Exhibit 4.5
ELECTRONICS ACCESSORY SPECIALISTS INTERNATIONAL, INC.
d/b/a Mobility Electronics
(A Delaware corporation)
FORM OF UNIT PURCHASE AGREEMENT
ELECTRONICS ACCESSORY SPECIALISTS INTERNATIONAL, INC., a Delaware
corporation (the "Company"), whose address is 0000 Xxxx Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxx 00000, hereby agrees with the undersigned Purchaser as
follows:
1. TRANSACTION
The Company, by due action of its Board of Directors, has authorized
the offer and sale to you under this Unit Purchase Agreement ("Agreement" or
"Purchase Agreement") and to other purchasers under similar Purchase Agreements
("Other Purchasers") of up to 875 Units (963 if the Company's over-allotment
option is exercised in full), each consisting of 2,000 shares of common stock,
par value $ .01 per share ("Common Stock"), of the Company ("Common Shares") and
warrants to purchase 500 shares Common Stock ("Warrants"). Each Warrant will
entitle the holder thereof to purchase one share of Common Stock, at an exercise
price of $7.00 per share. The Unit price shall be $8,000 and no fractional Units
shall be sold unless agreed to by the Company and Paradise Valley Securities,
Inc., Sentra Securities Corporation and Spelman & Co., Inc., the Company's
placement agents in this offering (collectively, the "Placement Agents"). The
Common Shares and the Warrants underlying the Units shall conform to the
description thereof in the Memorandum (as defined below).
2. PURCHASE AND SALE
2.1 Units. Subject to all of the terms and conditions of this
Agreement, the Company will issue and sell to you (sometimes referred to as
"Holder") the number of Units shown on the signature page hereof and you will
purchase the same from the Company; provided that Units in the aggregate amount
of at least $ 1,000,000 have been subscribed and paid for by you and the Other
Purchasers and all other terms and conditions set forth in this Purchase
Agreement are satisfied. You acknowledge that Units subscribed and paid for
(whether paid for by cash, cancellation of indebtedness or conversion of
outstanding shares of the Company's Series B Preferred Stock) by officers,
directors or employees of the Company, or by holders of the Company's
outstanding securities, or by officers or employees of any Placement Agent for
their own account, or by an affiliate of any of the foregoing, shall be counted
in determining whether all or any part of Units in the aggregate amount of at
least $1,000,000 have been subscribed and paid for.
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2.2 Funds Escrow Account. The funds tendered by you pursuant to this
Agreement will be deposited in a special escrow account (the "Fund") at the
First Arizona Savings and Loan Association ("Funds Escrow Agent"), whose address
is 0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, and will be
returned to you without interest or deduction for escrow fees and expenses, if:
(a) your subscription for the purchase of Units pursuant to this Agreement has
not been accepted by the Company or (b) if Purchase Agreements for at least 125
Units and funds in the amount of at least $1,000,000 are not deposited in the
Fund before the close of business on November 14, 1997, which date may be
extended one or more times by agreement of the Company and the Placement Agents,
without notice to you and the Other Purchasers, to a date not later than
December 31, 1997 (the "Termination Date"). It is understood and agreed that if
this Agreement is accepted by the Company, and the funds in payment of a minimum
of 125 Units are received and accepted by the Company before the close of
business on the Termination Date, then at the Closing (as defined below) with
respect to the Units subscribed for by you, the funds tendered herewith (less
any fees paid to the Placement Agents), shall be delivered to the Company by the
Funds Escrow Agent in payment for the Units subscribed for by you, or such
lesser amount as may be allocated to you by the Company. If you are allocated
less than the full amount of the Units subscribed for by you and the full amount
of the Units subscribed for has been timely paid in full by you, the Company
shall instruct the Funds Escrow Agent to remit the overpayment of the amount
paid, without interest or deduction, to you within fifteen days after such
partial acceptance of this Purchase Agreement. The Units are being offered by
the Company subject to the right of the Company and Placement Agents to reject,
at their discretion, any subscription, in whole or in part, for any reason, and
to accept subscriptions notwithstanding the order in which they are received.
2.3 Closing . The purchase by and sale and delivery to you and Other
Purchasers of the Units (the "Closing") shall take place at the offices of the
Placement Agents or of the Funds Escrow Agent at such date and time, or at such
other place, upon which the Company and the Placement Agents may agree (such
date being hereinafter called the "Closing Date"). At the Closing, the Company
shall deliver to a representative of the Placement Agents on your behalf,
instruments evidencing the Common Shares and Warrant comprising the Units being
purchased by you and other items required to be delivered to it pursuant to this
Purchase Agreement. If at any time prior to the Termination Date, subscriptions
for at least 125 Units have been received and accepted by the Company, and the
full purchase price for such Units have been deposited into the Fund, the
Company may have an initial closing ("Initial Closing") with respect to such
accepted subscriptions and continue to offer the remaining Units until the
Termination Date or all 875 Units (963 if the Company's over-allotment option is
exercised in full) have been sold, whichever occurs earlier; provided, however,
that the final Closing shall take place not later than ten days after the
Termination Date.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
As an inducement to you to enter into this Agreement, the Company
represents, warrants and agrees that:
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3.1 Disclosure Documents. The Company has prepared the Company's
Confidential Private Offering Memorandum ("Memorandum") dated September 11,
1997, together with all exhibits annexed thereto (such Memorandum and exhibits
annexed thereto are called collectively herein the "Disclosure Documents", which
term shall include any additions or supplements thereto).
3.2 Description of Securities. The Units, the Common Shares, the
Warrants, the Common Stock issuable upon due exercise of the Warrants, when
issued and delivered, will conform to the description thereof under the captions
"Description of Securities" and Description of Offering" in the Memorandum.
3.3 Authority for Agreement. This Agreement has been duly authorized by
all necessary action of the Company and, when executed and delivered by the
Company, will be a legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally or by general
principles of equity, and except that the indemnification provisions of the
Agreement may be held to be violative of public policy under either federal or
state laws in the context of the offer or sale of securities.
3.4 Validity of Common Stock. The Common Shares, when issued and paid
for at the Closing, will constitute duly authorized, legally issued shares of
Common Stock. The Common Stock underlying the Warrants, when issued in
accordance with the terms thereof, will constitute duly authorized, legally and
validly issued Common Stock, fully paid and non-assessable.
3.5 Validity of Warrant. The Warrants, when issued and paid for at the
Closing, will be duly authorized, validly existing obligations of the Company,
enforceable in accordance with their terms, except to the extent that the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally or by general
principles of equity.
3.6 No Conflicting Rights. The holders of the outstanding capital stock
of the Company are not entitled to pre-emptive or other rights to subscribe for
the Units. The offering of the Units as contemplated by the Memorandum does not
give rise to any rights relating to the registration of any outstanding capital
stock.
3.7 Disclosure. The Company has provided you with all of the material
information which you have reasonably requested in deciding whether to invest in
the Units.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY YOU
You hereby represent, warrant and agree that:
4.1 Authority. You have full power and authority to enter into this
Agreement and it constitutes your legal, valid and binding obligation,
enforceable in accordance with its terms.
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4.2 Purchase For Own Account. You are acquiring the Units for your own
account, for investment purposes and not for resale or with a view to any
distribution, or in connection with any distribution thereof You are able to (i)
bear the economic risk of your investment in the Units, (ii) hold the Units for
an indefinite period of time, and (iii) afford a complete loss of your
investment.
4.3 Investment Experience. You have the requisite knowledge and
experience in financial and business matters, including investments of this
type, to be capable of evaluating the merits and risks of an investment in the
Units and of making an informed investment decision with respect thereto.
4.4 Receipt Of Information. You have received, read carefully,
considered and fully understood the Disclosure Documents and you have received
from the Company all of the information concerning the Company which you
consider to be material in making your investment decision, which information
has been requested by you if not already furnished by the Company. You have had
full access to the books and records of the Company and to its officers,
directors and accountants for the purpose of obtaining and verifying such
information and you have had an opportunity to ask questions and receive answers
from the officers of the Company regarding the terms and conditions of this
transaction and the Company's business and financial condition.
Except as expressly set forth in the Disclosure Documents, no
representations or warranties, oral or otherwise, have been made to you,
including without limitation, any representations concerning the future
prospects of the Company, by the Company, any Placement Agent or any agent
employee or affiliate of the Company or of any Placement Agent or any other
person whether or not associated with this action, and in entering into this
action you are not relying upon any information other than that contained in the
Disclosure Documents, and the results of your own independent investigation. You
have obtained sufficient information to evaluate the merits and risks of your
investment and to make an informed investment decision.
4.5 Restricted Securities. You understand and acknowledge that the
Common Shares and Warrants you are purchasing hereunder are, and the Common
Stock issuable upon the due exercise of the Warrants, will be, "restricted
securities" under United States federal and state securities laws insofar as
they have not been registered under the Securities Exchange Act of 1933, as
amended (the "1933 Act"), or the securities laws of any other jurisdiction, that
they may not be resold or transferred without compliance with the registration
or qualification provisions of the 1933 Act or applicable federal and state
securities laws of any state or other jurisdiction or an opinion of counsel
acceptable to the Company that an exemption from such registration and
qualification requirements is available.
4.6 Limitations on Disposition. Without in any way limiting the
representations set forth above, you further agree not to make any disposition
of all or any portion of the Common Shares, the Warrants, or the shares of
Common Stock issuable upon the due exercise of the Warrants, unless and until:
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(a) There is then in effect a registration statement under the 1933 Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
(b) (i) You shall have notified the Company of the proposed disposition
and shall have shed the Company with a statement of the circumstances
surrounding the proposed disposition and (ii) you have shed the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities under the 1933 Act
and applicable securities laws of any state or other jurisdiction.
4.7 Illiquid Investments. Your overall commitment to investments which
are not readily marketable is not disproportionate to your net worth and your
investment in the Units will not cause such overall commitment to become
excessive. You have adequate means of providing for your current needs and
personal contingencies.
4.8 Accredited Investor. You are an "Accredited Investor" as such term
is defined in the Memorandum and Rule 501 (a) promulgated under the 0000 Xxx.
4.9 Company Reliance On Questionnaire. You understand, acknowledge and
agree that the Company, in entering into and performing under this Agreement, is
relying on the accuracy of the responses by you to the Purchaser Questionnaire
heretofore delivered by you to the Company, which responses you warrant to be
true, complete and correct.
5. CONDITIONS TO YOUR OBLIGATIONS
Your obligations to purchase the Units under this Agreement are subject
to the fulfillment on or before the Closing of each of the following conditions:
5.1 Representations and Warranties. The representations and warranties
of the Company contained in Section 3 above shall be true as of the Closing.
5.2 Company Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement,
which performance or compliance are required of it on or before the Closing.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligations of the Company to sell and issue the Units to you are
subject to the fulfillment on or before the Closing of each of the following
conditions by you:
6.1 Representations and Warranties. Your representations and warranties
contained in Section 4 above shall be true on and as of the Closing with the
same effect as though made on and as of the date thereof.
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6.2 Payment. You shall have delivered into the Fund the amount of the
purchase price of the Units being purchased by you.
6.3 Blue Sky Qualification. The Company shall have received any permits
or authorization from any state securities law authority which may be necessary
to qualify the offer and sale of the Units to you.
7. REGISTRATION RIGHTS
The Company covenants and agrees with you as follows:
7.1 Definitions. For purposes of this Section 7:
(a) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance
with Section 7.10 hereof.
(b) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
(c) The term "Public Company" means a corporation which has a
class of equity securities registered pursuant to Section 12 of the
1934 Act, or which is required to file periodic reports pursuant to
Section 15(d) of the 1934 Act.
(d) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration
statement or similar document in compliance with the 1933 Act, and the
declaration or ordering of effectiveness of such registration statement
or document.
(e) The term "Registrable Securities" means (i) the Common Shares
purchased by a Purchaser or Other Purchaser under this or similar
Purchase Agreement, (ii) the Common Stock issuable or issued upon
exercise of any outstanding Warrants, and (iii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in
replacement of the shares referenced in (i) and (ii) above, excluding
in all cases, however, any Registrable Securities (1) sold by a person
in a transaction in which his rights under this Section 7 are not
assigned or (II) registered under the 1933 Act, the registration
statement in connection therewith has been declared effective, and such
shares have been disposed by such holder pursuant to such registration
statement.
(f) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common
Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which
are, Registrable Securities.
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(g) The term "SEC" shall mean the Securities and Exchange
Commission.
(h) All other capitalized terms used herein which are not defined
herein shall have the meaning given elsewhere in this Agreement.
7.2 Piggyback Registration. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
Common Stock or other securities under the 1933 Act in connection with the
public offering of such securities solely for cash (other than an initial public
offering, registration relating solely to the sale of securities to participants
in a Company stock option, stock purchase or similar employee benefit plan, a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities (including Form S-4 or any form
substitution thereof) or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered or a SEC Rule 145 transaction), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty calendar days after mailing
of such notice by the Company, the Company shall, subject to the provisions of
Section 7.6, cause to be registered under the 1933 Act and any applicable state
securities laws all of the Registrable Securities that each such Holder has
requested to be registered.
7.3 Obligations of the Company. Whenever under this Section 7 the
Company effects the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC on any appropriate form a
registration statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to become
effective;
(b) Unless such registration is a firm commitment underwriting,
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of
the 1933 Act with respect to the disposition of all Registrable
Securities and other securities covered by such registration statement
for a period of 270 days.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities or "blue sky"
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laws of such jurisdictions as the underwriter or such sellers (not to
exceed ten) shall reasonably request and do any and all other acts and
things as may be reasonably necessary to consummate the disposition in
such jurisdictions of the Registrable Securities covered by such
registration statement, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, or to
subject itself to taxation in respect of doing business in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction.
(e) Immediately notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act, of
the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing
or if its is necessary, in the opinion of counsel to the Company, to
amend or supplement such prospectus to comply with law, and at the
request of any such seller prepare and sh to such seller a reasonable
number of copies of a supplement to or any amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing and shall otherwise comply in all material respects with
law and so that such prospectus, as amended or supplemented, will
comply with law.
(f) Otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, any make available to its security
holder, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve (12) months, beginning with the
first month of the first fiscal quarter after the effective date of
such registration statement, which earnings statement shall satisfy
the provisions of Section I 1 (a) of the 1933 Act.
(g) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering.
Each Holder participating in such underwriting shall also enter into
and perform its obligations under such an agreement.
(h) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto
is required to be delivered under the 1933 Act of the happening of any
event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing.
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(i) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(j) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective
date of such registration.
7.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 7 with
respect to the Registrable Securities of any selling Holder that such Holder
shall sh to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
7.5 Expenses of Registration. All expenses incurred in connection
with registrations, filings or qualifications pursuant to this Section 7,
including, without limitation, all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company, but excluding fees and disbursements of counsel to the selling Holders,
underwriter's commissions and fees and any fees of others employed by a selling
Holder, shall be borne by the Company.
7.6 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 7.2 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
materially jeopardize or in any way reduce the success of the offering by the
Company. If the total amount of securities, including Registrable Securities,
requested by security holders to be included in such offering exceeds the amount
of securities sold other than by the Company that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling security
holders (including Holders) according to the total amount of securities entitled
to be included therein owned by each selling shareholder (including Holders) or
in such other proportions as shall mutually be agreed to by such selling
shareholders (including Holders)).
7.7 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 7.
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7.8 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 7:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the 0000
Xxx) for such Holder and each person, if any, who controls such Holder
or underwriter within the meaning of the 1933 Act or the 1934 Act
against any losses, claims, damages, or liabilities joint or several)
to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the 1933 Act, the 1934 Act or any state
securities law; and, subject to subsection 7.8 (c) below, the Company
will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 7.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the
Company (which consent shall not be reasonably withheld), nor shall
the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling
person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the
1933 Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such
underwriter or other Holder, and any agent of the Company, against any
losses, claims, damages, or liabilities joint or several) to which any
of the foregoing persons may become subject, under the 1933 Act, the
1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this
subsection 7.8(b), in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided,
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however, that the indemnity agreement contained in this subsection
7.8(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be
reasonably withheld; provided, that, in no event shall any indemnity
under this subsection 7.8(b) exceed the gross proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 7.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under
this Section 7.8, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party receiving similar
notice, to assume the defense thereof with counsel reasonably
satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified party which may be
represented without conflict by one counsel) shall have the right to
retain one separate counsel, with the fees and expenses to be paid by
the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in
such proceeding; otherwise, the indemnified party shall be responsible
for the fees and expenses of its counsel. The failure to deliver
written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 7.8.
(d) Except as provided in the last sentence of subsection 7.8(c)
above, if the indemnification provided for in this Section 7.8 is held
by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage,
or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party hereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of
such loss, liability, claim, damage, or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party
on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other
relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
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(f) The obligations of the Company and Holders under this Section
7.8 shall survive the completion of any offering of Registrable
Securities pursuant to a registration statement under this Section 7.
7.9 Assignment of Piggyback Rights. Subject to the provisions of
Section 7.10, the piggyback registration rights of the Holders under Section 7.2
may be assigned (but only with all related obligations) by a Holder to a
permitted transferee or assignee of such securities who, after such assignment
or transfer, holds at least 10,000 shares of Registrable Securities (subject to
appropriate adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such piggyback
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including without limitation the provisions of Section 7.10 below;
and (c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act. For the purposes of determining the
number of shares of Registrable Securities held by a transferee or assignee, the
holdings of transferees and assignees of a partnership who are partners or
retired partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
and with the partnership; provided that all assignees and transferees who would
not qualify individually for assignment of registration rights shall have a
single attorney-in-fact for the purpose of exercising any rights, receiving
notices or taking any action under this Section 7.
7.10 "Lock-up" Agreement. Each Holder hereby agrees that he or she
shall not, for the period commencing on the date of such Holder's Unit Purchase
Agreement and ending 120 days after the earlier of: (i) the effective date of a
registration statement under the 1933 Act covering all of the Registrable
Securities or (ii) the effective date of a registration statement filed by the
Company pursuant to Section 7.2 hereof, without the prior written approval of
the Placement Agents and the managing underwriter in such registration directly
or indirectly, sell, offer to sell, contract to sell (including without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any shares
of Common Stock (including shares of Common Stock issuable upon the exercise of
the Warrants) legally or beneficially owned by such Holder.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
7.11 Termination of Registration Rights. No Holder shall be entitled to
exercise any right provided for in this Section 7 after three (3) years
following the date after the Company becomes a Public Company.
12
7.12 Extension of Warrant Exercise Period. In the event the holders of
Warrants are delayed in selling the shares of Common Stock underlying the
Warrants at the time such holders desire pursuant to the terms of Section 7.2 or
7.11, the parties hereto agree that the exercise period for the Warrants shall
be extended by the amount of such delay.
7.13 Amendments and Waivers. Any term or provision of the registration
rights stated in this Section 7 may be amended and the observance of any term of
such rights may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Company and the holders of at least fifty-one percent (51%) of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 7.13 shall be binding upon each holder of any Registrable
Securities then outstanding, each future holder of all such Registrable
Securities, and the Company.
8. FURTHER AGREEMENTS
You agree that:
8.1 No Transfer or Assignment. You will not transfer or assign this
Agreement or any of your interest herein except as provided in Section 4.6
above.
8.2 Successors and Assigns. You may not cancel or revoke this
Agreement and this Agreement shall be binding upon your successors and assigns,
except as provided by certain state laws.
8.3 Indemnification. You shall indemnify, hold harmless and defend the
Company and the Placement Agents and their respective affiliates and agents with
respect to any and all loss, damage, expense, claim, action or liability any of
them may incur as a result of the breach or untruth of any representations or
warranties made by you herein, and you agree that in the event of any breach or
untruth of any representations or warrants made by you herein, the Company may,
at its option, forthwith rescind the sale of the Units to you, in addition to
any other rights or remedies which the Company may have.
8.4 Legend. A legend in substantially the following form will be
placed on all documents or certificates evidencing the securities comprising the
Units:
"THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAW OF ANY STATE OR OTHER JURISDICTION AND SUCH SECURITIES MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION, OR AN OPINION OF COUNSEL
13
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
9. GENERAL AND MISCELLANEOUS
9.1 Survival. The warranties, representations and covenants of the
parties contained in this Agreement shall survive the execution and delivery of
this Agreement and the Closing.
9.2 Entire Agreement. This Agreement constitutes the entire agreement
among the parties, and no party shall be liable or bound to any other party in
any manner by any warranties, representations, guarantees or covenants except as
specifically set forth in this Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of Delaware without regard to conflicts of
law.
9.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.5 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the tenth day after the date of mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows: if to the
purchaser, at his address as shown in the Company records; and if to the
Company, at its principal office. Any party may change its address for purposes
of this paragraph by giving the other party written notice of the new address in
the manner set forth above.
9.6 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
If the foregoing conforms to your understanding of our agreement,
please so indicate by signing two copies of this Agreement and returning both
copies to the Company. If and when this Agreement is accepted by the Company,
such acceptance being evidenced by the Company's execution of this Agreement,
this Agreement shall become a binding agreement between and among us, and the
Company shall deliver to you one fully executed copy of this Agreement.
14
DATE: 1997 Number of Units:
--------------------, ------------------------
Total Purchase Price: $
-----------------
-------------------------------- ---------------------------------------
(Name of Purchaser, Please Print) (Signature of Purchaser)
---------------------------------------
(Print name and title of authorized
signatory if purchaser is not natural
person)
-------------------------------- ---------------------------------------
(Name of Joint Purchaser, if any (Signature of joint purchaser, if any)
- please print)
AGREED TO AND ACCEPTED on the
day of , 1997:
------------- -------------------------------
ELECTRONICS ACCESSORY SPECIALISTS
INTERNATIONAL, INC.
By:
-------------------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
15
