Exhibit 10.19
Form of Stock Purchase Agreement dated March 31, 2004
THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS ("BLUE
SKY LAWS"), AND MAY NOT BE OFFERED OR SOLD WITHOUT
REGISTRATION UNDER THE SECURITIES ACT, AND AS REQUIRED BY BLUE
SKY LAWS IN EFFECT AS TO SUCH TRANSFER, UNLESS AN EXEMPTION
FROM SUCH REGISTRATION UNDER STATE AND FEDERAL LAW IS
AVAILABLE.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated effective as
of March 30, 2004, by and between Enova Systems, Inc., a California corporation
(the "Corporation") and the investor whose name is set forth on the signature
page attached hereto (the "Investor").
R E C I T A L S
A. The Investor desires to purchase from the Corporation, and the
Corporation desires to sell to the Investor, Common Stock on the terms
and conditions hereinafter set forth.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained in this Agreement, the parties hereby
agree as follows:
1. Issuance of Securities, Payment and Delivery.
a. Sale of Securities. Subject to the terms and conditions of this
Agreement, the Investor agrees to purchase on, or before, the date set
forth on Schedule 1 to the signature page attached hereto, or on such later
date as is agreed upon in writing by the Investor and the Corporation (the
"Closing"), and the Company agrees to sell and issue to the Investor that
number of shares of the Corporation's Common Stock set forth on Schedule 1
(the "Shares") at $0.12 (twelve cents) per share for an aggregate purchase
price as set forth on Schedule 1 (the "Purchase Price").
b. Payment and Delivery. The Investor shall purchase the Shares by
making payment to Enova Systems, Inc. in cash, by cashiers check or wire
transfer of funds, in immediately available U.S. Dollars funds.
2. Deliveries at Closing. At the Closing or thereafter as indicated:
a. The Corporation and the Investor will at the Closing deliver
executed counterparts of this Stock Purchase Agreement and the Registration
Rights Agreement (as defined in Section 6 below);
b. The Investor will provide the Corporation at the Closing with
payment in immediately available funds of the aggregate amount of the
Purchase Price;
c. The Corporation will deliver within sixty (60) business days
after the Closing a share certificate evidencing the Shares in the name of
the Investor;
d. Upon the written request of the Investor, the Corporation shall
deliver to the Investor written evidence reasonably satisfactory to the
Investor that the condition set forth in Section 3 below has been
satisfied.
Exhibits - 2
3. Condition to Closing. It is expressly agreed by the parties that the
closing of the transactions contemplated by this Agreement is
conditional upon the Corporation entering into one or more definitive
written agreements with one or more third parties or affiliates of the
Investor or the Company to purchase the Corporation's Common Stock on,
or before, the Closing, the purchase price(s) of which when combined
with the Purchase Price of the Shares purchased by the Investor
hereunder, will equal at least U.S.$500,000 in the aggregate. In the
event that the foregoing condition is not satisfied on, or before, the
date of the Closing, the Closing shall not occur and this Agreement
shall automatically terminate without obligation or liability of either
party.
4. Corporation's Representations and Warranties. The Corporation hereby
represents and warrants to the Investor that as of the Closing:
a. Corporate Organization and Standing. The Corporation is a
corporation duly organized, validly existing and in good standing under the
laws of the State of California. The Corporation has the requisite
corporate power to carry on its business as presently conducted, and as
proposed or contemplated to be conducted in the future, and to enter into
and carry out the provisions of this Agreement and the transactions
contemplated under this Agreement.
b. Authorization. All corporate action on the part of the
Corporation, its directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement by the
Corporation and the performance of all of the Corporation's obligations
hereunder has been taken. This Agreement, when executed and delivered by
the Corporation, shall constitute a valid and binding obligation of the
Corporation, enforceable in accordance with its terms, except as may be
limited by principles of public policy, and subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies. The Shares, when issued in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
non-assessable
c. No Breach. The issue and sale of the Shares by the Corporation
does not and will not conflict with and does not and will not result in a
breach of any of the terms of the Corporation's incorporating documents or
any agreement or instrument to which the Corporation is a party. The
consummation of the transactions or performance of the obligations
contemplated by this Agreement will not result in a breach of any term of,
or constitute a default under, any statute, indenture, mortgage, or other
agreement or instrument to which the Corporation or any of its subsidiaries
is or are a party or by which any of them is or are bound.
d. Pending or Threatened Claims. Neither the Corporation nor any of
its subsidiaries is a party to any action, suit or proceeding which could
materially affect its business or financial condition, and no such actions,
suits or proceedings are contemplated or have been threatened.
5. Investor Representations and Warranties. The Investor represents and
warrants to the Corporation that:
a. Account. The Investor is acquiring the Shares for investment for
its own account, and not with a view to, or for resale in connection with,
any distribution thereof, and it has no present intention of selling or
distributing any of the Shares (but by making this representation the
Investor is not agreeing to hold the Shares for any minimum period of
time). The Investor understands that the Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature
of the investment as expressed herein.
b. Access to Data. The Investor has had an opportunity to discuss
the Corporation's business, management and financial affairs with its
management and to obtain any additional information which the Investor has
deemed necessary or appropriate for deciding whether or not to purchase the
Shares, and has had an opportunity to receive, review and understand the
disclosures and information regarding the Corporation's financial
statements, capitalization and other business information as set forth in
Corporation's filings with the Securities and Exchange Commission (the "SEC
Filings") which are all incorporated herein by reference, together with all
exhibits referenced therein. The Investor acknowledges that no
representations or warranties, oral or written, have been made by the
Corporation or any agent thereof except as set forth in this Agreement.
Exhibits - 3
c. No Fairness Determination. The Investor is aware that no federal,
state or other agency has made any finding or determination as to the
fairness of the investment, nor made any recommendation or endorsement of
the Shares.
d. Knowledge And Experience. The Investor has such knowledge and
experience in financial and business matters, including investments in
other start-up companies, that it is capable of evaluating the merits and
risks of the investment in the Shares, and it is able to bear the economic
risk of such investment. Further, the individual executing this Agreement
has such knowledge and experience in financial and business matters that
he/it is capable of utilizing the information made available to him/it in
connection with the offering of the Shares, of evaluating the merits and
risks of an investment in the Shares and of making an informed investment
decision with respect to the Shares, including assessment of the Risk
Factors set forth in the SEC Filings which are incorporated herein by
reference.
e. Limited Public Market. The Investor is aware that there is
currently a very limited "over-the-counter" public market for the
Corporation's registered securities and that the Corporation became a
"reporting issuer" under the Securities Exchange Act of 1934, as amended,
on January 27, 1995. There is no guarantee that a more established public
market will develop at any time in the future. The Investor understands
that the Shares are all unregistered and may not presently be sold in even
this limited public market. The Investor understands that the Shares cannot
be readily sold or liquidated in case of an emergency or other financial
need. The Investor has sufficient liquid assets available so that the
purchase and holding of the Shares will not cause it undue financial
difficulties
f. Authority. If Investor is a corporation, partnership, trust or
estate: (i) the individual executing and delivering this Agreement on
behalf of the Investor has been duly authorized and is duly qualified to
execute and deliver this Agreement on behalf of Investor in connection with
the purchase of the Shares and (ii) the signature of such individual is
binding upon Investor.
g. Investment Experience. The Investor is an "accredited investor"
as that term is defined in Regulation D promulgated by the Securities and
Exchange Commission. The term "Accredited Investor" under Regulation D
refers to:
i. A person or entity who is a director or executive officer
of the Corporation;
ii. Any bank as defined in Section 3(a)(2) of the Securities
Act, or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its individual
or fiduciary capacity; any broker or dealer registered pursuant to Section
15 of the Exchange Act; insurance Corporation as defined in Section 2(13)
of the Securities Act; investment Corporation registered under the
Investment Corporation Act of 1940; or a business development Corporation
as defined in Section 2(a)(48) of that Act; Small Business Investment
Corporation licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; any
plan established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political subdivisions for
the benefit of its employees, if such plan has total assets in excess of
$5,000,000; employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance Corporation, or
registered investment adviser, or if the employee benefit plan has total
assets in excess of $5,000,000 or, if a self-directed plan, with investment
decision made solely by persons that are accredited investors;
iii. Any private business development Corporation as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
iv. Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
Securities offered, with total assets in excess of $5,000,000;
v. Any natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase exceeds
$1,000,000;
Exhibits - 4
vi. Any natural person who had an individual income in excess
of $200,000 during each of the previous two years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year;
vii. Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities offered, whose
purchase is directed by a person who has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits
and risks of the prospective investment; or
viii. Any entity in which all of the equity owners are accredited
investors.
ix. As used in this Section 4(g), the term "net worth" means
the excess of total assets over total liabilities. For the purpose of
determining a person's net worth, the principal residence owned by an
individual should be valued at fair market value, including the cost of
improvements, net of current encumbrances. As used in this Section 4(g),
"income" means actual economic income, which may differ from adjusted gross
income for income tax purposes. Accordingly, the undersigned should
consider whether it should add any or all of the following items to its
adjusted gross income for income tax purposes in order to reflect more
accurately its actual economic income: Any amounts attributable to
tax-exempt income received, losses claimed as a limited partner in any
limited partnership, deductions claimed for depletion, contributions to an
XXX or Xxxxx retirement plan, and alimony payments.
6. Lock-Up/Registration Rights. Except for the registration rights granted
pursuant to the Registration Rights Agreement (as defined in this
Section 6), the Investor acknowledges and agrees that the Shares may be
subject to certain restrictions on transfer following a registered
public offering of the Corporation's securities as provided in this
Section 6. In connection with any underwritten registration of the
Corporation's securities, the Investor agrees, upon the request of the
underwriters managing such offering of the Corporation's securities, if
applicable, not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any Shares (other than
those included in the registration) without the prior written consent
of the Corporation and, if applicable, such underwriters, as the case
may be, for such period of time, not to exceed thirty (30) days before
and one hundred eighty (180) days, after the effective date of such
registration as the Corporation or the underwriters may specify;
provided, however, that all executive officers, directors and
shareholders holding more than 1% of the fully diluted capital stock of
the Corporation are subject to the same restrictions as the Investor.
The Corporation and underwriters may request such additional written
agreements in furtherance of such standoff in the form reasonably
satisfactory to the underwriter and the Investor. The Corporation may
also impose stop-transfer instructions with respect to the shares
subject to the foregoing restrictions until the end of said one hundred
eighty (180) day or shorter period. Contemporaneous with the execution
of this Agreement, the Corporation and the Investor shall enter into a
written resale registration rights agreement in form and substance
substantially as attached hereto as Exhibit A (the "Registration Rights
Agreement"), which shall provide for the registration by the
Corporation of the Shares with the Securities and Exchange Commission
and such states as may be required by the Investor according to the
terms of such agreement. The obligations of the Corporation pursuant to
this Section hereof shall cease and terminate upon the earlier to occur
of (i) such time as all of the Shares have been resold or (ii) such
time as all of the Shares may be sold during any 90 day period pursuant
to Rule 144, including Rule 144(k) or (iii) upon the second anniversary
date of the effective date of this Agreement.
7. Restrictive Legends. Each certificate evidencing the Shares which the
Investor may acquire hereunder and any other securities issued upon any
stock split, stock dividend, recapitalization, merger, consolidation or
similar event (unless no longer required in the opinion of the counsel
for the Corporation) shall be imprinted with one or more legends
substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS, AND MAY BE OFFERED AND SOLD
ONLY IF SO REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THE HOLDER OF THESE SHARES MAY BE REQUIRED TO
Exhibits - 5
DELIVER TO THE COMPANY, IF THE COMPANY SO REQUESTS, AN OPINION
OF COUNSEL (REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO
THE COMPANY) TO THE EFFECT THAT AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (OR QUALIFICATION UNDER STATE
SECURITIES LAWS) IS AVAILABLE WITH RESPECT TO ANY TRANSFER OF
THESE SHARES THAT HAS NOT BEEN SO REGISTERED (OR QUALIFIED).
THE COMPANY IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF
STOCK. A COPY OF THE PREFERENCES, POWERS, QUALIFICATIONS AND
RIGHTS OF EACH CLASS AND SERIES WILL BE PROVIDED TO EACH
STOCKHOLDER WITHOUT CHARGE, UPON WRITTEN REQUEST.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER, INCLUDING A "LOCK-UP"
PROVISION RESTRICTING THE TRANSFER OF THE SECURITIES FOR A
PERIOD OF TIME NOT TO EXCEED ONE HUNDRED EIGHTY (180) DAYS
FROM THE EFFECTIVE DATE OF THE CORPORATION'S UNDERWRITTEN
PUBLIC OFFERING.
The Corporation shall be entitled to enter stop transfer notices on its
transfer books with respect to the Securities.
8. Confidential Information. The Investor agrees that any information not
currently set forth in the Company's SEC Filings may be treated by the
Corporation as confidential with respect to the Corporation or its
activities ("Confidential Information"). The Investor understands and
agrees that such Confidential Information may not be disclosed to any
third party or used by the Investor for purposes of trading in the
Corporation's publicly traded stock until such Confidential Information
is publicly disclosed by the Corporation.
9. Miscellaneous.
a. Notices. Any notice, request or other communication required or
permitted hereunder will be in writing and shall be deemed to have been
duly given if personally delivered or if telecopied or mailed by registered
or certified mail, postage prepaid, at the respective addresses of the
parties as set forth below. Any party hereto may by notice so given change
its address for future notices hereunder. Notice will be deemed to have
been given when personally delivered or when deposited in the mail or
telecopied in the manner set forth above and will be deemed to have been
received when delivered.
(a) If to the Investor: as set forth on Schedule 1
(b) If to the Company
Enova Systems, Inc.
00000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Exhibits - 6
with a copy to:
Xxxx Xxxxx LLP
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
b. Survival. The representations, warranties, covenants and
agreements made herein shall survive the closing of the transactions
contemplated hereby.
c. Successors and Assigns. Except as otherwise expressly provided
herein, 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.
d. Applicable Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall
be governed, construed and interpreted in accordance with the laws of the
State of California, without giving effect to principles of conflicts of
law.
e. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. This Agreement may be executed by
facsimile.
f. Title and Subtitles. The titles of the Sections and subsections
of this Agreement are for the convenience of reference only and are not to
be considered in construing this Agreement.
g. Attorney's Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to
which it may be entitled.
h. Waiver. The provisions of this Agreement may be waived, altered,
amended or repealed, in whole or in part, only upon the written consent of
the Corporation and the Investor. No waiver by any party hereto of any
breach of this Agreement by any other party shall operate or be construed
as a waiver of any other or subsequent breach. No waiver by any party
hereto of any breach of this Agreement by any other party hereto shall be
effective unless it is in writing and signed by the party claimed to have
waived such breach.
i. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith to achieve the closest comparable
terms as is possible. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and
(c) the balance of the Agreement shall be enforceable in accordance with
its terms.
j. Venue. Any action, arbitration, or proceeding arising directly or
indirectly from this Agreement or any other instrument or security
referenced herein shall be litigated or arbitrated, as appropriate, in the
County of Los Angeles, State of California.
k. Entire Agreement. This Agreement and the Exhibits, Schedules and
other documents referred to herein (including the Registration Rights
Agreement) constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or
oral agreements regarding the subject matter hereof existing between the
parties hereto are expressly canceled.
l. Finders Fees. The Investor acknowledges and agrees that a finders
fee not to exceed five percent (5%) of the Purchase Price may be paid to
Exhibits - 7
other parties, including an affiliate of the Company, in the form of Common
Stock of the Company valued at the closing price of the Company's Common
Stock on the date of Closing.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
Exhibits - 8
SIGNATURE PAGE TO
ENOVA MARCH 2004 STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first written.
INVESTOR Enova Systems, Inc.
By: ______________________________ By:____________________________________
Authorized Signature Xxxx X. Xxxxx, Chief Executive Officer
Name:______________________________
Title:_____________________________
Schedule 1
Closing Date:______________________
Number of Shares: _________________
Purchase Price: ___________________
Price per share: $0.12
-----------------------------------
___________________________________
___________________________________
(Investor Address)
Exhibits - 9
