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Exhibit 10.1
UNIT PURCHASE AGREEMENT
Borealis Technology Corporation
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▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies & Gentlemen:
The undersigned,_____________ (the "Purchaser"), hereby confirms its
agreement with you as follows:
1. This Unit Purchase Agreement (the "Agreement") is made as of _________,
1998 between Borealis Technology Corporation, a Delaware corporation (the
"Company"), and the Purchaser.
2. The Company has authorized the sale and issuance of units up to an
amount whose aggregate purchase price shall not exceed $2,426,010 (the "Units"),
each Unit consisting of two (2) shares (the "Shares") of Common Stock of the
Company and one warrant (a "Warrant") to purchase one (1) share of Common Stock
of the Company.
3. The purchase price per Unit (the "Price per Unit") will be $5.00. The
Company and the Purchaser agree that the Purchaser will purchase and the Company
will sell, at such Price per Unit, the number of Units whose aggregate purchase
price equals $____________ pursuant to the Terms and Conditions for Purchase of
Units attached hereto as Annex I and incorporated herein by reference as if
fully set forth herein. Unless otherwise requested by the Purchaser,
certificates representing the Shares and the Warrants purchased by the Purchaser
will be registered in the Purchaser's name and address as set forth below.
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
_____________________________________
PURCHASER
By:__________________________________
Title:_______________________________
Address:_____________________________
_____________________________________
Tax ID No.:__________________________
AGREED AND ACCEPTED:
_________________________________
BOREALIS TECHNOLOGY CORPORATION
By:______________________________
Title:___________________________
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
1. Authorization and Sale of Units
1.1 Authorization. The Company has authorized the sale and issuance of
units up to an amount whose aggregate purchase price shall not exceed $2,426,010
(the "Units"), each Unit consisting of two (2) shares of Common Stock of the
Company (the "Shares") and one warrant to purchase one (1) share of Common Stock
of the Company (a "Warrant"), pursuant to the Unit Purchase Agreement to which
this Annex I is attached (the "Agreement"). The shares of Common Stock of the
Company to be issued upon exercise of the Warrants are hereinafter referred to
as the "Warrant Shares".
1.2 Sale of Units. Subject to the terms and conditions of the
Agreement, the Company agrees to issue and sell to each Purchaser and each
Purchaser severally agrees to purchase from the Company the number of Units set
forth in the Agreement.
2. Closing Dates; Delivery
2.1 Closings. The first closing of the purchase and sale of the Units
hereunder (the "First Closing") shall be conditioned upon receipt of capital
contributions from investors of at least $200,000 (the "Minimum Condition"). The
First Closing shall be held immediately following the satisfaction of the
Minimum Condition at the offices of Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.,
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at such other time and place as
shall be mutually agreed upon by the Company and the Purchasers purchasing a
majority of the units at the First Closing. The Company may at its option
schedule additional closings of the purchase and sale of up to the balance of
the Units not sold at the First Closing (the "Subsequent Closings," each,
together with the First Closing, referred to herein as a "Closing") on such date
or dates as the Company may determine.
2.2 Delivery. At each Closing, the Company will deliver to each
Purchaser (a) a certificate, registered in the Purchaser's name and address as
shown in the Agreement, representing the number of Shares to be purchased by the
Purchaser and (b) a Warrant certificate, substantially in the form attached
hereto as Exhibit A, representing the Warrant to be purchased by such Purchaser.
Such delivery shall be against payment therefor by wire transfer of the
aggregate purchase price of the Units set forth in the Agreement to an escrow
account established by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional
Corporation, escrow agent for the Company (the "Escrow Agent"). All payments
received by the Escrow Agent prior to each date of Closing (each a "Closing
Date") shall be held in a trust account for the benefit of the Purchasers
pending such Closing.
3. Representations and Warranties of the Company
The Company represents and warrants to the Purchasers as of the date of
the Agreement as follows:
3.1 Organization; Standing; Qualification to Do Business. The Company
is a corporation duly organized and validly existing under, and by virtue of,
the laws of the State of Delaware and is in good standing as a domestic
corporation under the laws of said state. The Company 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 its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified or be in good standing is not reasonably likely to have a material
adverse effect on the Company.
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 Agreement, to sell and issue the Units and to carry out and perform
all of its obligations under the Agreement. The Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, except (a) as rights to indemnification and contribution hereunder may be
limited by applicable law, equitable principles or public policy, (b) as limited
by applicable bankruptcy, insolvency,
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reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally and (c) as limited by equitable principles
generally. To the Company's knowledge, the execution and delivery of the
Agreement does not, and the performance of the Agreement and the compliance with
the provisions hereof and the issuance, sale and delivery of the Units by the
Company will not materially conflict with, or result in a material breach or
violation of the terms, conditions or provisions of, or constitute a material
default under the Certificate of Incorporation or Bylaws of the Company or any
statute, law, rule or regulation to which the Company or any of its properties
is subject.
3.3 Issuance and Delivery of the Shares, Warrants and Warrant Shares.
The Shares and the Warrants, when issued in compliance with the provisions of
the Agreement, and the Warrant Shares, when issued in compliance with the
Agreement and the Warrants, will be validly issued, fully paid and
nonassessable.
3.4 Private Placement Offering Memorandum; SEC Documents; Financial
Statements. The Company has filed in a timely manner all documents that the
Company was required to file with the Securities and Exchange Commission (the
"SEC") under Sections 13, 14(a) and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), during the 12 months preceding the date
of the Agreement. As of their respective filing dates, all documents filed by
the Company with the SEC (the "SEC Documents") complied in all material respects
with the requirements of the Exchange Act or the Securities Act of 1933, as
amended (the "Securities Act"), as applicable. Neither the Agreement nor any of
the SEC Documents as of their respective dates included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under 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 SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of
the Company and any subsidiaries at the dates thereof and the consolidated
results of their operations and consolidated cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring
adjustments).
3.5 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
the Agreement, except for (a) compliance with the securities and blue sky laws
in the states in which Units are offered and/or sold, (b) the filing of a
registration statement and any amendments thereto with the SEC as contemplated
by Section 7.1 of the Agreement and (c) the filing of a Notification Form For
the Listing of Additional Shares with The Nasdaq Stock Market and a Form 10-C
with the SEC.
3.6 No Material Adverse Change. Except as otherwise disclosed herein or
in the Company's Private Placement Offering Memorandum prepared on November 18,
1997 (such Private Placement Offering Memorandum, including all exhibits
thereto, being hereinafter referred to as the "Memorandum"), since September 30,
1997, there has not been (a) any changes in the assets, liabilities, financial
condition, business prospects or operations of the Company which, individually
and in the aggregate, have had a material adverse effect on the Company or (b)
any declaration or payment of any dividend or other distribution of assets of
the Company.
3.7 Litigation. Except as set forth in the Memorandum, there are no
actions, suits, proceedings or investigations pending or, to the best of the
Company's knowledge, threatened against the Company or any of its properties
before or by any court or arbitrator or any governmental body, agency or
official that (a) might have a material adverse effect on the Company and its
subsidiaries considered as one enterprise or (b) might impair the ability of the
Company to perform in any material respect its obligations under the Agreement.
3.8 Private Placement. Assuming the accuracy of the representations and
warranties of the Purchasers, and compliance by the Purchasers of all of their
covenants and agreements contained in the Agreement, the offer, sale and
issuance by the Company of the Units to the Purchasers as contemplated in the
Agreement constitute transactions exempt from the registration requirements of
Section 5 of the Securities Act.
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4. Representations, Warranties and Covenants of the Purchasers
Each Purchaser hereby severally represents and warrants, and covenants
and agrees with, to the Company, as of the Closing Date, as follows:
4.1 Authorization. Purchaser has all requisite legal and corporate or
other power and capacity and has taken all requisite corporate or other action
to execute and deliver the Agreement, to purchase the Units to be purchased by
it and to carry out and perform all of its obligations under the Agreement. The
Agreement constitutes the legal, valid and binding obligation of the Purchaser,
enforceable in accordance with its terms, except (a) as rights to
indemnification and contribution hereunder may be limited by applicable law,
equitable principles or public policy, (b) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally and (c) as limited by equitable
principles generally.
4.2 Investment Experience. Purchaser is an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Purchaser is aware of the
Company's business affairs and financial condition and has had access to and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Units. Purchaser has such business and
financial experience as is required to give it the capacity to protect its own
interests in connection with the purchase of the Units. Purchaser is not a
"broker" or a "dealer" as defined in the Exchange Act and is not an "affiliate"
of the Company as defined in the Securities Act.
4.3 Investment Intent. Purchaser is purchasing the Units for its own
account as principal, for investment purposes only, and not with a present view
to, or for, resale, distribution or fractionalization thereof, in whole or in
part, within the meaning of the Securities Act. Purchaser understands that its
acquisition of the Units has 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. Purchaser
has, in connection with its decision to purchase the number of Units set forth
in the Agreement, relied solely upon the representations and warranties of the
Company contained herein. Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares, Warrants
or Warrant Shares except in compliance with the Securities Act and the rules and
regulations promulgated thereunder.
4.4 Registration or Exemption Requirements. Purchaser further
acknowledges and understands that the Shares, the Warrants and the Warrant
Shares may not be resold or otherwise transferred except in a transaction
registered under the Securities Act or unless an exemption from such
registration is available. Purchaser understands that the certificates
evidencing the Shares and the Warrant Shares, and the Warrants, will be
imprinted with a legend that prohibits the transfer of the Shares, the Warrants
or the Warrant Shares unless (a) such transaction is registered or such
registration is not required, and (b) if the transfer is pursuant to an
exemption from registration other than Rule 144 under the Securities Act, and if
the Company shall so request in writing, an opinion reasonably satisfactory to
the Company of counsel reasonably satisfactory to the Company is obtained to the
effect that the transaction is so exempt.
4.5 Restriction on Sales, Short Sales and Hedging Transactions.
Purchaser will not, prior to the effectiveness of the Registration Statement,
sell, offer to sell, solicit offers to buy, dispose of, loan, pledge, or grant
any right with respect to (collectively, a "Disposition"), the Common Stock of
the Company, nor will Purchaser engage in any hedging or other transaction which
is designed to or could reasonably be expected to lead to or result in a
Disposition of Common Stock of the Company by the Purchaser or any other person
or entity. Such prohibited hedging or other transactions would include without
limitation effecting any short sale or having in effect any short position
(whether or not such sale or position is against the box and regardless of when
such position was entered into) or any purchase, sale or grant of any right
(including without limitation any put or call option) with respect to the Common
Stock of the Company or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from the Common Stock of the Company.
4.6 No Legal, Tax or Investment Advice. Purchaser understands that
nothing in the Memorandum, the Agreement or any other materials presented to
Purchaser in connection with the purchase and sale of the Units constitutes
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legal, tax or investment advice. 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 Units.
5. Conditions to Closing of Purchasers
Each Purchaser's obligation to purchase the Units at the Closing is, at
the option of such Purchaser, subject to the fulfillment or waiver as of the
Closing Date of the following conditions:
5.1 Representations and Warranties. The representations and warranties
made by the Company in Section 3 hereof shall be true and correct in all
material respects when made and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of the Closing Date.
5.2 Covenants. All covenants, agreements and conditions contained in
the Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all respects.
5.3 Blue Sky. The Company shall have obtained all necessary blue sky
law permits and qualifications, or secured exemptions therefrom, required by any
state or foreign or other jurisdiction for the offer and sale of the Units.
5.4 Minimum Purchase. The Company shall have received executed
Agreements with respect to not fewer than the number of Units whose aggregate
purchase price is equal to $200,000.
6. Conditions to Closing of Company
The Company's obligation to sell and issue the Units at the Closing is,
at the option of the Company, subject to the fulfillment or waiver of the
following conditions:
6.1 Representations and Warranties. The representations and warranties
made by each Purchaser in Section 4 hereof shall be true and correct in all
material respects when made and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of the Closing Date.
6.2 Covenants. All covenants, agreements and conditions contained in
the Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.
6.3 Blue Sky. The Company shall have obtained all necessary blue sky
law permits and qualifications, or secured exemptions therefrom, required by any
state or foreign or other jurisdiction for the offer and sale of the Units.
6.4 Minimum Purchase. The Company shall have received executed
Agreements with respect to not fewer than the number of Units whose aggregate
purchase price is equal to $200,000.
7. Affirmative Covenants
The Company and the Purchasers hereby respectively covenant and agree
as follows:
7.1 Registration Requirements.
(a) The Company shall use its commercially reasonable efforts to
secure the effectiveness, not later than the date which is 90 days following the
last Closing hereunder, of a registration statement on Form S-3 filed
with the SEC under the Securities Act (the "Registration Statement") to register
the resale of the Shares and the Warrant Shares (collectively, the "Registerable
Securities").
(b) The Company shall pay all Registration Expenses (as defined
below) in connection with any registration, qualification or compliance
hereunder, and each Purchaser shall pay all Selling Expenses (as defined below)
and other expenses that are not Registration Expenses relating to the
Registerable Securities resold by such Purchaser.
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"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, escrow fees, 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 Registerable Securities and all fees and disbursements of
counsel for any Purchaser.
(c) In connection with the registration effected by the Company
pursuant to these registration provisions, the Company will use its commercially
reasonable efforts to: (i) keep such registration effective until the earlier of
(A) the second anniversary of the First Closing, (B) such date as all of the
Registerable Securities have been resold or (C) such time as all of the
Registerable Securities held by the Purchasers can be sold within a given
three-month period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144 promulgated thereunder ("Rule 144"); (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 all securities covered by the
Registration Statement; (iii) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Purchaser from time to time may reasonably request; (iv) cause
the Shares and the Warrant Shares 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 securities registered pursuant to the Registration Statement; (vi)
otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC; and (vii) file the documents required of the Company and
otherwise use its commercially reasonable efforts to maintain requisite blue sky
clearance in (X) all jurisdictions in which any of the Units are originally sold
and (Y) all other states specified in writing by a Purchaser, provided, 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.
(d) If any Purchaser shall propose to sell any Registerable
Securities pursuant to the Registration Statement, it shall notify the Company
of its intent to do so at least three (3) full business days prior to such sale.
Such notice shall be deemed to constitute a representation that any written
information previously supplied by such Purchaser (including without limitation
the information referred to in Section 8.4 hereof) is accurate as of the date of
such notice. At any time within such three (3) business-day period, the Company
may require that such Purchaser delay such sale of any Registerable Securities
pursuant to the Registration Statement for an initial period not to exceed sixty
(60) days; provided, however, that in order to exercise this right, the Company
must deliver a certificate in writing to the Purchaser to the effect that a
delay in such sale is necessary because a sale pursuant to such Registration
Statement in its then-current form would not be in the best interests of the
Company and its shareholders due to disclosure obligations of the Company.
Notwithstanding the foregoing, the Company shall not be entitled to exercise its
right to delay a sale more than three (3) times in any calendar year. Each
Purchaser hereby covenants and agrees that it will not sell any Registerable
Securities pursuant to the Registration Statement during the periods the
Registration Statement is withdrawn as set forth in this Section 7.1(d).
7.2 Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Purchaser from and against any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) to which such Purchaser 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 or omission to
state a material fact in the Registration Statement on the effective date
thereof, or arise out of any failure by the Company to fulfill any undertaking
included in the Registration Statement, and the Company will, as incurred,
reimburse such Purchaser for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided, however, that the Company shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of, or is
based upon (i) an untrue statement or omission in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Purchaser specifically for use in preparation of
the Registration Statement, (ii) the failure of such Purchaser to comply with
the covenants and agreements contained in Sections 7.1(d), 8.3 or 8.4 hereof, or
(iii) an untrue statement or omission in any prospectus that is corrected in
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any subsequent prospectus, or supplement or amendment thereto, that was
delivered to the Purchaser prior to the pertinent sale or sales by the
Purchaser.
(b) Each Purchaser, 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 (i) an untrue statement of a material
fact or omission to state a material fact in the Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Purchaser specifically for use in preparation of
the Registration Statement, (ii) the failure of such Purchaser to comply with
the covenants and agreements contained in Sections 7.1(d), 8.3 or 8.4 hereof, or
(iii) an untrue statement or omission in any prospectus that is corrected in any
subsequent prospectus, or supplement or amendment thereto, that was delivered to
the Purchaser prior to the pertinent sale or sales by the Purchaser, and each
Purchaser, 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.
(c) 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 7.2, 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. 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.
(d) If the indemnification provided for in this Section 7.2 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) 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) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Purchasers on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), 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 Purchaser 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 Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this subsection (d). 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
subsection (d) 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. No person 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 Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective sales of Shares or
Warrant Shares, as the case may be, to which such loss relates and not joint.
8. Restrictions on Transferability of Shares, Warrants and Warrant
Shares; Compliance with Securities Act
8.1 Restrictions on Transferability. The Shares, the Warrants and the
Warrant Shares 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 Agreement. The Company shall be entitled to give stop
transfer instructions to its transfer agent with respect to the Shares, the
Warrants and the Warrant Shares in order to enforce the foregoing restrictions.
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8.2 Restrictive Legend. Each certificate representing the Shares, the
Warrants and the Warrant Shares shall bear substantially the following legends
(in addition to any legends required under applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
ADDITIONALLY, THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN A UNIT
PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL PURCHASER, AND
NO TRANSFER OF SECURITIES SHALL BE VALID OR EFFECTIVE ABSENT COMPLIANCE
WITH SUCH RESTRICTIONS. ALL SUBSEQUENT HOLDERS OF THIS CERTIFICATE WILL
HAVE AGREED TO BE BOUND BY CERTAIN OF THE TERMS OF THE AGREEMENT,
INCLUDING SECTIONS 7.1, 8.3 AND 8.4 OF THE AGREEMENT. A COPY OF THE
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
REGISTERED HOLDER OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.
8.3 Transfer of Shares, Warrants and Warrant Shares. Each Purchaser
hereby covenants with the Company not to make any sale of the Shares, the
Warrants or the Warrant Shares except either (a) a sale of Shares or Warrant
Shares in accordance with the Registration Statement, in which case the
Purchaser covenants to comply with the requirement of delivering a current
prospectus, (b) a sale of Shares, Warrants or Warrant Shares in accordance with
Rule 144, in which case the Purchaser covenants to comply with Rule 144, or (c)
subject to such conditions as the Company in its sole discretion shall impose,
in accordance with another exemption from the registration requirements of the
Securities Act. Each Purchaser further acknowledges and agrees that such Shares,
Warrants and Warrant Shares are not transferable on the books of the Company
unless the certificate submitted to the Company's transfer agent evidencing such
Shares, Warrants or Warrant Shares is accompanied by such additional
certification, documentation or information as the Company in its sole
discretion shall require in order to effect such sale in accordance with the
Registration Statement, Rule 144 or such other exemption from the registration
requirements of the Securities Act. The legend set forth in Section 8.2 will be
removed from a certificate representing Shares, Warrants or Warrant Shares
following and in connection with any sale of Shares, Warrants or Warrant Shares,
as the case may be, pursuant to subsection (a) or (b) hereof but not in
connection with any sale of Shares, Warrants or Warrant Shares, as the case may
be, pursuant to subsection (c) or (d) hereof.
8.4 Purchaser Information. Each Purchaser covenants that it will
promptly furnish to the Company such information, including information
regarding such Purchaser, the Registerable Securities held by such Purchaser,
and the distribution proposed, as the Company shall reasonably request in
writing to enable the Company to comply with the provisions hereof in connection
with any registration, qualification or compliance referred to in this
Agreement.
9. Miscellaneous
9.1 Waivers and Amendments. The terms of the Agreement may be waived or
amended with the written consent of the Company and the record holders of more
than 50% of the Shares then outstanding and held by Purchasers (including, for
purposes of such calculation, outstanding Warrant Shares and shares of Common
Stock issuable upon exercise of outstanding Warrants), the terms of the
Agreement may be waived or amended and any such amendment or waiver shall be
binding upon the Company and all holders of Shares, Warrants or Warrant Shares.
9.2 Broker's Fee. Each Purchaser acknowledges that the Company intends
to pay a fee and issue warrants to ▇.▇. ▇▇▇▇▇▇ & Co., Inc. or certain dealers
selected by it ("▇.▇. ▇▇▇▇▇▇") in respect of the sale of the Units to the
Purchasers as described in the Memorandum. Each of the parties hereto hereby
represents that, on the basis of any actions and agreements by it, there are no
other brokers or finders entitled to compensation in connection with the sale of
the Units to the Purchasers.
9.3 Governing Law. The Agreement shall be governed in all respects by
and construed in accordance with the laws of the State of Delaware without
regard to conflicts of laws principles.
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9.4 Survival. The representations, warranties, covenants and agreements
made in the Agreement shall survive any investigation made by the Company or the
Purchasers and shall survive the Closing.
9.5 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to the Agreement, provided, however, that the
provisions hereof shall not inure to the benefit of subsequent holders of
Shares, Warrants or Warrant Shares purchasing pursuant to Section 8.3(a) or
8.3(b). Notwithstanding the foregoing, no Purchaser shall assign the Agreement
without the prior written consent of the Company.
9.6 Entire Agreement. The Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
9.7 Indemnification of Escrow Agent. The Company and each of the
Purchasers jointly and severally agree to indemnify and hold harmless Wilson,
Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation and all partners,
employees, agents and affiliates thereof ("WSG&R") against any and all losses,
claims, damages, liabilities, costs, expenses and disbursements (including fees
and expenses of counsel) (collectively, "Losses") arising out of or in
connection with WSG&R's services hereunder. Each of the Company and the
Purchasers further agree that WSG&R shall not have any liability whatsoever
(whether direct or indirect, in contract or tort or otherwise) to the Company or
any Purchaser (or any party claiming through either of them) arising out of or
in connection with its services hereunder. The Company and the Purchasers
further agree that WSG&R shall be entitled to rely on their respective
representations, warranties, covenants and agreements herein and pursuant
hereto. The Company and the Purchasers acknowledge and agree that WSG&R is an
intended third-party beneficiary of this Section 9.7.
9.8 Notices, etc. All notices and other communications required or
permitted under the Agreement shall be in writing and may be delivered in
person, by telecopy, overnight delivery service or United States mail, addressed
to the Company or the Purchasers, as the case may be, at their respective
addresses set forth in the Agreement, or at such other address as the Company or
the Purchasers shall have furnished to the other party in writing. All notices
and other communications shall be effective upon the earlier of (a) actual
receipt thereof by the person to whom notice is directed or (b) (i) in the case
of notices and communications sent by personal delivery or telecopy, the time
such notice or communication arrives at the applicable address or is
successfully sent to the applicable telecopy number, (ii) in the case of notices
and communications sent by overnight delivery service, at noon (local time) on
the second business day following the day such notice or communication is sent,
and (iii) in the case of notices and communications sent by United States mail,
five days after such notice or communication is deposited in the United States
mail.
9.9 Severability of the Agreement. If any provision of the 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.
9.10 Counterparts. The Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.11 Further Assurances. Each party to the Agreement shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as the other party hereto may reasonably request in order to carry
out the intent and accomplish the purposes of the Agreement and the consummation
of the transactions contemplated hereby.
9.12 Termination. In the event that the First Closing shall not have
occurred on or before January 31, 1998, the Agreement shall terminate at the
close of business on such date.
9.13 Expenses. The Company and each such Purchaser shall bear its own
expenses incurred on its behalf with respect to the Agreement and the
transactions contemplated hereby, including fees of legal counsel.
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9.14 Currency. All references to "dollars" or "$" in the Agreement
shall be deemed to refer to United States dollars.
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