CONCEPTUS INC
S-3, EX-4.1, 2000-08-01
SURGICAL & MEDICAL INSTRUMENTS & APPARATUS
Previous: CONCEPTUS INC, S-3, 2000-08-01
Next: CONCEPTUS INC, S-3, EX-5.1, 2000-08-01






                                                                     EXHIBIT 4.1

                            STOCK PURCHASE AGREEMENT

Conceptus, Inc.
1021 Howard Avenue
San Carlos, CA  94070

Ladies & Gentlemen:

    The  undersigned,   ___________________________   (the  "Investor"),  hereby
confirms its agreement with you as follows:

1.  This Stock Purchase Agreement (the "Agreement") is made effective as of July
20, 2000 between Conceptus,  Inc., a Delaware  corporation (the "Company"),  and
the Investor.

2.  The Company has  authorized  the issuance and sale of up to 1,940,000 shares
(the  "Shares") of common stock of the Company,  $0.003 par value per share (the
"Common Stock"),  subject to adjustment by the Company's Board of Directors,  to
certain investors in a private placement (the "Offering").

3. The Company and the Investor  agree that the Investor  will purchase from the
Company  and the  Company  will  issue and sell to the  Investor  ______________
Shares,  for a purchase  price of $7.2531 per share,  or an  aggregate  purchase
price of  $______________,  pursuant to the Terms and Conditions for Purchase of
Shares  attached  hereto as Annex I and  incorporated  herein by reference as if
fully set forth herein. Unless otherwise requested by the Investor, certificates
representing  the Shares  purchased by the Investor  will be  registered  in the
Investor's name and address as set forth below.

4.  The Investor represents  that,  except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the  Company or its  affiliates,  (b) neither it, nor any group of which it is a
member or to which it is  related,  beneficially  owns  (including  the right to
acquire  or vote)  any  securities  of the  Company  and (c) it has no direct or
indirect affiliation or association with any NASD member. Exceptions:

__________________________________________________________________
_________________________________________________________________.
    (If no exceptions,  write "none." If left blank,  response will be deemed to
be "none.")

    Please confirm that the foregoing correctly sets forth the agreement between
us by signing in the space provided below for that purpose.


                    ---------------------------------------------------------
                    "INVESTOR"

                    By:
                         ----------------------------------------------------
                    Print Name:
                                 --------------------------------------------
                    Title:
                            -------------------------------------------------
                    Address:
                              -----------------------------------------------
                    Tax ID No.:
                                 --------------------------------------------
                    Contact name:
                                   ------------------------------------------
                    Telephone:
                                ---------------------------------------------
                    Name in which shares should be registered
                    (if different):
                                   ------------------------------------------

AGREED AND ACCEPTED:
-------------------
CONCEPTUS, INC.


____________________________
By:      Steven Bacich
         President and CEO


<PAGE>



                                     ANNEX I

                   TERMS AND CONDITIONS FOR PURCHASE OF SHARES

    1. Authorization and Sale of the Shares. Subject to the terms and conditions
of this  Agreement,  the  Company  has  authorized  the sale of up to  1,940,000
Shares. The Company reserves the right to increase or decrease this number.

    2. Agreement to Sell and Purchase the Shares; Subscription Date.

       2.1 At the Closing  (as  defined in Section 3), the Company  will sell to
the Investor,  and the Investor  will purchase from the Company,  upon the terms
and  conditions  hereinafter  set  forth,  the number of Shares set forth on the
signature page hereto at the purchase price set forth on such signature page.

       2.2 The  Company  is  entering  into  this  same  form of Stock  Purchase
Agreement with certain other investors (the "Other  Investors")  effective as of
the date hereof  (the  "Subscription  Date") and  expects to  complete  sales of
Shares to them. (The Investor and the Other Investors are hereinafter  sometimes
collectively  referred to as the  "Investors,"  and this Agreement and the Stock
Purchase  Agreements  executed by the Other Investors are hereinafter  sometimes
collectively referred to as the "Agreements.")

    3.  Delivery of the Shares at Closing.  The  completion  of the purchase and
sale of the Shares (the "Closing") shall occur (the "Closing Date") on the third
business  day after the  Subscription  Date (or upon  such  earlier  date as the
Company and the Investors shall agree), at the offices of the Company's counsel.
At the  Closing,  the Company  shall  deliver to the  Investor one or more stock
certificates  representing  the number of Shares set forth on the signature page
hereto,  each such  certificate to be registered in the name of the Investor or,
if so  indicated  on the  signature  page  hereto,  in  the  name  of a  nominee
designated by the Investor.  The Company's obligation to issue the Shares to the
Investor shall be subject to the following conditions,  any one or more of which
may be waived by the  Company:  (a)  receipt by the  Company of a  certified  or
official bank check or wire transfer of funds in the full amount of the purchase
price for the Shares being  purchased  hereunder  as set forth on the  signature
page hereto; (b) completion of the purchases and sales under the Agreements with
the Other Investors;  and (c) the accuracy of the representations and warranties
made by the Investors and the fulfillment of those undertakings of the Investors
to be fulfilled prior to the Closing. The Investor's  obligation to purchase the
Shares shall be subject to the  following  conditions,  any one or more of which
may be waived by the Investor:  (a) receipt by the Investor of one or more stock
certificates  representing  the number of Shares set forth on the signature page
hereto;  (b)  receipt  by the  Investor  of an opinion  letter,  dated as of the
Closing Date, from Latham & Watkins, counsel to the Company; (c) the accuracy of
the  representations  and warranties  made by the Company and the fulfillment of
those  undertakings of the Company to be fulfilled prior to the Closing;  (d) on
the  Closing  Date,  no legal  action,  suit or  proceeding  shall be pending or
threatened which seeks to restrain or prohibit the transactions  contemplated by
the  Agreements;  (e) the Company  shall have  delivered  to the  Investors  its
certificate,  dated the  Closing  Date,  duly  executed


                                       2


<PAGE>

by its Chief Executive  Officer to the effect set forth in clause (c) above; (f)
the receipt by the  Investors of a  certificate,  dated the Closing Date, of the
Secretary or Assistant  Secretary of the Company  certifying (i) the certificate
of  incorporation  and bylaws of the Company as in effect on the  Closing  Date,
(ii) all resolutions of the board of directors (and  committees  thereof) of the
Company relating to the Agreements and the transactions contemplated thereby and
(iii) the incumbency of all officers of the Company executing the Agreements and
any other agreement or document contemplated thereby.

    4.  Representations,  Warranties  and Covenants of the Company.  The Company
hereby represents and warrants to, and covenants with, the Investor, as follows:

        4.1  Organization.  Each of the  Company  and its  Subsidiaries  is duly
organized  and  validly  existing  in  good  standing  under  the  laws  of  the
jurisdiction of its  organization.  Each of the Company and its Subsidiaries (as
defined  in  Rule  405  under  the  Securities  Act of  1933,  as  amended  (the
"Securities  Act")) has full power and authority to own,  operate and occupy its
properties and to conduct its business as presently  conducted and is registered
or qualified to do business and in good standing in each  jurisdiction  in which
it owns or leases property or transacts  business and where the failure to be so
qualified would have a material  adverse effect upon the financial  condition or
business,  operations,  assets or prospects of the Company and its Subsidiaries,
considered as one enterprise,  and no proceeding has been instituted in any such
jurisdiction,  revoking,  limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.

        4.2 Due Authorization. The Company has all requisite power and authority
to execute,  deliver and perform its obligations  under the Agreements,  and the
Agreements have been duly  authorized and validly  executed and delivered by the
Company  and  constitute  legal,  valid and  binding  agreements  of the Company
enforceable against the Company in accordance with their terms, except as rights
to indemnity and contribution may be limited by state or federal securities laws
or the public  policy  underlying  such laws,  except as  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws affecting  creditors' and contracting parties' rights generally and
except  as  enforceability  may be  subject  to  general  principles  of  equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law).

        4.3 Non-Contravention. The execution and delivery of the Agreements, the
issuance and sale of the Shares to be sold by the Company under the  Agreements,
the  fulfillment  of the terms of the  Agreements  and the  consummation  of the
transactions  contemplated  thereby will not (A) conflict  with or  constitute a
violation of, or default (with or without the giving of notice or the passage of
time or both) under, (i) any material bond, debenture, note or other evidence of
indebtedness,  or under any material lease, indenture,  mortgage, deed of trust,
loan  agreement,  joint  venture or other  agreement or  instrument to which the
Company or any  Subsidiary is a party or by which it or any of its  Subsidiaries
or their  respective  properties are bound,  (ii) the charter,  by-laws or other
organizational  documents  of the Company or any  Subsidiary,  or (iii) any law,
administrative  regulation,  ordinance  or  order of any  court or  governmental
agency,  arbitration  panel  or  authority


                                       3


<PAGE>

applicable to the Company or any Subsidiary or their respective  properties,  or
(B)  result in the  creation  or  imposition  of any lien,  encumbrance,  claim,
security interest or restriction  whatsoever upon any of the material properties
or assets of the Company or any Subsidiary or an  acceleration  of  indebtedness
pursuant to any  obligation,  agreement or  condition  contained in any material
bond,  debenture,  note or any other  evidence of  indebtedness  or any material
indenture, mortgage, deed of trust or any other agreement or instrument to which
the Company or any  Subsidiary is a party or by which any of them is bound or to
which any of the property or assets of the Company or any Subsidiary is subject.
No  consent,  approval,  authorization  or  other  order  of,  or  registration,
qualification  or filing  with,  any  regulatory  body,  administrative  agency,
self-regulatory  organization,  stock exchange or market, or other  governmental
body in the United  States is required  for the  execution  and  delivery of the
Agreements  and the valid issuance and sale of the Shares to be sold pursuant to
the  Agreements,  other than such as have been made or obtained,  and except for
any  securities  filings  required to be made under federal or state  securities
laws.

        4.4  Reporting  Status.  The  Company  has filed in a timely  manner all
documents  that the Company was required to file under the  Securities  Exchange
Act of 1934, as amended (the "Exchange Act"), during the 12 months preceding the
date of  this  Agreement.  The  following  documents  complied  in all  material
respects with the SEC's  requirements as of their  respective  filing dates, and
the  information  contained  therein as of the date  thereof  did not contain 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 in light of the
circumstances  under where they were made not  misleading,  except to the extent
that  information  contained in any such document has been revised or superseded
by a later filed SEC Document (as defined below):

        (i)   The  Company's  Annual  Report  on Form  10-K for the  year  ended
              December 31, 1999, as amended, including the exhibits thereto (the
              "Form 10-K"); and

        (ii)  all other documents,  including the exhibits thereto, filed by the
              Company  with the SEC since  December  31,  1999  pursuant  to the
              reporting   requirements  of  the  Exchange  Act,   including  the
              Company's  Quarterly  Reports on Form 10-Q for the quarters  ended
              March 31, 2000 and June 30, 2000 (together with the Form 10-K, the
              "SEC Documents").

        The SEC Documents (together with press releases and other documents made
publicly  available by the Company),  when taken together as a whole,  as of the
date hereof,  do not contain 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 in light of the circumstances  under which they were made not
misleading.

        4.5 Capitalization.  As of the date hereof, the authorized capital stock
of the  Company  consists of  30,000,000  shares of Common  Stock and  3,000,000
shares of  preferred  stock,  par value  $.003 per share,  of the  Company  (the
"Preferred  Stock"). As of June 30, 2000, there were approximately (i) 9,728,964
shares of Common Stock issued and  outstanding,  (ii) no shares of the

                                       4



<PAGE>

Preferred Stock issued and  outstanding,  (iii)  2,106,040  shares of the Common
Stock reserved for issuance upon exercise of outstanding stock options issued by
the Company to current or former  employees,  consultants  and  directors of the
Company and its  Subsidiaries,  (iv) 81,561 shares of Common Stock  reserved and
available for issuance  pursuant to the Company's  1995 Employee  Stock Purchase
Plan,  and (v) no other  shares or options,  warrants or other rights to acquire
shares of capital  stock of the Company or securities  convertible  into capital
stock of the Company. The Company is, directly or indirectly, the registered and
beneficial  owner of all of the  outstanding  shares of capital stock of each of
its  Subsidiaries.  All outstanding  shares of Common Stock are duly authorized,
validly issued,  fully paid and nonassessable,  free from any liens or any other
encumbrances  created by the Company  with  respect to the issuance and delivery
thereof and not subject to preemptive rights. Other than as disclosed in the SEC
Documents,  there  are no  outstanding  rights,  options,  warrants,  preemptive
rights,  rights of first refusal  agreements,  commitments or similar rights for
the purchase or  acquisition  from the Company of any securities of the Company.
The Shares to be sold pursuant to the Agreements have been duly authorized,  and
when issued and paid for in accordance  with the terms of the Agreements will be
duly and validly  issued,  fully paid and  nonassessable,  free and clear of all
pledges,  liens,  encumbrances and other restrictions  (other than those arising
under federal or state  securities laws as a result of the private  placement of
the Shares to the Investors). No preemptive right, co-sale right, right of first
refusal or other similar right exists with respect to the Shares or the issuance
and sale thereof.  No further approval or authorization of any stockholder,  the
Board of  Directors  of the Company or others is required  for the  issuance and
sale of the Shares.  Except as set forth in the SEC Documents,  no holder of any
of the  securities  of the  Company  or any of its  Subsidiaries  has any rights
("demand,"  "piggyback"  or  otherwise)  to have such  securities  registered by
reason of the  intention  to file,  filing or  effectiveness  of a  Registration
Statement (as defined in Section 7.1 hereof).

        4.6  Legal  Proceedings.  There is no  material  legal  or  governmental
proceeding pending or, to the knowledge of the Company,  threatened to which the
Company or any  Subsidiary  or any  officer or  director  of the  Company or any
Subsidiary in their capacity as such officer or director is or may be a party or
of which the  business or property of the Company or any  Subsidiary  is subject
that  is  not  disclosed  in  the  SEC  Documents.  There  is no  action,  suit,
proceeding,  inquiry or  investigation  before or by any court,  public board or
body (including,  without  limitation,  the SEC) pending or, to the knowledge of
the  Company,  threatened  against  or  affecting  the  Company  or  any  of its
Subsidiaries wherein an unfavorable decision,  ruling or finding could adversely
affect the  validity or  enforceability  of, or the  authority or ability of the
Company to perform its obligations under the Agreements.

        4.7  No  Violations.  Neither  the  Company  nor  any  Subsidiary  is in
violation  of its  charter,  bylaws,  or other  organizational  document,  or in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any Subsidiary,  which violation,  individually or in the aggregate, would be
reasonably likely to have a material adverse effect on the business, operations,
assets or prospects or financial  condition of the Company and its Subsidiaries,
considered  as one  enterprise,  or is in default (and there exists no condition
which,  with or without the  passage of time or giving of notice or both,  would
constitute a default) in any material  respect in the  performance  of any bond,


                                       5



<PAGE>

debenture,  note  or any  other  evidence  of  indebtedness  in  any  indenture,
mortgage,  deed of trust or any other material  agreement or instrument to which
the  Company  or any  Subsidiary  is a party  or by  which  the  Company  or any
Subsidiary is bound or by which the  properties of the Company or any Subsidiary
are bound,  which would be reasonably  likely to have a material  adverse effect
upon the business, operations, assets or prospects or financial condition of the
Company and its Subsidiaries, considered as one enterprise.

        4.8 Governmental  Permits,  Etc. With the exception of the matters which
are dealt  with  separately  in Section  4.1,  4.4,  4.12 and 4.13,  each of the
Company  and  its   Subsidiaries   has  all  necessary   franchises,   licenses,
certificates and other authorizations from any foreign,  federal, state or local
government  or  governmental  agency,  department,  or body  that are  currently
necessary for the operation of the business of the Company and its  Subsidiaries
as currently conducted,  except where the failure to currently possess could not
reasonably  be expected  to have a material  adverse  effect upon the  business,
operations,  assets or prospects  or financial  condition of the Company and its
Subsidiaries, considered as one enterprise.

        4.9 Intellectual Property. Each of the Company and its Subsidiaries owns
or possesses  sufficient rights to use all patents,  patent rights,  trademarks,
copyrights,  licenses,  inventions,  trade  secrets,  trade  names and  know-how
(collectively,  "Intellectual  Property")  that are necessary for the conduct of
its  business as now  conducted  except  where the failure to  currently  own or
possess would not have a material  adverse effect on the financial  condition or
business of the  Company  and its  Subsidiaries  considered  as one  enterprise.
Except as set forth in the SEC Documents, (i) neither the Company nor any of its
Subsidiaries  has  received  any  notice  of,  or  has  any  knowledge  of,  any
infringement   of  asserted  rights  of  a  third  party  with  respect  to  any
Intellectual  Property  that,  individually  or in the  aggregate,  would have a
material  adverse  effect on the  financial  condition or business,  operations,
assets or  prospects  of the  Company  and its  Subsidiaries  considered  as one
enterprise and (ii) neither the Company nor any of its Subsidiaries has received
any  notice of any  infringement  rights by a third  party  with  respect to any
Intellectual  Property  that,  individually  or in the  aggregate,  would have a
material  adverse effect upon the business,  operations,  assets or prospects or
financial  condition  of the Company  and its  Subsidiaries,  considered  as one
enterprise.

        4.10 Financial  Statements.  The financial statements of the Company and
the related  notes  thereto  included in the SEC Documents  present  fairly,  in
accordance with generally accepted accounting principles, the financial position
of the Company and its Subsidiaries as of the dates  indicated,  and the results
of its  operations  and cash  flows  for the  periods  therein  specified.  Such
financial  statements  (including  the  related  notes)  have been  prepared  in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods therein  specified,  except as set forth in the SEC
Documents and subject in the case of unaudited financial  statements,  to normal
year-end audit adjustments.

        4.11  No  Material  Adverse  Change.  Except  as  disclosed  in the  SEC
Documents,  since December 31, 1999 there has not been (i) any material  adverse
change in the financial condition,  earnings or prospects of the Company and its
Subsidiaries  considered as one  enterprise  nor has any material  adverse event
occurred to the Company or its  Subsidiaries,  (ii) any material



                                       6


<PAGE>

adverse  event  affecting  the  Company  or any of its  Subsidiaries,  (iii) any
obligation,  direct or  contingent,  that is  material  to the  Company  and its
Subsidiaries  considered  as one  enterprise,  incurred by the  Company,  except
obligations  incurred in the ordinary  course of business,  (iv) any dividend or
distribution  of any kind  declared,  paid or made on the  capital  stock of the
Company or any of its  Subsidiaries,  or (v) any loss or damage  (whether or not
insured) to the  physical  property  of the  Company or any of its  Subsidiaries
which has been  sustained  which has a material  adverse effect on the condition
(financial or otherwise),  earnings, operations,  business or business prospects
of the Company and its  Subsidiaries  considered  as one  enterprise.  Except as
disclosed in the SEC Documents,  neither the Company nor any of its Subsidiaries
has (i) sold, assigned, transferred,  abandoned, mortgaged, pledged or subjected
to lien any of its material properties,  tangible or intangible, or rights under
any material  contract,  permit,  license,  franchise or other agreement or (ii)
waived or cancelled any indebtedness or other obligations owed to the Company or
any such Subsidiary.

        4.12 NASDAQ Listing.  The Company's Common Stock is registered  pursuant
to Section  12(g) of the Exchange Act and is listed on The Nasdaq Stock  Market,
Inc. National Market (the "Nasdaq National  Market"),  and the Company has taken
no  action  designed  to,  or  likely to have the  effect  of,  terminating  the
registration of the Common Stock under the Exchange Act or de-listing the Common
Stock from the Nasdaq  National  Market,  nor to the Company's  knowledge is the
National   Association   of  Securities   Dealers,   Inc.   ("NASD")   currently
contemplating  terminating  such listing.  The Company and the Common Stock meet
the criteria for continued listing and trading on the Nasdaq National Market.

        4.13  Listing  of  the  Shares.   The  Company  shall  comply  with  all
requirements  of the National  Association  of  Securities  Dealers,  Inc.  with
respect to the  issuance  of the Shares  and the  listing  thereof on the Nasdaq
National Market. In furtherance  thereof, the Company shall use its best efforts
to take such actions as may be necessary  and as soon as  practicable  and in no
event later than 20 days after the Closing Date to file with the Nasdaq National
Market an application or other document  required by the Nasdaq  National Market
and pay all  applicable  fees for the  listing  of the  Shares  with the  Nasdaq
National Market and shall provide evidence of such filing to the Investors.  The
Company  knows of no reason why the Shares will not be  eligible  for listing on
the Nasdaq National Market.

        4.14 No Manipulation  of Stock.  The Company has not taken and will not,
in violation  of  applicable  law,  take,  any action  designed to or that might
reasonably be expected to cause or result in  stabilization  or  manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.

        4.15 S-3 Status.  The Company meets the requirements for the use of Form
S-3 for the  registration  of the resale of the Shares by the Investors and will
use its best efforts to maintain S-3 status with the SEC during the Registration
Period (as defined in Section 7.1(c)).

        4.16  Insurance.  The Company  maintains  and will  continue to maintain
insurance  against  loss or  damage  by fire or other  casualty  and such  other
insurance,  including,  but not limited


                                       7


<PAGE>

to, product liability  insurance,  in such amounts and covering such risks as is
reasonably  adequate  consistent  with industry  practice for the conduct of its
business  and the value of its  properties,  all of which  insurance  is in full
force and effect.

        4.17 Tax Matters. The Company has filed all material federal,  state and
local income and  franchise  and other tax returns  required to be filed and has
paid all taxes  due in  accordance  therewith,  and no tax  deficiency  has been
determined adversely to the Company which has had (nor does the Company have any
knowledge of any tax deficiency  which, if determined  adversely to the Company,
might have) a material adverse effect on the condition (financial or otherwise),
earnings, operations,  business or prospects of the Company and its Subsidiaries
considered as one enterprise .

        4.18  Investment  Company.  The Company is not an  "investment  company"
within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the SEC thereunder.

        4.19 No Registration.  Assuming the accuracy of the  representations and
warranties  made by, and  compliance  with the  covenants  of, the  Investors in
Section 5 hereof,  no  registration  of the Shares under the  Securities  Act is
required in  connection  with the offer and sale of the Shares by the Company to
the Investors as contemplated by the Agreements.

        4.20  Internal  Accounting  Controls.  The Company and its  Subsidiaries
maintain a system of internal accounting controls sufficient, in the judgment of
the  Company's  board of directors,  to provide  reasonable  assurance  that (i)
transactions  are executed in accordance with  management's  general or specific
authorizations,   (ii)   transactions   are  recorded  as  necessary  to  permit
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting  principles  and to maintain  asset  accountability,  (iii) access to
assets is permitted  only in accordance  with  management's  general or specific
authorization and (iv) the recorded  accountability  for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

        4.21 Form D. The Company agrees to file one or more Forms D with respect
to the  Shares  on a timely  basis as  required  under  Regulation  D under  the
Securities  Act to claim the exemption  provided by Rule 506 of Regulation D and
to provide a copy thereof to the Investors and their counsel promptly after such
filing.

        4.22 Certain Future Financings and Related Actions.

             (a) The Company will not sell, offer to sell, solicit offers to buy
or  otherwise  negotiate  in  respect  of  any  "security"  (as  defined  in the
Securities  Act) that is or could be integrated with the sale of the Shares in a
manner that would require the  registration  of the Shares under the  Securities
Act.

                                       8


<PAGE>


             (b) The Company  shall not offer,  sell,  contract to sell or issue
(or  engage any person to assist  the  Company  in taking any such  action)  any
equity securities or securities convertible into,  exchangeable for or otherwise
entitling  the holder to acquire,  any Common  Stock at a price below the market
price of the Common Stock  during the period from the date of this  Agreement to
the  effective  date of the  Registration  Statement;  provided,  however,  that
nothing  in this  Section  4.22(b)  shall  prohibit  the  Company  from  issuing
securities (v) to employees, directors, officers, advisors or consultants of the
Company; (w) upon exercise of conversion,  exchange,  purchase or similar rights
issued,  granted or given by the Company and  outstanding as of the date of this
Agreement;  (x) pursuant to a public offering  underwritten on a firm commitment
basis  registered  under the Securities  Act; (y) for the purpose of funding the
acquisition  of securities or assets of any entity in a single  transaction or a
series of related  transactions;  or (z) pursuant to a strategic  partnership or
alliance  agreement,  loan  agreement,  equipment  lease or  similar  commercial
agreement (including licensing and similar arrangements).

        4.23 Use of Proceeds.  The Company  will use the net  proceeds  from the
sale of the Shares for working capital and other general corporate purposes.

    5.  Representations, Warranties and Covenants of the Investor.

        5.1 The Investor  represents  and warrants to, and covenants  with,  the
Company  that:  (i) the  Investor  is an  "accredited  investor"  as  defined in
Regulation  D under  the  Securities  Act and the  Investor  has the  knowledge,
sophistication  and  experience  necessary  to make,  and is  qualified  to make
decisions  with  respect to,  investments  in shares  presenting  an  investment
decision like that involved in the purchase of the Shares, including investments
in securities issued by the Company and investments in comparable companies, and
has  requested,  received,  reviewed and  considered  all  information it deemed
relevant  in making an  informed  decision  to  purchase  the  Shares;  (ii) the
Investor  is  acquiring  the  number of Shares set forth on the  signature  page
hereto for its own account for investment only and with no present  intention of
distributing  any of such  Shares  in  violation  of the  Securities  Act or any
arrangement or understanding  with any other persons  regarding the distribution
of such Shares;  (iii) the Investor  will not,  directly or  indirectly,  offer,
sell,  pledge,  transfer or otherwise  dispose of (or solicit any offers to buy,
purchase or otherwise  acquire or take a pledge of) any of the Shares  except in
compliance with the Securities  Act,  applicable  state  securities laws and the
respective rules and regulations promulgated  thereunder;  (iv) the Investor has
filled in all  requested  information  on the  signature  page hereto for use in
preparation of the  Registration  Statement and the answers thereto are true and
correct  as of the date  hereof and will be true and  correct as of the  Closing
Date; (v) the Investor will notify the Company  promptly of any change in any of
such  information  until such time as the Investor has sold all of its Shares or
until the  Company  is no longer  required  to keep the  Registration  Statement
effective;  and (vi) the  Investor  has,  in  connection  with its  decision  to
purchase the number of Shares set forth on the  signature  page  hereto,  relied
only  upon the SEC  Documents,  other  publicly  available  information  and the
representations  and warranties of the Company  contained  herein.  The Investor
understands that its acquisition of the Shares has not been registered under the
Securities  Act or registered  or qualified  under any state  securities  law in
reliance on specific  exemptions  therefrom,  which  exemptions may

                                       9


<PAGE>

depend  upon,  among  other  things,  the bona  fide  nature  of the  Investor's
investment intent as expressed herein.

        5.2 The Investor  acknowledges  that the Company has represented that no
action has been or will be taken in any  jurisdiction  outside the United States
by the Company that would  permit an offering of the Shares,  or  possession  or
distribution  of offering  materials in connection with the issue of the Shares,
in any  jurisdiction  outside the United States where action for that purpose is
required.  If the Investor is located or domiciled  outside the United States it
agrees  to comply  with all  applicable  laws and  regulations  in each  foreign
jurisdiction in which it purchases,  offers,  sells or delivers Shares or has in
its possession or  distributes  any offering  material,  in all cases at its own
expense.

        5.3 The Investor hereby  covenants with the Company not to make any sale
of the Shares without complying with the provisions of this Agreement, including
Section 7.2 hereof,  provided  that the Company  complies  with its  obligations
under  Section  7.1,  without   effectively   causing  the  prospectus  delivery
requirement  under the  Securities Act to be satisfied,  if applicable,  and the
Investor  acknowledges  that the  certificates  evidencing  the  Shares  will be
imprinted  with a legend that  prohibits  their  transfer  except in  accordance
therewith.  The Investor  acknowledges that there may occasionally be times when
the Company, based on the advice of its counsel, determines that, subject to the
limitations of Section 7.2, it must suspend the use of the Prospectus  forming a
part of the  Registration  Statement  until  such  time as an  amendment  to the
Registration  Statement has been filed by the Company and declared  effective by
the SEC or until the Company has amended or supplemented such Prospectus.

        5.4 The Investor further represents and warrants to, and covenants with,
the Company that (i) the Investor has full right, power,  authority and capacity
to enter into this  Agreement and to consummate  the  transactions  contemplated
hereby and has taken all necessary  action to authorize the execution,  delivery
and  performance of this  Agreement and (ii) this Agreement  constitutes a valid
and binding  obligation  of the  Investor  enforceable  against the  Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium or similar laws  affecting
creditors'   and   contracting   parties'   rights   generally   and  except  as
enforceability  may be subject to general  principles of equity  (regardless  of
whether such  enforceability  is considered in a proceeding in equity or at law)
and except as the indemnification  and contribution  agreements of the Investors
herein may be legally unenforceable.

        5.5 Investor will not, prior to the  effectiveness  of the  Registration
Statement,  sell, offer to sell, solicit offers to buy, dispose of, loan, pledge
or grant any right with respect to (collectively,  a "Disposition"),  the Common
Stock of the Company in  violation  of the  Securities  Act,  nor will  Investor
engage  in any  hedging  or  other  transaction  which is  designed  to or could
reasonably be expected to lead to or result in a Disposition  of Common Stock of
the Company by the  Investor or any other  person or entity in  violation of the
Securities  Act. Such  prohibited  hedging or other  transactions  would include
without  limitation  effecting  any short  sale or  having  in effect  any short
position (whether or not such sale or position is against the box and regardless
of when such position


                                       10

<PAGE>

was entered into) or any purchase, sale or grant of any right (including without
limitation  any put or call  option)  with  respect to the  Common  Stock of the
Company or with respect to any security (other than a broad-based  market basket
or index) that includes, relates to or derives any significant part of its value
from the Common Stock of the Company.

        5.6 The Investor understands that nothing in this Agreement or any other
materials  presented to the Investor in connection with the purchase and sale of
the Shares  constitutes  legal,  tax or  investment  advice.  The  Investor  has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of Shares.

    6.  Survival of Representations,  Warranties and Agreements. Notwithstanding
any  investigation  made  by  any  party  to  this  Agreement,   all  covenants,
agreements,  representations and warranties made by the Company and the Investor
herein  shall  survive the  execution  of this  Agreement,  the  delivery to the
Investor of the Shares being purchased and the payment therefor.

    7.  Registration of the Shares; Compliance with the Securities Act.


        7.1 Registration Procedures and Expenses. The Company shall:

            (a) subject to receipt of necessary  information from the Investors,
use its best efforts to prepare and file with the SEC,  within 30 days after the
Closing Date, a registration  statement (the  "Registration  Statement") on Form
S-3 to enable the resale of the  Registrable  Shares (as  defined  below) by the
Investors on a delayed or continuous basis under Rule 415 of the Securities Act.
"Registrable  Shares"  means (a) all  shares of Common  Stock  purchased  in the
Offering,  (b) Penalty Shares (as defined below),  if any, and (c) any shares of
capital stock issued or issuable,  from time to time, upon any reclassification,
share  combination,  share  subdivision,  stock split,  share dividend,  merger,
consolidation or similar transaction or event or otherwise as a distribution on,
in exchange  for or with respect to any of the  foregoing,  in each case held at
the relevant time by an Investor;

            (b)  use  its  best   efforts,   subject  to  receipt  of  necessary
information from the Investors,  to cause the  Registration  Statement to become
effective within 120 days after the Closing Date;

            (c) use its best  efforts  to  prepare  and  file  with the SEC such
amendments and supplements to the Registration Statement and the Prospectus used
in  connection  therewith and take all such other actions as may be necessary to
keep  the  Registration  Statement  current  and  effective  for a  period  (the
"Registration   Period")  not  exceeding,   with  respect  to  each   Investor's
Registrable  Shares,  the earlier of (i) the second  anniversary  of the Closing
Date,  (ii) the date on which the  Investor may sell all Shares then held by the
Investor  without  restriction  by the volume  limitations of Rule 144(e) of the
Securities  Act,  and (iii)  such time as all  Registrable  Shares  held by such
Investor  have been sold (A)  pursuant to a  registration  statement,  (B) to or
through a broker or dealer or underwriter in a public  distribution  or a public
securities transaction, and/or (C) in a


                                       11

<PAGE>

transaction exempt from the registration and prospectus delivery requirements of
the Securities Act under Section 4(1) thereof so that all transfer  restrictions
and  restrictive  legends  with  respect  thereto,  if any, are removed upon the
consummation of such sale.

            (d)  promptly  furnish to the  Investor  with  respect to the Shares
registered  under  the  Registration  Statement  such  number  of  copies of the
Registration Statement,  Prospectuses and Preliminary Prospectuses in conformity
with the  requirements  of the  Securities  Act and such other  documents as the
Investor may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Shares by the Investor;

            (e) promptly  take such action as may be  necessary  to qualify,  or
obtain,  an  exemption  for the  Registrable  Shares  under  such  of the  state
securities laws of United States jurisdictions as shall be necessary to qualify,
or  obtain  an  exemption  for,  the sale of the  Registrable  Shares  in states
specified in writing by the Investor;  provided, however, that the Company shall
not be  required  to qualify to do  business or consent to service of process in
any jurisdiction in which it is not now so qualified or has not so consented;

            (f) bear all expenses in connection with the procedures in paragraph
(a) through (e) of this Section 7.1 and the  registration of the Shares pursuant
to the Registration  Statement,  regardless of whether a Registration  Statement
becomes effective, including without limitation: (i) all registration and filing
fees and expenses (including filings made with the NASD); (ii) fees and expenses
of compliance with federal  securities and state "blue sky" or securities  laws;
(iii) expenses of printing (including printing  certificates for the Registrable
Securities  and  Prospectuses),  messenger and delivery  services and telephone;
(iv) all  application and filing fees in connection with listing the Registrable
Securities  on a national  securities  exchange or  automated  quotation  system
pursuant  to the  requirements  hereof;  and (v) all fees and  disbursements  of
counsel of the Company  and  independent  certified  public  accountants  of the
Company  (including the expenses of any special audit and "cold comfort" letters
required by or  incident  to such  performance);  provided,  however,  that each
Investor  shall be  responsible  for  paying  the  underwriting  commissions  or
brokerage fees, and taxes of any kind (including,  without limitation,  transfer
taxes)  applicable  to any  disposition,  sale or  transfer  of such  Investor's
Registrable  Securities.  The Company  shall,  in any event,  bear its  internal
expenses  (including,  without  limitation,  all  salaries  and  expenses of its
officers and employees  performing legal or accounting  duties),  the expense of
any annual  audit,  rating  agency fees and the fees and expenses of any person,
including special experts, retained by the Company;

            (g) advise the Investors, within two business days by e-mail, fax or
other type of  communication,  and, if requested  by such  person,  confirm such
advice in writing:  (i) after it shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending  the  effectiveness
of the  Registration  Statement or of the initiation or threat of any proceeding
for that purpose,  or any other order issued by any state securities  commission
or other  regulatory  authority  suspending the  qualification or exemption from
qualification  of such  Registrable  Securities  under state securities or "blue
sky" laws;  and it will promptly use its best efforts to prevent the issuance of
any stop  order or other  order or to  obtain  its  withdrawal  at the  earliest
possible


                                       12


<PAGE>

moment  if such  stop  order or other  order  should  be  issued;  (ii) when the
Prospectus or any  Prospectus  Supplement or  post-effective  amendment has been
filed,  and, with respect to the  Registration  Statement or any  post-effective
amendment  thereto,  when the same has  become  effective;  and (iii)  after the
Company shall receive notice or obtain knowledge of the existence of any fact or
the  happening of any event that makes any  statement of a material fact made in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any document  incorporated by reference  therein untrue, or that requires the
making of any  additions  to or changes  in the  Registration  Statement  or the
Prospectus in order to make the statements therein not misleading;

            (h)  otherwise  use its best  efforts to comply with all  applicable
rules and regulations of the SEC;

            (i) use its best  efforts  to cause  all  Registrable  Shares  to be
listed on each securities exchange or market, if any, on which equity securities
issued by the Company are then listed; and

            (j) use its best efforts to take all other steps necessary to effect
the registration of the Registrable Shares contemplated hereby and to enable the
Investors to sell the Shares under Rule 144.

            (k)  The  Company  further  agrees  that,  in  the  event  that  the
Registration  Statement has not (i) been filed with the SEC within 30 days after
the  Closing  Date or (ii) been  declared  effective  by the SEC within 120 days
after the Closing  Date (each such event  referred to in clauses (i) and (ii), a
"Registration  Default"),  for all or part of each  30-day  period  (a  "Penalty
Period")  during which the  Registration  Default remains  uncured,  the Company
shall issue or pay, as  applicable,  to each Investor 1% for each Penalty Period
of the aggregate purchase price paid by the Investor for its Shares,  payable in
validly issued,  fully paid and nonassessable  shares of Common Stock (valued at
the average of the closing  price of the Common Stock for the three trading days
ending on the last trading day of such Penalty Period) (the "Penalty Shares") or
cash,  at the option of the Company;  provided,  that if the issuance of Penalty
Shares by the Company  would result in the Company being  required  under NASDAQ
rules  or other  applicable  rules  to  obtain  the  approval  of the  Company's
shareholders,  then the Company  shall pay cash  rather than issue such  Penalty
Shares to the extent  needed to avoid such  shareholder  approval.  The  Company
shall deliver said shares or cash payment to the Investor by the fifth  business
day after the end of each such Penalty Period.  Notwithstanding  anything to the
contrary in Section 7.3 or any other provision of this  Agreement,  the issuance
of the Penalty  Shares or cash as provided in this  Section  7.1(k) shall be the
Investor's sole and exclusive remedy in the event of any  Registration  Default;
provided,  however,  that if the foregoing  remedy is deemed  unenforceable by a
court of competent  jurisdiction then the Investor shall have all other remedies
available at law or in equity.

        7.2 Transfer of Shares; Suspension.


            (a) The Investor  agrees that it will not effect any  Disposition of
the Shares or its right to  purchase  the Shares  that would  constitute  a sale
within  the  meaning  of  the  Securities


                                       13


<PAGE>


Act except as contemplated in the Registration  Statement referred to in Section
7.1 and as described  below or otherwise in accordance  with the Securities Act,
and that it will promptly  notify the Company of any changes in the  information
set forth in the  Registration  Statement  regarding the Investor or its plan of
distribution.

            (b)  Except in the event  that  paragraph  (c)  below  applies,  the
Company shall, at all times during the Registration Period, promptly (i) prepare
and file  from  time to time  with  the SEC a  post-effective  amendment  to the
Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain 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,  and
so that,  as  thereafter  delivered  to  purchasers  of the  Shares  being  sold
thereunder,  such Prospectus will not contain 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,  in light of the circumstances under which they
were made,  not  misleading;  (ii) provide the Investor  copies of any documents
filed  pursuant to Section  7.2(b)(i);  and (iii) inform each  Investor that the
Company has complied with its obligations in Section  7.2(b)(i) (or that, if the
Company has filed a post-effective amendment to the Registration Statement which
has not yet been  declared  effective,  the Company  will notify the Investor to
that  effect,  will use its best  efforts  to secure the  effectiveness  of such
post-effective  amendment as promptly as possible and will  promptly  notify the
Investor  pursuant to Section  7.2(b)(i)  hereof when the  amendment  has become
effective).

            (c) Subject to paragraph (d) below,  in the event (i) of any request
by the SEC or any other  federal  or state  governmental  authority  during  the
period  of  effectiveness  of  the  Registration  Statement  for  amendments  or
supplements to a Registration  Statement or related Prospectus or for additional
information;  (ii) of the  issuance  by the SEC or any  other  federal  or state
governmental  authority  of any stop order  suspending  the  effectiveness  of a
Registration  Statement or the initiation of any  proceedings  for that purpose;
(iii) of the  receipt by the  Company of any  notification  with  respect to the
suspension of the  qualification  or exemption from  qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose;  or (iv) of any event or circumstance  which
necessitates  the  making  of any  changes  in  the  Registration  Statement  or
Prospectus, or any document incorporated or deemed to be incorporated therein by
reference,  so that,  in the  case of the  Registration  Statement,  it will not
contain  any untrue  statement  of a material  fact or any  omission  to state a
material fact required to be stated  therein or necessary to make the statements
therein  not  misleading,  and that in the case of the  Prospectus,  it will not
contain  any untrue  statement  of a material  fact or any  omission  to state 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;  then the  Company  shall  deliver a  certificate  in writing to the
Investor  (the  "Suspension  Notice") to the effect of the  foregoing  and, upon
receipt of such  Suspension  Notice,  the Investor will refrain from selling any
Registrable Shares pursuant to the Registration Statement (a "Suspension") until
the  Investor's  receipt  of  copies of a  supplemented  or  amended  Prospectus
prepared  and filed by the  Company,  or until it is  advised  in writing by the
Company that the current  Prospectus may be used, and has received copies of any
additional or supplemental  filings that are incorporated or deemed incorporated
by reference in any

                                       15


<PAGE>


such Prospectus.  In the event of any Suspension,  the Company will use its best
efforts to cause the use of the Prospectus so suspended to be resumed as soon as
reasonably  practicable  after  the  delivery  of a  Suspension  Notice  to  the
Investor.  In addition to and without  limiting any other  remedies  (including,
without limitation, at law or at equity) available to the Investor, the Investor
shall be entitled to specific performance in the event that the Company fails to
comply with the provisions of this Section 7.2(c).

            (d)  Notwithstanding  the foregoing  paragraphs of this Section 7.2,
the Investor shall not be prohibited from selling  Registrable  Shares under the
Registration  Statement as a result of  Suspensions  on more than two  occasions
(for two separate suspension events) of not more than 30 days each in any twelve
month period.

            (e) Provided that a Suspension  is not then in effect,  the Investor
may sell Registrable Shares under the Registration  Statement,  provided that it
arranges for delivery of a current  Prospectus to the transferee of such Shares.
Upon receipt of a request  therefor,  the Company has agreed to provide,  at its
own expense,  an adequate number of current  Prospectuses  (including  documents
incorporated  by reference  therein) to the Investor and to supply copies to any
other parties requiring such Prospectuses.

            (f) In the event of a sale of  Registrable  Shares  by the  Investor
under  the  Registration  Statement,  the  Investor  must  also  deliver  to the
Company's  transfer  agent,  with  a copy  to  the  Company,  a  Certificate  of
Subsequent Sale  substantially in the form attached hereto as Exhibit A, so that
the Registrable Shares may be properly transferred.

        7.3   Indemnification. For the purpose of this Section 7.3:

        (i)   the term "Selling  Stockholder" shall include the Investor and any
affiliate of such Investor;

        (ii)  the  term   "Registration  Statement"  shall  include  any  final
Prospectus,  exhibit,  supplement  or  amendment  included in or relating to the
Registration Statement referred to in Section 7.1; and

        (iii) 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  or  Prospectus  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.

              (a) The Company agrees to indemnify and hold harmless each Selling
Stockholder  from and  against  any  losses,  claims,  damages,  liabilities  or
expenses  to which  such  Selling  Stockholder  may  become  subject  (under the
Securities  Act  or  otherwise)  insofar  as  such  losses,   claims,   damages,
liabilities or expenses (or actions or proceedings in respect thereof) arise out
of, or are based upon (i) any untrue  statement of a material fact  contained in
the  Registration  Statement or  Prospectus,  (ii) any failure by the Company to
fulfill any undertaking  included in the

                                       15


<PAGE>

Registration Statement,  or (iii) any breach of any representation,  warranty or
covenant  made by the Company in this  Agreement,  and the Company will promptly
reimburse such Selling  Stockholder  for any reasonable  legal or other expenses
incurred  in  investigating,   defending  or  preparing  to  defend,   settling,
compromising or paying any such action, proceeding or claim, provided,  however,
that the  Company  shall not be liable in any such case to the extent  that such
loss,  claim,  damage,  liability or expense  arises  solely out of, or is based
solely upon, an untrue statement made in such Registration Statement in reliance
upon and in conformity with written information furnished to the Company by such
Selling  Stockholder  specifically  for use in preparation  of the  Registration
Statement  or the  failure  of such  Selling  Stockholder  to  comply  with  its
covenants and agreements contained in Sections 5.3 or 7.2 hereof respecting sale
of the Shares or any statement or omission in any  Prospectus  that is corrected
in any subsequent  Prospectus  that was delivered to the Investor at least three
business  days  prior  to  the   pertinent   sale  or  sales  by  the  Investor.
Notwithstanding  the  foregoing,  the Company shall not be liable to any Selling
Stockholder for any consequential damages,  including lost profits,  solely with
respect  to losses,  claims,  damages,  liabilities  or  expenses  to which such
Selling Stockholder may become subject arising out of, or based upon, any breach
of any  representation,  warranty  or  covenant  made  by the  Company  in  this
Agreement.

              (b) The Investor agrees  (severally and not jointly with any other
Investor) 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,
liabilities  or expenses 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,  liabilities or expenses (or actions or
proceedings  in respect  thereof) arise solely out of, or are based solely upon,
(i) any failure to comply with the covenants and agreements contained in Section
5.3 or 7.2 hereof respecting sale of the Shares, or (ii) any untrue statement of
a material fact contained in the Registration Statement if such untrue statement
was made in reliance upon and in conformity with written  information  furnished
by the  Investor  specifically  for  use  in  preparation  of  the  Registration
Statement (provided,  however, that no Investor shall be liable in any such case
for any untrue  statement in any  Registration  Statement or  Prospectus if such
statement  has been  corrected in writing by such  Investor and delivered to the
Company at least three business days prior to the pertinent sale or sales by the
Investor),  and the  Investor  will  reimburse  the  Company  (or such  officer,
director  or  controlling  person),  as the case may be,  for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend,
settling,   compromising  or  paying  any  such  action,  proceeding  or  claim.
Notwithstanding the foregoing,  (x) the Investor's  aggregate liability pursuant
to this  subsection  (b) and  subsection  (d) shall be limited to the net amount
received by the Investor from the sale of the Shares and (y) the Investor  shall
not be liable to the  Company  for any  consequential  damages,  including  lost
profits, solely with respect to losses, claims, damages, liabilities or expenses
to which the Company (or any  officer,  director  or  controlling  person as set
forth above) may become subject (under the Securities Act or otherwise), arising
out of, or based upon,  any failure to comply with the covenants and  agreements
contained in Section 5.3 or 7.2 hereof respecting sale of the Shares.


                                       16


<PAGE>

              (c) 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 to be
sought  against an  indemnifying  person  pursuant  to this  Section  7.3,  such
indemnified person shall notify the indemnifying person in writing of such claim
or of the  commencement  of such  action,  but the  omission  to so  notify  the
indemnifying  party will not relieve it from any liability  which it may have to
any  indemnified  party  under this  Section 7.3 (except to the extent that such
omission  materially and adversely  affects the indemnifying  party's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions  hereinafter  stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such  indemnified  party,  shall be entitled 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  further,
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  (together with appropriate local
counsel) for all indemnified  parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in  settlement of any action unless the
indemnifying  person shall have approved the terms of such settlement;  provided
that such consent shall not be unreasonably  withheld.  No  indemnifying  person
shall,  without the prior written consent of the indemnified person,  effect any
settlement  of any  pending  or  threatened  proceeding  in respect of which any
indemnified person is or could have been a party and indemnification  could have
been  sought  hereunder  by such  indemnified  person,  unless  such  settlement
includes an unconditional  release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.

              (d) If the  indemnification  provided  for in this  Section 7.3 is
unavailable  to or  insufficient  to hold  harmless an  indemnified  party under
subsection  (a)  or  (b)  above  in  respect  of any  losses,  claims,  damages,
liabilities or expenses (or actions or proceedings in respect thereof)  referred
to therein,  then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,  claims,  damages,
liabilities or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and the
Investor on the other in  connection  with the  statements or omissions or other
matters which resulted in such losses, claims, damages,  liabilities or expenses
(or  actions  in  respect  thereof),  as well as any  other  relevant  equitable
considerations.  The relative  fault shall be  determined by reference to, among
other things, in the case of an untrue  statement,  whether the untrue statement
relates to information supplied by the Company on the one hand or an Investor on
the other and the parties' relative intent, knowledge, access to information and
opportunity  to correct or prevent  such untrue  statement.  The Company and the
Investors agree that it would not be just and equitable if contribution pursuant
to this  subsection  (d) were  determined  by pro rata  allocation  (even


                                       17

<PAGE>


if the  Investors  were treated as one entity for such  purpose) or by any other
method  of   allocation   which  does  not  take  into  account  the   equitable
considerations  referred  to above in this  subsection  (d).  The amount paid or
payable by an indemnified  party as a result of the losses,  claims,  damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses  reasonably  incurred
by such indemnified party in connection with investigating or defending any such
action or claim.  Notwithstanding  the  provisions  of this  subsection  (d), no
Investor  shall be required to contribute any amount in excess of the net amount
received  by the  Investor  from the sale of the  Shares.  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.  The Investors' obligations in this
subsection to  contribute  are several in proportion to their sales of Shares to
which such loss relates and not joint.

              (e) The parties to this Agreement hereby acknowledge that they are
sophisticated  business  persons  who were  represented  by  counsel  during the
negotiations regarding the provisions hereof including,  without limitation, the
provisions  of  this  Section  7.3,  and  are  fully  informed   regarding  said
provisions.

        7.4 Rule 144. For a period of two years  following the date hereof,  the
Company agrees with each holder of Registrable Shares to:

            (a) comply with the requirements of Rule 144(c) under the Securities
Act with respect to current public information about the Company;

            (b) use its best efforts to 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 (at any time it is subject to such reporting requirements); and

            (c) furnish to any holder of  Registrable  Shares upon request (i) a
written  statement by the Company as to its compliance with the  requirements of
said Rule 144(c) and the reporting  requirements  of the  Securities Act and the
Exchange Act (at any time it is subject to such reporting requirements),  (ii) a
copy of the most recent  annual or quarterly  report of the  Company,  and (iii)
such other  reports and  documents of the Company as such holder may  reasonably
request to avail itself of any similar rule or regulation of the SEC allowing it
to sell any such securities without registration.

        7.5 Termination of Conditions and Obligations.  The conditions precedent
imposed  by Section 5 or this  Section 7 upon  Dispositions  of the  Registrable
Shares by the Investor shall cease and terminate as to any particular  number of
the  Registrable  Shares and the  restrictive  legend shall be removed when such
Registrable  Shares shall have been effectively  registered under the Securities
Act and sold or otherwise  disposed of in accordance with the intended method of
disposition set forth in the  Registration  Statement  covering such Registrable
Shares or at such time as an opinion of counsel  reasonably  satisfactory to the
Company  shall have been  rendered  to the effect that such  conditions  are not
necessary in order to comply with the Securities Act (provided that such opinion
shall  not  be  required  if  the  Company  shall  be  furnished   with  written
documentation


                                       18


<PAGE>

reasonably satisfactory to it that such Registrable Shares are being transferred
in a customary  transaction  exempt from  registration  under Rule 144 under the
Securities Act).

    8. Notices. Except as specifically permitted by Section 7.1(g), all notices,
requests, consents and other communications hereunder shall be in writing, shall
be mailed (A) if within  domestic  United  States by  first-class  registered or
certified airmail, or nationally  recognized overnight express courier,  postage
prepaid, or by facsimile, or (B) if delivered from outside the United States, by
International  Federal  Express or  facsimile,  and shall be deemed given (i) if
delivered by first-class  registered or certified mail domestic,  three business
days after so mailed,  (ii) if  delivered  by  nationally  recognized  overnight
carrier,  one business day after so mailed,  (iii) if delivered by International
Federal  Express,  two business  days after so mailed,  and (iv) if delivered by
facsimile,  upon  electric  confirmation  of receipt and shall be  delivered  as
addressed as follows:

       (a) if to the Company, to:

                Conceptus, Inc.
                1021 Howard Ave.
                San Carlos, CA  94070
                Attn:  President and CEO
                Phone:  (650) 802-7240
                Telecopy:  (650) 610-8363

           with a copy to:

                Latham & Watkins
                135 Commonwealth Drive
                Menlo Park, CA  94025
                Attn:  Ora T. Fisher, Esq.
                Phone:  (650) 328-4600
                Telecopy:  (650) 463-2600

       (b) if to the Investor,  at its address on the signature page hereto,  or
           at such other address or addresses as may have been  furnished to the
           Company in writing,

           with a copy to:

                Morrison & Foerster
                1290 Avenue of the Americas
                New York, NY  10104
                Attn:  Jeffrey Marcus, Esq.
                Phone:  (212) 468-8137
                Telecopy:  (212) 468-7900


                                       19


<PAGE>


    9. Changes. This Agreement may not be modified or amended except pursuant to
an instrument in writing signed by the Company and the Investor.

    10.  Headings.  The headings of the various  sections of this Agreement have
been inserted for  convenience  of reference  only and shall not be deemed to be
part of this Agreement.

    11.  Severability.  In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity,  legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

    12.  Governing  Law. This  Agreement  shall be governed by, and construed in
accordance  with, the internal laws of the State of  California,  without giving
effect to the principles of conflicts of law.

    13.  Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties hereto pertaining to the subject matter hereof,  and any and
all other  written  or oral  agreements  relating  to such  subject  matter  are
expressly cancelled.

    14. Finders Fees.  Each of the Company and the Investor  represents  that it
neither  is nor  will  be  obligated  for  any  finder's  fee or  commission  in
connection with this transaction other than those certain fees payable solely by
the Company to PaineWebber.

    15.   Counterparts.   This   Agreement  may  be  executed  in  two  or  more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument,  and shall become effective
when  one or more  counterparts  have  been  signed  by each  party  hereto  and
delivered to the other parties.

    16. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding  upon the  successors  and  permitted  assigns of the Company and the
Investors,  including  without  limitation  and  without the need for an express
assignment,  affiliates of the Investors. With respect to transfers that are not
made pursuant to the  Registration  Statement,  the rights and obligations of an
Investor under this Agreement shall be  automatically  assigned by such Investor
to any transferee of all or any portion of such  Investor's  Registrable  Shares
who is a Permitted Transferee (as defined below); provided, however, that within
two business days prior to the transfer,  (i) the Company is provided  notice of
the transfer  including the name and address of the transferee and the number of
Registrable Shares transferred;  and (ii) that such transferee agrees in writing
to be bound by the terms of this Agreement.  (For purposes of this "Agreement, a
"Permitted  Transferee"  shall  mean  any  Person  who  (a)  is  an  "accredited
investor,"  as that term is defined  in Rule  501(a) of  Regulation  D under the
Securities Act and (b) is a transferee of at least 20,000  Registrable Shares as
permitted  under the securities  laws of the United  States).  Upon any transfer
permitted by this Section 16, the Company shall be obligated to such  transferee
to perform all of its covenants  under this Agreement as if such transferee were
an Investor.


                                       20


<PAGE>

    17.  Expenses.  Each of the  Company  and the  Investors  shall bear its own
expenses in connection  with the  preparation  and negotiation of the Agreement;
provided,  that,  notwithstanding  the foregoing,  the Company agrees to pay the
reasonable fees and  disbursements,  up to $25,000,  of Morrison & Foerster LLP,
counsel to the Investors, in connection with the negotiation,  documentation and
consummation of the Agreement and the transactions contemplated thereby.


                                       21

<PAGE>



                                                                       Exhibit A

                         CERTIFICATE OF SUBSEQUENT SALE


ChaseMellon Shareholder Services, L.L.C.
235 Montgomery Street, 23rd Floor
San Francisco, CA  94104
Attention:  Gloria Pouncil

                  RE:      Sale of  Shares of Common  Stock of  Conceptus,  Inc.
                           (the "Company") pursuant to the Company's  Prospectus
                           dated _____________ (the "Prospectus")

Ladies and Gentlemen:

    The undersigned  hereby certifies,  in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Stockholders in the
Prospectus,  that the undersigned has sold the shares pursuant to the Prospectus
and in a manner  described  under  the  caption  "Plan of  Distribution"  in the
Prospectus  and that such sale complies  with all  applicable  securities  laws,
including,  without  limitation,  the Prospectus  delivery  requirements  of the
Securities Act of 1933, as amended.

Selling Stockholder (the beneficial owner):
                                            ------------------------------------
Record Holder (e.g., if held in name of nominee):
                                                  ------------------------------
Restricted Stock Certificate No.(s):
                                     -------------------------------------------
Number of Shares Sold:
                       ---------------------------------------------------------
Date of Sale:
              ------------------------------------------------------------------

    In the event  that you  receive  a stock  certificate(s)  representing  more
shares of Common Stock than have been sold by the  undersigned,  then you should
return to the  undersigned a newly issued  certificate for such excess shares in
the name of the Record Holder and BEARING A  RESTRICTIVE  LEGEND.  Further,  you
should place a stop transfer on your records with regard to such certificate.

                                        Very truly yours,

Dated:                                  By:
       --------------------                 ------------------------------------

                                        Print Name:
                                                    ----------------------------

                                        Title:
                                               ---------------------------------

cc:      President and CEO
         Conceptus, Inc.
         1021 Howard Avenue
         San Carlos, CA  94070




© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission