EXHIBIT 10.17
Dieter Bakic Stock
Purchase Agreement
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is effective as
of January 14, 2000, by and between Hydrogen Burner Technology, Inc., a
California corporation (the "Company"), and Dieter Bakic, an individual
("Purchaser").
As consideration for the mutual covenants and agreements contained
herein, the Company and Purchaser hereby agree as follows:
1. PURCHASE AND SALE OF THE SHARES. Subject to the terms and
conditions of this Agreement, the Company hereby agrees to sell to Purchaser,
and Purchaser hereby agrees to purchase from the Company at the Closing (as
defined in Section 2 of this Agreement), Eighty Thousand (80,000) shares of
the Company's Common Stock (the "Shares") at a price of $5.00 per Share (the
"Purchase Price"), for an aggregate purchase price of Four Hundred Thousand
Dollars ($400,000) (the "Aggregate Purchase Price").
2. CLOSING. The purchase and sale of the Shares shall occur at a
closing (the "Closing") to be held at a time to be mutually agreed on by the
Company and Purchaser but not later than January 30, 2000. At the Closing,
Purchaser shall deliver to the Company an amount equal to the Aggregate
Purchase Price by wire transfer (in immediately available funds) to an
account designated by the Company. As soon as reasonably practicable after
the Closing and after confirmation of receipt of the Aggregate Purchase
Price, the Company shall issue a stock certificate representing the Shares
registered in the name of Purchaser and shall deliver such stock certificate
to Purchaser at the Purchaser's principal residence (or such other location
that Purchaser may designate) in the country of Great Britain.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. In connection with
Purchaser's purchase of the Shares, Purchaser hereby represents and warrants
to the Company as follows:
3.1 AUTHORIZATION. Purchaser has full power and authority to enter
into this Agreement, and this Agreement, when executed and delivered, will
constitute a valid and legally binding obligation of Purchaser.
3.2 INVESTMENT INTENT; CAPACITY TO PROTECT INTERESTS. Purchaser is
purchasing the Shares solely for Purchaser's own account for investment and
not with a view to or for sale in connection with any distribution of the
Shares or any portion of the Shares and not with any present intention of
selling, offering to sell, granting any participation in or otherwise
disposing of or distributing the Shares or
any portion of the Shares in any transaction other than a transaction exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"). The entire legal and beneficial interest of the
Shares is being purchased by Purchaser and shall be held for Purchaser's
account only and neither in whole or in part for any other person. By
executing this Agreement, Purchaser further represents that Purchaser does
not have any contract, undertaking, agreement or arrangement with any person
to sell, transfer or grant any participation to such person or to any third
person, with respect to any of the Shares.
3.3 RELIANCE ON PURCHASER'S REPRESENTATIONS. Purchaser understands
that the Shares are not registered under the Securities Act on the ground
that the sale provided for in this Agreement and the issuance of securities
under this Agreement is exempt from the registration requirements of the
Securities Act pursuant to Regulation S promulgated under the Securities Act
("Regulation S"). Purchaser understands that the Company's reliance on such
exemption is predicated on the Purchaser's representations that are set forth
in this Agreement and the Certificate of Non-U.S. Person attached hereto as
Exhibit A, Purchaser understands that the basis for such exemption may not be
present if, notwithstanding such representations, Purchaser has in mind
merely acquiring the Shares for a fixed or determinable time in the future,
or for a market rise, or for sale if the market does not rise. Purchaser has
no such intention.
3.4 RESIDENCE. Purchaser's principal residence is as set forth on
the signature page of this Agreement. Purchaser is not a U.S. Person, as such
terms is defined under Regulation S and has completed a Certificate of
Non-U.S. Person in the form attached to this Agreement as Exhibit A. The
Certificate of Non-U.S. Person is incorporated herein by reference in its
entirety and made a part of this Agreement as if fully set forth herein.
Purchaser acknowledges and understands that, in addition to all other
representations set forth in this Agreement, the Company's reliance on the
exemptions described under Section 3.3 of this Agreement is predicated on the
representations, warranties and certification set forth in the Certificate of
Non-U.S. Person.
3.5 INFORMATION CONCERNING THE COMPANY. Purchaser has heretofore
discussed the Company and its plans, operations and financial condition with
the Company's officers, knows that the Company is a speculative business and
has heretofore received all such information as Purchaser has deemed
necessary and appropriate to enable Purchaser to evaluate the financial risk
inherent in making an investment in the Shares, and Purchaser has received
satisfactory and complete information about the business and financial
condition of the Company in response to all inquiries in respect thereof.
Purchaser has had the opportunity to ask questions and receive answers from
the Company regarding
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the terms and conditions of the offering of the Shares and the business,
properties, prospects and financial condition of the Company and to obtain
additional information (to the extent the Company possessed such information
or could acquire it without unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to Purchaser or to which
Purchaser had access.
3.6 NO PUBLIC MARKET. Purchaser understands that no public market
now exists for any of the Shares and that there is no assurance that a public
market ever will exist for the Shares.
3.7 ECONOMIC RISK. Purchaser understands that the purchase of the
Shares will be a highly-speculative investment and involves a high degree of
risk, and Purchaser is able, without impairing Purchaser's financial
condition, to hold the Shares for an indefinite time and to suffer a complete
loss of Purchaser's investment.
3.8 OFFSHORE TRANSACTION. Purchaser understands and acknowledges
that:
(a) The purchase and sale of the Shares under this
Agreement is permissible only if the Shares are offered and sold outside the
United States to a person located outside the United States, who is not a
U.S. Person and who is not purchasing for the benefit or the account of a
U.S. Person (as defined below) (a "Non-U.S. Person"). Whenever used in this
Agreement, the terms "United States" and "U.S. Person" shall have the
meanings given to them under Rule 902(k) and Rule 902(l) of Regulation S
under the Securities Act, a recitation of which is set forth in the
Certificate of Non-U.S. Person.
(b) Neither the offer nor sale of the Shares to Purchaser
under this Agreement was accomplished by means of advertising in any
publication or by means of "directed selling efforts" in the United States,
as such term is defined under Rule 902(c) of Regulation S under the
Securities Act. A recitation of Rule 902(c) is set forth in the Certificate
of Non-U.S. Person.
(c) None of the transactions contemplated herein,
including the offer and sale of the Shares to Purchaser, were consummated in
the United States.
(d) With respect to the transactions contemplated in this
Agreement and at all times contemplated herein, Purchaser was and continues
to remain located outside the United States.
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3.9 RESTRICTED SECURITIES. Purchaser understands and acknowledges
that:
(a) The sale of the Shares has not been registered under
the Securities Act, the Shares must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from the registration
requirements of the Securities Act is available (such as Rule 144 under the
Securities Act), and the Company is under no obligation to register the
Shares;
(b) The Shares are "restricted" securities within the
meaning of Rule 144 and will be stamped with the legends specified in Section
7 of this Agreement;
(c) Without limiting the acknowledgment set forth in
subpart (a) of this Section 3.9, before the expiration of the period
commencing on the date of Closing and ending one year thereafter (the
"Restricted Period"):
(i) None of the Shares may be sold or offered for
sale to U.S. Person or for the account or benefit of a U.S. Person;
(ii) None of the Shares may be sold or offered for
sale in the United States or in any transaction consummated in the United
States (in whole or in part);
(d) Further without limiting the acknowledgment set forth
in subpart (a) of this Section 3.9, none of the shares may be sold or offered
for sale before the expiration of the Restricted Period unless each of the
following conditions is satisfied:
(i) The prospective subsequent purchaser of the
Shares certifies that such purchaser is not a U.S. Person and is not
acquiring the Shares for the account or benefit of any U.S. Person;
(ii) The prospective subsequent purchaser agrees to
resell such securities in accordance with Regulation S, pursuant to a
registration under the Securities Act or pursuant to an available exemption
from registration (other than Regulation S); and
(iii) Each certificate evidencing all Shares to be
transferred contains a legend to the effect that transfer of such Shares is
prohibited except in accordance with Regulation S, which may be in the form
set forth in Section 7.1 of this Agreement;
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(e) The Company will make a notation in its records of the
aforementioned restrictions on transfer and legends; and
(f) The Company has no obligation to register the transfer
of any of the Shares and shall refuse to register any such transfer not in
accordance with Regulation S.
3.10 LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, Purchaser further agrees that Purchaser
shall in no event make any disposition of all or any portion of the Shares
unless and until:
(a)(i) There is then in effect a Registration Statement under
the Securities Act covering such proposed disposition, and such disposition
is made in accordance with such Registration Statement; (ii) the resale
provisions of Rule 144 are available and the proposed disposition would
comply with the requirements of Regulation S in the opinion of counsel to the
Company; or (iii)(A) Purchaser shall have notified the Company of the
circumstances surrounding the proposed disposition, (B) Purchaser shall have
furnished the Company with an opinion of Purchaser's counsel to the effect
that such disposition will not require registration of such Shares under the
Securities Act, (C) the proposed disposition would comply with all applicable
requirements of Regulation S, and (D) counsel for the Company shall have
concurred with such opinion of Purchaser's counsel, and the Company shall
have advised Purchaser of such concurrence; and
(b) Purchaser shall have complied with the terms of the
Rights of First Refusal set forth in Section 6 of this Agreement, and the
transferee of the Shares agrees in writing to be bound by all terms of this
Agreement, including, without limitation, the "lock-up" provisions set forth
in Section 8 of this Agreement.
3.11 COMPLIANCE WITH OTHER LAWS. Purchaser has observed the laws
of Purchaser's jurisdiction in connection with any invitation to subscribe
for or purchase the Shares or any use of this Agreement, including (i) the
legal requirements within Purchaser's jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restriction applicable to such purchase,
(iii) any governmental or other consent that may need to be obtained and (iv)
the income tax and other tax consequences, if any, that may be relevant to
the purchase, holding, redemption, sale or transfer of the Shares.
Purchaser's subscription and payment for, and Purchaser's continued
beneficial ownership of, the Shares will not violate any applicable
securities or other law of Purchaser's jurisdiction.
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4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
on the Schedule of Exceptions furnished to Purchaser and attached hereto as
Exhibit B, the Company hereby represents and warrants to Purchaser that:
4.1 ORGANIZATION; GOOD STANDING; QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of California, has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as now conducted and as proposed to be conducted, to execute and
deliver this Agreement and to issue and sell the Shares and to carry out the
provisions of this Agreement. The Company is not qualified to transact
business as a foreign corporation in any other jurisdiction, and such
qualification is not now required.
4.2 AUTHORIZATION. All corporate action on the part of the
Company and its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of
all obligations of the Company hereunder at the Closing and the
authorization, issuance (or reservation for issuance), sale and delivery of
the Shares being sold hereunder has been taken or will be taken before the
Closing, and this Agreement and the obligations of the Company hereunder
constitute valid and legally binding obligations of the Company, enforceable
in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights generally,
and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
4.3 VALID ISSUANCE OF SHARES. The Shares that are being purchased
by Purchaser hereunder, when issued, sold and delivered in accordance with
the terms of this Agreement for the consideration expressed herein, will be
duly and validly issued, fully paid and nonassessable, and will be free of
liens, encumbrances and restrictions on transfer other than restrictions on
transfer under this Agreement and under applicable state and federal
securities laws, and free of all liens, encumbrances and preemptive or
similar rights contained in the Company's Articles of Incorporation or Bylaws
or in any agreement to which the Company is a party, except as set forth in
the Schedule of Exceptions.
4.4 GOVERNMENTAL CONSENTS. No consent, approval, qualification,
order or authorization of, or filing with, any local, state or federal
governmental authority is required on the part of the Company in connection
with the performance of this Agreement, the offer, sale or issuance of the
Common Stock, except that any notice of sale required to be filed with the
Securities and Exchange Commission under the Securities Act or such
post-closing filings as may be
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required under applicable state securities laws, will be timely filed after
the Closing within the applicable periods therefor.
4.5 FINANCIAL STATEMENTS. The Company has made available to the
Purchaser an audited balance sheet of the Company dated December 31, 1998, an
audited income statement and statement of changes in cash flows of the
Company for its fiscal year ended December 31, 1998, and an unaudited income
statement and balance sheet of the Company for the eleven-month period ended
November 30, 1999 (all such financial statements being collectively referred
to herein as the "Financial Statements"). Such Financial Statements (a) are
in accordance with the books and records of the Company, (b) are true,
correct and complete and present fairly the financial condition of the
Company at the date or dates therein indicated and the results or operations
for the period or periods therein specified and (c) have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except as to the unaudited financial statements, for the
omission of notes thereto and normal year-end audit adjustments. Except as
set forth Schedule of Exceptions, the respective balance sheets of the
Financial Statements disclose all of the Company's material debts,
liabilities and obligations of any nature, whether due or to become due, as
of their respective dates (including, without limitation, absolute
liabilities, accrued liabilities and contingent liabilities) to the extent
that such debts, liabilities and obligations are required to be disclosed in
accordance with generally accepted accounting principles. The Company has
good and marketable title to all assets set forth on the balance sheets of
the Financial Statements, except for such assets as have been spent, sold or
transferred in the ordinary course of business since their respective dates.
5. RIGHTS AS SHAREHOLDER. Subject to the terms and conditions of this
Agreement, Purchaser shall have all of the rights of a shareholder of the
Company with respect to the Shares from and after the date on which Purchaser
delivers full payment for the Shares until such time as Purchaser disposes of
the Shares or the Company and/or its assignee(s) exercises the Rights of
First Refusal as set forth in Section 6 of this Agreement. Upon such
exercise, Purchaser shall have no further rights as a holder of the Shares so
purchased except the right to receive payment for the Shares so purchased in
accordance with the provisions of this Agreement, and Purchaser shall
forthwith cause the certificate(s) representing the Shares so purchased to be
surrendered to the Company for transfer or cancellation.
6. RIGHTS OF FIRST REFUSAL.
6.1 GENERAL. Before any Shares held by Purchaser or any
transferee (either being sometimes referred to in this Agreement as the
"Selling Shareholder") may be sold or otherwise transferred, the Company or
its
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assignee(s) shall have rights of first refusal to purchase the Shares under
the terms and conditions set forth in this Section 6 (the "Rights of First
Refusal").
6.2 NOTICE OF PROPOSED TRANSFER. The Selling Shareholder of the
Shares shall deliver to the Company a written notice (the "Notice") stating:
(a) the Selling Shareholder's BONA FIDE intention to sell or otherwise
transfer such Shares (the "Offered Shares"); (b) the name of each proposed
purchaser or other transferee (the "Proposed Transferee"); (c) the number of
Offered Shares to be transferred to each Proposed Transferee; and (d) the
BONA FIDE cash price or other consideration for which the Selling Shareholder
proposes to transfer the Offered Shares (the "Offered Price"), and the
Selling Shareholder shall offer the Offered Shares at the Offered Price to
the Company or its assignee(s).
6.3 EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
Fifteen (15) days after receipt of the Notice, the Company or its assignee(s)
may, by giving written notice to the Selling Shareholder, elect to purchase
all (but not less than all) of the Offered Shares, at the purchase price
determined in accordance with Section 6.4 below.
6.4 PURCHASE PRICE. The purchase price (the "Purchase Price") for
the Offered Shares purchased by the Company or its assignee(s) under this
Section 6.4 shall be the Offered Price. If the Offered Price includes
consideration other than cash, then the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in
good faith.
6.5 PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation
of all or a portion of any outstanding indebtedness of the Selling
Shareholder to the Company (or, in the case of purchase by an assignee, to
the assignee), or by any combination thereof within Forty (40) days after
receipt of the Notice or in the manner and at the times set forth in the
Notice. The sale shall constitute a representation and warranty by the
Selling Shareholder that the Shares being sold are free and clear of all
liens, claims and encumbrances.
6.6 SELLING SHAREHOLDER'S RIGHT TO TRANSFER. If all of the
Offered Shares proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company or its assignee(s) as provided in
this Section 6, then none of the Offered Shares shall be purchased under this
Section 6, and the Selling Shareholder may sell or otherwise transfer the
Offered Shares to that Proposed Transferee at the Offered Price or at a
higher price, provided that such sale or other transfer (a) is consummated
within Ninety (90) days after the date of the Notice, (b) is in accordance
with all of the terms of this Agreement and all other agreements between the
Selling Shareholder and the Company and (c) is
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effected in accordance with all applicable securities laws, and the Proposed
Transferee agrees in writing that the provisions of this Agreement shall
continue to apply to the Offered Shares in the hands of such Proposed
Transferee. If the Offered Shares described in the Notice are not transferred to
the Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company or its assignees shall again be offered the Rights of
First Refusal before any Offered Shares held by the Selling Shareholder may be
sold or otherwise transferred.
6.7 EXCEPTION FOR CERTAIN TRANSFERS. Anything to the contrary
contained in this Section 6 notwithstanding, the provisions of this Section 6
shall not apply to the transfer without consideration of any or all of the
Offered Shares during the Selling Shareholder's lifetime or upon the Selling
Shareholder's death by will or intestacy to the Selling Shareholder's immediate
family, a trust for the benefit of the Selling Shareholder or to the Selling
Shareholder's immediate family as a gift. "Immediate Family" as used herein
shall mean spouse, lineal descendant or antecedent, brother or sister. In such
case, the transferee or other recipient shall receive and hold the Offered
Shares so transferred subject to the provisions of this Section 6, and there
shall be no further transfer of such Offered Shares except in accordance with
the terms of this Section 6.
6.8 TERMINATION OF RIGHTS OF FIRST REFUSAL. The Rights of First
Refusal under this Section 6 shall not apply to and shall terminate immediately
before the closing of any initial public offering of the Company's Common Stock
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act and shall be
reinstated if there is no such closing.
7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
7.1 LEGENDS. Purchaser understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto to be placed on all certificates representing the Shares along with all
other legends that may be required by state or federal securities laws:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF BEFORE ONE YEAR FROM THE DATE OF THE
CLOSING AT WHICH SUCH SHARES WERE PURCHASED, WITHIN THE UNITED STATES,
CANADA, THEIR TERRITORIES AND POSSESSIONS OR ANY AREA SUBJECT TO THEIR
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JURISDICTION OR TO ANY CITIZEN OR RESIDENT OF THE UNITED STATES OR CANADA,
OR ANY STATE, TERRITORY OR POSSESSION THEREOF, INCLUDING ANY ESTATE OF
SUCH PERSON OR ANY CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY CREATED
OR EXISTING UNDER THE LAWS THEREOF, AND THEREAFTER MAY NOT BE SO
TRANSFERRED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER, INCLUDING RIGHTS OF FIRST REFUSAL, AS SET
FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDERS,
A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180-DAY
MARKET STANDOFF PROVISION AS SET FORTH IN THE COMMON STOCK PURCHASE
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
MARKET STANDOFF PROVISION IS BINDING ON TRANSFEREES OF THESE SHARES."
"THE TRANSFER, SALE, ASSIGNMENT, HYPOTHECATION, ENCUMBRANCE, OR ALIENATION
OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY A FIRST
REFUSAL AGREEMENT DATED AUGUST 7, 1996."
7.2 STOP-TRANSFER NOTICES. Purchaser agrees that, in order to
ensure compliance with the restrictions set forth in this Agreement, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
7.3 REFUSAL OF TRANSFER. The Company shall not be required (a) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (b) to treat as owner of
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such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares have been so transferred.
8. COVENANTS.
8.1 COVENANTS OF PURCHASER. Purchaser understands that the
Company is a party to that certain Right of First Refusal Agreement dated
August 7, 1996, by and between the Company and Sofinov Societe financiere
d'innovation Inc. ("Sofinov")(the "Refusal Agreement"). Under the terms of
that Refusal Agreement, and as a material condition to the Company's
obligations hereunder, Purchaser shall execute and deliver to the Company, at
the Closing, a counterpart signature page to the Refusal Agreement and shall
be bound by the terms and conditions of the Refusal Agreement. Purchaser
shall not resell or offer to resell any of the Shares, except in compliance
with all applicable terms and conditions set forth in this Agreement
(including, without limitation, all applicable terms, conditions and
limitations set forth under Section 3 of this Agreement) and the requirements
of Regulation S. Purchaser shall not resell or offer to resell any of the
Shares in the United States or to any person in the United States, to any
U.S. Person or to others for the benefit or account of any U.S. Person, at
any time before the expiration of the Restricted Period. Without limiting the
application of any of the remaining conditions set forth in this Section 8.1,
Purchaser shall in no case resell or offer to resell any of the Shares before
expiration of the Restricted Period, unless each of the following additional
conditions is satisfied:
(a) The prospective subsequent purchaser certifies that
such purchaser is not a U.S. Person and is not acquiring the Shares for the
account or benefit of any U.S. Person;
(b) The prospective subsequent purchaser agrees to resell
all such Shares in accordance with Regulation S, pursuant to a registration
under the Securities Act or pursuant to an available exemption from
registration; and
(c) Under the terms of the sale to such prospective
subsequent purchaser, each certificate evidencing all such Shares to be
transferred must contain a legend to the effect that transfer of such Shares
is prohibited except in accordance with Regulation S, which may be in the
form set forth in Section 7.1 of this Agreement.
8.2 COVENANT OF THE COMPANY. The Company shall not register the
transfer of any of the Shares that shall have been sold or transferred in
violation of Regulation S.
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9. COMPANY RIGHTS. The Company shall not be required (a) to
transfer on the Company's books any of the Shares that are or have been sold
or transferred in violation of any of the terms or provisions set forth in
this Agreement (including, without limitation, the conditions and limitations
set forth under Section 3 and Section 8 of this Agreement) or (b) to treat as
owner of such Shares, or to accord voting rights associated with the ownership
of such Shares or to pay dividends to, any transferee to whom such Shares
have been so transferred.
10. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The
obligations of the Company to Purchaser under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Purchaser contained in Section 3 of this Agreement and
those contained in the Certificate of Non-U.S. Certificate shall be true on
and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
10.2 PERFORMANCE. Purchaser shall have performed and
complied with all agreements, obligations, covenants and conditions contained
in this Agreement that are required to be performed or complied with it on or
before the Closing.
10.3 QUALIFICATIONS. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
issuance and sale of the Common Stock pursuant to this Agreement shall be
duly obtained and effective as of the Closing.
11. CONDITIONS OF PURCHASER'S OBLIGATIONS AT CLOSING. The
obligations of Purchaser to the Company under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions:
11.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company contained in Section 4 shall be true on the
Closing with the same effect as though such representations and warranties
had been made on the date of the Closing.
11.2 PERFORMANCE. The Company shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or
before the Closing.
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12. MARKET STANDOFF AGREEMENT. Purchaser hereby agrees, if so
requested by the Company or the managing underwriters in a public offering of
the Company's capital stock, that, without the prior written consent of the
Company or such managing underwriters, Purchaser shall not offer, sell,
contract to sell, grant any option to purchase, make any short sale or
otherwise dispose of, reduce Purchaser's market risk with respect to or make
a distribution of any capital stock of the Company held by or on behalf of
Purchaser or beneficially owned by Purchaser in accordance with the rules and
regulations of the Securities and Exchange Commission for a period of up to
180 days after the date of the final prospectus relating to any initial
public offering by the Company.
13. ADJUSTMENT FOR STOCK SPLIT. All references to the number of
Shares, the Purchase Price and similar terms regarding the Shares in this
Agreement shall be adjusted appropriately to reflect any stock split, stock
dividend or other change in the Shares that may be made by the Company after
the date of this Agreement.
14. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth in this Agreement, this Agreement shall
be binding on Purchaser and Purchaser's heirs, executors, administrators,
successors and assigns.
15. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Purchaser or by the Company forthwith to the
Board of Directors of the Company, which shall review such dispute at its next
regular meeting. The resolution of such a dispute by the Board of Directors of
the Company shall be final and binding on Purchaser and the Company.
16. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by
and construed in accordance with the laws of the State of California, excluding
that body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions nevertheless shall remain effective and shall remain
enforceable.
17. CHOICE OF FORUM. Any judicial proceeding brought by any party
hereto as a result of a dispute or controversy arising out of or related to this
Agreement shall be commenced in courts located within Los Angeles County,
California. All parties hereto agree to submit to the jurisdiction of the
federal and state courts located within such county in the event of such a
dispute or controversy.
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18. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties and agreements contained in this Agreement shall not
be discharged or dissolved upon the Closing but shall survive and remain in full
force and effect after the Closing.
19. NO WAIVER. The failure of any party hereto at any time to
require performance by the other party hereto of any term or provision of
this Agreement shall not affect the right of such party to require
performance of that term or provision, and any waiver by any party hereto of
any breach of any term or provision of this Agreement shall not be construed
as a waiver of any continuing or succeeding breach of such term or provision,
a waiver of the term or provision itself or a waiver of any right under this
Agreement.
20. WRITTEN AMENDMENTS. This Agreement may not be modified, amended,
altered or changed in any respect whatsoever except by further agreement in
writing, duly executed by all parties hereto. No oral statements or
representations made after the date of this Agreement by any party hereto are
binding on such party, and no party hereto shall have the right to rely on such
oral statements or representations.
21. NOTICES. Any notice, demand, offer or request required or
permitted to be given by either the Company or Purchaser pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (a) when received, (b) when delivered personally, (c)
One (1) business day after being delivered by facsimile, (d) One (1) business
day after being deposited with an overnight courier service or (d) Four (4)
days after being deposited in the U.S. Mail, First Class with postage prepaid
and addressed to the parties at the addresses provided to the Company (which
the Company agrees to disclose to the other parties upon request) or such
other address as a party may request by notifying the other in writing.
22. FURTHER INSTRUMENTS. The Company and Purchaser agree to execute
such further instruments and to take such further action as may be reasonably
necessary to carry out the purposes and intent of this Agreement.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto and supersedes in its entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof.
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24. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
The "Company": "Purchaser":
Hydrogen Burner, Inc.,
a California corporation
/s/ Dieter Bakic
--------------------------
Dieter Bakic
By: /s/ David Moard
--------------------------
David Moard Cuvillies Strasse #6
Its: President 81679 Munchen 80
Germany
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