original Escrow Agent and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under
the Grant Notice and these Joint Escrow Instructions in whole or in part. 

	 	 	Very truly yours,
	

 	
 	
eSoft, Inc.
	

 	
 	

By:	
 	

	

 	
 	
Recipient
	

 	
 	

By:	
 	

	
Escrow Agent:	
 	

 	
 	

 
	

	
 	

 	
 	

 

10

   Attachment IV

Promissory Note  

11

 
RECOURSE PROMISSORY NOTE  

$52,000

        June 15, 2001  

        For Value Received, the undersigned hereby unconditionally promises to pay to the order of eSoft, Inc., a
Delaware corporation (the "Company"), at 295 Interlocken Blvd. Suite 500, Broomfield, Colorado, or at such other place as the holder hereof may designate in writing, in lawful money of the
United States of America and in immediately available funds, the principal sum of Fifty Two Thousand Dollars ($52,000) (not to exceed the undersigned's
annual base salary) together with interest accrued from the date hereof on the unpaid principal at the rate of 11.125% per annum, or the maximum rate permissible by law (which under the laws of the
State of Delaware shall be deemed to be the laws relating to permissible rates of interest on commercial loans), whichever is less, as follows: 

        Principal Repayment. The outstanding principal amount hereunder shall be due and payable in full on  June 15, 2004. 

        Interest Payments. Interest shall be payable annually in arrears and shall be calculated on the basis of a 360-day year for
the actual number of days elapsed; 

        In
the event that the undersigned's employment by or association with the Company is terminated for any reason prior to payment in full of this Note, this Note shall be accelerated and
all remaining unpaid principal and interest shall become due and payable 90 days after the date of such termination; provided, however that in
the event that during such 90-day period the undersigned would violate the provisions of any law, regulation, or agreement restricting the disposition of the Company's common stock
purchased with this Note, then such 90-day period shall be extended, and all remaining unpaid principal and interest shall become due and payable on the first day that such restrictions
lapse. Notwithstanding the foregoing, in the event that the undersigned is terminated by the Company without "Cause," as defined in the undersigned's employment agreement with the Company, then the
90-day period shall be extended, and all remaining unpaid principal and interest shall become due and payable one year from the date of such termination without "Cause." 

        If
the undersigned fails to pay any of the principal and accrued interest when due, the Company, at its sole option, shall have the right to accelerate this Note, in which event the
entire principal balance and all accrued interest shall become immediately due and payable, and immediately collectible by the Company pursuant to applicable law. 

        This
Note may be prepaid at any time without penalty. All money paid toward the satisfaction of this Note shall be applied first to the payment of interest as required hereunder and then
to the retirement of the principal. 

        This
Note is a full recourse promissory note. In addition, the full amount of this Note is secured by a pledge of shares of Common Stock of the Company and is subject to all of the terms
and provisions of the Stock Purchase Agreement and the Pledge Agreement, each of even date herewith between the undersigned and the Company. 

        The
undersigned hereby represents and agrees that the amounts due under this Note are not consumer debt, and are not incurred primarily for personal, family or household purposes, but
are for business and commercial purposes only. 

        The
undersigned hereby waives presentment, protest and notice of protest, demand for payment, notice of dishonor and all other notices or demands in connection with the delivery,
acceptance, performance, default or endorsement of this Note. 

12

 

        The
holder hereof shall be entitled to recover, and the undersigned agrees to pay when incurred, all costs and expenses of collection of this Note, including without limitation,
reasonable attorneys' fees. 

        This
Note shall be governed by, and construed, enforced and interpreted in accordance with, the laws of the State of Delaware, excluding conflict of laws principles that would cause the
application of laws of any other jurisdiction. 

	 	 	Signed	 	 
	 	 	 	 	

13

 
Attachment V

Pledge Agreement  

14

 
PLEDGE AGREEMENT  

        1.    As
collateral security for the payment of that certain $52,000 promissory note issued this date to  Amy Beth Hansman ("Pledgee") by the undersigned
(hereinafter called "indebtedness"), the undersigned hereby assigns, transfers to and pledges with the
Pledgee the securities listed on Schedule 1 hereto
which were this day delivered to be deposited with Pledgee, together with any stock rights, rights to subscribe, dividends paid in cash or other property in connection with the complete or partial
liquidation of Pledgee, stock dividends, dividends paid in stock, new securities or other property except cash dividends other than liquidating dividends to which the undersigned is or may hereafter
become entitled to receive on account of such property, and in the event that the undersigned receives any such, the undersigned will immediately deliver it to Pledgee to be held by Pledgee hereunder
in the same manner as the property originally pledged hereunder. All property assigned, transferred to and pledged with Pledgee under this paragraph is hereinafter called "collateral." 

        2.    At
any time, without notice, and at the expense of the undersigned, Pledgee in its name or in the name of its nominee or of the undersigned may, but shall not be
obligated to: (a) collect by legal proceedings or otherwise all dividends (except cash dividends other than liquidating dividends), interest, principal payments and other sums now or hereafter
payable upon or on account of said collateral; (b) enter into any extension, reorganization, deposit, merger, or consolidation agreement, or any agreement in any way relating to or affecting
the collateral, and in connection therewith may deposit or surrender control of such collateral thereunder, accept other property in exchange for such collateral and do and perform such acts and
things as it may deem proper, and any money or property received in exchange for such collateral shall be applied to the indebtedness or thereafter held by it pursuant to the provisions hereof;
(c) insure, process and preserve the collateral; (d) cause the collateral to be transferred to its name or to the name of its nominee; (e) exercise as to such collateral all the
rights, powers, and remedies of an owner, except that so long as the indebtedness is not in default the undersigned shall retain all voting rights as to the collateral. 

        3.    The
undersigned agrees to pay prior to delinquency all taxes, charges, liens and assessments against the collateral, and upon the failure of the undersigned to do so
Pledgee at its option may pay any of them and shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same. 

        4.    All
advances, charges, costs and expenses, including reasonable attorneys' fees, incurred or paid by Pledgee in exercising any right, power or remedy conferred by this
agreement, or in the enforcement thereof, shall become a part of the indebtedness secured hereunder and shall be paid to Pledgee by the undersigned immediately and without demand. 

        5.    At
the option of Pledgee and without necessity of demand or notice, all or any part of the indebtedness of the undersigned shall immediately become due and payable
irrespective of any agreed maturity, upon the happening of any of the following events: (a) failure to keep or perform any of the terms or provisions of this agreement; (b) default in
the payment of principal or interest when due; (c) the levy of any attachment, execution or other process against the collateral; or (d) the insolvency, commission of an act of
bankruptcy, general assignment for the benefit of creditors, filing of any petition in bankruptcy or for relief under the provisions of Title 11, United States Code, Bankruptcy, of, by, or
against the undersigned. 

        6.    In
the event of the nonpayment of any indebtedness when due, whether by acceleration or otherwise, or upon the happening of any of the events specified in the last
preceding paragraph, Pledgee may
then, or at any time thereafter, at its election, apply, set off, collect or sell in one or more sales, or take such steps as may be necessary to liquidate and reduce to cash in the hands of Pledgee
in whole or in part, with or without any previous demands or demand of performance or notice or advertisement, the whole or any part of the collateral in such order as Pledgee may elect, and any such
sale may be made either at public or private sale at its place of business or elsewhere, or at any 

15

 

broker's board or securities exchange, either for cash or upon credit or for future delivery; provided, however, that if such disposition is at private
sale, then the purchase price of the collateral shall be equal to the public market price then in effect, or, if at the time of sale no public market for the collateral exists, then, in recognition of
the fact that the sale of the collateral would have to be registered under the Securities Act of 1933 and that the expenses of such registration are commercially unreasonable for the type and amount
of collateral pledged hereunder, Pledgee and the undersigned hereby agree that such private sale shall be at a purchase price mutually agreed to by Pledgee and the undersigned or, if the parties
cannot agree upon a purchase price, then at a purchase price established by a majority of three independent appraisers knowledgeable of the value of such collateral, one named by the undersigned
within 10 days after written request by the Pledgee to do so, one named by Pledgee within such 10 day period, and the third named by the two appraisers so selected, with the appraisal to
be rendered by such body within 30 days of the appointment of the third appraiser. The cost of such appraisal, including all appraiser's fees, shall be charged against the proceeds of sale as
an expense of such sale. Pledgee may be the purchaser of any or all collateral so sold and hold the same thereafter in its own right free from any claim of the undersigned or right of redemption.
Demands of performance, notices of sale, advertisements and presence of property at sale are hereby waived, and Pledgee is hereby authorized to sell hereunder any evidence of debt pledged to it. Any
sale hereunder may be conducted by any officer or agent of Pledgee. 

        7.    The
proceeds of the sale of any of the collateral and all sums received or collected by Pledgee from or on account of such collateral shall be applied by Pledgee to the
payment of expenses incurred or paid by Pledgee in connection with any sale, transfer or delivery of the collateral, to the payment of any other costs, charges, attorneys' fees or expenses mentioned
herein, and to the payment of the indebtedness or any part hereof, all in such order and manner as Pledgee in its discretion may determine. Pledgee shall pay any balance to the undersigned. 

        8.    Pledgee
shall be under no duty or obligation whatsoever to make or give any presentments, demands for performance, notices of non-performance, protests,
notices of protest or notices of dishonor in connection with any obligations or evidences of indebtedness held by Pledgee as collateral, or in connection with any obligations or evidences of
indebtedness which constitute in whole or in part the indebtedness secured hereunder. 

        9.    Pledgee
may at any time deliver the collateral or any part thereof to the undersigned and the receipt of the undersigned shall be a complete and full acquittance for the
collateral so delivered, and Pledgee shall thereafter be discharged from any liability or responsibility therefor. 

        10.  Upon
the transfer of all or any part of the indebtedness Pledgee may transfer all or any part of the collateral and shall be fully discharged thereafter from all
liability and responsibility with respect to
such collateral so transferred, and the transferee shall be vested with all the rights and powers of Pledgee hereunder with respect to such collateral so transferred; but with respect to any
collateral not so transferred Pledgee shall retain all rights and powers hereby given. 

        11.  Until
all indebtedness shall have been paid in full the power of sale and all other rights, powers and remedies granted to Pledgee hereunder shall continue to exist and
may be exercised by Pledgee at any time and from time to time irrespective of the fact that the indebtedness or any part thereof may have become barred by any statute of limitations, or that the
personal liability of the undersigned may have ceased. 

        12.  Pledgee
agrees that so long as the indebtedness is not in default, shares of eSoft, Inc. common stock held hereunder as collateral for the indebtedness shall be
released from pledge as the indebtedness is paid. Such releases shall be at the rate of one share for each $1.05 of principal amount of indebtedness
paid. Release from pledge, however, shall not result in release from the provisions of those certain Joint Escrow Instructions, if any, of even date herewith among the parties to this Pledge Agreement
and the Escrow Agent named therein. 

16

 

        13.  The
rights, powers and remedies given to Pledgee by this agreement shall be in addition to all rights, powers and remedies given to Pledgee by virtue of any statute or
rule of law. Pledgee may exercise its Pledgee's lien or right of setoff with respect to the indebtedness in the same manner as if the indebtedness were unsecured. Any forbearance or failure or delay
by Pledgee in exercising any right, power or remedy hereunder shall not be deemed to be a waiver of such right, power or remedy, and any single or partial exercise of any right, power or remedy
hereunder shall not preclude the further exercise thereof; and every right, power and remedy of Pledgee shall continue in full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by Pledgee. 

        Dated:
June 15, 2001

	 	 	

Attachment:  

        Schedule 1 

17

 

Schedule 1

To

PLEDGE AGREEMENT 

	Certificate Number
 
	 	# of Shares

	02697	 	50,000

18

QuickLinks

eSoft, Inc. Restricted Stock Award Grant Notice (eSoft, Inc. Equity Compensation Plan, as amended through May 20, 1999)QuickLinks
 -- Click here to rapidly navigate through this document
  

Exhibit 10.31 

CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24B-2 OF THE SECURITIES ACT OF 1934, AS AMENDED. 

 
 

PURCHASE AGREEMENT
  
    BETWEEN
  
    eSoft INCORPORATED
  (Buyer)
  
    AND
  
    WIN ENTERPRISES, INC.
  (Seller)
  
    FOR
  
    InstaGateTM EX2 AND
InstaRakTM
  (PRODUCT)
  
    CONTRACT NO.: 1032-001    
  

1

 

SECTION I    RECITAL  

	A.
	This
Agreement is made as of October 1, 2001, by eSoft, Incorporated ("Buyer") and Win Enterprises, Inc. ("Seller"). The
terms and conditions contained in this Agreement and all attachments together called (the "Agreement") exclusively govern the anticipated purchase and sale of product ("Product"), identified in
Exhibit A, ("Product, Pricing and Leadtime"). If any term of this Agreement conflicts with any term of an issued purchase order, this Agreement shall take precedence. 

SECTION II    PURCHASE ORDERS  

	A.
	Buyer
will authorize purchase and shipments of Product by issuing its purchase order form ("Purchase Order"). Each Purchase Order will identify items such as Product, quantity,
delivery schedule, destination and confirmation of price. Seller shall sign and return the acknowledgment copy of the Purchase Order ten (10) days after receipt. If Seller fails to return it,
Buyer will conclusively presume that Seller accepts any Purchase Order that conforms to the terms of this Agreement. Acceptance by Seller is limited to Buyer's offer as contained in this Agreement and
the Purchase Order. No additional or different provisions proposed by Seller shall apply. 

SECTION III    AGREEMENT PERIOD  

	A.
	The
period during which Buyer may issue Purchase Orders for Product under this Agreement begins on October 1, 2001 and ends on September 20, 2003 (the "Product Purchase
Period"). This Agreement governs Purchase Orders issued by Buyer during the Agreement Period and any extension so long as Buyer has requested delivery of Product within six (6) months beyond
the end of the Product Purchase Period or any extension.

	B.
	The
Agreement Period may be extended up to three (3) consecutive one (1) year period(s) upon no less than sixty (60) days written notice to Seller prior to the end
of the then current Agreement Period. 

SECTION IV    PRICING  

	A.
	The
prices for Product are set forth in Exhibit A, Product, Pricing and Leadtime, and shall remain firm for the Agreement Period as described in Section III, unless a
change has been mutually agreed upon by the parties. Seller expressly acknowledges and agrees that all prices established under this Agreement are lawful.

	B.
	All
prices include all charges such as packaging, packing, customs duties imposed before passage of title, and all taxes except sales, use and other such taxes imposed upon the sale or
transfer of Product. Buyer shall have no liability for such taxes if it has complied with statutory resale tax certificate requirements.

	C.
	Sixty
(60) days prior to the end of the then current Agreement Period, Buyer and Seller shall meet to review the pricing of Product for the next Agreement Period. If Buyer and
Seller reach agreement, a new Exhibit A shall be generated for the next Agreement Period and this Agreement will be amended to state the changes. If Buyer and Seller fail to reach agreement on
Product pricing, this Agreement will be terminated at the end of the then current Agreement Period. Buyer's liability to Seller for such termination shall be to pay Seller for:

	1)
	Product
delivered prior to the termination

	2)
	Product
in transit to Buyer prior to the termination

	3)
	Any
cost associated with Work in Process 

2

 

	4)
	Any
cost that Seller has incurred for procuring material in order to meet Seller's contractual requirements to Buyer.

	5)
	Any
cancellation charges that Seller may incur for canceling purchase orders with its vendors, if permitted to do so, as a result of cancellation or termination of this Agreement. 

SECTION V    DELIVERY  

	A.
	Buyer's
Purchase Orders shall state Seller's estimated delivery dates for Product, The maximum agreed upon period of time between Buyer's issuance of a Purchase Order and the estimated
delivery date ("Leadtime") shall be as stated in Exhibit A.

	B.
	All
deliveries of Product shall be FOB point of origin. In the absence of specific instructions, Seller will select the carrier, which will not be deemed an agent of Seller. Products
will be drop shipped to the U.S. destination designated on Buyer's Purchase Order. Unless Buyer's order specifically declines, Seller will provide "All Risk" transit insurance, commencing coverage
upon tender of Products to the carrier and terminating upon Customer's receipt thereof. Buyer shall pay for such coverage at current rates.

	C.
	Buyer
may require that shipments of Products be shipped by Seller to various destinations. The Purchase Order will clearly specify the "Ship To" locations for each Purchase Order
placed with Seller.

	D.
	Seller
reserves the right to make partial shipments, with Buyer's authorization, in which event Buyer agrees to pay for all Products received per the terms as stated herein.

	E.
	Delivery
and/or shipping dates given by Seller are + /- three (3) days unless otherwise stated in the Purchase Order.

	F.
	If
Buyer refuses and/or reschedules delivery of any Products that have been shipped to it due to reasons other than damaged or incorrect Product, Buyer shall pay Seller for additional
costs incurred, including without limitation storage and any additional freight costs. Terms and conditions for rescheduling delivery are included in Exhibit B, Product Reschedule Provisions.

	G.
	Any
cancellation of an order after shipment is subject to Seller's written acceptance thereof. 

SECTION VI    PAYMENT  

	A.
	Payment
for Products will be made net thirty (30) days from the date of the invoice. Any unpaid invoices that exceed the net thirty (30) day timeframe established herein
will be subject to an interest assessment of 11/2% per month or the maximum percentage allowable by law on the balance that exceeds the aforementioned payment term. In addition, at
Seller's option, Seller may suspend shipment of all Products to Buyer on any Purchase Order issued to Seller from Buyer, if Buyer has failed to pay Seller amounts due and owing for shipments delivered
under that Purchase Order that exceed sixty (60) days from the date of invoice. Shipments will be promptly commenced upon payment of the over sixty (60) day invoices. 

SECTION VII    ACCEPTANCE  

	A.
	Products
shall be deemed accepted upon delivery. 

SECTION VIII    PRODUCT WARRANTIES  

	A.
	Seller
warrants that the Products furnished under this Agreement shall be free from defects in material and workmanship and meets specifications. This warranty is applicable only if
the Products have had normal utilization within the published specifications as modified from time to 

3

 

time,
have been maintained in accordance with recommended procedures, use Seller's approved parts and have not been modified or altered in a manner not approved by Seller. 

Any
Product found therein defective within one (1) year of original shipping date from Seller's facility shall be returned to Seller and the defective component within the returned Product will
be repaired or replaced at the option and expense of Seller. Shipping cost to the Seller's facility shall be paid by Buyer and Seller will return the Products at its expense. Any extended warranty
over and above the aforementioned one (1) year term may be mutually agreed, and if agreed upon will be memorialized in writing via an amendment to this Agreement. 

Repair
or replacement of a part under this warranty shall neither extend nor decrease the warranty period. 

If
Seller has cooperated with Buyer on the design of a Product and Buyer has tested and accepted the design and later a defect in the design is uncovered by Buyer, Buyer will promptly notify Seller in
writing of the design defect. Sellers' only obligation to Buyer as it pertains to the design defect will be to cooperate with Buyer to modify the design to meet Customer's requirements. Seller will
not be obligated to refurbish any Products sold to Buyer prior to Seller's written notification. 

THE WARRANTIES SET FORTH IN THIS SECTION AND THE OBLIGATIONS AND LIABILITIES THEREUNDER ARE IN LIEU OF, AND THE BUYER HEREBY WAIVES, ALL IMPLIED GUARANTEES AND WARRANTIES,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

SECTION IX    LIMITATION OF LIABILITY  

	A.
	IN NO EVENT SHALL SELLER BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES (INCLUDING ANY LOSS OF PROFIT, REVENUE OR DATA) ARISING UNDER THIS
AGREEMENT, EVEN IF SELLER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE, OR FOR ANY CLAIM OR ACTION BROUGHT AGAINST BUYER BY ANY THIRD PARTY.

	B.
	Seller's
total liability to the Buyer for damages for any cause whatsoever and regardless of the form of action, shall be limited to the charges paid or payable by Buyer under this
Agreement for the particular Product from which the liability arises. 

SECTION X    CONFIDENTIAL INFORMATION  

	A.
	Except
as otherwise provided for in this Agreement, Seller and Buyer each agree that all information communicated to it by the other whether before or after the Product Purchase Period
will be received in strict confidence, and will be used only for the purposes of this Agreement and will not be disclosed by the recipient party without the prior written consent of the disclosing
party. Each party agrees to use
the same means it uses to protect its own confidential information, but in no event not less than reasonable means, to prevent the disclosure of such information to outside parties. However, neither
party will be prevented from disclosing information to its counsel or regular public accountants, or from disclosing information that is (a) already known by the recipient party without an
obligation of confidentiality other than pursuant to this Agreement; (b) publicly known or becomes publicly known through no authorized act of the recipient party; (c) rightfully
received from a third party; (d) independently developed without the use of the other party's confidential information; (f) approved by the disclosing party for disclosure; or
(g) required to be disclosed pursuant to a requirement of a governmental agency or a legal requirement if the disclosing party provides the recipient party with notice of this requirement prior
to disclosure. 

4

 

SECTION XI    FORCE MAJEURE  

	A.
	Neither
party shall be liable for failure to perform any of its obligations under this Agreement during any period in which such performance is delayed by fire, flood or other natural
disaster, war, embargo, riot, or the intervention of any government authority, provided that the party so delayed immediately notifies the other party of such delay. If Seller's performance is delayed
for these reasons for a cumulative period of sixty (60) days or more from the date of such notice, Buyer may terminate this Agreement by giving
Seller written notice. If Buyer terminates, its liability under this Agreement will be to pay Seller for any Product received prior to termination; any Product in transit prior to termination; any
material purchased by Seller prior to termination to meet the requirements of the Agreement and any charges incurred by Seller from its vendors for cancellation of commitments made pursuant to meeting
the requirements of this Agreement. 

SECTION XII    NOTICES  

	A.
	Any
notice given under this Agreement shall be written or by facsimile. Written notice shall be sent by registered mail or certified mail, postage prepaid, return receipt requested.
Any facsimile notice must be followed within three (3) days by written notice. All notices shall be effective when first received at the following addresses: 

	If to Seller:	 	If to Buyer:
	WIN Enterprises, Inc.	 	eSoft, Incorporated
	300 Willow Street South	 	295 Interlocken Boulevard #500
	North Andover, MA 01845	 	Broomfield, CO 80021

SECTION XIII    GENERAL  

	A.
	This
Agreement is the complete and entire understanding between the parties on this subject matter and supersedes all prior agreements, proposals, representations, statements, or
understandings whether written or oral on this subject between them. The provisions of this Agreement may be amended or waived only by a writing executed by the authorized representatives of the
parties hereto.

	B.
	In
the event that either party to this Agreement shall, on any occasion, fail to perform any provision of this Agreement, and the other party does not enforce that provision, the
failure to enforce shall not prevent enforcement of the provision on any other occasion.

	C.
	As
used in this Agreement, except where otherwise noted, the term "days" shall mean calendar days.

	D.
	Seller,
including its servants, agents, and employees, is an independent contractor and not an agent or employee of Buyer. Without limiting the generality of the foregoing, Seller is
not authorized to represent or make any commitments on behalf of Buyer, and Buyer expressly disclaims any liability therefore.

	E.
	Supplemental
terms are included in Exhibits to this Agreement and are incorporated herein by reference.

	F.
	All
rights and remedies conferred by this Agreement, by any other instrument, or by law are cumulative and may be exercised singularly or concurrently. If any provision of this
Agreement is held
invalid by any law or regulation of any government or by any court, such invalidity shall not effect the enforceability of any other provisions hereof. This Agreement and any Purchase Orders issued
hereunder shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, excluding its Conflict of Laws provisions. 

5

 

IN
WITNESS, the authorized representatives of the parties have executed this Agreement effective the commencement date of October 1, 2001. 

	 	 	WIN ENTERPRISES, INC.

(Seller)	 	 	 	(Buyer)
	

By:	
 	

/s/  CHIMAN PATEL      
	
 	

By:	
 	

/s/  JASON ROLLINS      

	

Chiman Patel
 (Authorized Representative)	
 	

Jason Rollins
 (Authorized Representative)
	

11-19-2001
 (Date)	
 	

11-02-2001
 (Date)

ATTACHMENTS  

EXHIBIT A—PRODUCT, PRICING AND LEADTIME  

EXHIBIT B—PRODUCT RESCHEDULE PROVISIONS  

EXHIBIT C—PRODUCT ESCROW  

EXHIBIT D—MANUFACTURING RIGHTS  

EXHIBIT E—Non-Cancelable, Non-Returnable Products  

6

 

EXHIBIT A—PRODUCT, PRICING AND LEADTIME***  

The
products covered by this agreement are the InstaGateTM EX2 and the InstaRakTM. 

The
Baseline Price of the InstaGateTM EX2 and the InstaRakTM is
$[ *** ] per unit (F.O.B. North Andover,
MA), effective  [ *** ]. The following are the unit prices
through [ *** ] (F.O.B. North Andover,
MA). 

Monthly
Pricing 

	October [...***...]	 	$	[...***...]
	November [...***...]	 	$	[...***...]
	December [...***...]	 	$	[...***...]
	Terms-Net 10 days	 	 	 
	December [...***...]	 	$	[...***...]
	Terms-Net 30 days	 	 	 

Seller
will work with Buyer to try to reduce costs and therefore generate savings that will be shared between Buyer and Seller or to recover increased costs from Buyer that Seller incurs. 

Pricing
shown above is contingent upon Seller's ability to acquire the following items at the baseline prices shown below: 

	1.
	64MB
SDRAM @ $[...***...]

	2.
	566MHz
Celeron CPU @$[...***...]

	3.
	Hard
Disk Drive @ $[...***...] 

Increases
in the baseline prices will result in an increase in the unit prices. 

Buyer
will provide Seller with a forecast for six (6) months and Purchase Orders for the first ninety (90) days of that period. Items that are purchased by the Seller for the Buyer that
are unique to the Buyer, either by type of product or quantity purchased, will be covered under a Non-Cancelable, Non-Returnable (NCNR) Products Agreement between Buyer and
Seller. (See Exhibit E.) 

	***
	 Confidential Treatment Requested

7

 

EXHIBIT B—PRODUCT RESCHEDULE PROVISIONS***  

	Days Prior to

Delivery Date
	 	Reschedule

Terms
	 	Cancellation/Termination/

Expiration Liability

	0-30 Days	 	Buyer may not reschedule an order within 30 days of the delivery date.	 	Buyer may not cancel an order within 30 days of the delivery date.
	

31-45 Days from original delivery date	
 	

Buyer may reschedule the delivery of up to [...***...] of an order without additional liability provided that such rescheduled order is rescheduled to be delivered within thirty (30) days of the original delivery date.	
 	

Buyer may cancel up to [...***...] of an order provided that items are not covered under a Non-Cancelable, Non-Returnable (NCNR) Agreement.
	

46-60 Days from original delivery date	
 	

Buyer may reschedule the delivery of up to [...***...] of an order without additional liability provided that such rescheduled order is rescheduled to be delivered within forty-five (45) days of the original delivery date.	
 	

Buyer may cancel up to [...***...] of an order provided that items are not covered under a Non-Cancelable, Non-Returnable (NCNR) Agreement.
	

61-90 days from original delivery date	
 	

Buyer may reschedule delivery of up to [***] of an order without additional liability provided that such rescheduled order is rescheduled to be delivered within sixty (60) days of the original delivery date.	
 	

Buyer may cancel up to [...***...] of an order provided that items are not covered under a Non-Cancelable, Non-Returnable (NCNR) Agreement.
	

90 days and beyond from original delivery date	
 	

Buyer may reschedule [...***...] of an order without additional liability provided that such rescheduled order is rescheduled to be delivered within ninety (90) days of the original delivery date.	
 	

Buyer may cancel up to [...***...] of an order provided that items are not covered under a Non-Cancelable, Non-Returnable (NCNR) Agreement.

	***
	 Confidential Treatment Requested

8

 

EXHIBIT C—PRODUCT ESCROW  

Upon
the request of eSoft, WIN shall, at eSoft's sole cost and expense, deposit all applicable documentation, schematics and processes for the complete design of the motherboard for eSoft's Instagate
EX2 product ("Documentation") with a third party escrow holder ("Escrow Holder"). The escrow agreement for the Documentation deposit shall name eSoft as beneficiary and at a minimum shall provide for
the release of the Documentation to eSoft upon the occurrence of any of the following release conditions ("Release Conditions"): 

	(1)
	Any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is commenced by or
against WIN, and if such case or proceeding is not commenced by WIN, it is not dismissed within sixty (60) days from the filing thereof; or

	(2)
	WIN
fails to continue to do business in the ordinary course, as such business relates to the goods and services to be provided under this Agreement; or

	(3)
	WIN
becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due; or

	(4)
	WIN
applies for or consents to the appointment of a trustee, receiver or other custodian for WIN, or makes a general assignment for the benefit of its creditors; or

	(5)
	WIN
subjects eSoft to any unreasonable price increases under this Agreement for the manufacture of the Instagate EX2 motherboard, predicated on WIN's increase of its sales price to
achieve increased profitability. For the purpose of this paragraph, unreasonableness shall be determined by price increases that WIN cannot substantiate with evidence of increased materials, direct
labor or freight charges. 

9

 

EXHIBIT D—MANUFACTURING RIGHTS ***  

Ownership/Exclusivity of the design  

Buyer
will own the design of the housing and associated tooling. Seller will not OEM the housing to any third party without the express written approval of Buyer. Seller will retain the manufacturing
rights to the controller until the production exceeds [ *** ], provided that Seller is able to meet the mutually agreed to quality standards.
After this production level is reached, Seller will grant Buyer the manufacturing rights to the controller. 

	***
	 Confidential Treatment Requested

10

 

EXHIBIT E—Non-Cancelable, Non-Returnable Products  

NCNR #                          

Customer
Acknowledgement for orders for Non-Cancelable, Non-Returnable (NCNR) Products between WIN Enterprises, Inc., and eSoft, Incorporated. 

Parts
identified below or on any attachments to this Customer Acknowledgement are NCNR Product: 

Customer
acknowledges that its orders for NCNR products are firm orders and that (1) Customer will be liable for any inventory WIN Enterprises cannot absolve using all reasonable commercial
efforts to return material associated with cancelled orders (2) Customer may reschedule delivery of orders for NCNR products as defined in the Purchase Agreement between WIN
Enterprises, Inc., and eSoft, Incorporated. 

	Win Part Number	 	 	 	 	 	 
	Description	 	 	 	 	 	 
	Manufacturer's Part Number	 	 	 	 	 	 
	Quantity	 	 	 	 	 	 
	Unit Price	 	 	 	 	 	 
	Total Value	 	 	 	 	 	 
	Intended Coverage Period	 	 	 	 	 	 
	Reason	 	 	 	 	 	 

	ACCEPTED AND AGREED:

    
 Company	 	Example
	By:	 	 	 	 
	 	 	
	 	 
	Title:	 	 	 	 
	 	 	
	 	 
	Date:	 	 	 	 
	 	 	
	 	 

11

QuickLinks

PURCHASE AGREEMENT BETWEEN eSoft INCORPORATED (Buyer) AND WIN ENTERPRISES, INC. (Seller) FOR InstaGateTM EX2 AND InstaRakTM (PRODUCT) CONTRACT NO.: 1032-001

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]