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EXHIBIT 10.1
STOCK AND WARRANT PURCHASE AGREEMENT
InSite Vision Incorporated
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Ladies & Gentlemen:
The undersigned purchaser (the "Purchaser") hereby confirms its
agreement with you as follows:
1. This Stock and Warrant Purchase Agreement (the "Purchase Agreement")
is made by and between InSite Vision Incorporated, a Delaware corporation (the
"Company"), and the Purchaser as of the date this Purchase Agreement is accepted
by the Company below (the "Effective Date").
2. This Purchase Agreement is one of a series of stock and warrant
purchase agreements of the Company relating to the offering (the "Offering") of
securities of the Company. In connection with the Offering, the Company has
authorized the issuance and sale of up to a maximum aggregate amount of four
million (4,000,000) shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), and four (4) year warrants (the "Warrants") to
purchase an aggregate of up to 1,400,000 shares of the Company's Common Stock at
an exercise price of $5.64. For every 100 shares of Common Stock purchased by
the Purchaser, the Company will issue to the Purchaser a Warrant to purchase an
aggregate of 35 shares of Common Stock. Each Warrant shall be exercisable
commencing six (6) months after the date of issuance, provided, that, the number
of Warrant Shares (as defined in Annex I hereto) shall be permanently reduced on
a share-for-share basis to the extent that the Purchaser sells Common Stock or
other securities of the Company during such six-month period. The Warrants are
redeemable by the Company at a price of $.01 per Warrant upon notice to record
holders of the Warrants if the weighted average closing price per share of the
Common Stock has been at least $8.35 for ten (10) consecutive trading days
during a period ending within five (5) days of the date of the notice of
redemption all as more fully described in this Purchase Agreement, the Warrant
and accompanying documents. The Warrants are also subject to a mandatory
exchange or termination in the case of certain reorganizations, mergers, or
divestitures.
3. The Company and the Purchaser agree that the Purchaser will purchase
from the Company, and the Company, conditioned upon acceptance in whole or in
part, will sell to the Purchaser at a purchase price per share of Common Stock
sold (the "Purchase Price") equal to $4.175 and pursuant to the Terms and
Conditions for Purchase of Common Stock and Warrants attached hereto as Annex I
and incorporated herein by reference as if fully set forth herein.
4. The Company makes no representation that this Purchase Agreement will
be accepted by the Company and is under no obligation to accept this Purchase
Agreement.
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5. The Purchaser hereby agrees not to engage, directly or indirectly, in
any short sale or third party short sales or hold a "put equivalent position"
with respect to the Common Stock (as defined in Rule 16a-1 of the ▇▇▇▇ ▇▇▇) of
the Company's Common Stock for a thirty (30) day period prior to and for a one
hundred eighty (180) day period following the Closing Date.
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
PURCHASER
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Print Name
By:
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Title:
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Address:
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ACCEPTED as of May 1, 2000
INSITE VISION INCORPORATED
By:
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Title: CEO and Chairman of the Board
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF COMMON STOCK
AND WARRANTS
1. Authorization and Sale of the Common Stock and Warrants.
1.1 Authorization of the Common Stock and Warrants. The Company
has authorized the issuance and sale of up to four million (4,000,000) shares of
the Company's Common Stock, par value $.01 per share (the "Common Stock") and
warrants to purchase up to an aggregate of 1,400,000 shares of the Company's
Common Stock (the "Warrants") in the form attached hereto as Exhibit 1.1.
1.2 Sale of Common Stock and Warrants. Subject to the terms and
conditions hereof, the Purchaser will purchase the number of shares of Common
Stock and Warrants agreed upon by the Purchaser and accepted by the Company at
the Purchase Price, as set forth in the Common Stock and Warrant Purchase
Agreement by and between the Company and the Purchaser (the "Purchase
Agreement"). The shares of Common Stock sold to Purchaser pursuant to the
Purchase Agreement are hereinafter referred to as the "Initial Shares" and the
shares of Common Stock issuable upon the exercise of the Warrants are
hereinafter referred to as the "Warrant Shares." The Initial Shares, the
Warrants and the Warrant Shares are hereinafter collectively referred to as the
"Securities."
2. Closings.
2.1 Closing Date. One or more closings of the purchase and sale
of the Common Stock and Warrants in the Offering hereunder (the "Closing") shall
be held at such place and such times as the Company may select. Each date of a
Closing of the purchase or sale of Common Stock and Warrants in connection with
the Offering is hereinafter referred to as a "Closing Date." As of the Closing
Date for a specific purchase of Common Stock and Warrants, the Company shall
prepare a certificate or certificates registered in the name of the Purchaser
representing the Initial Shares to be purchased by such Purchaser under the
Purchase Agreement, and the Purchaser shall send to the Company a wire transfer
(in accordance with the instructions set forth on Exhibit 2.1(a) hereto) in the
amount of the purchase price of the Common Stock to be purchased by such
Purchaser, payable to the Company's order. Funds received prior to the Closing
Date will not bear interest.
2.2 Warrant Issuance. For every 100 shares of Common Stock
purchased at a Closing the Company will issue to the Purchaser a Warrant
entitling the holder to purchase thirty-five (35) shares of the Company's Common
Stock at a per share exercise price of $5.64. Each Warrant will be issued as of
the Closing and the Company shall deliver the Warrant to the Purchaser as
promptly as practicable after the Closing Date; provided, however, that the
Purchaser may not exercise the Warrant until six (6) months after the Closing
(the "Warrant Determination Date"). The number of Warrant Shares will be
permanently reduced on a share-for-share basis by any sales of Company
securities (including short sales and sales or purchases of derivative
securities) by the Purchaser from the Closing Date until the Warrant
Determination Date. As a condition to exercising the Warrant, the Purchaser
shall
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provide to the Company an affidavit and other reasonable supporting materials
stating the amount of Company securities sold (including short sales and sales
or purchases of derivative securities) from the Closing Date to the Warrant
Determination Date. The Warrant is redeemable by the Company at a price of $.01
per Warrant upon notice to the record holder of the Warrant if the weighted
average closing price per share of the Common Stock has been at least [200% of
the Purchase Price] for a period of ten (10) consecutive trading days ending
within five (5) days of the date of the notice of redemption. The Warrant is
also subject to a mandatory exchange or termination in the case of certain
reorganizations, mergers, or divestitures.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser as of the Closing Date as follows, except as set
forth in the SEC Documents (as defined below):
3.1 Organization and Standing. Each of the Company and its
subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation with full
corporate power and corporate authority to own, lease and operate its properties
and conduct its businesses as described in the SEC Documents (as defined below).
Each of the Company and its subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
ownership or leasing of properties or the conduct of its business as presently
conducted require such qualification, except where the failure to be so
qualified would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations, or business of the Company and its
subsidiaries taken as a whole.
3.2 Corporate Power; Authorization. The Company has all
requisite legal and corporate power and has taken all requisite corporate action
to execute and deliver the Purchase Agreement, to sell and issue the Securities
and to carry out and perform all of its obligations hereunder. The Purchase
Agreement has been duly authorized, executed and delivered on behalf of the
Company and constitutes the valid and binding agreement of the Company,
enforceable in accordance with its terms, except (1) as limited by applicable
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally and (iii) rights to indemnification hereunder may be
limited by applicable law.
3.3 Validity of Securities. The Company has full corporate power
and lawful authority to sell the Securities on the terms and conditions
contemplated herein, and when so sold against payment therefor as provided
herein and in the Warrant, the Initial Shares and, when issued, the Warrants
will be validly authorized and issued, fully paid and nonassessable. The
issuance and delivery of each of the Initial Shares and the Warrants is not
subject to preemptive or any similar rights of the stockholders of the Company
or any liens or encumbrances arising through the Company and when the Warrant
Shares are issued in accordance with the terms of the Warrants, they will be
validly issued and outstanding, fully paid and nonassessable.
3.4 SEC Documents; Financial Statements. The Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 and the
Company's most recent Proxy Statement and Notice of Annual Shareholders' Meeting
(the "SEC Documents"), in each case, as
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filed by the Company with the Securities and Exchange Commission (the
"Commission") have been made available to the Purchaser. The SEC Documents
conform in all material respects to the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as applicable, and the rules and
regulations of the Commission thereunder. The SEC Documents did not as of their
dates contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances in which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto. Except as may be
indicated in the notes to the Financial Statements, the Financial Statements
have been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present, in all material respects, the
consolidated financial position of the Company and its subsidiaries at the dates
thereof and the consolidated results of their operations, stockholders' equity
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal, recurring adjustments).
3.5 Subsequent Events. Since December 31, 1999, (i) neither the
Company nor any of its subsidiaries has incurred any liabilities or obligations,
contingent or otherwise, that are material in the aggregate to the Company and
its subsidiaries, taken as a whole, except in the ordinary course of business,
and (ii) there has been no change in the financial condition or operating
results of the Company and its subsidiaries, taken as a whole from that
reflected in the Financial Statements, except changes that occurred in the
ordinary course of business or that have not had a material adverse effect on
the Company and its subsidiaries, taken as a whole.
3.6 Legal Proceedings. There are no legal proceedings pending
or, to the knowledge of the Company, threatened, to which the Company or any
subsidiary is a party or to which property of the Company or any subsidiary is
subject that is reasonably likely to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
3.7 Government Approval. Subject to compliance with the
provisions of applicable securities laws of state or foreign jurisdictions, no
other approval of any public body (state or federal) is or will, on the Closing
Date be necessary in connection with the offer, issue and sale of the Initial
Shares and the Warrant as contemplated herein.
3.8 No Breach. The consummation of the transactions contemplated
in the Purchase Agreement and the fulfillment of the terms thereof will not
result in (i) a violation of the Company's Certificate of Incorporation or
Bylaws, (ii) a breach of any of the material terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by which it is
bound or (iii) a violation of any law, rule, regulation, order, judgment or
decree applicable to the Company or by which any property or asset of the
Company is bound.
3.9 Licenses and Consents. To the knowledge of the Company, each
of the Company and its subsidiaries is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders and
permits from state, federal and other governmental authorities that are material
to the conduct of its business, all of which are valid
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and in full force and effect, except to the extent that the failure to have or
be in compliance with such is not reasonably likely to have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
3.10 Outstanding Stock. All outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable; all issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable.
3.11 Common Stock Registration. The Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and is traded on the American
Stock Exchange (the "AMEX") and the Company has taken no action designed to, or,
to the Company's knowledge, likely to, have the effect of terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the AMEX without relisting on another national securities exchange or
the NASDAQ National Market, nor has the Company received notification that the
Commission or AMEX is contemplating terminating such registration or listing.
3.12 Private Placement. The Company has not taken any action
inconsistent with the treatment of the sale of the Common Stock and Warrants
pursuant to the Purchase Agreement as a private placement exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to the provisions of Section 4(2) thereof. Assuming
the accuracy of the Purchasers' representations and warranties in the Purchase
Agreement and the compliance by each Purchaser with all of its covenants and
agreements, the offer, sale, and issuance by the Company of the Common Stock and
Warrants to the Purchasers as contemplated herein constitute transactions exempt
from the registration requirements of Section 5 of the Securities Act.
4. Representations and Warranties of the Purchaser; Access to
Information; Independent Investigation. The Purchaser hereby represents and
warrants to the Company as follows:
4.1 Investment Intent. The Purchaser is purchasing the Common
Stock and Warrants for investment for its own account only, not as a nominee or
agent, and not with a view to, or for resale in connection with, any
"distribution" of any part thereof within the meaning of the Securities Act. The
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. The Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
any participation to such person or to any third person with respect to any of
the Securities. The Purchaser understands that the Securities have not been
registered under the Securities Act or registered or qualified under any state
securities law in reliance on specific exemptions therefrom, which exemptions
may depend upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein. The Purchaser further understands that
neither the Company nor any of its officers or directors has any obligation to
register the Securities under any federal or state securities act or law, except
as otherwise expressly set forth in Section 5 hereof.
4.2 Investment Experience. The Purchaser is an "accredited
investor" within the meaning of Commission Rule 501 promulgated under the
Securities Act, and was not organized
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for the specific purpose of acquiring the Securities. The Purchaser had access
to the SEC Documents and has carefully reviewed the information contained
therein, including, but not limited to, the section entitled "Risk Factors". The
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 Securities.
4.3 Authorization. The Purchaser has full right, power and
authority to enter into this Agreement and perform its obligations hereunder.
This Purchase Agreement has been duly and validly authorized, executed and
delivered on behalf of the Purchaser and is a valid and legally binding
agreement of the Purchaser enforceable in accordance with its terms, subject as
to enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally.
4.4 Compliance with Securities Laws and Regulations. All
subsequent offers and sales of the Securities by the Purchaser shall be made
pursuant to registration under the Securities Act and qualification under the
applicable state securities laws or pursuant to exemptions from registration and
qualification as well as compliance with the provisions of Section 5.1 below.
4.5 Reliance by Company. The Purchaser understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration and qualification requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser's compliance with the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire the Securities.
4.6 No Government Approval. The Purchaser understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the
Securities.
4.7 No Legal, Tax or Investment Advice. The Purchaser
understands that nothing in the Purchase Agreement or any other materials
presented to the Purchaser in connection with the purchase and sale of the
Securities constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Securities.
4.8 Access to Information. The Purchaser acknowledges that it
has had the opportunity to ask questions, to receive answers concerning the
Company and the terms and conditions of the Offering from the Company and to
obtain any additional information from the Company that it considers necessary
or appropriate regarding the Offering, including, without limitation,
information relating to the engagement of Americal Securities, Inc. as placement
agent for the Offering pursuant to that certain fee engagement letter agreement,
dated March 14, 2000, which sets forth the cash fees, warrants and other
arrangements in connection with the Offering for deciding whether to purchase in
the Offering. In addition, the Purchaser acknowledges that no private placement
memorandum or similar document has been prepared in
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connection with the Offering and the Company has not made, and the Purchaser is
not relying on, any representations or warranties other than as specifically set
forth herein.
4.9 Accredited Investor. The Purchaser makes the additional
representations and warranties set forth on Exhibit 4.9 attached hereto.
4.10 Risk and Suitability. The Purchaser acknowledges and
realizes that Purchaser's purchase of the Securities involves a high degree of
risk and the Purchaser could lose a substantial portion or all of its investment
in the Securities. In addition, the Purchaser has such knowledge and experience
in business and financial matters, including, without limitation, investment in
technology and biotechnology companies, as will enable the Purchaser to fend for
itself, bear the economic risk of its investment and evaluate the merits and
risks of an investment in the Securities and to make an informed investment
decision.
4.11 Use of Proceeds. Purchaser acknowledges and understands
that the Company's current intention is to use the proceeds of the Offering for
(i) payment of liabilities, (ii) working capital, (iii) acquisitions, joint
ventures and projects that the Company may have determined or may from time to
time determine to undertake and (iv) other purposes as the Company's Board of
Directors may determine from time to time. The allocation of proceeds shall be
at the discretion of the Company and may vary depending on changes in the
Company's business plans and circumstances. Such business plans and
circumstances may cause the Company to seek further financing in addition to the
Offering.
4.12 Restricted Securities. The Purchaser understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,
the Purchaser represents that it is familiar with Rule 144 promulgated by the
Commission under the Securities Act, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act.
5. Restrictions on Transfer, Information and Registration Rights.
5.1 Restrictions on Transferability. The Securities shall not be
transferable in the absence of registration under the Securities Act or an
exemption therefrom, or in the absence of compliance with any term of the
Purchase Agreement. Without limiting the foregoing, (i) the Securities may be
offered, resold, pledged or otherwise transferred only (A) in a transaction
meeting the requirements of Rule 144 of the Commission ("Rule 144"), or in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company so requests)
or (B) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with the applicable securities laws of any state of
the United States or any other applicable jurisdiction and (ii) the Purchaser
will be required to notify any transferee of the Purchaser of any applicable
resale restrictions set forth above. The Company shall be entitled to give stop
transfer instructions to the transfer agent, and the transfer agent shall be
entitled to rely thereon, with respect to the Securities in order to enforce the
foregoing restrictions.
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5.2 Restrictive Legends. Each certificate or document
representing any of the Securities shall bear substantially the following
legends (in addition to any legends required under applicable securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED (I) UNLESS REGISTERED UNDER THE SECURITIES ACT AND
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION
REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS AND THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND
THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING
ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A STOCK AND WARRANT
PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY
(COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
5.3 Registration on Form S-3.
5.3.1 Filing of Registration Statement. As soon as
practicable, and in any event within thirty (30) days after the Closing Date,
the Company shall file with the Commission pursuant to the Securities Act a
registration statement on Form S-3 (the "Registration Statement"), and shall use
its best efforts to secure effectiveness of the Registration Statement within
one hundred twenty (120) days after the Closing (and in any event, use its best
efforts to secure effectiveness of the Registration Statement as soon as
practicable after the Closing Date) (unless such registration is not permitted
under the applicable rules and regulations of the Commission), to register the
resale of the Initial Shares and Warrant Shares (the "Registrable Securities");
provided however, that the holders of Registrable Securities (the "Holders")
shall request the registration of at least fifty thousand (50,000) shares of
Registrable Securities; and provided further that in the event the Company fails
(due to an action or inaction of the Company or for any other reason) to be
eligible to file a registration statement on Form S-3, the Company shall file
with the Commission pursuant to the Securities Act within sixty (60) days after
the Closing Date a registration statement on Form S-1.
5.3.2 Registration Expenses. The Company shall pay all
Registration Expenses (as defined below) in connection with any registration,
qualification or compliance hereunder, and each Holder shall pay all Selling
Expenses (as defined below) and other expenses that are not Registration
Expenses relating to the
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Registrable Securities resold by such Holder. "Registration Expenses" shall mean
all expenses, except for Selling Expenses, incurred by the Company in complying
with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
fees and disbursements of counsel for the Company, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for any Holder.
5.3.3 Additional Company Obligations. In the case of any
registration effected by the Company pursuant to these registration provisions,
the Company will use its reasonable best efforts to: (i) keep such registration
effective until two years after the Closing Date (or such earlier date as
provided for in the last sentence of this subsection); (ii) prepare and file
with the SEC such amendments and supplements to the Registration Statement and
the prospectus used in connection with the Registration Statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of the Registrable Securities; (iii) furnish such reasonable
number of prospectuses and other documents incident thereto, including any
amendment of or supplement to the prospectus, as a Holder from time to time may
reasonably request; (iv) cause all such Registrable Securities registered as
described herein to be listed on each securities exchange and quoted on each
quotation service on which similar securities issued by the Company are then
listed or quoted; (v) provide a transfer agent and registrar for all Registrable
Securities registered pursuant to the Registration Statement and a CUSIP number
for all such Registrable Securities; (vi) comply with all applicable rules and
regulations of the Commission, (vii) file the documents required of the Company
and otherwise maintain requisite blue sky clearance in (A) all jurisdictions in
which any of the Registrable Securities are originally sold and (B) all other
states specified in writing by a Holder as may reasonably be required to sell
such Holder's Registrable Securities, provided as to clause (B), however, that
the Company shall not be required to qualify to do business or consent to
service of process in any state in which it is not now so qualified or has not
so consented, and (viii) notify each Holder selling Shares in such offering, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon the discovery of the happening
of any event as a result of which, the prospectus included in such registration
statement contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and the Company will
promptly prepare and file with the SEC and, at the request of any such Holder,
furnish to such seller a reasonable number of copies of, a supplement or
amendment to such prospectus so that, as thereafter delivered to the Holders of
such Shares, such prospectus will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not misleading in the light of the circumstances under which they were made. The
Company shall not be obligated to maintain the effectiveness of the registration
or satisfy the other obligations in this Section 5.3.3 (other than, in
connection with the Registration Statement, under iv, v, vi and vii above)
beyond two (2) years after the Closing Date or, with respect to any Holder, if
(i) such Holder holds less than one percent (1%) of the outstanding Common
Stock, (ii) all Shares that such Holder is entitled to have registered
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hereunder may immediately be sold under Rule 144 during any 90-day period and
(iii) the Company has provided notice to such Holder that it will no longer
maintain the effectiveness of the registration.
5.3.4 Providing Information. Each Holder of Registrable
Securities shall furnish to the Company such information regarding such Holder
and the distribution proposed by such Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance described herein. Such Holder shall
represent that such information is true and complete.
5.3.5 Limitations on Sale. The Company may at any time
refuse to permit the Holders to resell any Registrable Securities pursuant to
the Registration Statement; provided, however, that in order to exercise this
right, the Company must deliver a certificate in writing to the Holders to the
effect that a delay in such sales is necessary because, in the good faith
judgment of the Company, sales pursuant to the Registration Statement would
require the public disclosure of information that would not otherwise be
required to be disclosed (which disclosure would, in the good faith judgment of
the Company, have a significant adverse effect on the Company) or could in other
respects constitute a violation of the federal securities laws or otherwise
materially adversely affect the Company. In such an event, the Company shall
notify the Holders promptly after it has determined that such circumstances no
longer exist. The Company shall not under any circumstances be entitled to
refuse to permit the Holders to resell any Registrable Securities under this
Section (i) more than two (2) times in the twelve (12) month period following
the Closing Date, and any individual period during which the Company refuses to
permit the Holder to resell any Registrable Securities in the twelve (12) month
period following the Closing Date shall not exceed sixty (60) days, and (ii)
more than two (2) times in the second twelve (12) month period following the
Closing Date, and any period during which the Company refuses to permit the
Holder to resell any Registrable Securities in the second twelve (12) month
period following the Closing Date shall not exceed forty-five (45) days. Each
Purchaser hereby covenants and agrees that it will not sell any Registrable
Securities pursuant to the Registration Statement during the periods the Company
refuses to permit the Holder to resell any Registrable Securities as set forth
in this Section.
5.4 Indemnification and Contribution.
5.4.1 Indemnification by the Company. The Company agrees
to indemnify and hold harmless each Holder from and against any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) to which
such Holder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement of a
material fact contained in the Registration Statement, on the effective date
thereof; provided, however, that the Company shall not be liable in any such
case to the extent that such loss, claim, damages or liability arises out of, or
is based upon (i) an untrue statement or alleged untrue statement made in such
Registration Statement in reliance upon and in conformity with written
information
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furnished to the Company by or on behalf of such Holder specifically for use in
preparation of the Registration Statement or (ii) any untrue statement in any
prospectus that is corrected in any subsequent prospectus or addendum or
supplement that was delivered to the Holder prior to the pertinent sale or sales
by the Holder, and the Company will reimburse the Holders for the expenses of a
single legal counsel and other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable opinion of such single legal counsel for
the same counsel to represent all of the affected Holders, then each Holder or
group of Holders designated by such counsel shall be entitled to retain its own
counsel at the expense of the Company; provided further, that the indemnity
contained in this subsection shall not apply to amounts paid in settlement of
any such loss, claim, damages or liability if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld).
5.4.2 Indemnification by Holder. Each Holder, severally
and not jointly, agrees to indemnify and hold harmless the Company from and
against any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) to which the Company may become subject (under the Securities
Act or otherwise) insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based upon an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder specifically for use in preparation of the Registration Statement,
provided, however, that no Holder shall be liable in any such case for any
untrue statement included in any Prospectus which statement has been corrected,
in writing, by such Holder and delivered to the Company at least seven business
days before the sale from which such loss occurred, and each Holder, severally
and not jointly, will, as incurred, reimburse the Company for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided, however, that no Holder shall be
required to pay an indemnity in any amount in excess of the net amount received
by the Holder from the sale of the Registrable Securities to which such
indemnity relates; provided further, that the indemnity contained in this
subsection shall not apply to amounts paid in settlement of any such loss,
claim, damages or liability if such settlement is effected without the consent
of the Holder (which consent shall not be unreasonably withheld).
5.4.3 Indemnification Procedures. Promptly after receipt
by any indemnified person of a notice of a claim or the beginning of any action
in respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 5.4, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, and, subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person and the indemnifying
person shall have been notified thereof, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to the
indemnified person; provided, however, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations hereunder unless the failure to give
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such notice is materially prejudicial to an indemnifying party's ability to
defend such action. After notice from the indemnifying person to such
indemnified person of the indemnifying person's election to assume the defense
thereof, the indemnifying person shall not be liable to such indemnified person
for any legal expenses subsequently incurred by such indemnified person in
connection with the defense thereof; provided, however, that if there exists or
shall exist a conflict of interest that would make it inappropriate in the
reasonable opinion of counsel for the indemnified person for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that in the case of the immediately preceding proviso, and
notwithstanding Section 5.4.1 above, the indemnifying person shall not be
responsible for the legal expenses of more than one counsel for all indemnified
persons.
5.4.4 Contribution in Lieu of Indemnity. If the
indemnification provided for in this Section 5.4 is unavailable to or
insufficient to hold harmless an indemnified party under Section 5.4.1 or 5.4.2
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as result of such losses, claims, damages or liabilities (or actions in respect
thereof) based on the relative fault of the indemnifying party and the
indemnified party as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or a Holder on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Holders agree that it would not
be just and equitable if contribution pursuant to this Section 5.4.4 were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
5.4.4. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this Section 5.4.4 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5.4.4, no Holder shall be required to contribute any
amount in excess of the net amount received by the Holder from the sale of the
Registrable Securities to which such loss relates. No person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations in this
Section 5.4.4 to contribute are several in proportion to their respective sales
of Registrable Securities to which such loss relates and not joint.
5.5 Reports Under the Exchange Act. With a view to make
available to the Purchasers or Holders the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the SEC that may at
any time permit a Purchaser or Holder to sell
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Securities to the public without registration or pursuant to a registration on
Form S-3, the Company will covenant and agree to use reasonable efforts to: (i)
make and keep public information available, as those terms are understood and
defined in Rule 144, for two years after the Closing; (ii) file with the SEC in
a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and (iii) furnish to any Purchaser or
Holder, so long as the Purchaser or Holder owns any Securities, forthwith upon
request, (A) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser or Holder of any rule or
regulation of the SEC that permits the selling of any such Securities without
registration or pursuant to such Form S-3.
6. Miscellaneous.
6.1 Waivers and Amendments. With the written consent of the
Company and the record holders of more than fifty percent (50%) of the
Securities (on an as-converted-to-Common Stock basis) then outstanding that have
not previously been sold in a public offering, the terms of the Purchase
Agreement may be waived or amended.
6.2 Governing Law. This Purchase Agreement shall be governed by
and construed in accordance with the internal laws of the State of California
without regard to its conflicts of laws principles. The Purchaser hereby
irrevocably submits to the jurisdiction of any State or United States Federal
court sitting in Alameda or San Francisco counties in the State of California
over any action or proceeding arising out of or relating to this Purchase
Agreement or any agreement contemplated hereby, and the Purchaser hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such State or Federal court. The Purchaser further
waives any objection to venue in such State and any objection to an action or
proceeding in such State on the basis of a non-convenient forum. The Purchaser
further agrees that any action or proceeding brought against the Company shall
be brought only in the State or United States Federal courts sitting in Alameda
or San Francisco counties in the State of California. THE PURCHASER AGREES TO
WAIVE ITS RIGHTS TO A JURY TRIAL OR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS PURCHASE AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
HEREBY.
6.3 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by the Company or
the Purchaser and the Closing for a period of two years.
6.4 Successors and Assigns. Subject to Section 5, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto (specifically
including successors in interest to the Securities).
6.5 Entire Agreement. The Purchase Agreement (including all
Exhibits thereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subject hereof.
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6.6 Notices, etc. All notices and other communications required
or permitted hereunder shall be effective upon receipt and shall be in writing
and may be delivered in person, by facsimile, or nationally recognized overnight
delivery service, addressed (a) if to the Purchaser, at the address set forth on
the signature page hereof or at such other address as the Purchaser shall have
furnished the Company in writing, or (b) if to the Company, at its address set
forth at the beginning of the Purchase Agreement, or at such other address as
the Company shall have furnished to the Purchaser in writing.
6.7 Severability. If any provision of the Purchase Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
6.8 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of the Purchase Agreement are for convenience of reference and
shall not, by themselves, determine the construction of the Purchase Agreement.
6.9 Counterparts. The Purchase Agreement may be executed in any
number of counterparts, each of which be an original, but all of which together
shall constitute one instrument.
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EXHIBIT 1.1
Warrant No. ____________
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED (I) UNLESS
REGISTERED UNDER THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS OR (II) UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE
QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS AND THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS
BOUND BY THE TERMS OF A STOCK AND WARRANT PURCHASE AGREEMENT BETWEEN THE
ORIGINAL PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE
COMPANY).
REDEEMABLE WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF INSITE VISION INCORPORATED
This certifies that _______ (the "Holder"), for value received is
entitled to purchase from InSite Vision Incorporated, a Delaware corporation
(the "Company"), ___________ (________) fully paid and nonassessable shares of
the Company's Common Stock, par value $.01 per share (the "Warrant Shares") at a
price per share of [135% of the Purchase Price of the Common Stock sold with
this Warrant] (the "Stock Purchase Price") at any time or from time to time on
or after the Commencement Date (as defined below) up to and including 5:00 p.m.
(Pacific time) on the Expiration Date (as defined below), upon surrender to the
Company at its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (or at such other location as the Company may advise Holder in writing) of
this Warrant properly endorsed with the Form of Subscription attached hereto
duly filled in and signed and upon payment by cash, cashier's check or wire
transfer of immediately available funds of the aggregate Stock Purchase Price
for the number of shares for which this Warrant is being exercised determined in
accordance with the provisions hereof, such exercise to be conditioned upon the
accuracy of all representations and warranties contained in such Form of
Subscription. The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.
"Commencement Date" means the date which is six (6) months after the date of
issuance of this Warrant and "Expiration Date" means the earlier of (i) four (4)
years from the date hereof, (ii) the occurrence of events, the proposal of which
causes termination of this Warrant under Section 3.4, or (iii) on the date
specified in the Notice of
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Redemption (as defined below) pursuant to Section 7. This Warrant is
issued pursuant to the Unit Purchase Agreement between the Company and Holder
dated as of the date hereof (the "Purchase Agreement").
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates: Payment for Shares. This Warrant
is exercisable at the option of Holder at any time or from time to time on or
after the Commencement Date and prior to or on the Expiration Date for all or a
portion of the shares of Warrant Shares which may be purchased hereunder, but if
this Warrant is to be exercised only in part, for not less than the greater of
(a) 25% of the number of Warrant Shares which may initially be purchased
hereunder or (b) 1,000 Warrant Shares (in either case as adjusted for any stock
dividend, split, combination, recapitalization or the like with respect to such
shares). The Company agrees that the shares of Warrant Shares purchased under
this Warrant shall be and are deemed to be issued to Holder as the record owner
of such shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares. Subject to the
provisions of Section 2, certificates for the shares of Warrant Shares so
purchased, together with any other securities or property to which Holder is
entitled upon such exercise, shall be delivered to Holder by the Company's
transfer agent at the Company's expense within a reasonable time after this
Warrant has been exercised. Each stock certificate so delivered shall be in such
denominations of Warrant Shares as may be requested by Holder and shall be
registered in the name of Holder or such other name as shall be designated by
Holder, subject to the limitations contained in Section 2. If, upon exercise of
this Warrant, fewer than all of the shares of Warrant Shares evidenced by this
Warrant are purchased prior to the date of expiration of this Warrant, one or
more new warrants substantially in the form of, and on the terms in, this
Warrant will be issued for the remaining number of shares of Warrant Shares not
purchased upon exercise of this Warrant.
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any stockholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will use its best efforts to at all times have authorized and reserved,
for the purpose of issue or transfer upon exercise of this Warrant, a sufficient
number of shares of authorized but unissued Common Stock. When and as required
to provide for the exercise of the rights represented by this Warrant, the
Company will take all such action as may be necessary to assure that such shares
of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange or automated quotation system upon which the Common Stock may be
listed.
3. Adjustment of Stock Purchase Price; Number of Shares. The Stock
Purchase Price and the number of shares of Warrant Shares purchasable upon the
exercise of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events described in this Section 3.
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3.1 Adjustment of Purchase Price. In the event that the Company at any
time or from time to time after the issuance of this Warrant shall declare or
pay, without consideration, any dividend on the Common Stock payable in Common
Stock or in any right to acquire Common Stock for no consideration, or shall
effect a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock (by stock split, reclassification or otherwise
than by payment of a dividend in Common Stock or in any right to acquire Common
Stock), or in the event the outstanding shares of Common Stock shall be combined
or consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, then the Stock Purchase Price in effect immediately
prior to such event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate. In the event that the
Company shall declare or pay, without consideration, any dividend on the Common
Stock payable in any right to acquire Common Stock for no consideration, then
the Company shall be deemed to have made a dividend payable in Common Stock in
an amount of shares equal to the maximum number of shares issuable upon exercise
of such rights to acquire Common Stock. Upon each adjustment of the Stock
Purchase Price pursuant to this Section 3.1, the holder of this Warrant shall
thereafter be entitled to purchase, at the Stock Purchase Price resulting from
such adjustment, the number of shares of Common Stock obtained by multiplying
the Stock Purchase Price in effect immediately prior to such adjustment by the
number of shares of Common Stock purchasable pursuant hereto immediately prior
to such adjustment, and dividing the product thereof by the Stock Purchase Price
resulting from such adjustment.
3.2 Adjustments for Reclassification and Reorganization. If the Common
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in Section 3.1), the Stock Purchase Price then in effect shall,
concurrently with the effectiveness of such reorganization or reclassification,
be proportionately adjusted so that this Warrant shall represent the right to
purchase, in lieu of the number of shares of Common Stock which this Warrant
would otherwise represent the right to purchase, a number of shares of such
other class or classes of stock equivalent to the number of shares of Common
Stock which this Warrant would have otherwise entitled the holder to purchase
immediately before that change.
3.3 Notice of Adjustment. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, the Company shall within five
business days give written notice thereof, by first class mail, postage prepaid
(or by international delivery service, for international addresses), addressed
to the registered holder of this Warrant at the address of such holder as shown
on the books of the Company. The notice shall be signed by the Company's chief
financial officer and shall state the Stock Purchase Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
3.4 Certain Termination Events; Other Notices. If at any time the
Company shall propose to:
(a) declare any cash dividend upon its Common Stock;
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(b) declare or make any dividend or other distribution to the
holders of its Common Stock, whether in cash, property or other securities;
(c) effect any reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the Company with or into
another corporation or any sale of all or substantially all of the property of
the Company; or
(d) effect a voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, or international delivery service for
international deliveries, addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company, (i) at least fifteen (15)
business days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend or distribution
or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, at least
fifteen (15) business days' written notice of, the date when the same shall take
place. Any notice given in accordance with clause (i) above shall also specify,
in the case of any such dividend or distribution, the record date for such
dividend or distribution, if after the Commencement Date. Any notice given in
accordance with clause (ii) above shall also specify the date on which the
holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property, if any, deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, as the case may be and in connection with the occurrence of an event
described in clause (d) above such notice shall specify the anticipated net
equity value that will accrue to Common Stock holders so that the Holder can
make an informed decision whether or not to exercise this Warrant. In the event
that the Holder of the Warrant does not exercise this Warrant prior to the
occurrence of a proposed event (but not upon the proposal of such event)
described in clause (a) or (b) above, the Holder shall not be entitled to
receive the benefits accruing to existing holders of the Common Stock in such
event. Upon the occurrence of a proposed event (but not upon the proposal of
such event) described in clause (c) in which the holders of the Company's voting
securities immediately prior to such event do not hold at least fifty percent
(50%) of the voting securities of the Company or the surviving entity (in a sale
of assets, the Company shall be the surviving entity) resulting from such event
immediately after such event, this Warrant shall terminate unless the Company
has negotiated (which it is under no obligation to do) for the assumption of
this Warrant. Upon the occurrence of a proposed event (but not upon the proposal
of such event) described in clause (c) and, subject to the immediately preceding
sentence, the Company's negotiation for the assumption of this Warrant (for
which the Company has no obligation to negotiate), the Holder shall be entitled
thereafter, upon payment of the Stock Purchase Price in effect immediately prior
to such action, to receive upon exercise of this Warrant the class and number of
shares which the Holder would have been entitled to receive after the occurrence
of such event had this Warrant been exercised immediately prior to such event.
In connection with the transactions described in clause (c) and provided that
this Warrant does not terminate as provided in the second sentence immediately
preceding this sentence, the Company will require each person (other than the
Company) that may be required to deliver any cash, stock, securities
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or other property upon the exercise of this Warrant as provided herein to
assume, by written instrument delivered to the Holder of this Warrant (x) the
obligations of the Company under this Warrant and (y) the obligation to deliver
to such Holder such cash, stock, securities or other property as such Holder may
be entitled to receive in accordance with the provisions of this Section 3. Upon
the occurrence of an event the proposal of which is described in clause (d),
this Warrant shall terminate. Notwithstanding any other provision hereof, no
Holder shall have the right to obtain an injunction or restraining order or
otherwise interfere with or prevent the occurrence of any of the actions
described in (a) - (d) above.
3.5 Adjustment of Number of Warrant Shares. The number of
Warrant Shares purchasable hereunder shall be reduced on a one-for-one basis by
the number of shares of Common Stock (or Common Stock equivalents) sold directly
or indirectly, including, without limitation, any short sale, third party short
sales or holdings of a "put equivalent position" (as defined in Rule 16a-1 of
the 1934 Act), of the Company's Common Stock by the Holder from the date hereof
until the Commencement Date. Prior to or simultaneously with the first exercise
of this Warrant by the Holder (or the transfer of this Warrant), the Holder
shall provide the Company with an affidavit and other reasonable supporting
materials as to the foregoing.
4. Issue Tax. The issuance of certificates for the Warrant Shares upon
the exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
5. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder in
respect of meetings of stockholders for the election of directors of the Company
or any other matters or any rights whatsoever as a stockholder of the Company.
Except for the adjustment to the Stock Purchase Price pursuant to Section 3.2 in
the event of a dividend on the Common Stock payable in shares of Common Stock,
no dividends or interest shall be payable or accrued in respect of this Warrant
or the interest represented hereby or the shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised. No
provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of Warrant Shares, and no mere enumeration herein of the rights
or privileges of the Holder hereof, shall give rise to any liability of such
Holder for the Stock Purchase Price or as a stockholder of the Company whether
such liability is asserted by the Company or by its creditors.
6. Restrictions on Transferability of Securities: Compliance With
Securities Act.
6.1 Restrictions on Transferability. The Warrant and the Warrant
Shares (collectively, the "Securities") shall not be transferable except upon
the conditions specified in the Purchase Agreement, which conditions are
intended to insure compliance with the provisions of the Securities Act and
applicable "blue sky" law.
6.2 Restrictive Legend. Each certificate representing the
Securities or any other securities issued in respect of the Securities upon any
stock split, stock dividend, recapitalization,
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merger, consolidation or similar event, shall (unless otherwise permitted by the
provisions of the Purchase Agreement) be stamped or otherwise imprinted with a
legend substantially in the following form (in addition to any legend required
under applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED (I) UNLESS REGISTERED UNDER THE SECURITIES ACT AND
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND THE QUALIFICATION
REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS AND THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND
THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING
ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A UNIT PURCHASE AGREEMENT
BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE
OBTAINED FROM THE COMPANY).
6.3 Exchange of Warrant. Subject to the terms and conditions
hereof, including the restrictions on transfer in this Section 6 and in the
Purchase Agreement, upon surrender of this Warrant to the Company with a duly
executed Assignment Form in the form attached hereto and funds sufficient to pay
any transfer tax, the Company shall, without charge, execute and deliver a new
Warrant or Warrants of like tenor in the name of the assignee named in such
Assignment Form and this Warrant shall promptly be canceled; provided, however,
that if the transfer is for less than all of this Warrant, the transferor shall
pay the reasonable costs of the Company incurred in connection with a transfer
of Warrants to purchase less than the greater of (a) 25% of the Warrant Shares
which may initially be purchased hereunder or (b) 1,000 Warrant Shares (in
either case, as adjusted for any stock dividend, split, combination,
recapitalization or the like with respect to such shares). The term "Warrant" as
used herein shall be deemed to include any Warrants issued in exchange for this
Warrant.
6.4 Ownership of Warrant. The Company may deem and treat the
person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in Section 6.3.
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7. Redemption. This Warrant may be redeemed at the option of the Company
at a redemption price of $.01 (subject to adjustment in good faith by the
Company's Board of Directors in the event of stock splits or other events
described in Section 3.1 or 3.2 above) (the "Redemption Price"), per Warrant at
any time after the date hereof provided that (i) the weighted average closing
bid price of the Common Stock as reported by the National Association of
Securities Dealers Automated Quotation ("Nasdaq") if the Common Stock is then
traded on the over-the-counter market or the Nasdaq Small Cap market, or (ii)
the weighted average closing sale price, if the Common Stock is then traded on
Nasdaq/NMS or a national securities exchange, provided that such exchange or
market is the primary trading market for the Company, shall have been [200% of
the Purchase Price of the Common Stock sold with this Warrant] for the ten (10)
consecutive trading days during a period ending within five (5) days prior to
Redemption Notice Date (as defined below) (subject to adjustment in good faith
by the Company's Board of Directors in the event of any stock splits or other
events as described in Section 3.1 or 3.2 above) provided, that any time after
the Redemption Notice Date (as defined below) and prior to the Redemption Date
(as defined below) the Holder may exercise this Warrant, provided, further, in
the event that the Redemption Notice Date is prior to six (6) months after the
date hereof, the Commencement Date shall be deemed to be the Redemption Notice
Date and notwithstanding anything herein or in the Purchase Agreement to the
contrary, after such date the Holder may exercise this Warrant at any time prior
to the Redemption Date. The Company shall provide written notice of redemption
which shall specify the Redemption Date (the "Notice of Redemption") to the
Holder not later than five (5) days after the election of the Company to redeem
this Warrant pursuant to this Section 7. On and after the date fixed for
redemption (the "Redemption Date") which shall be no less than thirty (30) days
after the date that the Notice of Redemption is sent to the Holder (the
"Redemption Notice Date") the Holder shall have no rights with respect to this
Warrant except to receive the Redemption Price upon surrender of this Warrant
Certificate.
8. Modification and Waiver. Except as otherwise provided herein, this
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.
9. Notices. Except as otherwise provided herein, any notice, request or
other document required or permitted to be given or delivered to the holder
hereof or the Company shall be delivered or shall be sent by United States
certified or registered mail, postage prepaid or reputable overnight courier
service (or international delivery service for international deliveries) to
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
10. Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
governed by and construed in accordance with the internal laws of the State of
California without regard to its conflicts of laws principles. The Holder hereby
irrevocably submits to the jurisdiction of any State or United States Federal
court sitting in Alameda or San Francisco counties in the State of California
over any action or proceeding arising out of or relating to this Warrant or any
agreement contemplated hereby, and the Holder hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such State or Federal court. The Holder further waives any objection
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23
to venue in such State and any objection to an action or proceeding in such
State on the basis of a non-convenient forum. The Holder further agrees that any
action or proceeding brought against the Company shall be brought only in the
State or United States Federal courts sitting in Alameda or San Francisco
counties in the State of California. THE HOLDER AGREES TO WAIVE ITS RIGHTS TO A
JURY TRIAL OR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
WARRANT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
11. Lost Warrants or Stock Certificates. The Company represents and
warrants to Holder that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of any Warrant or stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity and, if requested, bond reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
12. Amendment. This Warrant is one of a series of warrants (the "Warrant
Series") to purchase, in the aggregate, up to 1,400,000 shares of the Company's
Common Stock. This Warrant may be amended only with the written approval of the
Company and (i) the Holder of this Warrant or (ii) the holders of a majority of
the warrants in the Warrant Series; provided, however, that any amendment
effected pursuant to (ii) above shall be made in the same manner to all warrants
in the Warrant Series.
13. Binding Effect; Benefits. This Warrant shall inure to the benefit of
and shall be binding upon the Company and the Holder and their respective heirs,
legal representatives, successors and assigns. Nothing in this Warrant,
expressed or implied, is intended to or shall confer on any person other than
the Company and the Holder, or their respective heirs, legal representatives,
successors or assigns, any rights, remedies, obligations or liabilities under or
by reason of this Warrant.
14. Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the Holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the market price of the Common Stock, which shall be, on
any date, the closing price for the Common Stock or the closing bid if no sales
were reported, as quoted on the exchange or market that is the primary trading
market for the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers, thereunto duly authorized this _____ day of _______, 2000.
INSITE VISION INCORPORATED
By:
------------------------------------
Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, Ph.D.
Title: CEO and Chairman on the Board
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: InSite Vision Incorporated
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise such Warrant for, and to purchase thereunder,
_________________ (__________________) shares of common stock (the "Common
Stock") of InSite Vision Incorporated (the "Company"), and herewith makes
payment in the amount of $________ therefore. The certificates for such shares
should be issued in the name of, and delivered to, __________________ whose
address is __________________
The undersigned represents, unless the exercise of this Warrant has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
that (i) the undersigned is acquiring such Common Stock for his, her or its own
account for investment and not with a view to or for sale in connection with any
distribution thereof, (ii) the undersigned has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the undersigned's investment in the shares of Common Stock, (iii) the
undersigned has received all of the information the undersigned requested from
the Company and the undersigned considers necessary or appropriate for deciding
whether to purchase the shares, (iv) the undersigned has the ability to bear the
economic risks of the undersigned's prospective investment and (v) the
undersigned is able, without materially impairing his, her or its financial
condition, to hold the shares of Common Stock for an indefinite period of time
and to suffer complete loss on the undersigned's investment.
The undersigned is an "accredited investor", as defined in Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
on the date hereof.
DATED: _______________________
------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
------------------------------------------
------------------------------------------
(Address)
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THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER THE ACT OR PURSUANT TO EXEMPTIONS FROM REGISTRATION UNDER THE ACT
AND FROM THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS.
ASSIGNMENT FORM
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto __________________ (the
"Assignee") the right represented by such Warrant to purchase ___________
Warrant Shares and all other rights of the Holder with respect thereto under the
within Warrant, and appoints ________________ as Attorney to make such transfer
on the books of InSite Vision Incorporated maintained for such purpose, with
full power of substitution in the premises.
The undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired for investment and that the Assignee will not offer,
sell or otherwise dispose of this Warrant or any Warrant Shares to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws. Further, the Assignee has acknowledged that upon exercise of this Warrant,
the Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired for investment and not with a view toward distribution or resale and
such other representations and warranties as the Company may reasonably request.
Dated: ___________________
Signature
---------------------------
---------------------------
(Print Name)
---------------------------
(Street Address)
---------------------------
(City) (State) (Zip Code)
-------------------------------
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EXHIBIT 2.1(a)
WIRE TRANSFER INSTRUCTIONS
Bank: Union Bank of California
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account Number: ▇▇▇▇▇▇▇▇▇▇
ABA Number: ▇▇▇▇▇▇▇▇▇
Name of: InSite Vision Incorporated
27
EXHIBIT 4.9
INVESTMENT REPRESENTATION STATEMENT
1. Information Concerning the Company. Purchaser represents and warrants
that Purchaser has been provided with such information concerning the Company
that Purchaser deems necessary and appropriate to enable Purchaser to evaluate
the financial risk inherent in making an investment in the Securities. Purchaser
further acknowledges that Purchaser has received satisfactory and complete
information concerning the business and financial condition of the Company in
response to all inquiries in respect thereof.
2. Economic Risk and Suitability. Purchaser represents and warrants as
follows:
2.1 Purchaser realizes that Purchaser's purchase of the
Securities involves a high degree of risk and will be a highly speculative
investment and that Purchaser is able, without impairing Purchaser's financial
condition, to hold the Securities for an indefinite period of time and to suffer
a complete loss of Purchaser's investment.
2.2 Purchaser has carefully considered and has, to the extent
Purchaser believes such discussions necessary, discussed with Purchaser's
professional, legal, tax and financial advisors the suitability of an investment
in the Securities for the particular legal, tax and financial situation of
Purchaser and that Purchaser and/or Purchaser's advisors have determined that
the Securities are a suitable investment for Purchaser.
2.3 Purchaser has such knowledge and experience in business and
financial matters as will enable Purchaser to evaluate the merits and risks of
an investment in the Securities and to make an informed investment decision.
2.4 Purchaser has carefully read this Agreement and the Company
has made available to Purchaser or Purchaser's advisors all information and
documents requested by Purchaser relating to investment in the Securities, and
has provided answers to Purchaser's satisfaction to all of Purchaser's questions
concerning the Company and the Securities to be acquired.
2.5 Purchaser understands that neither the Company nor any of
its officers/directors, has any obligation to register the Securities under any
federal or state securities act or law except as otherwise expressly set forth
in Section 5 of the Purchase Agreement.
2.6 All information that Purchaser has provided concerning
himself or herself, his or her financial position and (each of) his or her
representative(s), if any, is correct and complete as of the date set forth
below, and if there should be any material change in such information, Purchaser
will provide such information to the Company as soon as practicable thereafter.
2.7 Purchaser understands that the Company is relying on the
truth and accuracy of the declarations, representations, warranties and
agreements made by Purchaser to the Company herein in transferring the
Securities to Purchaser.
28
2.8 Purchaser confirms that Purchaser has received no general
solicitation or general advertisement and has attended no seminar or meeting
(whose attendees have been invited by any general solicitation or general
advertisement) and has received no advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast or television or radio regarding the Offering of the Securities.
3. Status of Purchaser. Purchaser represents and warrants that Purchaser
is an "Accredited Investor", as defined in Rule 501 of the Commission because
Purchaser is either:
(a) A natural person whose individual net worth, or
joint net worth with that person's spouse, at the time of his/her purchase,
exceeds $1 million;
(b) A natural person who had individual income in excess
of $200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year;
(c) a bank as defined in Section 3(a)(2) of the Act;
(d) a savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its
individual or fiduciary capacity;
(e) a broker or dealer registered pursuant to Section 15
of the Exchange Act;
(f) an insurance company as defined in Section 2(13) of
the Securities Act;
(g) an investment company registered under the
Investment Company Act of 1940, as amended, or a business development company as
defined in Section 2(a)(48) of the Securities Act;
(h) a small business investment company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958;
(i) a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940, as amended;
(j) a corporation, partnership, an organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, or a
Massachusetts or similar business trust, not formed for the specific purpose of
acquiring the Securities, with total assets in excess of $5,000,000;
(k) a trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the Securities, whose purchase
of the Securities is
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29
directed by a sophisticated person as described in Rule 506(b)(ii) of Regulation
D promulgated under the Securities Act; or
(l) an entity in which all of the equity owners
meet one of the requirements of paragraphs (a) through (k) hereof.
4. Residency. Purchaser is a bona fide resident of __________________.
3