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RESOUND CORPORATION
COMMON STOCK PURCHASE AGREEMENT
JUNE 14, 1996
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TABLE OF CONTENTS
Page
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1. SALE OF STOCK...................................................... 1
2. CLOSING............................................................ 1
3. REPRESENTATIONS AND WARRANTIES OF COMPANY.......................... 2
3.1 Existence; Good Standing; Compliance with Law.................. 2
3.2 Authority; No Conflict; Required Filings and Consents.......... 2
3.3 Confidential Offering Memorandum; SEC Documents................ 3
3.4 Undisclosed Liabilities........................................ 3
3.5 Complete Copies of Materials................................... 4
3.6 Capitalization................................................. 4
3.7 Litigation..................................................... 4
3.8 Patents and Trademarks......................................... 4
3.9 Purchaser Agreements........................................... 4
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER........................ 4
4.1 Company Affairs; Purchaser's Account; Accredited Investor...... 4
4.2 Unregistered Securities........................................ 5
4.3 Holding Period; Legends........................................ 5
4.4 Rule 144....................................................... 5
4.5 No Market...................................................... 5
4.6 Registration of Sale........................................... 5
5. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT THE CLOSING........... 6
5.1 Representations and Warranties, Performance of Obligations..... 6
5.2 Stock Certificates............................................. 6
5.3 Corporate Documents............................................ 6
5.4 Opinion of Counsel to the Company.............................. 6
5.5 Consents, Permits, and Waivers................................. 6
5.6 Purchase Permitted by Applicable Law........................... 6
5.7 Completion of 3M Acquisition................................... 6
5.8 Minimum Proceeds............................................... 6
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT THE CLOSING............. 6
6.1 Purchase Price................................................. 7
6.2 Representations and Warranties................................. 7
6.3 Consents, Permits and Waivers.................................. 7
6.4 Purchase Permitted by Applicable Law........................... 7
6.5 Minimum Proceeds............................................... 7
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TABLE OF CONTENTS
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7. LEGENDS............................................................ 7
8. REGISTRATION RIGHTS................................................ 7
8.1 Shelf Registration............................................ 7
8.2 Company Registration.......................................... 8
8.3 Form S-3 Registration......................................... 8
8.4 Underwriting Requirements..................................... 9
8.5 Delay of Registration......................................... 9
8.6 Suspension of Effectiveness................................... 9
8.7 Company Obligations........................................... 10
8.8 Securities Indemnification.................................... 11
8.9 Survival...................................................... 13
9. MISCELLANEOUS...................................................... 13
9.1 Governing Law................................................. 13
9.2 Entire Agreement; Enforcement of Rights....................... 13
9.3 Severability.................................................. 13
9.4 Construction.................................................. 13
9.5 Notices....................................................... 14
9.6 Survival of Representations and Warranties.................... 14
9.7 Counterparts.................................................. 14
9.8 Successors and Assigns........................................ 17
9.9 Headings...................................................... 17
9.10 Delays or Omissions........................................... 17
9.11 Legal Fees.................................................... 17
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COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is made as of
June 14, 1996 by and between ReSound Corporation, a California corporation (the
"Company"), and the prospective purchaser identified on the signature page
hereof ("Purchaser").
RECITALS
The Purchaser desires to purchase from the Company, and the Company
desires to sell to the Purchaser, shares of the Company's Common Stock, par
value $.01 per share, (the "Common Stock"), in the private offering (the
"Offering") contemplated by that certain Confidential Offering Memorandum dated
April 23, 1996 (such Memorandum, together with any amendments thereof or
supplements or addenda thereto, is hereinafter referred to as the "Memorandum").
This Agreement is one of several identical agreements each of even date herewith
related to the purchase and sale of Common Stock in the Offering. The Purchaser,
together with all other purchasers in the Offering, are referred to herein
collectively as the "Purchasers."
AGREEMENT
In consideration of the mutual promises contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. SALE OF STOCK. Subject to the terms and conditions hereof, on the
Closing Date (as defined below) the Company will issue and sell to Purchaser,
and Purchaser agrees to purchase from the Company, that number of shares of
Common Stock (the "Shares") as equals the aggregate investment amount committed
for the purchase of Common Stock hereunder, as set forth on the signature page
hereof (the "Payment"), divided by the average closing price per share of Common
Stock as quoted on the NASDAQ National Market for the five (5) trading day
period ended June 14, 1996, multiplied by 0.89.
2. CLOSING.
2.1 Within five (5) business days following the date of this
Agreement (the "Escrow Funding Date"), Purchaser will transmit the Payment by
wire transfer to a segregated interest-bearing escrow account (the "Escrow
Account") established by the Company with First Trust of California, N.A., as
escrow agent (the "Escrow Agent"), pursuant to the terms of an Escrow Agreement
by and among the Company, the Escrow Agent and the Purchasers (the "Escrow
Agreement"). The Purchaser understands that the Payment will be held in the
Escrow Account, and will be distributed to the Company at a Closing (defined in
Section 2.2 below) to be held immediately prior to the completion of the
acquisition (the "3M Acquisition") by the Company of certain assets from
Minnesota Mining and Manufacturing Company ("3M"). In the event that the Company
has not satisfied all conditions to closing set forth in Section 5 hereof within
twenty-one (21) calendar days following the Escrow Funding Date, then the
Payment will be
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returned to the Purchaser. In either case, any and all interest accrued on the
Payment in the Escrow Account will be returned to the Purchaser.
2.2 The closing of the purchase and sale of the Shares hereunder
(the "Closing") shall be held at the offices of Venture Law Group, 2800 Sand
Hill Road, Menlo Park, California as contemplated in Section 2.1 above, (the
"Closing Date"). At the Closing, the Company will deliver to Purchaser a
certificate representing the Shares to be purchased by Purchaser (which shall be
issued in Purchaser's name) against disbursement of the Payment from the Escrow
Account to the Company's account.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY. Except as set forth in
the SEC Documents (as defined in Section 3.3 below), the Company hereby makes
the following representations and warranties to Purchaser as of the Closing
Date:
3.1 EXISTENCE; GOOD STANDING; COMPLIANCE WITH LAW. The Company and
each of its subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of incorporation. The
Company and each of its subsidiaries is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of each
other jurisdiction in which the character of the properties owned or leased by
it therein or in which the transaction of its business makes such qualification
necessary, except for jurisdictions in which the failure to be so qualified or
to be in good standing would not have a Material Adverse Effect (as defined
below). The Company has all requisite corporate power and authority to own its
properties and carry on its business as now conducted. As used in this
Agreement, the term "Material Adverse Effect" shall mean any change or effect
that is materially adverse to (a) the business, assets (including intangible
assets), financial condition, results of operations or prospects of the Company
and its subsidiaries, taken as a whole, (b) the ability of the Company to pay or
perform its obligations under the Transaction Documents (as defined below), or
(c) the rights and remedies of the Purchaser under the Transaction Documents. As
used in this Agreement, the term "Transaction Documents" shall mean this
Agreement and all other documents, instruments and agreements executed or
delivered in connection with transactions contemplated by this Agreement or such
specified Transaction Documents.
3.2 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
Company has all requisite corporate power and authority to enter into the
Transaction Documents and to consummate the transactions contemplated hereby.
The execution and delivery of the Transaction Documents and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of the Company. This Agreement has
been duly executed and delivered by the Company and constitutes, and the other
Transaction Documents when executed and delivered will constitute, valid and
binding obligations of the Company, legally enforceable in accordance with their
terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other laws of general application relating to or affecting
enforcement of creditors' rights or as limited by the effect of general
principles of equity upon the availability of equitable remedies. The Shares to
be issued hereunder will be duly authorized and validly issued, fully paid and
nonassessable. The execution and delivery of the Transaction Documents does not,
and the consummation of the transactions contemplated hereby and thereby,
including the issuance of the Shares, will not, conflict with, or result in any
violation
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of, or default (with or without notice or lapse of time, or both), or give rise
to a right of termination, cancellation or acceleration of any material
obligation or to loss of a material benefit under (i) any provision of the
Articles of Incorporation or Bylaws of the Company, or (ii) any mortgage,
indenture, lease, or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or its properties or assets. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any governmental entity is required by or with respect to the Company in
connection with the execution and delivery of the Transaction Documents by the
Company or the consummation by the Company of the transactions contemplated
hereby and thereby, including the issuance of the Shares, except (i) such
consents, approvals, orders, authorizations, registration, declarations and
filings as may be required under applicable state securities laws and the laws
of any foreign country, and (ii) such other consents, authorizations, filings,
approvals and registrations that if not obtained or made would not have a
Material Adverse Effect.
3.3 CONFIDENTIAL OFFERING MEMORANDUM; SEC DOCUMENTS. The Company has
furnished, or made available to counsel for Purchaser, a true and complete copy
of (i) the Memorandum and (ii) each statement, report, registration statement
and definitive proxy statement filed by the Company with the Securities and
Exchange Commission ("SEC") since January 1, 1995 (the "SEC Documents"), which
are all the documents (other than preliminary material) that the Company was
required to file with the SEC since such date. As of their respective filing
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Securities Act of 1933, as amended (the "Securities Act"). The Memorandum does
not, and as of their respective filing dates the SEC Documents did not, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein not misleading in light of the circumstances under which they were made,
except, with respect to the SEC Documents, to the extent corrected by a
subsequently filed SEC Document. The financial statements of the Company
included in the SEC Documents (the "Company Financial Statements") comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) and fairly present the consolidated financial position of the
Company and its subsidiaries as of the dates thereof and the consolidated
results of operations, shareholders' equity and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring audit
adjustments). Except as disclosed in the SEC Documents, or except as
contemplated by this Agreement or on account of the transactions contemplated
hereby, since March 31, 1996, there has not been any material adverse change in
the results of operations, financial condition, assets, business or prospects of
the Company and its subsidiaries taken as a whole.
3.4 UNDISCLOSED LIABILITIES. The Company does not have any
liabilities, either accrued, absolute, contingent or otherwise, of a nature
required to be reflected in a balance sheet or related notes prepared in
accordance with generally accepted accounting principles consistently applied
which are not reflected or provided for in the Company Financial Statements,
except those
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arising after March 31, 1996 that are in the ordinary course of business and
that, in the aggregate, would not have a Material Adverse Effect.
3.5 COMPLETE COPIES OF MATERIALS. The Company has delivered or made
available true and complete copies of each document that has been requested by
Purchaser or representatives of Purchaser.
3.6 CAPITALIZATION. The Company has authorized capital stock of
50,000,000 shares of Common Stock, $0.01 par value, and 2,000,000 shares of
Preferred Stock, $0.01 par value, of which 50,000 shares have been designated
Series A Participating Preferred Stock and 54,055 shares have been designated
Series B Preferred Stock. As of the close of business on March 31, 1996,
15,690,203 shares of Common Stock, no shares of Series A Participating Preferred
Stock, and 54,055 shares of Series B Preferred Stock were issued and
outstanding. There are no outstanding rights, warrants, options, subscriptions,
agreements, or commitments giving anyone any right to require the Company to
sell or issue any capital stock or other securities, except as disclosed in the
SEC Documents. All outstanding securities of the Company were issued in
compliance with applicable federal and state securities laws.
3.7 LITIGATION. There is no action, suit, investigation or
proceeding pending, or to the knowledge of the Company, threatened against or
affecting the Company or any of its properties or rights, by or before any
court, arbitrator or administrative or governmental body, which would, if
determined adversely to the Company, have a Material Adverse Effect.
3.8 PATENTS AND TRADEMARKS. The Company has sufficient title and
ownership of all patents, trademarks, servicemarks, tradenames, copyrights,
tradesecrets, information, proprietary rights and processes (collectively, the
"Proprietary Rights") necessary to conduct its business as presently conducted
without any conflict with or infringement of the rights of others, which
conflict or infringement would have a Material Adverse Effect. The Company has
not received any communications alleging that the Company has violated the
Proprietary Rights of any other person or entity, which violation would have a
Material Adverse Effect.
3.9 PURCHASER AGREEMENTS. The Company has entered into a separate
Common Stock Purchase Agreement with each Purchaser in the Offering. Each of
such Common Stock Purchase Agreements is identical to this Agreement, except
with respect to any information provided by or concerning the relevant purchaser
thereunder.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. In connection with the
purchase of the Shares, Purchaser represents to the Company as follows:
4.1 COMPANY AFFAIRS; PURCHASER'S ACCOUNT; ACCREDITED INVESTOR.
Purchaser is aware of the Company's business affairs and financial condition,
has reviewed the Memorandum, has had sufficient opportunity to ask questions of
and receive answers from representatives of the Company and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Shares. Purchaser is purchasing the Shares for
investment for Purchaser's own account only and not with a view to, or for
resale in connection with, any "distribution" thereof within the meaning of the
Securities Act. Purchaser is
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an "accredited investor" as such term is defined in Rule 501(a) of Regulation D
under the Securities Act and has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
investing in the Shares, including a complete loss of its investment.
4.2 UNREGISTERED SECURITIES. Purchaser understands that the Shares
have not been registered under the Securities Act by reason of a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Purchaser's investment intent as expressed herein.
4.3 HOLDING PERIOD; LEGENDS. Purchaser further acknowledges and
understands that the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser understands that the certificate evidencing
the Shares will be imprinted with a legend which prohibits the transfer of the
Shares unless they are registered or such registration is not required in the
opinion of counsel for the Company.
4.4 RULE 144. Purchaser is aware of the provisions of Rule 144,
promulgated under the Securities Act, which in substance, permits limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof (or from an affiliate of such issuer), in a non-public offering,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including, among other things: (a) the resale occurring not less than two years
after the party has purchased, and made full payment for, within the meaning of
Rule 144, the Shares to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the Shares less than three years, (b) the
availability of certain public information about the Company, (c) the sale being
made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as such term is defined under the
Exchange Act), and (d) the amount of securities being sold during any three
month period not exceeding the specified limitations stated therein, if
applicable. Purchaser further acknowledges that payment for the Shares with a
promissory note is not deemed payment unless such note is secured by assets
other than the Shares.
4.5 NO MARKET. Purchaser further understands that at the time
Purchaser wishes to sell the Shares there may be no public market upon which to
make such a sale, and that, even if such a public market then exists the Company
may not be satisfying the current public information requirements of Rule 144,
and that, in such event, Purchaser will be precluded from selling the Shares
under Rule 144 even if the two-year minimum holding period had been satisfied.
4.6 REGISTRATION OF SALE. Purchaser further understands that in the
event all of the applicable requirements of Rule 144 are not satisfied,
registration under the Securities Act, compliance with Regulation A or some
other registration exemption will be required; and that, notwithstanding the
fact that Rule 144 is not exclusive, the staff of the SEC has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales and that such persons and their respective
brokers who participate in such transactions do so at their own risk.
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5. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT THE CLOSING.
Purchaser's obligation to purchase the Shares shall be subject to each of the
following conditions having been fulfilled to Purchaser's reasonable
satisfaction on or before the Closing Date:
5.1 REPRESENTATIONS AND WARRANTIES, PERFORMANCE OF OBLIGATIONS. The
representations and warranties made by the Company in Section 3 shall be true
and correct on the Closing Date with the same effect as though made on and as of
such date; there shall not have been a Material Adverse Effect prior to the
Closing Date; and the Company shall have performed all actions, met all
conditions and satisfied all obligations required to be performed or satisfied
by it under this Agreement on or prior to the Closing Date.
5.2 STOCK CERTIFICATES. The Company shall have issued to Purchaser a
stock certificate evidencing the number of Shares purchased by Purchaser.
5.3 CORPORATE DOCUMENTS. The Company shall have delivered to
Purchaser such evidence of the Company's good standing and its authorization of
this Agreement and the other Transaction Documents as Purchaser or its counsel
shall reasonably request.
5.4 OPINION OF COUNSEL TO THE COMPANY. Purchaser shall have received
from Venture Law Group, counsel for the Company, an opinion letter addressed to
it, dated the Closing Date, reasonably satisfactory in form and content, to the
Purchaser and its counsel. In rendering the opinion called for under this
Section 5.4, counsel may rely as to factual matters on certificates of public
officials and officers of the Company.
5.5 CONSENTS, PERMITS, AND WAIVERS. The Company shall have obtained
any and all consents, permits, and waivers necessary or appropriate for
consummation of the transactions pursuant to this Agreement.
5.6 PURCHASE PERMITTED BY APPLICABLE LAW. The purchase of the Shares
on the Closing Date shall not be prohibited by any applicable law or
governmental regulation.
5.7 COMPLETION OF 3M ACQUISITION. The Company shall have certified
to the Purchaser in writing that (i) all of the conditions precedent to the
Company's obligation to complete the 3M Acquisition have been satisfied and (ii)
the completion of the 3M Acquisition will result in the dismissal of all pending
actions, suits, proceedings or claims brought by 3M against the Company.
5.8 MINIMUM PROCEEDS. An aggregate of at least $25 million shall
have been deposited in the Escrow Account by prospective purchasers in the
Offering, and all conditions to the disbursement of such funds to the Company
shall have been satisfied or waived.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT THE CLOSING. The
obligation of the Company to issue and sell to Purchaser the Shares to be issued
and sold hereunder shall be subject to the following conditions, any of which
may be waived by the Company, having been fulfilled on or before the Closing
Date:
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6.1 PURCHASE PRICE. Purchaser shall have delivered to the Company
payment of the purchase price for the Shares by check or wire transfer to the
Company's account.
6.2 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Purchaser in Section 4 hereof shall be true and correct on
the Closing Date with the same effect as though made on and as of such date.
6.3 CONSENTS, PERMITS AND WAIVERS. The Company shall have obtained
any and all consents, permits, and waivers necessary or appropriate for
consummation of the transactions pursuant to this Agreement.
6.4 PURCHASE PERMITTED BY APPLICABLE LAW. The purchase of the Shares
on the Closing Date shall not be prohibited by any applicable law or
governmental regulation.
6.5 MINIMUM PROCEEDS. An aggregate of at least $25 million shall
have been deposited in the Escrow Account by prospective purchasers in the
Offering, and all conditions to the disbursement of such funds to the Company
shall have been satisfied or waived.
7. LEGENDS. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(b) Any legend required to be placed thereon by the California
Commissioner of Corporations or by any other applicable state securities law.
8. REGISTRATION RIGHTS.
8.1 SHELF REGISTRATION.
(a) The Company shall use its best efforts to file, and cause
the SEC to declare effective, a "shelf" registration statement on Form S-3 (the
"Registration Statement") under Rule 415 under the Securities Act covering the
resale by Purchaser of the Shares, not later than ninety (90) days following the
Closing Date. The Company will promptly: (A) notify Purchaser when the
Registration Statement is declared effective; and (B) notify Purchaser of any
stop-order or similar proceeding by the SEC or any state securities authority.
(b) If the Company is able to secure the effectiveness of a
Registration Statement pursuant to Section 8.1(a) above, the Company shall
promptly prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in
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connection therewith as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement and, keep the Registration Statement effective until the
earlier of (i) the date upon which all of the Shares have been sold pursuant
thereto or (ii) the second anniversary of the Closing Date.
8.2 COMPANY REGISTRATION. If, at any time during the two (2) year
period following the termination or withdrawal of the Registration Statement,
the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Purchasers) any of its
stock or other securities under the Securities Act in connection with the public
offering of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock plan or a
registration relating solely to the sale of securities to participants in a
Company stock plan 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), the Company shall, at such time, promptly give each
Purchaser written notice of such registration. Upon the written request of each
Purchaser given within twenty (20) days after mailing of such notice by the
Company in accordance with Section 9.4, the Company shall, subject to the
provisions of Section 8.4, cause to be registered under the Securities Act all
of the Shares that each such Purchaser has requested to be registered.
8.3 FORM S-3 REGISTRATION. If, at any time during the one (1) year
period following the termination or withdrawal of the Registration Statement,
the Company shall receive from any Purchaser or Purchasers a written request or
requests that the Company effect a registration on Form S-3 (or any successor to
Form S-3 or any similar short-form registration statement) and any related
qualification or compliance with respect to all or a part of the Shares owned by
such Purchaser or Purchasers, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Purchasers; and
(b) as soon as practicable, effect such registration, which, at
the request of any Purchaser, shall be an underwritten registration with the
underwriter(s) to be reasonably satisfactory to the Company and Purchasers
holding a majority of the Shares to be registered, and all such qualifications
and compliances as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Purchaser's Shares as are
specified in such request, together with all or such portion of the Shares of
any other Purchaser or Purchasers joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to this Section 8.3: (i) if Form S-3 is not available for such offering by the
Purchasers; (2) if the Purchasers, (A) propose to sell Shares representing less
than twenty-five (25%) percent of the Shares sold in the Offering or (B)
together with the holders of any other securities of the Company entitled to
inclusion of such registration, propose to sell Shares and such other securities
(if any) at an aggregate price to the public (net of any underwriters' discounts
or commissions) of less than $10,000,000; (3) if the Company shall furnish to
the Purchasers a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Form
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S-3 Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after receipt of the request of the
Purchaser or Purchasers under this Section 8.3; provided, however, that the
Company shall not utilize this right more than once in any twelve (12) month
period; (4) if the Company has already effected one registration on Form S-3 for
the Purchasers pursuant to this Section 8.3; or (5) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration, qualification or compliance.
(c) promptly prepare and file with the SEC such amendments and
supplements to the registration statement and prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement and keep such registration statement effective for a
period of up to one hundred twenty (120) days or until the distribution
contemplated in the registration statement has been completed.
8.4 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 8.2 to include any of the Purchasers' Shares
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 jeopardize the
success of the offering by the Company. If the total amount of securities,
including Shares, requested by stockholders to be included in such offering
exceeds the amount of securities to be 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 Shares, 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 stockholders according to the total amount of securities requested to be
included therein owned by each selling stockholder or in such other proportion
as shall mutually be agreed to by such selling stockholders).
8.5 DELAY OF REGISTRATION. No Purchaser 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 8.
8.6 SUSPENSION OF EFFECTIVENESS. Purchaser acknowledges that there
may occasionally be times when the Company may be required to suspend the use of
the prospectus forming part of a registration statement filed under Section 8.1
or Section 8.3 above until such time as an amendment to registration statement
has been filed by the Company and declared effective by the SEC, until such
prospectus is supplemented or amended to comply with the Securities Act, or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act. The Company agrees to use diligent efforts to
avoid suspensions of the use of such prospectus and to limit the periods of such
suspensions to the shortest time possible. Purchaser hereby covenants that it
will not sell any Shares pursuant to any such prospectus during the period
commencing at the time at which the Company gives Purchaser notice of the
suspension of the use of such prospectus and ending at the time the Company
gives Purchaser
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notice that the Purchaser may thereafter effect sales pursuant to such
prospectus, as the same may have been supplemented or amended. In the event of
any suspension of use of a registration statement pursuant to this subsection,
the time period during which the Company is obligated to maintain the
effectiveness of such registration statement pursuant to this Agreement shall be
tolled for the duration of the period during which use of such registration
statement was suspended.
8.7 COMPANY OBLIGATIONS.
(a) The Company shall (i) use its best efforts to list the
Shares for trading on any national securities exchange on which the Common Stock
may be traded from time to time and (ii) provide a transfer agent, registrar and
CUSIP number with respect to Shares registered pursuant to this Section 8.
(b) The Company shall furnish to Purchaser, with respect to the
Shares registered pursuant to this Section 8, such number of copies of
prospectuses and preliminary prospectuses and supplements in conformity with the
requirements of the Securities Act and such other documents as Purchaser may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Shares by Purchaser.
(c) The Company shall use its best efforts to register or
qualify the Shares registered pursuant to this Section 8 under such other
securities or blue sky laws of such jurisdictions as Purchaser shall reasonably
request and do any and all other acts or things which may be necessary or
desirable to enable Purchaser to consummate the public sale or other disposition
in such jurisdictions, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or file
a general consent to service of process in any such jurisdictions.
(d) With a view to making available to the Purchaser the
benefits of Rules 144 and 144A promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit Purchaser to
sell Shares to the public without registration, the Company hereby covenants and
agrees, so long as Purchaser owns any Shares to use its best efforts to: (i)
make and keep public information available, as those terms are understood and
defined in Rule 144; (ii) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and (iii) furnish to Purchaser (A) a written statement by the
Company that it has complied with the reporting requirements of the Securities
Act and the Exchange Act, and (B) such other information as may be reasonably
requested in order to avail Purchaser of any rule or regulation of the SEC that
permits the selling of the Shares without registration. The Company further
covenants and agrees, so long as the Purchaser owns any Shares, to use its best
efforts to deliver to the Purchaser copies of all SEC Documents, promptly
following the filing thereof with the SEC.
(e) The Company shall bear all reasonable expenses in connection
with any registration completed under this Section 8, other than (i)
underwriter's commissions or
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discounts, transfer taxes, and fees and expenses, if any, of underwriter's
counsel or (ii) the fees and expenses of more than one counsel for all selling
Purchasers.
(f) The rights contemplated in this Section 8 will automatically
be assigned to each permitted transferee of shares, other than a transferee in a
transaction registered under the Securities Act pursuant to this Section 8 or
exempt from registration pursuant to Rule 144 or Rule 144A under the Securities
Act, and the provisions of Section 8 hereof shall apply to such transferee as if
such transferee were the Purchaser hereunder. In the event that it is necessary,
in order to permit a transferee of any shares to resell such shares pursuant to
the Registration Statement, to amend the Registration Statement to name such
transferee, the transferee shall, upon written notice to the Company, be
entitled to have the Company make such amendment as soon as reasonably
practicable.
8.8 SECURITIES INDEMNIFICATION.
(a) For the purposes of this Section 8.8, the term "Registration
Statement" shall include any final prospectus, exhibit, supplement or amendment
included in a Registration Statement, and any document incorporated by reference
in any registration statement filed pursuant to this Section 8. As used in this
Section 8.8, the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(b) The Company agrees to indemnify and hold harmless Purchaser,
its officers, directors, partners, advisors, each person controlling Purchaser
within the meaning of Section 15 of the Securities Act, each underwriter, if
any, and each person controlling any such underwriter within the meaning of
Section 15 of the Securities Act, from and against any and all expenses, losses,
claims, damages or liabilities (or actions, proceedings or settlements in
respect thereof) to which such persons may become subject (under the Securities
Act or otherwise) insofar as such losses, claims, damages or liabilities (or
actions, proceedings or settlements in respect thereof) arise out of, or are
based upon, any untrue statement of a material fact contained in the
Registration Statement, or arise out of any failure by the Company to fulfill
any undertaking included in the Registration Statement or arise out of any
violation by the Company of the Securities Act or the Exchange Act or any rule
or regulation thereunder applicable to the Company with respect to the
Registration Statement and relating to action or inaction required of the
Company, and will reimburse Purchaser, its officers, directors, partners,
advisors, each person controlling Purchaser, each underwriter, and each person
controlling any such underwriter, for any legal and other expenses reasonably
incurred in connection with investigating and defending or settling any such
expense, claim, loss, damage or liability; provided, however, that the Company
shall not be liable in any such case to the extent that such expense, loss,
claim, damage or liability arises out of, or is based upon, an untrue statement
made in a Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of Purchaser specifically
for inclusion in such Registration Statement, or any untrue statement in any
prospectus that is corrected in any subsequent prospectus that was delivered to
Purchaser at least five (5) business days prior to the pertinent sale.
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(c) Purchaser agrees to indemnify and hold harmless the Company
(and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities (including reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim) to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact contained in the Registration Statement on the
effective date thereof if such untrue statement was made in reliance upon and in
conformity with written information furnished by or on behalf of Purchaser
specifically for inclusion in the Registration Statement; provided, however,
Purchaser shall not be liable in any such case to the extent that such loss,
claims, damage or liability arises out of, or is based upon, an untrue statement
made in reliance upon and in conformity with written information furnished by or
on behalf of Purchaser, if such information is corrected and written notice of
such correction is delivered to the Company at least five (5) business days
prior to the pertinent sale or sales. Purchaser's obligation to indemnify the
Company hereunder shall be limited to the total amount of the proceeds received
by Purchaser for the Shares sold pursuant to the Registration Statement.
(d) Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is
sought against an indemnifying person pursuant to this Section 8.8, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties under
this Agreement. The failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 8.8 to the extent such failure is not prejudicial. No indemnifying
party, in the defense of any claim or litigation, shall, except with the consent
of each indemnified party, consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
(e) If the indemnification provided for in this Section 8.8 is
unavailable under state or federal law to an indemnified person hereunder in
respect to any losses, claims,
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damages or liabilities (or actions or proceedings in respect thereof) referred
to herein, then the indemnifying person, in lieu of indemnifying such
indemnified person, shall contribute to the amount paid or payable by such
indemnified person as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of the Company
and Purchaser in connection with the untrue statements of material fact or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and Purchaser shall be determined by reference to, among other things,
whether the untrue statements of material fact or omissions relate to
information supplied by the Company or by Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages or liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company and Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 8.8(e) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to herein. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8.9 SURVIVAL. The obligations of the Company and Purchaser under
this Section 8 shall survive the payment for the Shares.
9. MISCELLANEOUS
9.1 GOVERNING 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.
9.2 ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement sets
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the Company
and sixty-six and two-thirds percent (66 2/3%) in interest of the Purchasers.
9.3 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. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (x) such
provision shall be excluded from this Agreement, (y) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (z) the
balance of the Agreement shall be enforceable in accordance with its terms.
9.4 CONSTRUCTION. This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly,
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this Agreement shall be deemed to be the product of all of the parties hereto,
and no ambiguity shall be construed in favor of or against any one of the
parties hereto.
9.5 NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or fax, one (1) business day after being deposited with a
commercial courier that guarantees next day delivery, or three (3) business days
after being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, and addressed to the party to be notified at such party's
address as set forth on the signature page hereof or as subsequently modified by
written notice.
9.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by Purchaser and the Company in this Agreement and the
respective obligations of each party, to be performed on the terms hereof at,
prior to, or after the Closing Date hereunder, shall not expire with, or be
terminated, or extinguished by, such Closing on the Closing Date.
9.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
FOR CALIFORNIA RESIDENTS ONLY: THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF SECURITIES IS EXEMPT FROM
QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
FOR CONNECTICUT RESIDENTS ONLY: THE UNDERSIGNED ACKNOWLEDGES THAT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 36B-16 OF THE
CONNECTICUT UNIFORM SECURITIES ACT AND ARE OFFERED AND SOLD PURSUANT TO AN
EXEMPTION THEREFROM. THE SECURITIES CANNOT BE SOLD OR TRANSFERRED UNLESS THEY
ARE REGISTERED OR EXEMPT FROM REGISTRATION UNDER THE CONNECTICUT UNIFORM
SECURITIES ACT OR SOLD IN A TRANSACTION WHICH IS EXEMPT UNDER SAID ACT.
FOR FLORIDA RESIDENTS ONLY: THE UNDERSIGNED ACKNOWLEDGES THAT THE
FLORIDA SECURITIES ACT REQUIRES AND THE ISSUER HEREBY AGREES THAT THE
UNDERSIGNED SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE OF AN OFFER TO
ACQUIRE THESE SECURITIES FOR A PERIOD OF THREE (3) BUSINESS DAYS FOLLOWING HIS
EXECUTION OF AN AGREEMENT RELATING TO THE ACQUISITION OF SUCH SECURITIES AND
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PAYMENT THEREFOR. IF THE UNDERSIGNED SHOULD DETERMINE TO WITHDRAW HIS ACCEPTANCE
OF THE OFFER TO INVEST IN THE ISSUER, HE MAY DO SO WITHOUT ANY LIABILITY
WHATSOEVER. TO ACCOMPLISH THIS WITHDRAWAL, THE UNDERSIGNED NEED ONLY SEND A
LETTER OR TELEGRAM TO THE ISSUER INDICATING HIS INTENTION TO WITHDRAW. SUCH
LETTER OR TELEGRAM SHOULD BE SENT AND POSTMARKED PRIOR TO THE END OF THE
AFOREMENTIONED THIRD BUSINESS DAY. IF THE UNDERSIGNED SENDS A LETTER, IT PRUDENT
TO SEND IT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS
RECEIVED AND TO EVIDENCE THE TIME WHEN IT WAS MAILED. SHOULD THE REQUEST BE MADE
ORALLY, WRITTEN CONFIRMATION THAT THE REQUEST HAS BEEN RECEIVED SHOULD BE
REQUESTED.
FOR ILLINOIS RESIDENTS ONLY: THE UNDERSIGNED ACKNOWLEDGES THAT THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ILLINOIS SECURITIES ACT AND ARE
BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION THEREFROM. THE SECURITIES CANNOT
BE SOLD OR TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ILLINOIS SECURITIES
ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR INDIANA RESIDENTS ONLY: THE UNDERSIGNED ACKNOWLEDGES THAT SALES
OF THESE SECURITIES IN THE STATE OF INDIANA WILL BE MADE IN RELIANCE UPON THE
EXEMPTION PROVIDED IN SECTION 23-2-1-2(B)(10) OF THE INDIANA SECURITIES ACT.
SUCH SECURITIES MUST BE HELD INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY
REGISTERED UNDER SAID ACT OR UNLESS, IN THE OPINION OF COUNSEL OF THE ISSUER, A
SALE OR TRANSFER MAY BE MADE WITHOUT REGISTRATION THEREUNDER.
FOR MASSACHUSETTS RESIDENTS ONLY: WITH RESPECT TO ACCREDITED
INVESTORS WHO ARE NATURAL PERSONS, THE INVESTMENT MUST BE SUITABLE AND IS
PRESUMED SUITABLE IF THE INVESTMENT DOES NOT EXCEED 25 PERCENT OF THE INVESTOR'S
INDIVIDUAL NET WORTH OR NET WORTH COMBINED WITH SPOUSE, EXCLUSIVE OF PRINCIPAL
RESIDENCE AND FURNISHINGS.
WITH RESPECT TO NON-ACCREDITED INVESTORS, THE INVESTMENT MUST BE
SUITABLE AND IS PRESUMED SUITABLE IF EITHER OF THE FOLLOWING CONDITIONS ARE MET:
(1) THE INVESTMENT DOES NOT EXCEED 10 PERCENT OF THE INVESTOR'S INDIVIDUAL NET
WORTH OR NET WORTH COMBINED WITH SPOUSE, EXCLUSIVE OF PRINCIPAL RESIDENCE AND
FURNISHINGS, OR (2) (A) THE INVESTOR, EITHER ALONG OR WITH A PURCHASER
REPRESENTATIVE, HAS SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
MATTERS AS TO BE CAPABLE OF EVALUATING THE MERITS AND RISKS OF THE PROSPECTIVE
INVESTMENT AND (B) THE INVESTMENT DOES NOT EXCEED 25 PERCENT OF THE
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INVESTOR'S INDIVIDUAL NET WORTH OR NET WORTH COMBINED WITH SPOUSE, EXCLUSIVE OF
PRINCIPAL RESIDENCE AND FURNISHINGS.
FOR PENNSYLVANIA RESIDENTS ONLY: THE UNDERSIGNED IS AWARE OF THE
FACT THAT SALES OF THESE SECURITIES IN THE COMMONWEALTH OF PENNSYLVANIA WILL BE
MADE IN RELIANCE UPON THE EXEMPTION PROVIDED IN SECTION 203(D) OF THE
PENNSYLVANIA SECURITIES ACT. THE UNDERSIGNED AGREES NOT TO SELL THE SECURITIES
WITHIN TWELVE (12) MONTHS FROM THE DATE OF PURCHASE, EXCEPT IN ACCORDANCE WITH
WAIVERS ESTABLISHED BY RULE OR ORDER OF THE COMMISSIONER. THE UNDERSIGNED ALSO
AGREES THAT THE CERTIFICATE EVIDENCING THE SECURITIES WILL BEAR THE FOLLOWING
LEGEND:
EACH PENNSYLVANIA RESIDENT WHO PURCHASED THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAS AGREED NOT TO SELL THESE SECURITIES FOR A PERIOD OF
TWELVE (12) MONTHS AFTER THE DATE OF PURCHASE, EXCEPT IN ACCORDANCE WITH WAIVERS
ESTABLISHED BY RULE OR ORDER OF THE COMMISSIONER.
PURSUANT TO SECTION 207 OF THE PENNSYLVANIA SECURITIES ACT OF 1972,
EACH PENNSYLVANIA RESIDENT WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES EXEMPTED
FROM REGISTRATION BY SECTION 203(D) OF THE 1972 ACT, DIRECTLY FROM THE ISSUER OR
AN AFFILIATE OF THE ISSUER SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE
WITHOUT INCURRING ANY LIABILITY TO THE SELLER, UNDERWRITER (IF ANY) OR ANY OTHER
PERSON WITHIN TWO (2) BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE ISSUER OF
HIS WRITTEN BINDING CONTRACT OF PURCHASE OR, IN THE CASE OF A TRANSACTION IN
WHICH THERE IS NO BINDING CONTRACT OF PURCHASE, WITHIN TWO (2) BUSINESS DAYS
AFTER HE MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.
FOR TEXAS RESIDENTS ONLY: THE UNDERSIGNED IS AWARE OF THE FACT THE
SALES OF THESE SECURITIES IN THE STATE OF TEXAS WILL BE MADE IN RELIANCE UPON
THE EXEMPTION PROVIDED IN SECTION 5.1 OF THE SECURITIES ACT OF TEXAS. SUCH
SECURITIES MUST BE HELD INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY REGISTERED
UNDER SAID ACT OR UNLESS, IN THE OPINION OF COUNSEL OF THE ISSUER, A SALE OR
TRANSFER MAY BE MADE WITHOUT REGISTRATION THEREUNDER. THE UNDERSIGNED AGREES
THAT ANY CERTIFICATE EVIDENCING THE SECURITIES WILL BEAR A LEGEND RESTRICTING
THE TRANSFER THEREOF CONSISTENT WITH THE FOREGOING AND THAT A NOTATION WILL BE
MADE IN THE RECORDS OF THE ISSUER RESTRICTING THE TRANSFER OF ANY OF THE
SECURITIES IN A MANNER CONSISTENT WITH THE FOREGOING.
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9.8 SUCCESSORS AND ASSIGNS. The rights and benefits of this
Agreement shall inure to the benefit of, and be enforceable by the Company's
successors and assigns. The rights and obligations of Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.
9.9 HEADINGS. The section and paragraph headings contained herein
are for reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
9.10 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any rights, power, or remedy accruing to either party, upon any breach
or default of the other party under this Agreement, shall impair any such
rights, power, or remedy, nor shall it be construed to be a waiver of any such
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent,
or approval of any kind or character on a party's part of any breach or default
under this Agreement, or any waiver on a party's part of any provisions or
conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing, and that all remedies, either
under this Agreement or by law or otherwise afforded to such party, shall be
cumulative and not alternative.
9.11 LEGAL FEES. If the Closing is completed, the Company shall pay,
promptly following the Closing, the reasonable fees and out-of-pocket expenses
of one counsel for all of the Purchasers in the Offering.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
RESOUND CORPORATION
By:__________________________________________
Title:_______________________________________
ADDRESS: 220 Saginaw Drive,
Seaport Centre
Redwood City, CA 94063
PURCHASER:
_____________________________________________
Name of Corporation, Partnership, Trust or
Individual
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address:_____________________________________
_____________________________________________
_____________________________________________
Payment Amount $____________________________
Tax ID No.: _________________________________
SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT