HARVARD SCIENTIFIC CORP.
FINANCING AGREEMENT
FEBRUARY 23, 1998
Harvard Scientific Corp. ("Harvard") has requested that O. Xxx
Xxxxx III ("Investor") provide equity financing of $600,000. The Investor has
agreed to do so on the following terms:
BASIC ISSUANCE: Investor hereby purchases 200,000 shares
("Basic Shares") of Harvard's Common Stock ("Common") at $3.00 per share
("Acquisition Price"), which reflects a discount from the current trading price
of the Common on the OTC Bulletin Board in view of the restrictions upon
transfer of the Basic Shares and in view of further factors such as the
development status of Harvard and the potential volatility of the market for the
Common.
CONTINGENT ISSUANCE: If on the date of effectiveness of the
registration statement referred to below the closing bid price of the Common is
less than $6.00 per share ("Contingent Price"), Investor will automatically
receive that number of shares of Common ("Additional Shares," which together
with the Basic Shares are referred to herein as the "Acquired Shares") that is
the difference between (a) 600,000 divided by one-half the Contingent price and
(b) 200,000. The $600,000 consideration received as herein provided will be
allocated ratably over all the Acquired Shares so that the per share price of
each share of Basic Shares and Additional Shares will be identical.
SECURITIES LAW RESTRICTIONS: Investor recognizes that the
Basic Shares have not been, and the Additional Shares, upon issuance, may not
be, registered under the Securities Act of 1933 or qualified or registered under
the laws of any state or other jurisdiction. Investor will execute Harvard's
standard Investment Letter in the form of Exhibit A hereto.
REGISTRATION: Harvard will cause Basic shares (and any
Additional Shares so long as their inclusion will not delay the effectiveness of
registration of the Basic Shares) to be registered as promptly as practicable
under the Securities Act of 1933 and to be qualified or registered under the
laws of any other jurisdiction as to which the Investor may reasonably request.
To the extent any Additional Shares have not been so registered at the time of
effectiveness of such Registration Statement, such Additional Shares will
thereafter be registered as promptly as practicable.
FURTHER AGREEMENT: This document is an agreement between the
parties hereto, effective upon its execution and delivery by Harvard and the
Investor. The parties will consult as to whether or not a more extensive
agreement is desired covering the matters herein, and if Harvard and the
Investor determine that such an agreement is desirable, then it will be
prepared, but until such a further agreement is executed and delivery by Harvard
and the Investor, this Agreement shall remain in full force and effect.
COSTS AND EXPENSES: As additional consideration for the
Investor hereunder, Harvard will bear all costs and expenses relating to this
Agreement, including those of registration and including fees and expenses of
counsel, if any, to the Investor.
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COUNTERPARTS: This Agreement may be signed in counterparts,
each of which will be an original and all together will constitute one
agreement.
IN WITNESS HEREOF, the parties hereto have executed this
Agreement this 23rd day of February, 1998.
HARVARD SCIENTIFIC CORP. INVESTOR
By:/S/ Xxxxxx X. Xxxxx /S/O. Xxx Xxxxx III
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Its: President O. Xxx Xxxxx III
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INVESTMENT LETTER
Harvard Scientific Corp.
000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxx, Xxxxxx 00000
Re: Investment in Common Stock, par value 0.01 per share
("Shares")
Ladies and Gentlemen:
In connection with our acquisition of Shares, the undersigned
hereby represents and warrants to the Company as follows:
1. We understand that the Shares have not been and are not
expected to be registered under the United States
Securities Act of 1933, as from time to time amended (the
"Act", which term includes the rules and regulations from
time to time promulgated thereunder), or qualified or
registered under any state securities laws. The Shares we
receive will be "restricted securities" (as defined in the
Act". We are aware that this means that we will not be
able to reoffer, resell, pledge, hypothecate or otherwise
transfer ("Transfer") the Shares unless (I) the Shares
have been registered under the Act or (ii) an exemption
from the registration provisions of the Act is available
for such Transfer, and , in either case, the Transfer is
in compliance with any applicable state securities laws.
2. We acknowledge that the Shares are being acquired solely
for our own account for investment and not for the account
of any other person and not for distribution, assignment
or resale to others, except as may be permitted under the
act, and no other person has, or will have, upon our
acquisition of the Shares, direct or indirect beneficial
interest in the Shares.
3. We understand that a restrictive legend may be placed on
the certificate representing the Shares and that
stop-transfer instructions may be issued to the transfer
agent of the Shares or any related depositary shares
reflecting the foregoing restrictions, which restrictions
normally will not be released without opinion of counsel
satisfactory to the Company that such restrictions may be
released.
4. We have sufficient knowledge and experience in financial
and business matters, by ourselves or with our financial
advisors, to be capable of evaluating the merits and risks
of the acquisition of the Shares and to protect our
interests in connection with the transaction. We are able
and prepared to bear the economic risk represented by
holding the Shares indefinitely, regardless of what the
future value of the Shares may be.
5. We understand that an investment in the Shares, because of
the nature of the business or the Company and the stage of
development of that business, involves a high degree of
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risk. We have been given the opportunity to ask questions
and receive answers concerning the Company, its business
and matters concerning our acquisition of the Shares, and
our questions have been answered to our satisfaction for
purposes of the acquisition of the Shares.
6. We understand that the U.S. Securities and Exchange
Commission (the "Commission") does not pass upon the
merits of any securities offered or the terms of the
offering, nor does it pass upon the accuracy or
completeness of any offering circular or selling
literature and that no state commissioner has done so. We
also understand that, although these securities are
offered under an exemption from registration under the
Act, the Commission has not made an independent
determination that these securities are exempt from
registration, and that no state commissioner has
determined that qualification, registration or some other
action is not required.
7. Our residence address and our social security or employer
identification number, if any, are set forth below. If no
social security or employer identification number is set
forth below, we represent that we do not have any on and
are not required to have any.
8. We recognize that the Company and others will rely upon
the truth, accuracy and completeness of the foregoing
representations and warranties.
Sincerely yours,
[NAME OF INVESTOR]
Dated: February 23, 1998
Full name and permanent home address: By: /S/ O. Xxx Xxxxx
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Signature
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Social Security or Employer Identification Number:
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