AMERIGON INCORPORATED
COMMON SHARES SUBSCRIPTION AGREEMENT
JUNE 14, 2000
To Each of the Investors
Who Are Signatories Hereto
Ladies and Gentlemen:
Amerigon Incorporated, a California corporation (the "Company"), hereby agrees
with each of you as follows:
1. Authorization Of Sale Of The Securities.
The Company has authorized the sale and issuance of 2,500,000 shares of its
common stock, no par value (the "Common Shares"), as described in the Private
Placement Memorandum dated April 2000 (as supplemented on May 30, 2000, the
"Memorandum"). The shares of Common Shares sold hereunder shall be referred to
herein as the "Shares."
2. Agreement To Sell And Purchase The Shares.
2.1 Sale of Shares. Subject to the terms of this Common Shares Subscription
Agreement (this "Subscription Agreement"), at the Closing (as defined in Section
3.1 hereof), the Company agrees to sell to each purchaser of Shares who has
executed a counterpart execution page to this Subscription Agreement (each an
"Investor"), and each Investor agrees to purchase from the Company, the
aggregate number of Shares set forth above such Investor's signature on the
counterpart execution page hereof, at a purchase price of five and no/100
Dollars ($5.00) per Share.
2.2 Separate Agreement. Each Investor shall severally, and not jointly, be
liable for only the purchase of the Shares that appears above such Investor's
signature and that relates to such Investor. The Company's agreement with each
of the Investors is a separate agreement, and the sale of Shares to each of the
Investors is a separate sale. The obligations of each Investor hereunder are
expressly not conditioned on the purchase by any or all of the other Investors
of the Shares such other Investors have agreed to purchase.
2.3 Acceptance of Proposed Purchase of Shares. Each Investor understands
and agrees that the Company, in its sole discretion, reserves the right to
accept or reject, in whole or in part, any proposed purchase of Shares. The
Company shall have no obligation hereunder with respect to any Investor until
the Company shall execute and deliver to such Investor an executed copy of this
Subscription Agreement. If this Subscription Agreement is not executed and
delivered by the Company or the offering is terminated, this Subscription
Agreement shall be of no further force and effect.
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2.4 Escrow of Purchase Price. Each Investor understands and agrees that
upon execution and delivery hereof, the Investor shall deposit the purchase
price for all of the Shares being purchased by such Investor, in immediately
available funds, with the Escrow Agent under that certain Escrow Agreement
entered by and among the Company, California Bank and Trust and Xxxx Capital
Partners, Inc. (the "Placement Agent"), a form of which is attached hereto as
Appendix I (the "Escrow Agreement").
3. Closing And Delivery.
3.1 Closing. The closing of the purchase and sale of the Shares pursuant to
this Subscription Agreement (the "Closing") shall be held as soon as practicable
after the satisfaction or waiver of all other conditions to Closing set forth in
Sections 6 and 7 hereof, at 10:00 a.m. (Pacific Time) at the offices of
O'Melveny & Xxxxx LLP, located at 000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx, or on such other date and place as may be agreed to by the Company
and the Investors. Prior to the Closing, each Investor shall execute any related
agreements or other documents required to be executed hereunder.
3.2 Delivery of the Shares at the Closing. At the Closing, the Company
shall deliver to each Investor stock certificates registered in the name of such
Investor, or in such nominee name(s) as designated by such Investor,
representing the Shares to be purchased by such Investor at the Closing as set
forth in the Schedule of Investors against payment of the purchase price for
such Shares. The name(s) in which the stock certificates are to be issued to
each Investor are set forth in the Investor's counterpart execution page hereto,
as completed by each Investor.
4. Representations, Warranties And Covenants Of The Company.
The Company hereby represents and warrants as of the date hereof to, and
covenants with, the Investors as follows:
4.1 Organization and Standing. The Company and each of its subsidiaries is
duly incorporated and validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation with full corporate power and
corporate authority to own, lease and operate its properties and conduct its
current business as described in the Memorandum; the Company is duly qualified
to do business as a foreign corporation and 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 condition (financial or otherwise), operations, business
or business prospects of the Company (hereinafter, a "Material Adverse Effect");
no proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification; except as described in the Memorandum, the Company is in
possession of and operating in compliance with all authorizations, licenses,
certificates, consents, orders and permits from federal, state and other
regulatory authorities except where the failure to possess or be in compliance
with any of the foregoing is not reasonably likely to have a Material Adverse
Effect, all of which are valid and in full force and effect. The Company does
not own or control, directly or indirectly, any corporation, association or
other entity.
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4.2 Corporate Power; Authorization. The Company has full legal right, power
and authority to enter into this Subscription Agreement and to perform the
transactions contemplated hereby and thereby. This Subscription Agreement has
been duly authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by each of the other parties hereto and
thereto, are valid and binding agreements on the part of the Company,
enforceable in accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles. The making, execution and performance of this Subscription
Agreement by the Company and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under, (i) any
bond, debenture, note or other evidence of indebtedness, or under any lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which the Company is a party or by which its
properties may be bound, (ii) the Articles of Incorporation or bylaws of the
Company or (iii) any law, order, rule, regulation, writ, injunction, judgment or
decree of any court, administrative agency, regulatory body, government or
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or its properties, except for any conflict, breach, violation or default
which is not reasonably likely to have a Material Adverse Effect.
4.3 Memorandum; Financial Statements. The Company has not distributed any
offering material in connection with the offering of the Shares other than the
Memorandum. The Company has filed in a timely manner all documents that the
Company was required to file with the Securities and Exchange Commission ("SEC")
under Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the twelve (12) months preceding the date
of this Subscription Agreement. As of their respective filing dates (or, if
amended, when amended), the documents filed by the Company with the SEC
referenced in the Memorandum complied with the requirements of the Exchange Act.
The Company satisfies the registrant requirements for the use of Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act"). The Memorandum
did not contain any untrue statement of a material fact or omit to state
material facts required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company included in
the documents filed by the Company with the SEC and referenced in the Memorandum
(the "Financial Statements") comply in all 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 ("GAAP") and
fairly present the financial position of the Company at the dates thereof and
the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring adjustments
and the absence of complete footnotes). Except as and to the extent reflected
in the Financial Statements, the Company did not have, as of the date of the
Financial Statements, any liabilities or obligations (other than obligations of
continued performance under contracts and other commitments and arrangements
entered into in the ordinary course of business) which GAAP would require the
Company to reflect in the Financial Statements. Except as otherwise disclosed
in the Memorandum, there have not been any changes in the assets, liabilities,
financial condition or operations of the Company from that
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reflected in the Financial Statements, except changes in the ordinary course of
business that have not had a Material Adverse Effect.
4.4 Properties. Except as set forth in the Memorandum, (i) the Company has
good title to all properties and assets described in the Memorandum as owned by
it, free and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, other than as would not have a Material Adverse Effect, (ii)
the agreements to which the Company is a party described in the Memorandum are
valid agreements, enforceable by the Company, except as the enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the Company's knowledge, the other
contracting party or parties thereto are not in material breach or material
default under any of such agreements, and (iii) the Company has valid and
enforceable leases for all properties described in the Memorandum as leased by
it, except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles. Except
as set forth in the Memorandum, the Company owns or leases all such properties
as are necessary to the Company's operations as now conducted.
4.5 Capitalization. All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable federal and
state securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities. The
Company has an authorized, issued and outstanding capitalization as set forth in
the Memorandum under the caption "Capitalization". The capital stock of the
Company conforms to the description thereof contained in the Memorandum. The
Shares have been duly authorized for issuance and sale to the Investors pursuant
to this Subscription Agreement, and, when issued and delivered by the Company
against payment therefor in accordance with the terms of this Subscription
Agreement, will be duly and validly issued and fully paid and nonassessable, and
will be sold free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest. Except as disclosed in the Memorandum, no
preemptive right, co-sale right, registration right, right of first refusal or
other similar right of shareholders exists with respect to any of the Shares or
the issuance and sale thereof other than those that have been satisfied or
expressly waived prior to the date hereof and those that will automatically
expire upon and will not apply to the consummation of the transactions
contemplated on or before the Closing. No further approval or authorization of
any shareholder or the Board of Directors of the Company is required for the
issuance and sale or transfer of the Shares. Except as disclosed in the
Memorandum and the Financial Statements, and the related notes thereto included
in the Memorandum, and subject to the applicable anti-dilution provisions of
securities described in the Memorandum, the Company has no outstanding options
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations.
4.6 Litigation. There is not pending or, to the Company's knowledge,
threatened, any action, suit, claim or proceeding against the Company or any of
its respective officers, properties, assets or rights before any court,
administrative agency, regulatory body, government
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or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its respective officers, properties, or otherwise which
(i) is reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect or is reasonably likely to materially and adversely affect the
Company's properties, assets or rights or (ii) is reasonably likely to prevent
consummation of the transactions contemplated hereby and is not so disclosed in
the Memorandum. Neither the Company nor any of its subsidiaries is a party or
subject to the provisions of any injunction, judgment, decree or order of any
court, regulatory body, administrative agency, government or governmental agency
or body domestic or foreign, that could reasonably be expected to have a
Material Adverse Effect. The Company and each of its subsidiaries has conducted
and is conducting its business in compliance with all applicable federal, state,
local and foreign statutes, laws, rules, regulations, ordinances, codes,
decisions, decrees, directives and orders, except where the failure to do so
would not reasonably be likely, singly or in the aggregate, to have a Material
Adverse Effect.
4.7 Listed Shares. The Common Shares are registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and are approved for quotation on The Nasdaq SmallCap Market (the "NSM"). The
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Shares under the Exchange Act or
delisting the Common Shares from the NSM.
4.8 Intellectual Property. The Company owns or possesses rights to use all
patents, patent rights, inventions, trademarks, service marks, trade names and
copyrights and possesses all of the trade secrets and know-how which are
material and necessary to conduct its business as now conducted and as described
in the Memorandum. Except as disclosed in the Memorandum, the Company has not
received any written notice of, nor has it any actual knowledge of, any
infringement of or conflict with asserted rights of the Company by others with
respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights that are reasonably likely
to have a Material Adverse Effect that would prevent the Company from carrying
out its business substantially as described in the Memorandum. Except as
disclosed in the Memorandum, the Company has not received any written notice of,
nor has it any knowledge of, any infringement of or conflict with asserted
rights of others with respect to any patent, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names or copyrights which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, is reasonably likely to have a Material Adverse Effect that would
prevent the Company from carrying out its business substantially as described in
the Memorandum.
4.9 No Change. Subsequent to the respective dates as of which information
is given in the Memorandum, there has not been (i) any material adverse change
in the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company (not including reductions in the cash position
of the Company in the ordinary course consistent with past practices since the
date of the Memorandum), (ii) any transaction that is material to the Company,
(iii) any obligation, direct or contingent, incurred by the Company, except
obligations incurred in the ordinary course of business, (iv) any change in the
capital stock or outstanding indebtedness of the Company, except the incurrence
of trade debt and obligations incurred in the ordinary course consistent with
past practices, (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company, (vi) any default in the payment of
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principal of or interest on any outstanding debt obligations, or (vii) any loss
or damage (whether or not insured) to the property of the Company which has been
sustained or will have been sustained which has a Material Adverse Effect.
4.10 No Defaults. The Company is not (a) in violation of its Articles of
Incorporation or bylaws or (b) in default (upon notice or lapse of time or both)
in the performance or observance of any obligation, agreement, covenant or
condition contained in any bond, debenture, note or other evidence of
indebtedness, or in any lease, contract, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument to which it is a
party or by which its properties may be bound, or (c) in violation of any law,
order, rule, regulation, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or its properties except in the case of (b) or (c)
for any default or violation not reasonably likely to have a Material Adverse
Effect.
4.11 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
this Subscription Agreement ("Consents") except for (a) such Consents which are
not material, (b) compliance with the securities and Blue Sky laws in the states
and other jurisdictions in which Shares are offered and/or sold, which
compliance will be effected in accordance with such laws and (c) Consents
required by the NSM and the SEC. The Company has not been advised, and has no
reason to believe, that either it or any of its subsidiaries is not conducting
business in compliance in all material respects with all applicable laws, rules
and regulations of the jurisdictions in which it is conducting business,
including but not limited to, all applicable federal, state and local
environmental laws and regulations, except for any failure to comply which is
not reasonably likely to have a Material Adverse Effect.
4.12 Labor; Employees.
(a) No labor disturbance by the employees of the Company exists or,
to the Company's knowledge, is imminent. The Company is not aware of any
existing or imminent labor disturbance by the employees of any of its principal
suppliers, subcontractors, authorized dealers or international distributors that
is reasonably likely to result in a Material Adverse Effect. No collective
bargaining agreement exists with any of the Company's employees and, to the
Company's knowledge, no such agreement is imminent.
(b) If any employee of the Company has entered into any non-
competition, non-disclosure, confidentiality or other similar agreement with any
party other than the Company of which the Company is aware, to the Company's
knowledge, such employee is neither in violation thereof nor is expected to be
in violation thereof as a result of the business conducted or expected to be
conducted by the Company as described in the Memorandum or such person's
performance of his obligations to the Company. To the Company's knowledge, no
consultant or scientific advisor of the Company is in violation of any
noncompetition, non-disclosure, confidentiality or similar agreement between
such consultant or scientific advisor and any party other than the Company. To
the Company's knowledge, every consultant and scientific advisor
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(collectively, "Consultants") engaged by or on behalf of the Company to render
services for the Company has entered into an agreement with the Company
providing for terms and conditions of non-disclosure, non-competition and
confidentiality in connection with such services ("Consulting Agreements").
Assuming due authorization, execution and delivery of the Consulting Agreements,
the Consulting Agreements are legal, valid, binding and enforceable instruments
of the Consultants.
4.13 Taxes. The Company has timely filed all necessary federal, state and
foreign income and franchise tax returns and have paid all taxes shown thereon
as due, and there is no tax deficiency that has been or, to the Company's
knowledge, that might be asserted against the Company that is reasonably likely
to have a Material Adverse Effect. All tax liabilities are adequately provided
for on the books of the Company.
4.14 Insurance. The Company maintains insurance with insurers of
recognized financial responsibility of the types and in the amounts generally
deemed prudent for its business and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but not
limited to, insurance covering real and personal property owned or leased by the
Company or its subsidiaries against theft, damage, destruction, acts of
vandalism, products liability, errors and omissions, and all other risks
customarily insured against, all of which insurance is in full force and effect.
The Company has not been refused any insurance coverage sought or applied for;
and the Company does not have any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
4.15 Offering. Subject in part to the truth and accuracy of the
representations and warranties of each Investor set forth in Section 5 of this
Subscription Agreement, the offer, sale and issuance of the Shares as
contemplated by the Subscription Agreement are exempt from the registration
requirements of any applicable state and federal securities laws, and neither
the Company nor any authorized agent acting on its behalf shall take any action
hereafter that would cause the loss of such exemption.
4.16 Investment Company Act. The Company has been advised concerning the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and is not, and intends in the future to conduct its and
its subsidiaries' affairs in such a manner as to ensure that it is not and will
not become, an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
4.17 No Illegal Contributions. The Company has not at any time during the
last five (5) years (i) made any unlawful contribution to any candidate for
foreign office or failed to disclose fully any contribution in violation of law,
or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
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4.18 No Manipulation. The Company has not taken and the Company will not
take, directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Shares to facilitate the sale or resale of the Shares.
4.19 Transactions with Affiliates. There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of its subsidiaries or
any shareholder who owns beneficially more than five percent (5%) of the Common
Shares of the Company or any of the members of the families of any of them,
except as disclosed in the Memorandum.
4.20 Environmental Matters. (i) The Company is in compliance with all
rules, laws and regulations relating to the use, treatment, storage and disposal
of toxic substances and protection of health or the environment ("Environmental
Laws") which are applicable to its business, except where the failure to comply
would not reasonably be likely to have a Material Adverse Effect, (ii) the
Company has not received any written notice from any governmental authority or
third party of an asserted claim under Environmental Laws, which claim would be
required to be disclosed in its filings with SEC under the Exchange Act, (iii)
to the Company's knowledge, the Company will not be required to make future
material capital expenditures to comply with Environmental Laws and (iv) no
property which is, or has been, owned, leased or occupied by the Company has, to
the Company's knowledge, been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as amended, or
otherwise designated as a contaminated site under applicable state or local law.
5. Representations, Warranties And Covenants Of The Investors.
5.1 Investment Representations. Each Investor, severally and not jointly,
represents and warrants to and covenants with the Company that:
(a) Investor is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares presenting an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information Investor deems
relevant (including the Memorandum and the documents filed by the Company with
the SEC) in making an informed decision to purchase the Shares.
(b) Investor is purchasing the Shares in the ordinary course of its
business for its own account for investment only and with no present intention
of distributing the Shares or any arrangement or understanding with any other
persons regarding the distribution of the Shares.
(c) Investor shall 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 securities purchased hereunder
except in compliance with the Securities Act, applicable Blue Sky laws, and the
rules and regulations promulgated thereunder.
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(d) Investor has completed or caused to be completed the information
requested on the Investor's counterpart execution page and the Investors
Questionnaire, and the answers thereto are true and correct as of the date
hereof and will be true and correct as of the effective date of the Registration
Statement (provided that Investor shall be entitled to update such information
by providing notice thereof to the Company prior to the effective date of such
Registration Statement).
(e) Investor has, in connection with its decision to purchase the
Shares, relied with respect to the Company and its affairs solely upon the
Memorandum and the representations and warranties of the Company contained
herein.
(f) Investor is an "accredited investor" within the meaning of Rule
501 of Regulation D promulgated under the Securities Act.
(g) Investor has full right, power, authority and capacity to enter
into this Subscription Agreement and to perform the transactions contemplated
hereby and thereby. This Subscription Agreement has been duly authorized,
executed and delivered by the Investor. Assuming due authorization, execution
and delivery by each of the other parties hereto and thereto, this Subscription
Agreement is a valid and binding obligation of Investor, enforceable in
accordance with their terms.
5.2 Ability to Bear Risk. Investor is able to bear the economic risk of
holding the Shares for an indefinite period, including the loss of Investor's
entire investment. The Shares were not offered or sold to Investor by any form
of general solicitation or advertising.
5.3 Independent Advice. Investor understands that nothing in the
Memorandum, this Subscription Agreement or any other materials presented to
Investor in connection with the purchase and sale of the Shares constitutes
legal, tax or investment advice and that no independent legal counsel retained
by the Company has reviewed these documents and materials on Investor's behalf.
Investor 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 Shares.
5.4 No Transferability. Investor understands that: (a) the 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 this
Subscription Agreement; (b) the Company shall provide stop transfer instructions
to its transfer agent with respect to the Shares in order to enforce the
restrictions contained in this Section 5.4; and (c) each certificate
representing Shares shall be in the name of Investor and shall bear
substantially the following legends (in addition to any legends required under
applicable securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY JURISDICTION, AND
MAY ONLY BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF BY AN
INVESTOR IF SUBSEQUENTLY REGISTERED UNDER THE
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SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS, UNLESS EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION
REQUIREMENTS ARE AVAILABLE."
The legend contained in this Section 5.4 may be removed from a stock certificate
immediately upon receipt by the Company's transfer agent of a certificate
substantially in the form of Appendix II attached hereto and such other
documentation as the Company's transfer agent may routinely require, including,
but not limited to, an opinion of counsel. Notwithstanding the foregoing, such
Shares must be held in certificated form until such Shares have been sold in
accordance with the provisions of Appendix II attached hereto.
6. Conditions To Company's Obligations At The Closing.
The Company's obligations to complete the sale and issuance of the Shares
and to deliver Shares to each Investor, individually, as set forth in the
Schedule of Investors shall be subject to the following conditions (to the
extent not waived by the Company):
6.1 Escrow Agreement. The Escrow Agreement shall have been executed and
delivered by all of the parties thereto.
6.2 Representations and Warranties Correct. The representations and
warranties made by such Investor in Section 5 hereof shall be true and correct
when made, and shall be true and correct on the Closing.
6.3 Delivery of Purchase Price. The purchase price for the Shares being
purchased shall have been delivered by all of the Investors.
7. Conditions To Investors' Obligations At The Closing.
Each Investor's obligation to accept delivery of the Shares and to pay for
the Shares shall be subject to the following conditions (to the extent not
waived by such Investor):
7.1 Escrow Agreement. The Escrow Agreement shall have been executed and
delivered by all of the parties thereto.
7.2 Representations and Warranties Correct. The representations and
warranties made by the Company in Section 4 shall be true and correct when made
and as of the Closing and each Investor shall have received a certificate signed
by the chief executive officer and chief financial officer of the Company, or
such other officers of the Company as agreed upon by the parties hereto, that
each of such representations and warranties, as appropriate, is true and correct
in all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made or given on and as of the
Closing (except for any representations and warranties given as of a specified
date), and that such party has performed and complied in all material respects
with all of its obligations under this Subscription Agreement which are to be
performed or complied with on or prior to the Closing.
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7.3 Legal Opinion. Investors shall have received from O'Melveny & Xxxxx
LLP, counsel to the Company, an opinion letter addressed to the Investors, dated
as of the date of Closing, in a form acceptable to the Placement Agent and its
counsel, subject to customary assumptions and qualifications.
8. Registration Rights.
8.1 Registration Rights. The Company agrees to file a Registration Statement
with the SEC for the resale of the Shares as soon as reasonably practicable
following the Closing, but in no event more than ninety (90) days after the
Closing. Subject to the provisions of this Subscription Agreement, the Company
shall use its reasonable best efforts to effect such Registration Statement with
the SEC as promptly as shall be practicable. For the purposes of this
Subscription Agreement: (A) "Registrable Shares" means the Shares issued and
acquired pursuant to this Subscription Agreement (and including any shares
issued in connection with any split or dividend in respect of any such shares);
provided, however, that any such Share will cease to be a Registrable Share when
(1) a Registration Statement covering a Registrable Share has been declared
effective by the SEC and such Share has been disposed of by the Investors
pursuant to such effective Registration Statement, (2) the Registrable Share is
transferred to another person, (3) such share (after initial issuance) is held
by the Company or otherwise ceases to be outstanding, or (4) such share may be
traded without restriction pursuant to paragraph (k) of Rule 144, if applicable;
and (B) "Registration Statement" means any registration statement or comparable
document under the Securities Act through which a public sale or disposition of
the Registrable Shares may be registered, including the prospectus, amendments
and supplements to such registration statement, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
8.2 Suspension Of Effectiveness. The Company's obligations under Section
8.1 above shall not restrict its ability to suspend the effectiveness of, or
direct the Investors not to offer or sell securities under, any Registration
Statement, at any time, for such reasonable period of time which the Company
believes is necessary to prevent the premature disclosure of any events or
information having a material effect on the Company. In addition, the Company
shall not be required to keep any Registration Statement effective, or may,
without suspending such effectiveness, instruct the Investors not to sell such
securities, during any period during which the Company is instructed, directed,
ordered or otherwise requested by any governmental agency or self-regulatory
organization to stop or suspend such trading or sales.
8.3 Holdback Agreement. In the event of any filing of a prospectus
supplement or the commencement of an underwritten public distribution of the
Company's Common Shares under a Registration Statement, whether or not
Registrable Shares are included, the Investors agree not to effect any public
sale or distribution of the Shares (except as part of such underwritten public
distribution), including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, during a period designated by the Company in a written notice
duly given to the Investors, which period shall commence up to 14 days prior to
the effective date of any such filing of such prospectus supplement or the
commencement of such underwritten public distribution of such Common Shares
under a Registration Statement and shall continue for up to 134 consecutive
days.
11
8.4 Registration Procedures. Except as otherwise expressly provided
herein, in connection with any registration of Registrable Shares pursuant to
this Subscription Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with
respect to such Registrable Shares and use its reasonable best efforts to cause
such Registration Statement to become effective as soon as practicable
thereafter; and before filing a Registration Statement or prospectus or any
amendments or supplements thereto, furnish to the Investors copies of such
Registration Statement and such other documents as proposed to be filed
(including copies of any document to be incorporated by reference therein), and
thereafter furnish to the Investors such number of copies as may be reasonably
requested in writing by the Investors of such Registration Statement, each
amendment and supplement thereto (including copies of any document to be
incorporated by reference therein), including all exhibits thereto, the
prospectus included in such Registration Statement (including each preliminary
prospectus), and, promptly after the effectiveness of a Registration Statement,
the definitive final prospectus filed with the SEC;
(b) notify the Investors, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the occurrence
of any event as a result of which the prospectus included in such Registration
Statement (including any document to be incorporated by reference therein)
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading and, at the request of the Investors,
the Company shall prepare a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such Registrable Shares, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly make available to the Investors
any such supplement or amendment;
(c) notify the Investors and the managing underwriters, if any,
promptly, and (if requested by any such Person) confirm such advice in writing,
(i) when the Registration Statement, the prospectus or any prospectus supplement
or post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose and the Company shall promptly use its reasonable
best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued and (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of a Registration Statement or any of the
Registrable Shares for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose.
The Company may require the Investors to furnish to the Company such
information regarding themselves and the distribution of such Registrable Shares
as the Company may from time to time reasonably request in writing and such
other information as may be legally required in connection with such
registration. The Investors agree, by their acquisition of Registrable Shares
and their acceptance of the benefits provided to it hereunder, to furnish
promptly to the Company all information required to be disclosed in order to
make any previously furnished
12
information not materially misleading. All Investors proposing to distribute
their Registrable Shares through such underwriting shall (together with the
Company) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected by the Company for such underwriting and
shall provide to such underwriter or underwriters any opinions and certificates,
and any indemnification with respect to such Investor as reasonably required by
such underwriter or underwriters.
The Investors agree that upon receipt of any notice from the Company of the
happening of any event of the kind described herein requiring the cessation of
the distribution of a prospectus or the distribution of a supplemented or
amended prospectus, the Investors will forthwith discontinue disposition of
Registrable Shares pursuant to the Registration Statement covering such
Registrable Shares until the Investors' receipt of the copies of the
supplemented or amended prospectus contemplated by this Subscription Agreement,
or until it is advised in writing by the Company that the use of the prospectus
may be resumed, and, if so directed by the Company, the Investors will deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies then in the Investors' possession, of the prospectus covering such
Registrable Shares current at the time of receipt of such notice.
8.5 Registration Expenses. All expenses incident to the Company's
performance of or compliance with the registration of shares pursuant to this
Subscription Agreement, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel of the Company and
counsel for the underwriters in connection with "blue sky" qualifications of the
Registrable Shares), fees and expenses associated with filings required to be
made with the National Association of Securities Dealers, Inc., and with listing
on any national securities exchange or exchanges in which listing may be sought,
printing expenses, messenger and delivery expenses, fees and expenses of counsel
for the Company and its independent certified public accountants, securities
acts liability insurance (if the Company elects to obtain such insurance), the
fees and expenses of any special experts retained by the Company in connection
with such registration, and fees and expenses of other persons retained by the
Company (all such expenses being herein called "Registration Expenses") will be
borne by the Company; provided that in no event shall Registration Expenses
payable by the Company include any (i) underwriting discounts, commissions, or
fees attributable to the sale of Registrable Shares, (ii) fees and expenses of
any counsel, accountants, or other persons retained or employed by the Investors
or underwriters, or (iii) transfer taxes, if any.
9. ARBITRATION.
9.1 Scope. Resolution of any and all disputes arising from or in connection
with the Agreements, whether based on contract, tort, common law, equity,
statute, regulation, order or otherwise ("Disputes"), shall be exclusively
governed by and settled in accordance with the provisions of this Section 9;
provided, that the foregoing shall not preclude equitable or other judicial
relief to enforce the provisions hereof or to preserve the status quo pending
resolution of Disputes hereunder.
9.2 Binding Arbitration. The parties hereby agree to submit all Disputes to
arbitration for final and binding resolution. Either party may initiate such
arbitration by delivery
13
of a demand therefor (the "Arbitration Demand") to the other party. The
arbitration shall be conducted in Los Angeles, California by a sole arbitrator
selected by agreement of the parties not later than 10 days after delivery of
the Arbitration Demand, or, failing such agreement, appointed pursuant to the
Commercial Arbitration Rules of the American Arbitration Association, as amended
from time to time (the "AAA Rules"). If the arbitrator becomes unable to serve,
his successor(s) shall be similarly selected or appointed.
9.3 Procedure. The arbitration shall be conducted pursuant to the Federal
Arbitration Act and such procedures as the parties may agree or, in the absence
of or failing such agreement, pursuant to the AAA Rules. Notwithstanding the
foregoing, (a) each party shall have the right to conduct limited discovery of
information relevant to the Dispute; (b) each party shall provide to the other,
reasonably in advance of any hearing, copies of all documents that a party
intends to present in such hearing; (c) all hearings shall be conducted on an
expedited schedule; and (d) all proceedings shall be confidential, except that
either party may at its expense make a stenographic record thereof.
9.4 Timing. The arbitrator shall use best efforts to complete all hearings
not later than 90 days after his or her selection or appointment, and shall use
best efforts to make a final award not later than 30 days thereafter. The
arbitrator shall apportion all costs and expenses of the arbitration, including
the arbitrator's fees and expenses, and fees and expenses of experts
("Arbitration Costs") between the prevailing and non-prevailing party as the
arbitrator shall deem fair and reasonable. In circumstances where a Dispute has
been asserted or defended against on grounds that the arbitrator deems
manifestly unreasonable, the arbitrator may assess all Arbitration Costs against
the non-prevailing party and may include in the award the prevailing party's
attorney's fees and expenses in connection with any and all proceedings under
this Section 9. Notwithstanding the foregoing, in no event may the arbitrator
award multiple or punitive damages.
10. Miscellaneous.
10.1 Waivers and Amendments. Neither this Subscription Agreement nor any
provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the written consent of the Company and holders of at least a
majority of the Shares, or, in the case of non-material or ministerial
amendments, upon the written consent of the Company and the Placement Agent.
10.2 Headings. The headings of the various sections of this Subscription
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Subscription Agreement.
10.3 Broker's Fee. The Company and each Investor (severally and not
jointly) hereby represent that, except for amounts to be paid to the Placement
Agent by the Company, there are no brokers or finders entitled to compensation
in connection with the sale of the Shares, and shall indemnify each other for
any such fees for which they are responsible.
10.4 Severability. In case any provision contained in this Subscription
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability
14
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
10.5 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (c) upon receipt when sent by first-class registered or
certified mail, return receipt requested, postage prepaid, or (d) upon receipt
after deposit with a nationally recognized overnight express courier, postage
prepaid, specifying next day delivery with written verification of receipt. All
communications shall be sent to the party to be notified at the address as set
forth below or at such other address as such party may designate by ten (10)
days advance written notice to the Company. All communications shall be
addressed as follows:
(a) if to the Company, to:
Amerigon Incorporated
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy so mailed to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
(b) if to the Investors, at the address as set forth on the
Counterpart Execution Page of this Subscription Agreement.
10.6 Governing Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of California as applied to
contracts entered into and performed entirely in California by California
residents, without regard to conflicts of law principles.
10.7 Counterparts. This Subscription Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
10.8 Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Subscription
Agreement, all covenants, agreements, representations and warranties made by the
Company and each Investor herein and in the
15
certificates for the securities delivered pursuant hereto shall survive the
execution of this Subscription Agreement, the delivery to the Investors of the
Shares and the payment therefor until 90 days after the Closing.
10.9 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto. Neither the terms "successors" nor "assigns" as used herein
shall include any entity or person who purchases Shares from any Investor after
the Closing and is not an affiliate of an Investor.
10.10 Entire Agreement. This Subscription Agreement and other documents
delivered pursuant hereto, including the exhibits, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
10.11 Payment of Fees and Expenses. Each of the Company and the Investors
shall bear its own expenses and legal fees incurred on its behalf with respect
to this Subscription Agreement and the transactions contemplated hereby (the
"Offering"); provided, however, that the Company shall bear the costs in
connection with the Registration Statement as described in Section 8.5 and shall
reimburse the Placement Agent for certain fees and expenses incurred by the
Placement Agent in connection with the Offering, as set forth in the engagement
letter with the Placement Agent. Each Investor acknowledges that the Placement
Agent will receive a commission in the amount described in the Memorandum and
hereby authorize the Placement Agent to deduct the amount of such commission
from the gross proceeds payable to the Company from the sale of the Shares
hereunder. If any action at law or in equity is necessary to enforce or
interpret the terms of this Subscription Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
10.12 Confidentiality. Each Investor acknowledges and agrees that any
information or data it has acquired from the Company, not otherwise properly in
the public domain, was received in confidence. Except to the extent authorized
by the Company and required by any federal or state law, rule or regulation or
any decision or order of any court or regulatory authority, Investor agrees that
it will refrain from disclosing any such information to any person other than to
any agent, attorneys, accountants, employees, officers and directors of Investor
who need to know such information in connection with Investors' purchase of the
Shares, and who agree to be bound by the confidentiality provisions of this
Subscription Agreement. In the event that Investor or its agents are required
by federal or state or other law, rule or regulation or any decision or order of
any court or regulatory authority to release such information, it shall give the
Company sufficient prior notice so that the Company may seek a stay or other
release or waiver from disclosing such information. Each Investor agrees not to
use to the detriment of the Company or for the benefit of any other person or
persons, or misuse in any way, any confidential information of the Company.
10.13 Knowledge. The phrases "knowledge," "to the Company's knowledge,"
"to our knowledge," "of which the Company is aware" and similar language as used
herein shall mean the actual knowledge and current awareness, or knowledge which
a reasonable person would have acquired following a reasonable investigation, of
Xxxxxxx Xxxxxxxx and Xx. Xxx X. Xxxx;
16
provided, however, that the term "actual knowledge of the Company" shall mean
the actual knowledge and current awareness of Xxxxxxx Xxxxxxxx and Xx. Xxx X.
Xxxx.
If this Subscription Agreement is satisfactory to you, please so indicate
by signing the acceptance on a counterpart execution page to this Subscription
Agreement and return such counterpart to the Company whereupon this Subscription
Agreement will become binding between us in accordance with its terms.
Amerigon Incorporated,
a California corporation
By:
------------------------------
Name:
Title:
17
Common Shares Subscription Agreement
Counterpart Execution Page
By signing below, the undersigned agrees to the terms of the Amerigon
Incorporated Common Shares Subscription Agreement and to purchase the number of
Shares set forth below.
Number of Shares being purchased:
--------------------------------------
INVESTOR:
--------------------------------------
By:
----------------------------------
Name:
Title:
Address:
Facsimile:
Please complete the following:
1. The exact name that your Shares are
to be registered in (this is the ---------------------------------
name that will appear on your
Shares certificate(s)). You may use
a nominee name if appropriate:
2. The relationship between the purchaser
of the Shares and the Registered ----------------------------------
Holder listed in response to
item 1 above:
3. The mailing address and facsimile
number of the Registered Holder ----------------------------------
listed in response to item 1 above
(if different from above): Facsimile:
---------------------
4. (For United States Investors:) The
Social Security Number or Tax ----------------------------------
Identification Number of the Registered
Holder listed in the response to
item 1 above:
Common Shares Subscription Agreement
Signature Page
APPENDIX II
AMERIGON INCORPORATED
INVESTORS'S CERTIFICATE OF RESALE OF THE SHARES
The undersigned, an officer of, or other person duly authorized by
--------------------------------------------------- hereby certifies that he/
[fill in official name of individual or institution]
she [said institution] is the purchaser of the Shares evidenced by the attached
stock certificate(s) and as such, sold such Shares on [date]
----
in accordance with registration statement number ---------------------- and the
[fill in the number of or otherwise identify registration statement]
requirement of delivering a current prospectus and current annual, quarterly and
reports (Forms 10-K, 10-Q, and 8-K) by the Company has been complied with in
connection with such sale.
Print or Type:
Name of Investor (Individual or Institution):
---------------------------------
Name of Individual representing Investor
(if an Institution):
---------------------------------
Title of Individual representing Investor
(if an Institution):
---------------------------------
Signature by:
Individual Investor or Individual
representing Investor:
---------------------------------
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