EXHIBIT 10.1
Execution Version
STOCK PURCHASE AGREEMENT
by and between
EVERGREEN SOLAR, INC.
and
DC CHEMICAL CO., LTD.
Dated as of April 17, 2007
Table of Contents
Page
----
Section 1. Definitions....................................................................... 1
Section 2. Agreement to Purchase and Sell.................................................... 5
Section 3. Closing........................................................................... 6
Section 4. Transfer Taxes.................................................................... 6
Section 5. Representations and Warranties of the Company..................................... 6
Section 6. Representations and Warranties of the Purchaser................................... 17
Section 7. Conditions to Closing............................................................. 20
Section 8. Affirmative Covenants of the Company.............................................. 22
Section 9. Termination....................................................................... 24
Section 10. Survival of Representations, Warranties and Covenants; Indemnification............ 24
Section 11. Miscellaneous..................................................................... 27
Exhibit A
Exhibit B
Exhibit C
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of
April 17, 2007 by and between Evergreen Solar, Inc., a Delaware corporation (the
"Company"), and DC Chemical Co., Ltd., a Korean company (the "Purchaser").
RECITALS
A. The Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, 3,000,000 shares of Common
Stock, 625 shares of Restricted Preferred Stock and 4,500,000 shares of
Restricted Common Stock (together, the "Shares"); and
B. The parties hereto desire to enter into this Agreement for the purpose
of setting forth certain representations, warranties and covenants made by each
to the other as an inducement to the execution and delivery of this Agreement
and the conditions precedent to the consummation of the transactions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
provisions, agreements and covenants contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings.
(a) "Action" has the meaning set forth in Section 5(n).
"Agreement" has the meaning set forth in the Preamble.
"Affiliate" shall mean (i) with respect to a natural person, any member of
such natural person's family (including any child, step child, parent, step
parent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law); (ii) with respect to an
entity, any officer, director, stockholder, partner, member or investor in such
entity or of or in any affiliate of such entity; and (iii) with respect to a
Person or entity, any Person or entity which directly or indirectly controls, is
controlled by, or is under common control with such Person or entity.
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"Board" means the board of directors of the Company.
"Business Day" means a day other than a Saturday, Sunday or other day on
which banking institutions in New York or Korea are, or the New York Stock
Exchange is, permitted or required by any applicable law to close.
"Closing" has the meaning set forth in Section 3(a).
"Closing Date" has the meaning set forth in Section 3(a).
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock of the Company, par value $0.01, or
any other securities of the Company or any other Person issued with respect to
such Common Stock by way of a conversion, exchange, replacement, stock dividend
or stock split or other distribution in connection with a combination of shares,
conversion exchange, replacement, recapitalization, merger, consolidation or
other reorganization or otherwise.
"Company" has the meaning set forth in the Preamble.
"Company Copyrights" has the meaning set forth in Section 5(j).
"Company Intellectual Property" has the meaning set forth in Section 5(j).
"Company Marks" has the meaning set forth in Section 5(j).
"Company Patents" has the meaning set forth in Section 5(j).
"Company Stock Option Plans" means, collectively, the Company's 1994 Stock
Option Plan, 2000 Stock Option and Incentive Plan, 2000 Employee Stock Purchase
Plan, and any other future equity incentive plans of the Company with similar
objectives which shall be duly authorized and adopted by the Board and
stockholders of the Company.
2
"Control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly, or as trustee or executor,
of the power to direct or cause the direction of the management policies of a
Person, whether through the ownership of stock, as trustee or executor, by
contract or credit arrangement or otherwise.
"Copyrights" has the meaning set forth in Section 5(j).
"Disclosure Documents" has the meaning set forth in Section 5(g).
"Disclosure Schedule" has the meaning set forth in Section 5.
"Environmental Laws" has the meaning set forth in Section 5(q).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.
"Evaluation Date" has the meaning set forth in Section 5(y).
"GAAP" means generally accepted accounting principles, consistently
applied.
"Governmental Authority" has the meaning set forth in Section 5(o).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Losses" means liabilities, obligations, losses, damages, amounts paid in
settlement, penalties, actions, judgments, fines, suits, claims, costs,
attorneys' fees, expenses and disbursements, as the same are incurred, of any
kind or nature (whether or not arising out of third-party claims and including
all amounts paid in investigation, defense or settlement of the foregoing and
consequential damages).
"Marks" has the meaning set forth in Section 5(j).
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"Material Adverse Effect" means a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole.
"NASD" means the National Association of Securities Dealers, Inc.
"Patents" has the meaning set forth in Section 5(j).
"Permits" has the meaning set forth in Section 5(o).
"Person" means an individual, corporation, partnership, association,
trust, any unincorporated organization or any other entity.
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Indemnified Parties" has the meaning set forth in Section
10(b)(i).
"Restricted Common Stock" means the Common Stock of the Company, par value
$0.01, the Common Stock into which the Restricted Preferred Stock converts or
any other securities of the Company or any other Person issued with respect to
such Common Stock by way of a conversion, exchange, replacement, stock dividend
or stock split or other distribution in connection with a combination of shares,
conversion exchange, replacement, recapitalization, merger, consolidation or
other reorganization or otherwise, which are subject to the Transfer
Restriction.
"Restricted Preferred Stock" means the Series B Preferred Stock of the
Company, par value $0.01, or any other securities of the Company or any other
Person issued with respect to such Series B Preferred Stock by way of a
conversion, exchange, replacement, stock dividend or stock split or other
distribution in connection with a combination of shares, conversion exchange,
replacement, recapitalization, merger, consolidation or other reorganization or
otherwise, which are subject to the Transfer Restriction.
"Series B Preferred Stock" means the Series B Preferred Stock of the
Company, par value $0.01, or any other securities of the Company or any other
Person issued with respect to such Series B Preferred Stock by way of a
conversion, exchange, replacement, stock dividend or stock split or other
distribution in connection with a combination of shares, conversion exchange,
replacement, recapitalization, merger, consolidation or other reorganization or
otherwise.
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"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Shares" has the meaning set forth in the Recitals.
"Stockholders Agreement" has the meaning set forth in Section 3(a).
"Supply Agreement" has the meaning set forth in Section 3(a).
"Subsidiary" of a Person means any corporation more than fifty percent
(50%) of whose outstanding voting securities, or any partnership, limited
liability company, joint venture or other entity more than fifty percent (50%)
of whose total equity interest, is directly or indirectly owned by such Person;
provided, however, with respect to the Company, includes EverQ GmbH, a German
limited liability company.
"Third Party Rights" has the meaning set forth in Section 5(j)(iii).
"Trade Secrets" has the meaning set forth in Section 5(j)(viii).
"Transaction Documents" means this Agreement, the Stockholders Agreement
and the Supply Agreement.
"Transfer Restriction" in respect of a share of Restricted Common Stock or
Restricted Preferred Stock, as the case may be, means a restriction on transfer
of such Restricted Common Stock or Restricted Preferred Stock, as the case may
be, until the earlier of (a) the Transfer Restriction Lapse Date and (b) the
date on which the Board removes such transfer restriction.
"Transfer Restriction Lapse Date" means the date on which the Purchaser
shall have Delivered (as defined in the Supply Agreement) 500,000 kilograms of
Product (as defined in the Supply Agreement).
Section 2. Agreement to Purchase and Sell. Subject to the terms and
conditions of this Agreement, the Purchaser agrees to purchase at the Closing,
and the Company agrees to issue and sell to the Purchaser at the Closing, (i)
3,000,000 shares of Common Stock for a price per share of $12.07 (being the
closing sale price (or if the sale price is not available, the bid price) as at
April 16, 2007), or an aggregate purchase price of $36,210,000; (ii) 4,500,000
shares of Restricted Common Stock for a price per share of $0.01, or an
aggregate purchase price of $45,000 and (iii) 625 shares of
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Restricted Preferred Stock for a price per share of $100, or an aggregate
purchase price of $62,500.
Section 3. Closing.
(a) The purchase and sale of the Shares pursuant to Section 2 (the
"Closing") will take place on the date hereof at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, 0000 X Xxxxxx XX, Xxxxx Xxxxx,
Xxxxxxxxxx, X.X. 00000, or at such other place and time as may be mutually
agreed upon by the Company and the Purchaser (the "Closing Date"). On the
Closing Date, (i) the Company and the Purchaser shall enter into that certain
Supply Agreement attached hereto as Exhibit A (the "Supply Agreement"), and that
certain Stockholders Agreement attached hereto as Exhibit B (the "Stockholders
Agreement") and (ii) upon receipt by the Company on the Closing Date of the
aggregate purchase price of $36,317,500 by wire transfer of immediately
available funds to an account designated by the Company in writing, the Company
shall issue and deliver to the Purchaser a stock certificate or certificates
representing the Shares, in such denominations and registered in such names as
the Purchaser may request.
Section 4. Transfer Taxes. All transfer taxes, fees and duties under
applicable law incurred in connection with the sale and transfer of the
Securities under this Agreement will be borne and paid by the Company and it
shall promptly reimburse the Purchaser for any such tax, fee or duty which it
may be required to pay under applicable law.
Section 5. Representations and Warranties of the Company. In order to
induce the Purchaser to enter into this Agreement and consummate the
transactions contemplated hereby, and except as disclosed in the disclosure
schedule supplied by the Company to the Purchaser (the "Disclosure Schedule")
and dated as of the date hereof, the Company represents and warrants to the
Purchaser as of the date hereof and as of the Closing Date, as if such
representations and warranties had been made on and as of such dates, as
follows:
(a) Organization; Good Standing; Qualification. Each of the Company and
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and has
full corporate power and authority to conduct its business as presently
conducted and as proposed to be conducted by it. The Company has full corporate
power and authority to enter into and perform the Transaction Documents and to
carry out the transactions contemplated thereby. Each of the Company and its
Subsidiaries is duly qualified and in good standing to do business as a foreign
corporation in each jurisdiction in which the failure to so qualify would have a
Material Adverse Effect 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.
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(b) Authorization and Noncontravention; Binding Effect. (i) The
Transaction Documents have been duly executed and delivered by the Company, and
are valid and binding obligations of the Company, enforceable in accordance with
their respective terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
generally, and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought. The execution, delivery and performance of
the Transaction Documents, the issuance and delivery of the Shares have been
duly authorized by all necessary corporate or other action of the Company. The
Board has determined, at a duly convened meeting or pursuant to a unanimous
written consent, that the issuance and sale of the Shares, the removal of the
Transfer Restriction on the Transfer Restriction Lapse Date, and the
consummation of the transactions contemplated by the Transaction Documents
(including without limitation the issuance of the Shares), are in the best
interests of the Company. The certification of designation of Series B Preferred
Stock (the "Certificate"), a form of which is attached hereto as Exhibit C, has
been duly approved by the Board and filed with the Secretary of the State of
Delware and is in full force and effect.
(c) Valid Issuance of Shares. When issued to and paid for by the Purchaser
or converted in accordance with the terms of the Transaction Documents, the
Shares and the Common Stock into which the Preferred Stock will convert will be
duly authorized, validly issued, fully paid and nonassessable, free and clear of
all liens, and the issuance of the Shares and the Common Stock into which the
Preferred Stock will convert will not be subject to any preemptive or similar
rights that have not been waived. The Company has reserved from its duly
authorized capital stock the maximum number of securities issuable pursuant to
this Agreement.
(d) Capitalization. As of the date of this Agreement, the authorized and
outstanding capitalization of the Company consists of (i) a total of 27,227,668
authorized shares of preferred stock, $0.01 par value per share, of which
26,227,668 shares have been designated Series A Convertible Preferred Stock,
none of which are issued and outstanding as of the date hereof, and 1,000 shares
of Series B Preferred Stock, none of which are issued and outstanding as of the
date hereof (ii) a total of 150,000,000 authorized shares of Common Stock, of
which 69,631,123 shares were issued and outstanding as of the date hereof. All
of such outstanding shares are validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive
rights, right of first refusal or similar rights to subscribe for or purchase
securities. In addition to the foregoing, as of the date hereof, warrants to
purchase a total of 667,328 shares of Common Stock were outstanding and such
shares of Common Stock were reserved for issuance, options to purchase a total
of 5,135,870 shares of Common Stock were outstanding and such shares of Common
Stock are reserved for issuance, and the Company is authorized to grant up to
1,681,497 additional shares of Common Stock pursuant to the Company Stock Option
Plans. Except as set forth in this Section 5(d), there are no other outstanding
options, warrants or similar agreements or rights for the purchase from the
Company of any shares of its
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capital stock or any securities convertible into or ultimately exchangeable or
exercisable for any shares of the Company's capital stock. There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Common Stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company's stockholders, except the
Stockholders Agreement. All the outstanding shares of capital stock or other
equity interests of each Subsidiary of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and are owned by the Company
directly or indirectly through one or more wholly-owned subsidiaries (it being
expressly understood that the Company does not own all of the outstanding shares
of EverQ GmbH), free and clear of any claim, lien, encumbrance, security,
interest, restriction upon voting or transfer or any other claim of any third
party (other than with respect to EverQ GmbH).
(e) Defaults. Neither the issuance and sale of the Shares or the
conversion of the Series B Preferred Stock pursuant to the terms and conditions
hereunder or under the Certificate nor the execution and delivery of the
Transaction Documents and the performance of the Company's obligations
thereunder will (i) violate or conflict with, result in a breach of or
constitute a default (or constitute an event that, with notice or lapse of time,
would constitute a violation or breach of or a default) under (A) the
certificate of incorporation or bylaws of the Company; (B) any decree, judgment,
order or determination of any court, governmental agency or body, or any
arbitrator having jurisdiction over the Company or any of the Company's assets;
(C) any law, rule or regulation applicable to the Company; or (D) the terms of
any material agreement by which the Company is bound or to which any property of
the Company is subject, or (ii) 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 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 is a party or by which it is bound or to which any of the
material property or assets of the Company is subject. Neither the sale of the
Shares hereunder nor the performance of the Company's other obligations under
this Agreement will result in the suspension, revocation, impairment, forfeiture
or nonrenewal of any material permit, license, authorization, right or approval
applicable to the Company, its businesses or operations or any of its assets or
properties. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body, administrative
agency, or other governmental body in the United States or any other Person is
required for the execution and delivery of the Transaction Documents and the
valid issuance and sale of the Shares or the conversion of the Series B
Preferred Stock thereunder, other than such as have been made or obtained, and
except for any post-closing securities filings or notifications required to be
made under federal or state securities laws and the Nasdaq rules. Based in part
on the representations of the Purchaser set forth in Section 6 below, the offer
and sale of the Shares to the Purchaser will be in compliance with all
applicable federal and state securities laws and the Company has made or will
make all requisite filings and has taken or will take all action necessary to
comply, with such federal and state securities laws.
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(f) General Solicitation. Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Shares by any form of
general solicitation or general advertising. The Company has offered the Shares
for sale only to the Purchaser.
(g) SEC Filings. The Company's Annual Report on Form 10-K for the years
ended December 31, 2004, 2005 and 2006, and all Current Reports on Form 8-K
filed by the Company including any exhibits thereto and all other documents, if
any, filed or furnished by the Company with the Commission since December 31,
2004 (collectively, the "Disclosure Documents"), as of the respective dates
thereof, do not contain any untrue statements of 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. The Disclosure Documents have been prepared in compliance with the
requirements of the Securities Act or the Exchange Act and the rules promulgated
thereunder. The Company has timely made all filings and furnished all other
documents required to be filed or furnished by it under the Exchange Act during
the twelve (12) months preceding the date of this Agreement.
(h) Financial Statements. The financial statements of the Company included
in the Disclosure Documents, including the schedules and notes thereto, comply
in all material respects with the requirements of the Securities Act or the
Exchange Act, as applicable, fairly present, in accordance with GAAP, the
financial condition and results of operations and cash flows of the Company at
the respective dates and for the respective periods indicated, and have been
prepared in accordance with GAAP consistently applied throughout such periods.
The Company maintains and will continue to maintain a standard system of
accounting established and administered in accordance with GAAP and the
applicable requirements of the Exchange Act. The other financial information
contained in the Disclosure Documents has been prepared on a basis consistent
with the financial statements of the Company. Except as set forth in the
Disclosure Documents, the Company has no liabilities, contingent or otherwise,
other than liabilities incurred in the ordinary course of business which, under
GAAP, are not required to be reflected in the financial statements included in
the Disclosure Documents and which, individually or in the aggregate, are not
material to the consolidated business or financial condition of the Company.
(i) No Material Adverse Change. Since the date of the Company's most
recent audited financial statements contained in the Disclosure Documents, there
has not been (i) any material adverse change in the properties, business,
results of operations, prospects or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, (ii) any material adverse event
affecting the Company, (iii) any obligation or liability, direct or contingent,
that is material to the Company, 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, (v) any
loss or damage (whether or not insured) to the physical property of the Company
which has been sustained which could reasonably be
9
expected to have a Material Adverse Effect or (vi) any change in the Company's
method of accounting.
(j) Intellectual Property. All material (i) patents, patent applications,
patent rights, and inventions and discoveries and invention disclosures (whether
or not patented) shall be referred to collectively as "Patents", and all Patents
owned by the Company or otherwise used in its business shall be referred to as
"Company Patents"; (ii) trade names, trade dress, logos, packaging design,
slogans, Internet domain names, registered and unregistered trademarks and
service marks and related registrations and applications for registration shall
be referred to collectively as "Marks", and all Marks; owned by the Company or
otherwise used in its business shall be referred to as "Company Marks"; and
(iii) copyrights in both published and unpublished works, including without
limitation all compilations, databases and computer programs, manuals and other
documentation and all copyright registrations and applications, and all
derivatives, translations, adaptations and combinations of the above shall be
referred to collectively as "Copyrights", and all Copyrights owned by the
Company or otherwise used in and, in either case, material to its business shall
be refered to as "Company Copyrights". Except as set forth on Schedule 5(j):
(i) the Company exclusively owns or possesses adequate and
enforceable rights to use, without any material payment obligation to a
third party, all Patents, Marks, Copyrights, trade names, information,
Trade Secrets (as defined below), proprietary rights and processes
necessary for the operation of the its business (collectively, "Company
Intellectual Property"), free and clear of all mortgages, pledges,
charges, liens, equities, security interests, claims or other encumbrances
or similar dispositions;
(ii) all Company Patents, Company Marks and Company Copyrights which
are issued by or registered with, as applicable, the U.S. Patent and
Trademark Office, the U.S. Copyright Office or in any similar office or
agency anywhere in the world are currently in compliance with formal legal
requirements (including without limitation, as applicable, payment of
filing, examination and maintenance fees, proofs of working or use, timely
post-registration filing of affidavits of use and incontestability and
renewal applications) and are valid and enforceable;
(iii) there are no pending, or, to the Company's knowledge,
threatened claims against the Company or any of its employees alleging
that any of the Company Intellectual Property infringes or conflicts with
the rights of others ("Third Party Rights");
(iv) to the knowledge of the Company, no Company Intellectual
Property infringes or conflicts with any Third Party Right;
(v) the Company has not received any communications alleging that
the Company has violated or, by conducting its business in the manner
currently
10
contemplated, would violate any Third Party Rights or that any of the
Company Intellectual Property is invalid or unenforceable;
(vi) no current or former employee or consultant of the Company owns
any rights in or to any of the Company Intellectual Property, except such
rights as would not, individually on in the aggregate, have a Material
Adverse Effect;
(vii) the Company is not aware of any violation or infringement by a
third party of any of the Company Intellectual Property;
(viii) the Company has taken reasonable security measures to protect
the secrecy, confidentiality and value of all know-how, trade secrets,
confidential or proprietary information, research in progress, algorithms,
data, designs, processes, formulae, drawings, schematics, blueprints, flow
charts, models, strategies, prototypes, and techniques (collectively,
"Trade Secrets") used in its business, including, without limitation,
requiring all Company employees and consultants and all other persons with
access to Trade Secrets of the Company to execute a binding
confidentiality agreement, copies or forms of which have been made
available to each Purchaser or its counsel and, to the Company's
knowledge, there has not been any breach by any party to such
confidentiality agreements;
(ix) the Company (A) has not granted any other person any option,
license or other right with respect to the Company Intellectual Property,
which option, license or other right is currently outstanding, and (B) is
not bound by or a party to any material options, licenses or agreements of
any kind (other than standard end-user agreements) with respect to the
Patents, Marks, Copyrights, trade names, information, Trade Secrets,
proprietary rights and processes of any other person or entity.
(k) Contracts. The Company is not in violation or default (i) of any
provision of its certificate of incorporation or bylaws, as amended, or (ii) of
any instrument, judgment, order, writ, decree or contract or in the performance
of any bond, debenture, note or other evidence of indebtedness to which it is a
party or by which it is bound, except where such violations or defaults would
not, individually or in the aggregate, have a Material Adverse Effect, nor is
the Company, to the Company's knowledge, in violation of any provision of any
federal or state statute, rule or regulation or any law, ordinance or order of
any court or governmental agency or authority applicable to the Company, which
violations would, individually or in the aggregate, have a Material Adverse
Effect.
(l) Nasdaq Compliance. The Common Stock is registered pursuant to Section
12(g) of the Exchange Act, and is listed on the Nasdaq Global Market, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the Nasdaq Global Market nor has
the Company
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received in the past 16 months any notification that the Commission or the NASD
is contemplating terminating such registration or listing. The Company currently
meets the continuing eligibility requirements for listing on the Nasdaq Global
Market.
(m) Taxes. Each of the Company and its subsidiaries (i) has filed all
necessary federal, state and foreign income and franchise tax returns that are
required to be filed through the date hereof, (ii) has paid all federal, state,
local and foreign taxes due and payable for which it is liable through the date
hereof and (iii) does not have any tax deficiency or claims outstanding or
assessed or, to the Company's knowledge, proposed against it other than those
filings, payments or deficiencies.
(n) Legal Proceedings. Except as set forth in the Disclosure Schedule,
there is no action, suit, inquiry, notice of violation, proceeding, inquiry or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an "Action") which (i)
adversely affects or challenges the legality, validity or enforceability of the
Transaction Documents, the issuance of the Shares or the conversion of the
Series B Preferred Stock or (ii) would, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company, nor, to the knowledge of the Company, any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of the Company there is
not pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the
Exchange Act or the Securities Act.
(o) Governmental Permits, Etc. The Company has all necessary franchises,
licenses, certificates and other authorizations (collectively, "Permits") from
any foreign, federal, state or local government or governmental agency,
department, or body (a "Governmental Authority") that are currently necessary
for the operation of the business of the Company as currently conducted. The
Company has not received and is not aware of any threatened notice of
proceedings relating to the revocation or modification of any Permit. No Permit
is subject to termination as a result of the execution of the Transaction
Documents or consummation of the transactions contemplated thereby. The Company
is now and has heretofore been in compliance with all applicable statutes,
ordinances, orders, rules and regulations promulgated by any U.S. federal,
state, municipal, non-U.S. or other governmental authority, which apply to the
conduct of its business. The Company has never entered into or been subject to
any judgment, consent decree, compliance order or administrative order with
respect to any aspect of the business, affairs, properties or assets of the
Company or received any request for information, notice, demand letter,
administrative inquiry or formal or informal complaint or claim from any
regulatory agency with respect to any aspect of the business, affairs,
properties or assets of the Company.
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(p) Disclosure. The representations and warranties made or contained in
the Transaction Documents and all other information provided in writing by the
Company to the Purchaser in connection with the transactions contemplated
thereby (including without limitation the Disclosure Documents), when taken
together, do not and shall not contain any untrue statement of a material fact
and do not and shall not omit to state a material fact required to be stated
herein or therein or necessary in order to make such representations, warranties
or other material not misleading in the light of the circumstances in which they
were made or delivered. To the knowledge of the Company, there is no material
fact directly relating to the assets, liabilities, business, operations, or
condition (financial or other) of the Company that materially adversely affects
the same. Except as disclosed in the Disclosure Documents, no officer or
director of the Company has been: (i) subject to voluntary or involuntary
petition under the federal bankruptcy laws or any state insolvency law or the
appointment of a receiver, fiscal agent or similar officer by a court for his or
her business or property or that of any partnership of which he or she was a
general partner or any corporation or business association of which he or she
was an executive officer; (ii) convicted in a criminal proceeding or named as a
subject of a pending criminal proceeding (excluding traffic violations and other
minor offenses) or been otherwise accused of any act of moral turpitude; (iii)
the subject of any order, judgment, or decree (not subsequently reversed,
suspended or vacated) of any court of competent jurisdiction permanently or
temporarily enjoining him or her from, or otherwise imposing limits or
conditions on his or her ability to engage in any securities, investment
advisory, banking, insurance or other type of business or acting as an officer
or director of a public company; (iv) found by a court of competent jurisdiction
in a civil action or by the Commission or the Commodity Futures Trading
Commission to have violated any federal or state commodities, securities or
unfair trade practices law, which judgment or finding has not been subsequently
reversed, suspended, or vacated; or (v) has engaged in other conduct that would
be required to be disclosed in a prospectus under Item 401(f) of SEC Regulation
S-K.
(q) Environmental Laws. The Company is not in material violation of any
foreign, federal, state or local rules, laws or regulations relating to the use,
treatment, storage and disposal of toxic substances and the protection of health
or the environment ("Environmental Laws") that are applicable to its business;
the Company has not received any written or, to its knowledge, other notice from
any governmental authority or third party of an asserted claim under
Environmental Laws; the Company has received all material permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its business and is in material compliance with all terms and conditions of any
such permit, license or approval; and there is no claim, action or cause of
action filed with a court or governmental authority, no investigation with
respect to which the Company has received notice and no notice by any other
person or entity alleging potential liability for investigatory costs, cleanup
costs, governmental response costs, natural resources damages, property damages,
personal injuries, attorneys' fees or penalties arising out of, based on or
resulting from the storage, generation, transportation, handling, treatment,
disposal, discharge, emission or other release of any kind of toxic or other
wastes or other hazardous substances by, due to or caused by the Company (or any
other entity for whose acts or omissions the
13
Company is or may be liable) upon any of the property now or previously owned or
leased by the Company in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit that would, under any
Environmental Law, give rise to any liability.
(r) Solvency. The Company has not: (i) made a general assignment for the
benefit of creditors; (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by its creditors; (iii) suffered
the appointment of a receiver to take possession of all, or substantially all,
of its assets; (iv) suffered the attachment or other judicial seizure of all, or
substantially all, of its assets; (v) admitted in writing its inability to pay
its debts as they come due; or (vi) made an offer of settlement, extension or
composition to its creditors generally.
(s) 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.
(t) Company not an "Investment Company". The Company has been advised of
the rules and requirements under the Investment Company Act. The Company is not,
and immediately after receipt of payment for the Shares will not be, an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act and shall conduct its business in a
manner so that it will not become subject to the Investment Company Act at any
time.
(u) Foreign Corrupt Practices. Neither the Company, nor to the knowledge
of the Company, any agent or other person acting on behalf of the Company, has
(i) directly or indirectly, used any corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
(v) Accountants. To the Company's knowledge, PricewaterhouseCoopers LLP,
who have expressed their opinion with respect to the Company's financial
statements, are independent accountants as required by the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder.
(w) Insurance. The Company has in full force and effect general
commercial, general liability, product liability, professional liability,
specified director's and officer's liability, workers compensation and
employee's liability, fire and casualty and such other appropriate insurance
policies with insurers of recognized financial responsibility with coverages
customary for similarly situated companies in the same or similar industries and
as required by applicable law. The Company does
14
not have any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost, except for such increases in cost or
decreases in coverage as are likely to be experienced by similarly situated
companies.
(x) Transactions With Affiliates And Employees. None of the officers or
directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $50,000
other than (i) for payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) for
other employee benefits, including stock option agreements under any stock
option plan of the Company.
(y) Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient 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 GAAP 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. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company is made known to the certifying officers by others within those
entities, particularly during the period in which the Company's Form 10-K or
10-Q, as the case may be, is being prepared. The Company's certifying officers
evaluated the effectiveness of the Company's controls and procedures as of a
date prior to the filing date of the Form 10-K for the year ended December 31,
2006, (such date, the "Evaluation Date"). The Company presented in its Form 10-K
for the year ended December 31, 2006 the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in the Company's internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the
Company's knowledge, in other factors that could significantly affect the
Company's internal controls.
(z) Certain Fees. No brokerage or finder's fees or commissions are or will
be payable by the Company to any broker, financial advisor or consultant,
finder,
15
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement.
(aa) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Shares to be integrated with prior offerings by the Company for purposes of the
Securities Act or any applicable shareholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated. The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that would be integrated with the offer or sale of the
Shares in a manner that would require the registration under the Securities Act
of the sale of the Shares to the Purchaser or that would be integrated with the
offer or sale of the Shares for purposes of the rules and regulations of the
Nasdaq Global Market.
(bb) Registration Rights. Except pursuant to (i) the Stockholders
Agreement, (ii) that certain Amended and Restated Registration Rights Agreement
dated June 21, 2004, by and among the Company and the parties thereto and (iii)
that certain Registration Rights Agreement dated as of June 29, 2005, by and
among the Company and XX Xxxxx & Co., LLC, no person has any right to cause the
Company to effect the registration under the Securities Act of any securities of
the Company. The Company is eligible to register the Shares for resale by the
Purchaser using Form S-3 promulgated under the Securities Act. Such registration
statement(s) covering the resale of all of the Shares shall not violate or
conflict with any registration rights granted by the Company, and no
stockholders of the Company shall have any incidental or "piggy-back" rights
with respect to such registration statement(s).
(cc) Stockholders Agreement and Supply Agreement. The Company has entered
into the Stockholders Agreement and the Supply Agreement.
(dd) Property. The Company has good and marketable title in fee simple to,
or has valid rights to lease or otherwise use, all items of real or personal
property that are material to the business of the Company, in each case free and
clear of all liens, encumbrances, claims and defects, except (i) as reflected in
the financial statements included in the Company's Form 10-K for the year ended
December 31, 2006, (ii) liens held by the lessor of such property or for taxes
not yet due and payable, and (iii) such imperfections of title and encumbrances,
if any, which do not detract from the value or interfere with the present use of
the property subject thereto or affected thereby.
(ee) Labor. No labor disturbance by the employees of the Company exists
or, to the Company's knowledge, is threatened. To the Company's knowledge, no
key employee or significant group of employees of the Company plans to terminate
employment with the Company.
16
(ff) Money Laundering. The operations of the Company is and has been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws"), and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of it subsidiaries with respect to the
Money Laundering Laws is pending or, to the Company's knowledge, threatened.
(gg) Sanctions. Neither the Company nor any director, officer, agent,
employee or affiliate of the Company is currently subject to any United States
sanctions administered by the Office of Foreign Assets Control of the United
States Treasury Department.
(hh) Xxxxxxxx-Xxxxx. The Company is in compliance with all applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations
promulgated thereunder or implementing the provisions thereof (collectively, the
"Xxxxxxxx-Xxxxx Act") that are currently in effect.
(ii) Contributions and Payments. Neither the Company nor any employee or
agent of the Company has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation of any
law.
(jj) Well-known Seasoned Issuer. The Company is a "Well-known Seasoned
Issuer" as defined by the Securities Act.
Section 6. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company, as of the date hereof and as of the
Closing Date, as if such representations and warranties had been made on and as
of such dates, as follows:
(a) Organization; Good Standing; Qualification. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has full corporate power and authority
to conduct its business as presently conducted and as proposed to be conducted
by it. The Purchaser has full corporate power and authority to enter into and
perform this Agreement and to carry out the transactions contemplated under the
Transaction Documents. The Purchaser is duly qualified and in good standing to
do business as a foreign corporation in each jurisdiction in which the failure
to so qualify would have a Material Adverse Effect 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.
(b) Authorization. The Transaction Documents will be, at Closing, duly
executed and delivered by the Purchaser, and are valid and binding obligations
of the
17
Purchaser, enforceable in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally, and except that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding therefor may be
brought. The Purchaser has taken, or prior to the Closing, will have taken, all
corporate or other action required to authorize the execution and delivery of
the Transaction Documents and the performance of its obligations thereunder.
(c) Defaults. The execution and delivery of the Transaction Documents and
the performance of the Purchaser's obligations thereunder will not (i) violate
or conflict with, result in a breach of or constitute a default (or constitute
an event that, with notice or lapse of time, would constitute a violation or
breach of or a default) under (A) the certificate of incorporation or bylaws of
the Purchaser; (B) any decree, judgment, order or determination of any court,
governmental agency or body, or any arbitrator having jurisdiction over the
Purchaser or any of the Purchaser's assets; (C) any law, rule or regulation
applicable to the Purchaser; or (D) the terms of any material agreement by which
the Purchaser is bound or to which any property of the Purchaser is subject, or
(ii) 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 Purchaser 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 Purchaser is a
party or by which it is bound or to which any of the material property or assets
of the Purchaser is subject. No consent, approval, authorization or other order
of, or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body in the United States or the
Republic of Korea or any other Person is required for the execution and delivery
of the Transaction Documents by the Purchaser, other than such as have been made
or obtained.
(d) Reliance Upon Purchaser's Representations. The Purchaser understands
that the issuance of the Shares hereunder has not been registered under the
Securities Act, based on the exemption from registration provided by Section
4(2) of the Securities Act and Regulation D thereunder, and that the Company's
reliance on such exemption with respect to the issuance of the Shares depends in
part on the Purchaser's representations and warranties hereunder.
(e) Purchase Entirely for Own Account. The Purchaser is acquiring the
Shares for its own account (or for an account over which it exercises investment
discretion) for investment purposes and not with a view to the distribution
thereof within the meaning of the Securities Act, except pursuant to sales that
are registered under the Securities Act or are exempt from the registration
requirements of the Securities Act; provided, however, that, in making such
representation, the Purchaser does not agree to hold the Shares for any minimum
or specific term and reserves the right to sell, transfer or otherwise dispose
of the Shares at any time in accordance with
18
the provisions of this Agreement and with Federal and state securities laws
applicable to such sale, transfer or disposition.
(f) Restricted Securities. The Purchaser understands that the Shares
constitute "restricted securities" within the meaning of Rule 144 under the
Securities Act and may not be sold, pledged or otherwise disposed of unless they
are subsequently registered under the Securities Act and applicable state
securities laws or unless an exemption from registration thereunder is
available.
(g) Accredited Investor. The Purchaser is an "accredited investor" within
the meaning of Rule 501(a) under the Securities Act, who by reason of such
Purchaser's business and financial experience has such knowledge and experience
in financial and business matters that the Purchaser is capable of evaluating
the merits and risks of an investment in the Shares.
(h) No Governmental Approval of Issuance of Shares. The Purchaser
understands that no federal or state or other governmental agency has passed
upon or made any recommendation or endorsement with respect to the Shares.
(i) SEC Filings. The Purchaser acknowledges that the Company may be
required to file this Agreement with the Commission under the Securities Act and
the rules thereunder and/or the Exchange Act and the rules thereunder, and to
describe the transactions contemplated by this Agreement in such filing, and
subsequent filings, and the Purchaser hereby consents to such filing; provided,
that the Company shall provide the Purchaser with a reasonable opportunity to
review and comment on any such filing.
(j) Short Sales. To the Purchaser's knowledge, neither the Purchaser, nor
any of its affiliates, is presently the record or beneficial owner of a short
position in the Common Stock.
(k) Receipt of Information. The Purchaser has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the issuance and sale of the Shares and the business, properties,
prospects and financial condition of the Company and to obtain any additional
information requested and has received and considered all information it deems
relevant to make an informed decision to purchase the Shares.
(l) Legends. The Purchaser understands that any certificates evidencing
the Shares will bear substantially the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION,
AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE
19
WITH THE REQUIREMENTS OF SUCH ACT AND THE APPLICABLE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION."
Certificates evidencing the Shares shall not contain any legend (i) following
any sale of such Shares, as applicable, pursuant to Rule 144 or pursuant to an
effective registration statement, as certified by the Purchaser to the Company,
(ii) if such Shares, as applicable, are eligible for sale under Rule 144(k), or
(iii) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission). The Company agrees that at such time as such
legend is no longer required under this Section 5(l), the Company shall cause
its counsel to promptly issue a legal opinion addressed to the Company's
transfer agent if required by the Company's transfer agent to effect the removal
of the legend hereunder as and when the Purchaser so requests. The Company
agrees that at such time as such legend is no longer required under this Section
5(l), it will, promptly following the delivery by the Purchaser to the Company
or the Company's transfer agent of a certificate representing Shares issued with
a restrictive legend, deliver or cause to be delivered to the Purchaser a
certificate representing such Shares that is free from all restrictive and other
legends.
Section 7. Conditions to Closing.
(a) Conditions to the Obligations of the Company. The obligations
hereunder of the Company to consummate the transactions contemplated by this
Agreement with respect to the Purchaser are subject to the fulfillment, prior to
or at the Closing, of the following conditions precedent:
(i) the accuracy of the representations and warranties of the
Purchaser hereunder as of the date hereof and as of the Closing Date, as
the case may be, as if such representations and warranties had been made
on and as of such dates;
(ii) the performance by the Purchaser of its obligations hereunder
that are required to be performed at or prior to the Closing;
(iii) the execution and delivery of the Stockholders Agreement and
the Supply Agreement by the Purchaser, both of which shall, upon execution
thereof by the Company, be in full force and effect;
(iv) no action or proceeding by or before any court, administrative
body or governmental agency shall have been instituted or threatened by a
third party which seeks to enjoin, restrain or prohibit, or might result
in damages in respect of, the Transaction Documents or consummation of the
transactions contemplated by the Transaction Documents.
20
(b) Conditions to the Obligations of the Purchaser. The obligations
hereunder of the Purchaser to consummate the transactions contemplated by the
Transaction Documents with respect to the Purchaser are subject to the
fulfillment, prior to or at the Closing, of the following conditions precedent:
(i) the accuracy of the representations and warranties of the
Company hereunder as of the date hereof and as of the Closing Date, as the
case may be, as if such representations and warranties had been made on
and as of such dates;
(ii) the execution and delivery of the Stockholders Agreement and
the Supply Agreement, both of which shall, upon execution and delivery
thereof by the Purchaser, be in full force and effect;
(iii) the performance by the Company of its obligations hereunder
that are required to be performed at or prior to the Closing;
(iv) All corporate proceedings and other legal matters incident to
the authorization, form and validity of the Transaction Documents and the
transactions contemplated thereby shall be reasonably satisfactory in all
material respects to counsel for the Purchaser, and the Company shall have
furnished to such counsel all documents and information that such counsel
may reasonably request to enable them to pass upon such matters;
(v) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation shall
have furnished to the Purchaser a written opinion, as counsel for the
Company, addressed to the Purchaser and dated the Closing Date, in form
and substance reasonably satisfactory to the Purchaser, to the effect
that:
(1) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own its properties and
assets and to carry on its business.
(2) The execution and delivery by the Company of the Transaction
Documents, and the performance by the Company of its obligations hereunder
and thereunder, do not violate any provisions of the Company's charter or
bylaws or any provisions of any applicable United States federal or
Delaware state law, rule or regulation known to us to be customarily
applicable to transactions of this nature.
(3) No consent, approval or authorization of, or designation,
declaration, filing or registration with, any United States federal or
Delaware state court or governmental agency is required on the part of the
Company for the execution and delivery of the Transaction Documents and
the consummation by the Company of the transactions contemplated thereby,
except as may be required in connection with the transactions contemplated
by the Transaction Documents.
21
(4) The Company is not required to register as an "investment
company" as such term is defined in the Investment Company Act and the
rules and regulations of the Commission thereunder.
(vi) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body that would, as of such Closing Date,
materially and adversely affect or potentially materially and adversely
affect the business or operations of the Company; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of such Closing
Date that would materially and adversely affect or potentially materially
and adversely affect the business or operations of the Company.
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Purchaser.
Section 8. Affirmative Covenants of the Company. The Company hereby
covenants and agrees with the Purchaser as follows:
(a) Conduct of the Company. Between the date hereof and the Closing Date,
the Company will:
(i) preserve and maintain in full force and effect its existence and
good standing under the laws of its jurisdiction of formation or
organization;
(ii) conduct its business in the ordinary course in accordance with
sound business practices and keep its properties in good working order and
condition (normal wear and tear excepted);
(iii) conduct its business in a manner such that the representations
and warranties of the Company contained in Section 5 shall continue to be
true and correct in all material respects on and as of the Closing Date as
if made on and as of the Closing Date; and
(iv) use its commercially reasonable efforts to cause the closing
conditions contained in Section 7(a) to be satisfied on or before the
Closing Date.
(b) Nasdaq Listing. The Company shall comply with all listing and
maintenance requirements of the NASD with respect to the issuance of the Common
Stock and the listing thereof on the Nasdaq Global Market. The Company shall use
commercially reasonable efforts to maintain the listing of the Common Stock on
the Nasdaq Global Market, including, without limitation, (i) taking all actions
reasonably related to maintaining Nasdaq listing standards, and (ii) refraining
from taking actions reasonably expected to cause the Company to fail to meet
Nasdaq listing standards.
22
(c) Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized shares of Common Stock solely for the
issuance and delivery of Common Stock upon conversion of the Restricted
Preferred Stock, the maximum number of shares of Common Stock that may be
issuable or deliverable thereupon.
(d) Form S-3 Eligibility. The Company hereby covenants and agrees to use
commercially reasonable efforts to maintain its eligibility to make filings with
the Commission on Form S-3 until one or more registration statements covering
the resale of all of the Shares shall have been filed with, and declared
effective by, the Commission pursuant to the terms and conditions of the
Stockholders Agreement.
(e) Public Statements. The Company shall issue a press release not later
than 9:00 a.m. Eastern Time on the first Business Day following the date of this
Agreement disclosing certain material terms of this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby,
which press release shall be followed by the filing of a Form 8-K with the
Commission not later than the close of business on the fourth Business Day
following the Closing and to make such other filings and notices in the manner
and time required by the Commission. The Company and the Purchaser shall consult
with each other in issuing any press releases with respect to the transactions
contemplated hereby, including but not limited to the press release referenced
in the preceding sentence, and neither the Company nor the Purchaser shall issue
any such press release or otherwise make any public statement regarding the
Transaction Documents or the transactions contemplated thereby without the prior
consent of the other party, provided that each Purchaser shall have a reasonable
opportunity to review and comment on any such press release or Form 8-K prior to
the issuance or filing thereof. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of the Purchaser, or include the name of the
Purchaser in any filing with the Commission, without the prior written consent
of the Purchaser, except (i) as required by the Securities Act in connection
with the registration statement(s) contemplated by the Stockholders Agreement
and (ii) to the extent that such disclosure is required by applicable laws,
rules or regulations, in which case the Company shall provide the Purchaser with
prior written notice of such disclosure.
(f) The parties hereto shall take all actions necessary to file as soon as
practicable all notifications, filings and other documents required to obtain
all governmental authorizations, approvals, consents or waivers under the HSR
Act to permit the conversion of the Series B Preferred Stock held by the
Purchaser into Common Stock, and to respond promptly to any inquiries received
from the Federal Trade Commission, the Antitrust Division of the Department of
Justice or any other governmental entity in connection therewith.
23
Section 9. Termination.
(a) Termination. This Agreement may be terminated prior to the Closing as
follows:
(i) at any time on or prior to the Closing Date, by mutual written
consent of the Company and the Purchaser;
(ii) at the election of the Company or the Purchaser by written
notice to the other party hereto after 5:00 p.m., New York time, on May
30, 2007, if the Closing shall not have occurred on or prior to such date,
unless such date is extended by the mutual written consent of the Company
and the Purchaser; provided, however, that the right to terminate this
Agreement under this Section 9(a)(ii) shall not be available to any party
whose breach of any representation, warranty, covenant or agreement under
this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before such date.
(iii) at the election of the Company, if there has been a material
breach of any representation, warranty, covenant or agreement on the part
of the Purchaser contained in this Agreement, which breach has not been
cured within fifteen (15) Business Days of notice to the Purchaser of such
breach; or
(iv) at the election of the Purchaser, if there has been a material
breach of any representation, warranty, covenant or agreement on the part
of the Company contained in this Agreement, which breach has not been
cured within fifteen (15) Business Days of notice to the Company of such
breach.
If this Agreement so terminates, it shall become null and void and have no
further force or effect, except as provided in Section 10(b) below.
(b) Survival. If this Agreement is terminated and the transactions
contemplated hereby are not consummated as described above, this Agreement
shall become void and of no further force and effect, except for the
provisions of Section 10(a); provided, however, that (i) none of the
parties hereto shall have any liability in respect of a termination of
this Agreement pursuant to Section 9(a)(i) or Section 9(a)(ii), and (ii)
nothing shall relieve any of the parties from liability for actual damages
resulting from a termination of this Agreement pursuant to Section
9(a)(iii) or Section 9(a)(iv); and provided, further, that none of the
parties hereto shall have any liability for speculative, indirect or
unforeseeable damages or lost profits resulting from any legal action
relating to any termination of this Agreement.
Section 10. Survival of Representations, Warranties and Covenants;
Indemnification.
(a) Survival of Representations, Warranties and Covenants. All of
the representations and warranties made herein shall survive the execution
and delivery of
24
this Agreement until twelve (12) months following the Closing Date, except
for Section 5(m), which shall survive until the later to occur of (i) the
lapse of the statute of limitations with respect to the assessment of any
tax to which such representation and warranty relates (including any
extensions or waivers thereof) and (ii) sixty (60) days after the final
administrative or judicial determination of the taxes to which such
representation and warranty relates, and no claim with respect to Section
5(m) may be asserted thereafter with the exception of claims arising out
of any fact, circumstance, action or proceeding to which the party
asserting such claim shall have given notice to the other parties to this
Agreement prior to the termination of such period of reasonable belief
that a tax liability will subsequently arise therefrom. Except as
otherwise provided in this Agreement, all such representations,
warranties, covenants and agreements shall inure to the benefit of the
parties (subject to Section 9(b) below) and their respective successors
and assigns and to their transferees of the Shares.
(b) Indemnification.
(i) The Company agrees to defend, indemnify and hold harmless
the Purchaser, its Subsidiaries, its Affiliates and direct and
indirect partners (including partners of partners and stockholders
and members of partners), members, stockholders, directors,
officers, employees and agents and each person who controls any of
them within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively, the "Purchaser
Indemnified Parties" and each a "Purchaser Indemnified Party"),
harmless from and against any and all Losses which may be sustained
or suffered by any such Purchaser Indemnified Party in any manner
based upon, relating to or arising out of (a) any untrue
representation, misstatement, material omission, breach of warranty
or failure to perform any covenants or agreement by the Company
contained herein or in any Transaction Document or (b) any action
instituted against a Purchaser Indemnified Party by any stockholder
of the Company who is not an Affiliate of such Purchaser Indemnified
Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of
such Purchaser Indemnified Party's representation, warranties or
covenants under the Transaction Documents or any agreements or
understandings such Purchaser Indemnified Party may have with any
such stockholder or any violations by such Purchaser Indemnified
Party of state or federal securities laws or any conduct by such
Purchaser Indemnified Party which constitutes fraud, gross
negligence, willful misconduct or malfeasance). The Company will
also advance expenses as incurred to the fullest extent permitted
under applicable law; provided, however, that the Purchaser
Indemnified Party provides an undertaking to repay such advances to
Company if it is ultimately determined that such Purchaser
Indemnified Party is not entitled to indemnification. The Purchaser
Indemnified Party and the Company will cooperate in the defense of
any such matter.
(ii) A Purchaser Indemnified Party shall give written notice
of a claim for indemnification under this Section 10 to the Company
promptly after
25
receipt of any written claim by any third party and in any event not
later than twenty (20) Business Days after receipt of any such
written claim (or not later than ten (10) Business Days after the
receipt of any such written claim in the event such written claim is
in the form of a formal complaint filed with a court of competent
jurisdiction and served on such Purchaser Indemnified Party),
specifying in reasonable detail the amount, nature and source of the
claim, and including therewith copies of any notices or other
documents received from third parties with respect to such claim;
provided, however, that failure to give such notice shall not limit
the right of a Purchaser Indemnified Party to recover indemnity or
reimbursement except to the extent that the Company suffers any
material prejudice or material harm with respect to such claim as a
result of such failure. The Purchaser Indemnified Party shall also
provide the Company with such further information concerning any
such claims as the Company may reasonably request by written notice.
(iii) Within five (5) Business Days after receiving notice of
a claim for indemnification or reimbursement, the Company shall, by
written notice to the Purchaser Indemnified Party, either (A)
concede or deny liability for the claim in whole or in part, or (B)
in the case of a claim asserted by a third party, advise that the
matters set forth in the notice are, or will be, subject to contest
or legal proceedings not yet finally resolved. If the Company
concedes liability in whole or in part, it shall, within twenty (20)
Business Days of such concession, pay the amount of the claim to the
Purchaser Indemnified Party to the extent of the liability conceded.
Any such payment shall be made in immediately available funds equal
to the amount of such claim so payable. If the Company denies
liability in whole or in part or advises that the matters set forth
in the notice are, or will be, subject to contest or legal
proceedings not yet finally resolved, then the Company shall make no
payment (except for the amount of any conceded liability payable as
set forth above) until the matter is resolved by a final judgment
(not subject to any appeal) of a court or other tribunal of
competent jurisdiction.
(iv) In the case of any third party claim, if within five (5)
Business Days after receiving the notice described in the preceding
Section 10(a), the Company (A) gives written notice to the Purchaser
Indemnified Party stating that the Company disputes and intends to
defend against such claim, liability or expense at the Company's own
cost and expense and (B) provides assurance reasonably acceptable to
such Purchaser Indemnified Party that such indemnification will be
paid fully and promptly if required and such Purchaser Indemnified
Party will not incur cost or expense during the proceeding, then
counsel for the defense shall be selected by the Company (subject to
the consent of such Purchaser Indemnified Party which consent shall
not be unreasonably withheld) and the Company shall not be required
to make any payment to the Purchaser Indemnified Party with respect
to such claim, liability or expense as long as the Company is
conducting a good faith and diligent defense at its own expense;
provided, however, that the assumption of defense of any such
matters by the Company shall relate solely to the claim, liability
or expense that is
26
subject or potentially subject to indemnification. If the Company
assumes such defense in accordance with the preceding sentence, it
shall have the right, with the consent of such Purchaser Indemnified
Party, which consent shall not be unreasonably withheld, to settle
all indemnifiable matters related to claims by third parties which
are susceptible to being settled provided the Company's obligation
to indemnify such Purchaser Indemnified Party therefor will be fully
satisfied only by payment of money by the Company pursuant to a
settlement which includes a complete release of such Purchaser
Indemnified Party. The Company shall keep such Purchaser Indemnified
Party apprised of the status of the claim, liability or expense and
any resulting suit, proceeding or enforcement action, shall furnish
such Purchaser Indemnified Party with all documents and information
that such Purchaser Indemnified Party shall reasonably request and
shall consult with such Purchaser Indemnified Party prior to acting
on major matters, including settlement discussions. Notwithstanding
anything herein stated, such Purchaser Indemnified Party shall at
all times have the right to fully participate in such defense at its
own expense directly or through counsel; provided, however, if the
named parties to the action or proceeding include both the Company
and one or more Purchaser Indemnified Parties and representation of
such parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the reasonable expense
of separate counsel for all Purchaser Indemnified Parties shall be
paid by the Company, provided that the Company shall be obligated to
pay for only one counsel for all Purchaser Indemnified Parties in
any jurisdiction. If no such notice of intent to dispute and defend
is given by the Company, or if such diligent good faith defense is
not being or ceases to be conducted, such Purchaser Indemnified
Party may undertake the defense of (with counsel selected by such
Purchaser Indemnified Party), and shall have the right to compromise
or settle, such claim, liability or expense (exercising reasonable
business judgment) with the consent of the Company, which consent
shall not be unreasonably withheld. If such claim, liability or
expense is one that by its nature cannot be defended solely by the
Company, then such Purchaser Indemnified Party shall make available
all information and assistance that the Company may reasonably
request and shall cooperate with the Company in such defense.
Section 11. Miscellaneous.
(a) Entire Agreement; Amendments; Waivers. The terms and conditions of the
Transaction Documents represent the entire agreement between the parties with
respect to the subject matter hereof and thereof, and supersede any prior
agreements or understandings, whether written or oral, between the parties
respecting such subject matter. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No course of dealing between or
among any of the parties hereto and no delay on the part of any party hereto in
exercising any rights hereunder or thereunder shall operate as a waiver of the
rights hereof and thereof. No waiver of any default with
27
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.
(b) Successors and Assigns. This Agreement inures to the benefit of and is
binding upon the parties hereto and their respective successors, and no other
person has any right or obligation hereunder. The Purchaser may not assign this
Agreement or any rights or obligations hereunder, other than to Affiliates of
the Purchaser, without the prior written consent of the Company, such consent
not to be unreasonably withheld, provided that any permitted transferee shall
agree in writing to be bound, with respect to the transferred Shares, by the
provisions hereof that apply to the Purchaser. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Purchaser, except pursuant to a merger, recapitalization or other
business combination transaction in which the surviving entity agrees in writing
to assume all of the covenants, liabilities and obligations of the Company
hereunder. Any assignment contrary to the terms hereof is null and void and of
no force or effect. Notwithstanding the foregoing, nothing in this Agreement is
intended to give any person not named herein the benefit of any legal or
equitable right, remedy or claim under this Agreement, except as expressly
provided herein.
(c) Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the federal
courts sitting in the City of New York in the borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
(d) Remedies. It is specifically understood and agreed that any breach of
the provisions of the Transaction Documents by any party subject hereto will
result in irreparable injury to the other parties hereto, that the remedy at law
alone will be an inadequate remedy for such breach, and that, in addition to any
other remedies which they may have, such other parties may enforce their
respective rights by actions for specific performance (to the extent permitted
by law) without the necessity of showing economic loss or the posting of any
bond.
28
(e) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or the other provisions of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which when so executed and delivered shall be
taken to be an original; but such counterparts shall together constitute but one
and the same document. The Transaction Documents may be executed and delivered
by facsimile transmission.
(g) Notices. All notices and other communications required or permitted
hereunder must be in writing and, except as otherwise noted herein, must be
addressed as follows:
(i) if to the Company, to:
Evergreen Solar, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Fax: x0-000-000-0000
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
0000 X Xxxxxx XX, Xxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Fax No. x0-000-000-0000
(ii) if to the Purchaser, to:
DC Chemical Co., Ltd.
Oriental Chemical Xxxxxxxx
00, Xxxxxx-xxxx
Xxxx-xx, Xxxxx
000-000 Xxxxx
Attention: Woo Xxxx Xxx
Fax No. x00-0-000-0000
With a copy to:
Debevoise & Xxxxxxxx LLP
13/F Entertainment Building
00 Xxxxx'x Xxxx Xxxxxxx
00
Xxxx Xxxx
Attention: Xxxxx X. Xxx, Esq.
Fax No. x000-0000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other in writing in accordance with the provisions of this
Section 11(g). Any such notice or communication will be deemed to have been
received: (A) in the case of telecopy or personal delivery, on the date of such
delivery; (B) in the case of nationally-recognized overnight courier, on the
next Business Day after such notice is timely delivered to such courier; and (C)
if by registered or certified mail, on the Business Day actually received by the
intended recipient.
(h) Expenses. Each party will bear its own expenses related to this
Agreement and the transactions contemplated hereby, except that the Company will
reimburse the Purchaser for reasonable legal fees and expenses incurred by it in
connection with the offer and sale of the Shares up to, but not exceeding,
$100,000 in the aggregate.
(i) Section Headings. The descriptive headings and subheadings herein have
been inserted for convenience only and are not to be deemed to limit or
otherwise affect the construction of any provisions hereof.
(j) No Reliance. Each party acknowledges that (i) it has such knowledge in
business and financial matters as to be fully capable of evaluating the
Transaction Documents and the transactions contemplated hereby and thereby, (ii)
it is not relying on any advice or representation of any other party in
connection with entering into the Transaction Documents or such transactions
(other than the representations made in the Transaction Documents), (iii) it has
not received from such party any assurance or guarantee as to the merits
(whether legal, regulatory, tax, financial or otherwise) of entering into the
Transaction Documents or the performance of its obligations hereunder and
thereunder, and (iv) it has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors to the extent that it
has deemed necessary, and has entered into the Transaction Documents based on
its own independent judgment and on the advice of its advisors as it has deemed
necessary, and not on any view (whether written or oral) expressed by such other
party.
[SIGNATURE PAGES FOLLOW]
30
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first set forth above.
EVERGREEN SOLAR, INC.
By: /s/ Xxxxxxx El-Xxxxxx
-------------------------------------
Name: Xxxxxxx El-Hillow
Title: Chief Financial Officer
[Signature page to Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first set forth above.
DC CHEMICAL CO., LTD.
By: /s/ Xxxx Xxx Shin
-------------------------------------
Name: Xxxx Xxx Shin
Title: Vice-Chairman
[Signature page to Stock Purchase Agreement]
Exhibit A
Supply Agreement
Exhibit B
Stockholders Agreement
Exhibit C
Certificate of Designation of Series B Preferred Stock
