AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT, dated as of June 17, 1999 (this "Agreement"),
is be and among TERA COMPUTER COMPANY, a Washington corporation (the "Company")
and the BANCA DEL GOTTARDO (the "Investor").
WHEREAS, pursuant to a Purchase Agreement, dated as of March 9, 1999 (the
"March 1999 Agreement"), the Investor purchased 1,111,111 shares of the
Company's common stock, $0.01 par value (the "Common Stock), acquired common
stock purchase warrants covering 1,111,111 shares of Common Stock and aquired
the right to purachase and receive additional shares of Common Stock and
warrants; and
WHEREAS, the Company is raising additional capital from other sources in a
private placement of Common Stock and Common Stock Purchase Warrants (the
"Warrants") to be consummated in June 1999 (the "Private Placement"); and
WHEREAS, the Investor has agreed to participate in the Private Placement;
and
WHEREAS, it is a condition precedent to the closing of the Private
Placement that certain additional agreements be reached among the Investor and
the Company regarding the Investor's right to acquire additional shares of
Common Stock and warrants;
NOW THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions. All terms not defined in this Agreement are used as defined
in the March 1999 Agreement.
2. Private Placement. The Investor agrees to invest not less than
$5,000,000 in the Private Placement pursuant to the purchase agreement and
related documents governing the Private Placement.
3. Option/Additional Shares. The March 1999 Agreement is amended to
eliminate the Investor's right to purchase the Option Shares and receive
Additional Warrants in Section 2 of the March 1999 Agreement and Company's
obligation to issue Additional Shares contained in Section 3 of the March 1999
Agreement, and the March 1999 Agreement is hereby amended to delete Sections 2
and 3 in their entirety.
4. Issuance and Amendment of Warrants.
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(a) Issuance of Warrants. As part of the Closing of the Private
Placement and in addition to the Warrants to be issued to the Investor for its
investment in the Private Placement on the same terms as all other investors in
the Private Placement, the Company shall deliver to the Investor, or as the
Investor shall otherwise designate, Warrants in the same form and with the same
terms as the Warrants issued in the Private Placement for an aggregate of
775,556 shares of Common Stock plus 25% of the number of shares of Common Stock
issued to the Investor as part of its investment in the Private Placement.
(b) Amendment of Warrants. At the Closing of the Private Placement,
the Warrants issued to the Investor pursuant to the March Agreement for an
aggregate of 1,111,111 shares, and the other Warrants then issued, shall be
amended to reduce the initial Exercise Price from $5.16 to the initial Exercise
Price for the Warrants issued in the Private Placement.
5. Registration. The Company agrees to register the shares of Common Stock
issuable upon exercise of the Warrants (the "Warrant Shares") within 30 days of
issuance pursuant to the same Registration Statement as used for the
registration of the resale of the shares issued in the Private Placement. The
Company will enter into a Registration Rights Agreement with the Investor with
the same terms and provisions as the Registration Rights Agreement it enters
with the investors in the Private Placement.
6. Term of Agreement. If the Closing of the Private Placement does not
occur on or before June 30, 1999, then either party may declare this Agreement
to be null and void, which declaration shall be binding on the other.
7. Company Representations, Warranties and Covenants
The Company represents and warrants to, and covenants and agrees with, the
Investor that:
(a) Organization and Authority. The Company is a corporation duly
organized and validly existing under the laws of the State of Washington, and
has all requisite corporate power and authority (i) to own, lease, and operate
its properties and to carry on its business as now being conducted, and (ii) to
execute, deliver, and perform its obligations under this Agreement, the Warrants
and the other agreements to be executed and delivered or amended by the Company
in connection with this Agreement, and to consummate the transactions
contemplated hereby and thereby.
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(b) Concerning the Warrants. The Warrants have been duly authorized
and the Warrant Shares when issued upon due exercise of the Warrants, will be
duly and validly issued, fully paid and non-assessable, and will not subject the
holder thereof to personal liability by reason of being such holder.
(c) Authorization. This Agreement and the Warrants have been duly and
validly authorized by the Company, this Agreement has been duly executed and
delivered on behalf of the Company and this Agreement is, and the Warrants, when
executed and delivered by the Company, will be, valid and binding obligations of
the Company enforceable in accordance with their respective terms, subject to
general principles of equity and to bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and limits
upon rights to indemnity.
(d) Non-contravention. The execution and delivery of this Agreement by
the Company and the issuance by the Company of the Warrants and Warrants Shares,
as contemplated by this Agreement, and completion of the other transactions
contemplated in this Agreement and the Warrants do not and will not conflict
with or result in a breach by the Company of any of the terms or provisions of,
or constitute a default under, the Restated and Amended Articles of
Incorporation or Bylaws of the Company, or any indenture, mortgage, deed of
trust or other material agreement or instrument to which the Company is a party
or by which it or any of its properties or assets are bound which would have a
material adverse effect on the Company, or any applicable law, rule or
regulation or any applicable decree, judgment or order of any court, United
States federal or state regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of its properties
or assets which would have a material adverse effect on the Company.
(e) Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency or Nasdaq is required to be obtained by the
Company for (i) the issuance of the Warrants as contemplated by this Agreement,
and (ii) the issuance of Warrant Shares upon exercise of the Warrants, except
for the filing of one or more Forms D with respect to such securities as
required under Regulation D under the 1933 Act and Listing Applications on
Nasdaq.
(f) Information Provided All information provided by or on behalf of
the Company to the Investor in connection with the transactions contemplated by
the Agreement does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the
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statements therein, in the light of the circumstances in which they were made,
not misleading.
(g) SEC Filings. The Company has timely filed all required forms,
reports and other documents with the SEC. Except as set forth on Sechedule 7(g),
all of such forms, reports and other documents complied, when filed, in all
material respects, with all applicable requirements of the 1933 Act and the 1934
Act.
8. Certain Covenants and Restrictions.
(a) Transfer Restrictions. The Investor acknowledges that (i) the
Warrants have not been and are not being registered under the 1933 Act, and,
except as provided in this Agreement and the Registration Rights Agreement, the
Warrant Shares have not been and are not being registered under the 1933 Act,
and may not be transferred unless (x) subsequently registered thereunder or (y)
such Investor shall have delivered to the Company an opinion of counsel,
reasonably satisfactory in form, scope, and substance to the Company, to the
effect that the Warrant Shares to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration; (ii) any sale of
the Securities made in reliance on Rule 144 promulgated under the 1933 Act may
be made only in accordance with the terms of said Rule and further, if said Rule
is not applicable, any such resale of Securities under circumstances in which
the seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (iii) neither the Company nor any other person is under any
obligation to register the Securities (other than pursuant to the Registration
Rights Agreement) under the 1933 Act or to comply with the terms and conditions
of any exemption thereunder (other than pursuant to Section 6(d) hereof and
pursuant to the Registration Rights Agreement).
(b) Restrictive Legend. The Investor acknowledges and agrees that,
until such time as the Warrants and Warrant Shares have been registered under
the 1933 Act, the certificates for the such securities shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such securities):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
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EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.
Once an applicable Registration Statement has been declared effective,
thereafter (i) upon request of a Investor the Company will substitute
certificates without the above-referenced legend for certificates for any
Warrant Shares issued prior to the date such Registration Statement is declared
effective by the SEC which bear such legend and promptly remove any
stop-transfer restriction relating to such Warrant Shares, but in no event later
than five Business Days after surrender of such certificates by such Investor,
and (ii) the Company shall not place any restrictive legend on certificates for
any Warrant Shares issued or impose any stop-transfer restriction thereon.
(c) Form D. The Company agrees to file a Form D with the SEC with
respect to the Warrants and Warrant Shares as required under Regulation D
promulgated under the 1933 Act and to provide a copy thereof to the Investor
promptly after such filing. The Investor agrees to cooperate with the Company in
connection with such filing and, upon request of the Company, to provide all
information relating to the Investor reasonably required for such filing.
(d) Authorization for Trading; Reporting Status. On or before the date
that is 30 days after the Closing, but in any event before the effective date of
the Registration Statement, the Company shall file a listing application for the
Warrant Shares with the Nasdaq and shall provide evidence of such filing to the
Investor, and the Company, on or before the date that is 30 days after the
issuance thereof. From the Closing until such time as the Registration Statement
is no longer required to be in effect, the Company shall file all reports
required to be filed with the SEC pursuant to Section 13 or 15(d) of the 1934
Act and the Company shall not terminate its status as an issuer required to file
reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would permit such termination.
(e) Certain Expenses and Fees. Whether or not the closing of the
transactions contemplated hereby occurs, the Company shall pay or reimburse the
Investor for all reasonable expenses (including, without limitation, legal fees
and expenses of counsel to the Investor of up to $10,000) incurred by the
Investors in connection with this Agreement and the transactions contemplated
hereby.
(f) Reservation of Common Stock. The Company shall take all action
necessary so that a number of shares
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of the authorized but unissued Common Stock sufficient to provide for the
issuance of Warrant Shares issuable hereunder are at all times reserved by the
Company, free from preemptive rights. If the Company shall issue any securities
or make any change in its capital structure which would change the number of
shares of Common Stock issuable as Warrant Shares as herein provided, the
Company shall at the same time also make proper provision so that thereafter
there shall be a sufficient number of shares of Common Stock authorized and
reserved, free from preemptive rights, for issuance of the Warrant Shares on the
new basis. If at any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to permit the issuance of all Warrant Shares
issuable hereunder, the Company promptly shall seek, and use its best efforts to
obtain and complete, such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(g) Trading Reports. The Investor shall promptly report to the Company
all market sales of shares of Common Stock of the Company by such Investor.
(h) Brokers' or Finders' Fees. The Company and the Investor represents
and warrants to each other that they have not incurred any obligation or
liability, contingent or otherwise, for brokerage or finders' fees, or agents'
commission or other like payment in connection with this Agreement or the
transactions contemplated hereby. Each party agrees to indemnify and hold the
other parties harmless from and against any obligation or liability for brokers'
or finders' fees or agents' commissions or other like payment based in any way
on agreements, arrangements or understandings claimed to have been made by such
indemnifying party with any third party.
9. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and interpreted
in accordance with the internal laws of the State of Washington.
(b) Counterparts. This Agreement may be executed in counterparts and
by the parties hereto on separate counterparts, all of which together shall
constitute one and the same instrument. A facsimile copy of this Agreement
bearing a signature on behalf of a party hereto shall be legal and binding on
such party.
(c) Headings, etc. The headings, captions and footers of this
Agreement are for convenience of reference
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and shall not form part of, or affect the interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
(e) Amendments. No amendment, modification, waiver, discharge or
termination of any provision of this Agreement nor consent to any departure by
the Investors or the Company therefrom shall in any event be effective unless
the same shall be in writing and signed by the party to be charged with
enforcement, and then shall be effective only in the specific instance and for
the purpose for which given. No course of dealing between the parties hereto
shall operate as an amendment of this Agreement.
(f) Waivers. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, or any course of dealings between the parties, shall not operate as a
waiver thereof or an amendment hereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
exercise of any other right or power.
(g) Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be delivered personally (which shall include
telephone line facsimile transmission) or by courier and shall be effective upon
receipt (or on the next Business Day, if the date of such receipt is not a
Business Day), if delivered personally or by courier, in the case of the Company
addressed to the Company at its address shown in the introductory paragraph of
this Agreement, Attention: Chief Financial Officer (facsimile number (206)
701-2218), with a copy to Stoel Rives LLP, Suite 3600, One Union Square, 000
Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, Attn: Xxxxxxxxxxx X. Xxxx, Esq. (facsimile
number (000) 000-0000) or, in the case of each Investor, at its address shown on
the signature page of this Agreement, with a copy to the Law Offices of Xxxx X.
Xxxx, 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000 (facsimile number
(000) 000-0000), or such other address or telephone line facsimile transmission
number as a party shall have provided by notice to the other party in accordance
with this provision. Each Investor hereby designates as its address for any
notice required or permitted to be given to the Investor pursuant to the
Warrants the address shown on the signature page of this
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Agreement, until such Investor shall designate another address for such purpose.
(h) Survival. The respective representations, warranties, covenants,
and agreements of each Investor and the Company contained in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
survive the delivery of payment for the Initial Shares and the Option Shares,
the issuance of the Warrants, the Additional Warrants the Adjustment Shares and
the Warrant Shares, and shall remain in full force and effect regardless of any
investigation made by or on behalf of them or any person controlling or advising
any of them.
(i) Entire Agreement; Confirmation. This Agreement and the annexes and
schedules attached hereto set forth the entire agreement between the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, whether written or oral, with respect thereto. Except as amended
hereby, the March 1999 Agreement and the Registration Rights Agreement remain in
effect in accordance with their respective terms.
(k) Further Assurances. Each party to this Agreement will perform any
and all acts and execute any and all documents as may be necessary and proper
under the circumstances in order to accomplish the intents and purposes of this
Agreement and to carry out its provisions.
(l) Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Investors
and the Company by their respective officers thereunto duly authorized as of the
date set forth above.
TERA COMPUTER COMPANY
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and CEO
INVESTOR
BANCA DEL GOTTARDO
By: /s/ XXXXX XXXXXXX XXXXXXX XXXX
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Name: Xxxxx Xxxxxxx Xxxxxxx Xxxx
Title: Member of Executive Board Officer
Address: viale X. Xxxxxxxxx 0
0000 Xxxxxx
Xxxxxxxxxxx
Telephone: 000-0000-000-0000
Facsimile: 011-4191-808-2454/43
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