SUBSCRIPTION AGREEMENT
THE OFFERING OF SECURITIES OF ELECTROSOURCE, INC. HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
OSECURITIES ACTO), IN RELIANCE UPON THE AVAILABILITY OF EXEMPTION
FROM REGISTRATION PROVIDED BY SECTION 4(2) OF SAID ACT AND REGULATION
D OF THE GENERAL RULES AND REGULATIONS PROMULGATED THEREUNDER. THERE
ARE SUBSTANTIAL RESTRICTIONS UPON TRANSFER OF THE SECURITIES.
ACCORDINGLY, THE SECURITIES ARE NOT FREELY TRANSFERABLE AND MAY HAVE
TO BE HELD UNTIL TRANSFER MAY BE MADE PURSUANT TO A REGISTERED
TRANSACTION OR AN EXEMPTION FROM REGISTRATION.
ELECTROSOURCE, INC.
SUBSCRIPTION AGREEMENT
To Be Fully Completed by Subscriber
Along with Related Appendix
When accepted by Electrosource, Inc., a Delaware corporation (the
"Company"), this Subscription Agreement shall constitute a
subscription to purchase shares of the Common Stock, no par value
(the "Shares"), of the Company for a purchase price of $1.10 per
Share. Each person participating in the current offering of Shares
was also a participant in an offering of shares of Common Stock and
of warrants to purchase Common Stock (the "Warrants") conducted by
the Company in 1994 (the "Prior Offering"). THIS AGREEMENT AMENDS
CERTAIN PROVISIONS OF THE DOCUMENTS GOVERNING THE PRIOR OFFERING.
Each part of this subscription Agreement must be completed by the
subscriber, and by his execution below, he acknowledges that he
understands that the Company is relying upon the accuracy and
completeness hereof in complying with its obligations under
applicable securities laws.
Please read and complete, as thoroughly as possible, sign, date and
deliver one copy of this Subscription Agreement and of the required
Annex to:
Electrosource, Inc.
0000X Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Each subscriber hereto must complete the Subscription Agreement.
1. Subscription. Subject to the terms and conditions hereof, the
undersigned subscribes for the number of Shares set forth on the
signature page hereof by his execution and tender of this
Subscription Agreement, together with the following:
(a) In respect of the Shares, payment of the purchase price
by check made payable to Electrosource, Inc.;
(b) A completed and executed Purchaser Questionnaire (Annex
l);
Upon acceptance of this subscription by the Company (which shall be
in the sole discretion of the Company), the undersigned agrees to
execute the documents described herein and all other documents as may
be required by the Company.
2. Amendment of Prior Agreements. By executing this Agreement, the
undersigned agrees to the following amendments to the Subscription
Agreement entered into between the undersigned and the Company in
connection with the Prior Offering (the "Prior Offering Document")
and to the Warrants issued and sold in connection with the Prior
Offering:
(a) The provisions of paragraph 11 below shall apply with
respect to the registration of the Shares and of the shares of
Common Stock purchased by the undersigned in the Prior Offering;
paragraph 9 of the Prior Offering Document shall be deleted
therefrom and shall no longer be of any force or effect.
(b) The Exercise Price per share (as defined in the Warrants)
of those Warrants having an original Exercise Price of $4.50 shall
be reduced to $2.50 per share, and the Exercise Price of those
Warrants having an original Exercise Price of $5.50 per share
shall be reduced to $3.50 per share.
(c) The Exercise Period (as defined in the Warrants) of each
Warrant is extended to September 12, 1997.
3. Representations and Warranties of the Undersigned. The
undersigned hereby represents and warrants to the Company as follows:
(a) The undersigned has received and read and is familiar
with the Private Placement Memorandum dated August 29, 1995, all
exhibits thereto, and this Subscription Agreement. Except as set
forth in the Private Placement Memorandum, no representations or
warranties have been made to the undersigned by the Company, or any
agent, employee or affiliate of any of them, and in entering into
this transaction the undersigned is not relying upon any information
other than the information contained in the Private Placement
Memorandum and the exhibits thereto, or resulting from his own
independent investigation.
(b) The undersigned, before the date hereof, has had an
opportunity to ask questions and receive answers from the Company or
a person or persons acting on its behalf, concerning the terms and
conditions of this investment and has had an opportunity to examine
all applicable documents and such applicable information as specified
in Schedule A to the Securities Act, to the extent such documents and
information are relevant to this transaction and are possessed by the
Company or are obtainable by the Company without unreasonable effort
or expense, and all such questions have been answered and documents
and information have been supplied to the full satisfaction of the
undersigned.
(c) The undersigned has been furnished and has carefully
read the Private Placement Memorandum and the documents attached as
exhibits thereto, and he is aware that:
(i) there are substantial risks incident to an investment
in the company, and such investment is speculative and involves
a high degree of risk of loss of his entire investment in the
Company;
(ii) no Federal or state agency has passed upon the sale of
the Securities or made any finding or determination concerning
the fairness of this investment, and the terms of the offering
may not conform to the guidelines of certain state securities
administrators;
(iii) the Company has and may continue to have a
significant need for cash for operating expenses and other
purposes; that the aggregate proceeds from the sale of the
Securities alone may not be sufficient to satisfy the cash
requirements of the Company for any appreciable period of time;
that other sources of funds may not be available to the Company;
and that, if such other sources are not available, the Company
could be expected to terminate its business, which could result
in the loss of his entire investment;
(iv) the Company is a development stage company, and
therefore, all risks attendant to such enterprises apply, and
while management believes the business prospects to be viable,
there can be no assurance that the business plan contemplated by
management will be realized; and
(v) the industry in which the Company is engaged is
occupied by several firms, some of which will be substantially
greater in size and have financial resources and personnel staff
larger and more established than those of the Company, and there
can be no assurance that the Company will be able to compete in
the market effectively;
(d) The undersigned understands that an investment in the
Company is an illiquid investment and further recognizes and agrees
that as a result of the restrictions described in the Private
Placement Memorandum, the undersignedOs investment in the Company
will, most likely, be held for a lengthy period of time.
(e) The undersigned acknowledges awareness that there are
substantial restrictions on the transferability of the Securities.
Since the Securities will not be registered under the Securities Act
(except as provided herein) or any applicable state securities law,
the Securities may not be, and the undersigned agrees that they shall
not be, sold unless such sale is exempt from such registration under
the Securities Act and any other applicable state blue sky laws or
regulations. The undersigned further acknowledges that the Company is
under no obligation to aid him in obtaining any exemption from the
registration requirements. The undersigned also acknowledges
responsibility for compliance with all conditions on transfer imposed
by any securities administrator of any state and for any expenses
incurred by the Company for legal or accounting services in
connection with reviewing such a proposed transfer and/or issuing
opinions in connection therewith.
(f) The undersigned:
(i) is an "Accredited Investor," as such term is defined
in Rule 501 promulgated under the Securities Act, who
(A) is a natural person that either alone or together with
his spouse has a net worth of at least $1,000,000; or
(B) is a natural person that had individual income of not
less than $200,000 in each of 1993 and 1994 and reasonably
expects Income of at least $200,000 in 1995; or
(C) is a natural person that had a joint income with his
spouse in excess of $300,000 in each of 1993 and 1994 and
reasonably expects joint income of at least $300,000 in 1995.
(g) The undersigned has been furnished with all materials
relating to the Company, its proposed activities, the offering of the
Securities or anything set forth in the Private Placement Memorandum
and exhibits which he has requested, and has been afforded the
opportunity to obtain any additional information necessary to verify
the accuracy of any representations or information set forth in the
Private Placement Memorandum.
(h) The Company has answered all inquiries that the
undersigned has asked concerning the Company and its proposed
activities, and all other matters relating to the formation of the
Company and the offering and sale of the Securities.
(i) The undersigned has not been furnished any offering
literature other than the Private Placement Memorandum and the
documents attached as exhibits thereto, and he has relied on only the
information contained in the Private Placement Memorandum and such
exhibits and the information, as described in subparagraphs (g) and
(h) above, furnished or made available to them by the Company.
(j) If the undersigned is a corporation, partnership, trust
or other form of business entity, it is authorized and otherwise duly
qualified to purchase and hold Securities in the Company and
recognizes that the information under the captions as set forth in
(f) above relates to investments by an individual, and such entity
has its principal place of business as set forth on the signature
page of the Subscription Agreement and has not been formed for the
specific purpose of acquiring Securities in the Company. (If the
undersigned is one of the aforementioned entities, it must agree to
supply any additional written information that may be required of
it.)
(k) The undersigned is acquiring the Securities for which he
hereby subscribes for his own account, as principal, for investment
purposes only and not with a view to the distribution thereof.
(l) The undersigned has not distributed the Private
Placement Memorandum to anyone, and no one has used the Private
Placement Memorandum, and he has not made any copies thereof.
(m) The undersigned has adequate means of providing for his
current needs and personal contingencies and has no need for
liquidity in his investment.
(n) The undersigned has previously purchased securities
which were sold in reliance on a private offering exemption from
registration under the Securities Act.
4. Delivery of Securities. The Company agrees to deliver to the
undersigned the securities acquired pursuant to this Subscription
Agreement no later than ten (10) days from the date of acceptance of
the subject subscription. The undersigned acknowledges that the
securities to be delivered shall bear appropriate restrictive legends
as to transfer.
5. Brokerage Fees. No brokerage fees will be paid to persons,
entities or brokers who have referred the purchaser to the Company.
6. Conditions of Acceptance. It is understood that this
Subscription Agreement is not binding on the Company until the
Company accepts it, which acceptance is in its sole discretion.
7. Transferability. This subscription is not transferable or
assignable by the undersigned.
8. Revocation. The undersigned agrees that the undersigned shall
not cancel, terminate or revoke this Subscription Agreement or any
agreement of the undersigned made hereunder and that this
Subscription Agreement shall survive the death or disability of the
undersigned.
9. Governing Law. This Subscription Agreement shall be governed
by the internal laws of the State of Texas.
10. Registration Rights.
(a) The Company undertakes to use its reasonable best efforts
to file, on or before October 30, 1995, a registration statement
under the Securities Act of 1933, as amended (the "Securities
Act") covering the sale of the Shares and of the shares of Common
Stock purchased by the undersigned in the Prior Offering
(collectively referred to in this paragraph 11 as "Covered
Shares"). Such registration statement will be applicable only to
sales of Covered Shares made through registered broker-dealers at
market prices prevailing at the time of sale. Shares of Common
Stock acquired upon exercise of Warrants prior to the date of the
initial filing of the registration statement may be included in
such registration statement, but any such inclusion shall have no
effect upon the period of time that the Company is required to
keep such registrations statement effective. Except as provided
in the preceding sentence, such registration statement shall not
be applicable to any shares of Common Stock acquired pursuant to
the exercise of Warrants; the Purchaser acknowledges and agrees
that the obligations of the Company with respect to registration
of shares of Common Stock acquired upon exercise of Warrants are
set forth in the form of Warrant itself.
(b) In connection with the registration of Covered Shares
undertaken by the Company pursuant to this paragraph 11, the
Company shall:
(i) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with
respect to such shares and use its reasonable best efforts
to cause such registration statement to become effective;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement current at any time that
sales are proposed to be made thereunder for a period
expiring on the earlier of (A) three years following the
date of the closing of the offering described in the Private
Placement Memorandum and (B) the date that all of the
Covered Shares acquired at such closing have been sold by
the original purchasers thereof, and to comply with the
provisions of the Securities Act with respect to the sale of
all Covered Shares covered by such registration statement
during such period;
(iii) provide Purchaser a reasonable opportunity to review
prior to filing (A) any registration statement filed by the
Company in connection with a registration in which Purchaser
is participating pursuant to this paragraph 11, and (B) any
amendments or supplements to such registration statement and
any prospectus used in connection therewith;
(iv) furnish to Purchaser such number of conformed copies
of such registration statement and of each such amendment
and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included
in such registration statement (including each preliminary
prospectus and prospectus supplement), in conformity with
the requirements of the Securities Act, and such other
documents as Purchaser may reasonably request in order to
facilitate the sale of the Covered Shares covered by such
registration statement;
(v) use its best efforts to register or qualify the Covered
Shares covered by such registration statement under such
other securities or blue sky laws of such jurisdictions as
Purchaser shall reasonably request, and do any and all other
acts and things which may be reasonably necessary or
advisable to enable Purchaser to consummate the sale in such
jurisdictions of such shares; provided that the Company
shall not for any such purpose be required to register or
qualify the covered shares covered by such registration
statement in any jurisdiction in which the Common Stock is
not then qualified for public trading, to qualify generally
to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this
paragraph 11(c)(v) be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction or to
consent to general service of process in any such
jurisdiction, and provided further that, in the event that
the Company proposes to limit the number of states in which
it will sell shares, the expense of registration or
qualification in any states other than those in which the
Company proposes to sell, including all legal fees incurred
in connection with such additional registrations or
qualifications, shall be borne by Purchaser;
(vi) notify Purchaser at any time when a prospectus
relating to the Covered Shares covered by such registration
statement is required to be delivered under the Securities
Act, of the Company's becoming aware that the prospectus
included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances then existing, and at the request
of Purchaser promptly prepare and furnish to Purchaser a
reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to the purchasers
of such shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances then existing;
(vii) use its best efforts to cause all of the Covered
Shares by such registration statement to be listed on each
securities exchange on which securities of the same class
issued by the Company are then listed or, if there shall
then be no such listing, to be accepted for quotation on
NASDAQ; and
(viii) provide a transfer agent and registrar for the
Covered Shares covered by such registration statement not
later than the effective date of such registration
statement.
(d) For as long as Purchaser shall continue to hold any Covered
Shares, the Company shall use reasonable efforts to file, on a
timely basis, all annual, quarterly and other reports required to
be filed by it under Sections 13 and 15(d) of the Exchange Act,
and the rules and regulations of the Commission thereunder, as
amended from time to time. In the event of any proposed sale of
Covered Shares by Purchaser pursuant to Rule 144 (or any
successor rule) under the Securities Act, the Company shall
cooperate with Purchaser so as to enable such sales to be made in
accordance with applicable laws, rules and regulations, the
requirements of the Company's transfer agents, and the reasonable
requirements of the broker through which the sales are proposed
to be executed.
(e) In connection with any registration pursuant to this
paragraph 11, the Company shall pay all registration and filing
fees, underwriting discounts, commissions and expenses (other
than those attributable to Covered Shares being sold by
Purchaser), printing expenses, fees and disbursements of the
Company's legal counsel and accountants, and transfer agentsO and
registrars' fees. Purchaser shall pay only those out-of-pocket
expenses attributable to the inclusion in the offering of the
Covered Shares being sold by Purchaser including, without
limitation, registration and filing fees and underwriting
discounts, commissions and expenses attributable thereto and fees
and disbursements of Purchaser's legal counsel and accountants.
(f) In the case of each registration effected by the Company
pursuant to this paragraph 11, the Company agrees to indemnify
and hold harmless Purchaser, each underwriter of the Covered
Shares so registered and each person who controls any such
underwriter within the meaning of Section 15 of the Securities
Act, against any and all losses, claims, damages or liabilities
to which they or any of them may become subject under the
Securities Act or any other statute or common law, including any
amount paid in settlement of any litigation, commenced or
threatened, if such settlement is effected with the written
consent of the Company, and to reimburse them for any legal or
other expenses incurred by them in connection with investigating
any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the registration statement relating to
the sale of the Covered Shares, or any post-effective amendment
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, if used prior to the
effective date of such registration statement, or contained in
the final prospectus (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or
supplement thereto) if used within the period during which the
Company is required to keep the registration statement to which
such prospectus relates current, or the omission or alleged
omission to state therein (if so used) a material fact necessary
in order to make the statement therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the indemnification agreement contained
in this paragraph (f) shall not (x) apply to such losses, claims,
damages, liabilities or actions arising out of, or based upon,
any such untrue statement or alleged untrue statement, or any
such omission or alleged omission, if such statement or omission
was made in reliance upon and in conformity with information
furnished in writing to the Company by Purchaser or such
underwriter for use in connection with the preparation of the
registration statement, any preliminary prospectus or final
prospectus contained in the registration statement, or any
amendment or supplement thereto, or (y) inure to the benefit of
any underwriter or any person controlling such underwriter, if
such underwriter failed to send or give a copy of the final
prospectus to the person asserting the claim at or prior to the
written confirmation of the sale of Covered Shares to such person
and if the untrue statement or omission concerned had been
corrected in such final prospectus.
(g) In the case of a registration effected by the Company
pursuant to this paragraph 11, Purchaser and each underwriter of
the Covered Shares to be registered shall agree in the same
manner and to the same extent as set forth in paragraph 11(f) to
indemnify and hold harmless the Company, each person who controls
the Company, the directors of the Company and those of its
officers who shall have signed any such registration statement,
with respect to any untrue statement or alleged untrue statement
in, or omission or alleged omission from, such registration
statement or any post-effective amendment thereto or any
preliminary prospectus or final prospectus (as amended or as
supplemented, if amended or supplemented as aforesaid) contained
in such registration statement, if such statement or omission was
made in reliance upon and in conformity with information
furnished in writing to the Company and Purchaser or any such
underwriter for use in connection with the preparation of such
registration statement or any preliminary prospectus or final
prospectus contained in such registration statement or any such
amendment or supplement thereto.
(h) Each indemnified party shall, with reasonable promptness
after its receipt of written notice of the commencement of any
action against such indemnified party in respect of which
indemnity may be sought from an indemnifying party on account of
an indemnity agreement contained in this paragraph 11, notify the
indemnifying party in writing of the commencement thereof. In
case any such action shall be brought against any indemnified
party and it shall so notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent it may wish, jointly with
any other indemnifying party similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party
to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under this paragraph 11 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation. The indemnity agreements in this paragraph 11
shall be in addition to any liabilities that the indemnifying
parties may have pursuant to law.
(i) If the indemnification provided for in this paragraph 11
shall be unavailable to or insufficient to hold harmless an
indemnified party under paragraphs 11(f) or 11(g) above in
respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then the indemnifying
parties shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportions
as are appropriate to reflect to the relative benefits received
by the respective indemnifying parties from the offering of the
Covered Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable
law, or if the indemnified party failed to give the notice
required under paragraph 11(h) above, then each indemnifying
party shall contribute to such amount paid by or payable by such
indemnified party in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of
the indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other
relevant equitable considerations. The relative benefits received
by the indemnifying parties shall be deemed to be in the same
proportion as the net proceeds to any such party bear to the
total net proceeds from the offering before deducting expenses.
The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the respective
indemnifying party and the partiesO relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
(j) In connection with any registered offering of the Covered
Shares:
(i) Offers and Sales; Notices to the Company. At least ten
business days prior to making any offer or sale of Covered
Shares pursuant to the registration statement pertaining to
the sale (the "Registration Statement"), each Purchaser
participating in such registered offering (a "Selling
Shareholder") shall advise the Company that such Selling
Shareholder proposes to make offers or sales of Covered
Shares, the number of Covered Shares proposed to be offered
and sold, the name and address of each broker or dealer to
or through which such offers and sales are proposed to be
made, and the approximate period of time in which such
offers and sales are proposed to be made. If, in the
reasonable judgment of the Company, it is necessary to amend
or supplement the Registration Statement or the prospectus
contained therein (the "Prospectus") prior to or in
connection with any such offer or sale or during the period
any such offer or sale is being made, the Company will
advise the Selling Shareholder, who shall promptly notify
each broker or dealer named by the Selling Shareholder as
participating in the offer or sale of Covered Shares by the
Selling Shareholder. The Selling Shareholder and each broker
or dealer participating in the offer or sale of Covered
Shares by the Selling Shareholder shall not make any offer
or sale of Covered Shares until the expiration of ten
business days after such Selling Shareholder has advised the
Company that he proposes to make such offers and sales and,
following such ten-day period, shall offer and sell Covered
Shares only during the period specified by such Selling
Shareholder in the notice given to the Company.
Notwithstanding the foregoing, if the Company shall advise
the Selling Shareholder of its determination that it is
necessary to amend or supplement the Registration Statement
or Prospectus, the Selling Shareholder and each broker or
dealer participating in the offer and sale of Covered Shares
by the Selling Shareholder shall make no offers or sales of
Covered Shares until the Company notifies the Selling
Shareholder that such supplement has been filed with or that
such amendment has been declared effective by the
Commission. Shareholder shall promptly notify the Company of
each sale of Covered Shares and shall promptly notify the
Company when the sale or other distribution of all Covered
Shares held by such Selling Shareholder has been completed.
(ii) Copies of Registration Statement and Prospectus. The
Company will furnish to each Selling Shareholder a conformed
copy of the Registration Statement and of each amendment
thereto. From time to time, for such period as in the
opinion of counsel for the Company the Prospectus is
required by law to be delivered in connection with offers or
sales of Covered Shares pursuant to the Registration
Statement, the Company will deliver to the Selling
Shareholder, in such quantities as the Selling Shareholder
may reasonably request, copies of the Prospectus (and of any
amendments or supplements thereto). The Company consents to
the use of the Prospectus (and of any amendments or
supplements thereto) only in accordance with the Securities
Act in connection with the offer or sale of the Covered
Shares and for such period of time thereafter, if any, as
the Prospectus is required by law to be delivered in
connection therewith. If during such period any event shall
occur as a result of which it is in the judgment of the
Company necessary to amend or supplement the Registration
Statement or Prospectus in order to make the statements
therein not misleading or to comply with the Securities Act
or any other law or any undertaking made by the Company in
the Registration Statement or Prospectus, the Company will
promptly prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the
Prospectus. No person is authorized by the Company, and no
Selling Shareholder shall give or shall authorize or permit
any other person to give any information or make any
representations other than as contained in the Prospectus or
any amendment or supplement thereto in connection with the
offering and sale of Covered Shares.
(iii) Compliance with Laws. The Company and each Selling
Shareholder agree to comply with all applicable federal and
state laws and regulations in connection with the
registration, qualification, offering and sale of Covered
Shares, including but not limited to the Securities Act, the
Securities Exchange Act of 1934 (the "Exchange Act"), the
rules and regulations promulgated by the Commission under
the Securities Act and the Exchange Act and, particularly,
Rules 10b-2, 10b-6 and 10b-7 of the Commission under the
Exchange Act.
(iv) Prohibition Against Trading by Persons Interested in
the Distribution. Each Selling Shareholder hereby represents
and warrants to the Company and for the benefit of each
other shareholder participating in the Registration that no
broker, dealer, Underwriter, Prospective Underwriter,
Affiliated Purchaser or other person who has agreed to
Participate or is Participating in the Distribution
contemplated hereby on behalf of or at the direction of such
Shareholder, shall directly or indirectly, by the use of any
means or instrumentality of interstate commerce, or of the
mails, or of any facility of any national securities
exchange, either alone or with one or more other persons,
bid for or purchase for any account in which he has a
beneficial interest, any shares of Common Stock, or any
right to purchase shares of Common Stock, or attempt to
induce any person to purchase any shares of Common Stock or
rights until after he has completed his Participation in
such Distribution. A Selling Shareholder shall be deemed to
have completed his Participation in the Distribution when he
has sold all Covered Shares owned by him. So long as such
transactions are not engaged in for the purpose of creating
actual, or apparent, active trading in or raising the price
of the Common Stock, this paragraph shall not prohibit (i)
transactions in connection with the Distribution
contemplated hereby effected otherwise than on a securities
exchange with the Company or the Selling Shareholders on
whose behalf such distribution is being made or among
Underwriters, Prospective Underwriters or other persons who
have agreed to Participate or are Participating in such
Distribution; or (ii) unsolicited, privately negotiated
purchases, each involving at least a block of shares, that
are not effected from or through a broker or dealer; or
(iii) purchases by the Company effected more than 40 days
after the effective date of the Registration Statement
covering the Common Stock to be distributed hereunder, for
the purpose of satisfying a sinking fund or similar
obligation to which the Company is subject and which becomes
due as of a date that does not exceed twelve months from the
date of such purchases; or (iv) odd-lot transactions and
round-lot transactions that offset odd-lot transactions
previously or simultaneously executed or reasonably
anticipated in the usual course of business by a person who
acts in the capacity of an odd-lot dealer; or (v) brokerage
transactions not involving solicitation of the customer's
order; or (vi) brokerage transactions involving the
solicitation of a customer's order made prior to the later
of nine business days before commencement of offers or sales
of the Covered Shares to be Distributed or the time the
broker-dealer becomes a Participant in the Distribution; or
(vii) offers to sell or the solicitation of offers to buy
Covered Shares being Distributed or securities or rights
offered as principal by the person making such offer to sell
or solicitation; or (viii) the exercise of any right or
conversion privilege set forth in the instrument governing a
security, to acquire any security directly from the Company;
or (ix) bids or purchases by an Underwriter, Prospective
Underwriter, Affiliated Purchaser or dealer, if all such
bids or purchases are made (a) prior to the later of nine
business days prior to the commencement of offers or sales
of the shares of Common Stock to be Distributed or the time
such person becomes a Participant in the Distribution or (b)
in the case of unsolicited purchases, prior to the later of
the date of commencement of offers or sales of the shares of
Common Stock to be Distributed or the time such person
becomes a Participant in the Distribution; or (x) bids or
purchases by the Company or the Selling Shareholders or by
an Affiliated Purchaser if all such bids and purchases are
made (a) nine or more business days prior to the
commencement of offers or sales of the shares of Common
Stock to be Distributed or (b) in the case of unsolicited
purchases, prior to the date of commencement of offers or
sales of the Covered Shares. Capitalized terms used in this
paragraph and not defined in this Agreement shall have the
meanings assigned to such terms in Rule 10b-6 of the
Commission.
11. Prohibition of Stabilizing Transactions. Neither any
Selling Shareholder nor any broker or dealer or other person
acting for or on behalf of the Selling Shareholder shall place
any bid or effect any purchase for the purpose of pegging, fixing
or stabilizing the price of the Covered Shares to be offered as
contemplated herein.
12. Prospectus Delivery Requirements. Each Selling Shareholder
shall comply with all applicable requirements with respect to the
delivery of Prospectuses set forth in sections 5 and 10 of the
Securities Act and all applicable rules thereunder.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, subject to acceptance by the Company, the
undersigned has completed this Subscription Agreement to evidence his
subscription to Electrosource, Inc. this __ day of August, 1995.
PURCHASER:
Printed Name:
Amount of Subscription: $
Number of Covered Shares:
SUBSCRIBERS ALSO MUST EXECUTE THE APPENDIX ATTACHED HERETO.
The Company has accepted this Subscription this __ day of __________,
1995.
ELECTROSOURCE, INC.
By:
Its:
ANNEX TO SUBSCRIPTION AGREEMENT
ALL INFORMATION WILL BE TREATED CONFIDENTIALLY
PURCHASER QUESTIONNAIRE
Electrosource, Inc.
0000X Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Gentlemen:
The information contained herein is being furnished to you in
order to determine whether ______________________________ (insert
name of proposed purchaser) may purchase Shares of the Common Stock
of ELECTROSOURCE, INC. (the OCompanyO), pursuant to the private
offering exemption from registration provided by the Securities Act
of 1933, as amended (the OSecurities ActO). The undersigned
understands that (i) the Company will rely upon the information
contained herein for purposes of such determination, (ii) the Shares
will not be registered under the Securities Act in reliance upon the
private offering exemption from registration provided by the
Securities Act, and (iii) this questionnaire is not an offer of the
Shares or any other securities to the undersigned or to the
above-named proposed purchaser.
I herewith furnish you with the following representations and
information:
1. Name:
2. Residence Address:
3. Financial Data - see Subscription Agreement, Section 3(f).
(a) Individual income* during 1993: $ _____________
(b) Individual income* during 1994: $ _____________
(c) Estimated individual income* during 1995: $ _____________
(d) Joint income* with spouse during 1993: $ _______________
(e) Joint income* with spouse during 1994: $ _______________
(f) Estimated joint income* with spouse during 1995: $
___________
(g) Current net worth of undersigned (including homes,
furnishings and automobiles)):
$ _____________
(h) Current net worth of undersigned (excluding homes,
furnishings and automobiles)):
$ _____________
(i) Current net worth of spouse, if any (including homes,
furnishings and automobiles):
$ _______________
(j) Current net worth of spouse, if any (excluding homes,
furnishings and automobiles):
$ _______________
* The term "Income" shall be deemed to mean adjusted gross income of
the undersigned (as shown on the undersignedOs Federal Income
Tax returns).
4. I have such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of the
proposed investment. I can bear the economic risks in and can afford
a complete loss of any investment I may make by virtue of my
purchasing Securities and can afford to hold any such investment for
an indefinite period. If I acquire any Securities, such acquisition
shall be for my own account, for investment and not with a view to
the resale or distribution thereof.
5. I represent to you that (a) the information contained herein is
complete and accurate and may be relied upon by you, and (b) I will
notify you immediately of any material change in any of such
information occurring prior to the closing of my purchase of
Securities. I agree that, notwithstanding the confidential treatment
to be accorded the information contained herein, you may divulge such
information in whole or in part or present all or any part of this
document to such parties as you may deem appropriate in connection
with establishing the availability of an exemption under any Federal
or state securities laws, rules or regulations.
IN WITNESS WHEREOF, I have executed this Purchaser Questionnaire this
__ day of August, 1995, and declare that it is truthful and correct.
PURCHASER:
Sworn to before me this __ day of August, 1995.
Notary Public in and for the State of , County of _____________.
Printed Name: My Commission Expires: