EXHIBIT 4
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of October 9, 2002 by and among Superconductor
Technologies Inc., a Delaware corporation (the "Company"), and each
of the purchasers set forth on the signature pages of this Agreement
(the "Investors") with reference to the following facts:
A. The Company and the Investors are executing and delivering
this Agreement in reliance upon the exemption from securities
registration afforded by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange
Commission under the Securities Act of 1933, as amended (the
"Securities Act").
B. The Investors desire to purchase, and the Company desires to
issue and sell, upon the terms and conditions in this Agreement, (i)
an aggregate of 15,833,669 shares (the "Shares") of the Company's
common stock, par value $0.001 per share ("Common Stock"), at $0.95
per share and (ii) stock purchase warrants in the form attached
hereto as Exhibit A (the "Warrants") to purchase up to an aggregate
3,958,418 additional shares of Common Stock (the "Warrant Shares").
D. Each Investor wishes to purchase, upon the terms and
conditions in this Agreement, the number of Shares and the number of
Warrants set forth immediately next to its name on the signature
pages of this Agreement.
E. Contemporaneous with the closing of the transactions
contemplated by this Agreement, the parties will be executing and
delivering a Registration Rights Agreement, in the form attached
hereto as Exhibit B (the "Registration Rights Agreement"), pursuant
to which the Company will agree to provide certain registration
rights under the Securities Act and the rules and regulations
promulgated thereunder, and applicable state securities laws. This
Agreement, the Warrants and the Registration Rights Agreement are
collectively referred to as the "Transaction Documents".
F. The transaction contemplated by this Agreement is intended
to generate a minimum of $15,000,000 and a maximum of $20,000,000
gross proceeds to the Company on the Closing Date (as defined
below). The sale of securities hereunder to the Investors initially
executing this Agreement will meet the minimum gross proceeds
requirement, and the Company may secure additional commitments from
additional Investors executing this Agreement hereafter and prior to
the Closing for the sale of additional securities at the price and
on the terms specified herein provided the aggregate of all sales to
Investors does not exceed the maximum gross proceeds limit.
NOW, THEREFORE, the Company and each of the Investors severally (and
not jointly) hereby agree as follows:
1. Purchase and Sale of Shares and
Warrants.
1.1 Purchase of
Shares and Warrants. On the Closing Date
(as defined below), the Company shall issue
and sell to each Investor, and each Investor
severally agrees to purchase from the
Company, the number of Shares and Warrants
set forth immediately next to such
Investor's name on the signature pages to
this Agreement.
1.2 Form of Payment.
On the Closing Date, (i) each Investor shall
pay the purchase price for the Shares and
the Warrants to be issued and sold to it at
the Closing (as defined below) (the
"Purchase Price") by wire transfer of
immediately available funds to the Company,
in accordance with the Company's written
wiring instructions, against delivery of
duly executed certificates representing the
Shares and duly executed Warrants
which such Investor is purchasing and (ii)
the Company shall deliver such certificates
and Warrants duly executed on behalf of the
Company, to such Investor, against delivery
of such Purchase Price.
1.3 Closing Date. Subject to the
satisfaction (or waiver) of the conditions
set forth in Sections 5 and 6, the date and
time of the issuance and sale of the Shares
and the Warrants pursuant to this Agreement
(the "Closing Date") shall be 9:00 a.m.,
Pacific Standard Time, on the date of
closing of the Merger (as defined in Section
5.5 below) or such other mutually agreed
upon time. The closing of the transactions
contemplated by this Agreement (the
"Closing") shall occur on the Closing Date
at the offices of Xxxx|Xxxxxxxxxxx LLP,
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx, or at such other
location as may be agreed to by the parties.
1.4 Adjustments. If at any
time prior to the Closing the outstanding
shares of Common Stock are subdivided into a
greater number of shares or consolidated
into a lesser number of shares, then
proportionate adjustments shall be made to
per share purchase price and number of
shares of Common Stock purchased hereunder
and under the form of Warrant attached
hereto in order to prevent dilution and
maintain the same aggregate consideration
hereunder and thereunder.
2. Investors' Representations,
Warranties and Covenants. Each Investor
severally (and not jointly) represents,
warrants and covenants to the Company solely
as to such Investor that:
1.1 Investment Purpose. As of the date
hereof, the Investor is purchasing the
Shares, the Warrants and Warrant Shares
(collectively the "Securities") for its own
account and not with a present view towards
the public sale or distribution thereof,
except pursuant to sales registered or
exempted from registration under the
Securities Act; provided, however, that by
making the representations herein, the
Investor does not agree to hold any of the
Securities for any minimum or other specific
term and reserves the right to dispose of
the Securities at any time in accordance
with or pursuant to a registration statement
or an exemption under the Securities Act.
1.2 Investor Status.
The Investor is an "accredited investor" as
defined in Rule 501(a) of Regulation D. In
the normal course of its business, the
Investor invests in or purchases securities
similar to the Securities and it has such
knowledge and experience in financial and
business matters as to be capable of
evaluating the merits and risks of
purchasing the Securities.
1.3 Reliance on
Exemptions. The Investor understands that
the Securities are being offered and sold to
it in reliance upon specific exemptions from
the registration requirements of United
States federal and state securities laws and
that the Company is relying upon the truth
and accuracy of, and the Investor's
compliance with, the representations,
warranties, agreements, acknowledgments and
understandings of the Investor set forth
herein in order to determine the
availability of such exemptions and the
eligibility of the Investor to acquire the
Securities.
1.4 Information. The Investor and its
advisors, if any, have been furnished with
all materials (excluding any material
nonpublic information) relating to the
business, finances and operations of the
Company and materials relating to the offer
and sale of the Securities which have been
requested by the Investor or its advisors.
The Investor and its advisors, if any, have
been afforded the opportunity to ask
questions of the Company. Neither such
inquiries nor any other due diligence
investigation conducted by Investor or any
of its advisors or representatives shall
modify, amend or affect Investor's right to
rely on the Company's representations and
warranties contained in Section 3. The
Investor understands that its investment in
the Securities involves a significant degree
of risk.
1.5 Governmental Review. The Investor
understands that no United States federal or
state agency or any other government or
governmental agency has passed upon or made
any recommendation or endorsement of the
Securities.
1.6 Transfer or Re-sale. The Investor
understands that (i) except as provided in
the Registration Rights Agreement, the sale
or re-sale of the Securities has not been
and is not being registered under the
Securities Act or any applicable state
securities laws, and the Securities may not
be transferred unless (a) the Securities are
sold pursuant to an effective registration
statement under the Securities Act, (b) the
Investor shall have delivered to the Company
an opinion of counsel (which opinion shall
be in form, substance and scope customary
for opinions of counsel in comparable
transactions) to the effect that the
Securities to be sold or transferred may be
sold or transferred pursuant to an exemption
from such registration, (c) the Securities
are sold or transferred to an "affiliate"
(as defined in Rule 144 promulgated under
the Securities Act (or a successor rule)
("Rule 144")) of the Investor who agrees to
sell or otherwise transfer the Securities
only in accordance with this Section 2.6 and
who is an "accredited investor" (as defined
in Rule 501(a) of Regulation D) or (d) the
Securities are sold pursuant to Rule 144;
(ii) any sale of such Securities made in
reliance on Rule 144 may be made only in
accordance with the terms of said Rule and
further, if said Rule is not applicable, any
re-sale of such 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
defined in the Securities Act) may require
compliance with some other exemption under
the Securities Act or the rules and
regulations of the Securities and Exchange
Commission thereunder; and (iii) neither the
Company nor any other person is under any
obligation to register such Securities under
the Securities Act or any state securities
laws or to comply with the terms and
conditions of any exemption thereunder (in
each case, other than pursuant to the
Registration Rights Agreement).
Notwithstanding the foregoing or anything
else contained herein to the contrary, the
Securities may be pledged as collateral in
connection with a bona fide margin account
or other lending arrangement; provided,
however, that upon execution on any such
pledge, the pledgee shall be subject to the
restrictions on transfer of the Securities
contained in this Agreement.
1.7 Legends. The Investor understands
that the Shares and the Warrants and, until
such time as the Warrant Shares have been
registered under the Securities Act as
contemplated by the Registration Rights
Agreement or otherwise may be sold pursuant
to Rule 144 without any restriction as to
the number of securities as of a particular
date that can then be immediately sold, the
certificates for the Shares and Warrant
Shares may 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, or the securities laws of
any state of the United States. The
securities represented hereby may
not be offered or sold in the
absence of an effective registration
statement for the securities under
applicable securities laws unless
offered, sold or transferred under
an available exemption from the
registration requirements of those
laws.
The legend set forth above shall be removed and the
Company shall issue a certificate without such legend
to the holder of any Security upon which it is
stamped, if, unless otherwise required by applicable
state securities laws, (a) such Security is registered
for resale under an effective registration statement
filed under the Securities Act or otherwise may be
sold pursuant to Rule 144(k) without any restriction
as to the number of securities as of a particular date
that can then be immediately sold, or (b) such holder
provides the Company with an opinion of counsel, in
form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that
a public sale or transfer of such Security may be made
without registration under the Securities Act and such
sale or transfer is effected or (c) such holder
provides the Company with reasonable and customary
assurances that such Security can be sold pursuant to
Rule 144 and such sale or transfer is effected. The
Investor agrees to sell all Securities, including
those represented by a certificate(s) from which the
legend has been removed, in compliance with applicable
prospectus delivery requirements, if any.
1.8 Authorization; Enforcement. This
Agreement and the Registration Rights
Agreement have been duly and validly
authorized. This Agreement has been duly
executed and delivered on behalf of the
Investor, and this Agreement constitutes,
and upon execution and delivery by the
Investor of the Registration Rights
Agreement, such agreement will constitute,
valid and binding agreements of the Investor
enforceable in accordance with their terms,
subject to bankruptcy, insolvency,
reorganization, moratorium or other similar
rights affecting or relating to creditors'
rights generally and general principles of
equity.
1.9 Residency. The Investor is a
resident of the jurisdiction set forth
immediately next to such Investor's name on
the signature pages hereto.
1.10 Trading Limitations. The Investor
will conduct any sales of Common Stock in
compliance with all relevant securities laws
and regulations. The Investor will not
engage in any "short sales" (as defined in
Rule 3b-3 under the Securities Act) prior to
the effective date of the Registration
Statement (as defined in the Registration
Rights Agreement). This prohibition against
short sales will not apply to the Investor
during any period in which the Investor is
prevented from publicly reselling previously
acquired shares of common stock of the
Company or Conductus, Inc. (or shares
hereafter acquired under previously issued
warrants) due to the suspension or lapse for
any reason of the registration statements
presently in effect under existing
registration rights agreements. The
Investor has not engaged in any purchases or
sales of Common Stock within the past five
(5) trading days.
2. Representations and Warranties
of the Company. The Company represents and
warrants to each Investor that:
1.1 Organization and Qualification.
The Company and each of its Subsidiaries (as
defined below), if any, is a corporation
duly organized, validly existing and in good
standing under the laws of the jurisdiction
in which it is incorporated and has the
requisite corporate power to own its
properties and to carry on its business as
now being conducted. Schedule 3.1 sets
forth a list of all of the Subsidiaries of
the Company and the jurisdiction in which
each is incorporated. The Company and each
of its Subsidiaries is duly qualified as a
foreign corporation to do business and is in
good standing in every jurisdiction in which
its ownership or use of property or the
nature of the business conducted by it makes
such qualification necessary except where
the failure to be so qualified or in good
standing would not have a Material Adverse
Effect. "Material Adverse Effect" means any
material adverse effect on (i) the holder's
rights relating to the Securities, (ii) the
business, operations, assets, financial
condition or prospects of the Company and
its Subsidiaries, if any, taken as a whole,
(iii) the transactions contemplated hereby
or by the agreements or instruments to be
entered into in connection herewith or (iv)
the authority or the ability of the Company
to perform its obligation under this
Agreement, the Registration Rights Agreement
or the Warrants. "Subsidiaries" means any
corporation or other organization, whether
incorporated or unincorporated, in which the
Company owns, directly or indirectly, any
equity or other ownership interest.
1.2 Authorization; Enforcement. (i)
The Company has all requisite corporate
power and authority to enter into and
perform this Agreement, the Registration
Rights Agreement and the Warrants and to
consummate the transactions contemplated
hereby and thereby and to issue the
Securities, in accordance with the terms
hereof and thereof, (ii) the execution and
delivery of this Agreement, the Registration
Rights Agreement and the Warrants by the
Company, and the consummation by it of the
transactions contemplated hereby and thereby
(including, without limitation, the issuance
of the Warrants and the issuance and
reservation for issuance of the Warrant
Shares issuable upon exercise of the
Warrants) have been duly authorized by the
Company's Board of Directors and no further
consent or authorization of the Company, its
Board of Directors, or its stockholders is
required, (iii) this Agreement has been duly
executed and delivered by the Company, and
(iv) this Agreement constitutes, and upon
execution and delivery by the Company of the
Registration Rights Agreement and the
Warrants, each of such agreements and
instruments will constitute, a legal, valid
and binding obligation of the Company
enforceable against the Company in
accordance with its terms, subject to
bankruptcy, insolvency, reorganization,
moratorium or other similar rights affecting
or relating to creditors' rights generally
and general principles of equity.
1.3 Capitalization. As of the date
hereof, the authorized capital stock of the
Company consists of (i) 75,000,000 shares of
Common Stock, of which 25,198,270 shares are
issued and outstanding, 3,643,405 shares are
reserved for issuance pursuant to the
Company's stock option plans, 3,461,091
shares are reserved for issuance pursuant to
securities (other than the Warrants)
exercisable for, or convertible into or
exchangeable for shares of Common Stock,
3,958,418 shares are reserved for issuance
upon exercise of the Warrants; and (ii)
2,000,000 shares of preferred stock, of
which no shares are issued and outstanding.
All of such outstanding shares of capital
stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and
nonassessable. No shares of capital stock
of the Company are subject to preemptive
rights or any other similar rights of the
stockholders of the Company or any liens or
encumbrances imposed through the actions or
failure to act of the Company. Except as
disclosed in Schedule 3.3, as of the date of
this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first
refusal, agreements, understandings, claims
or other commitments or rights of any
character whatsoever relating to, or
securities or rights convertible into or
exchangeable for any shares of capital stock
of the Company or any of its Subsidiaries,
or arrangements by which the Company or any
of its Subsidiaries is or may become bound
to issue additional shares of capital stock
of the Company or any of its Subsidiaries,
(ii) there are no agreements or arrangements
under which the Company or any of its
Subsidiaries is obligated to register the
sale of any of its or their securities under
the Securities Act (except the Registration
Rights Agreement) and (iii) there are no
anti-dilution or price adjustment provisions
contained in any security issued by the
Company (or in any agreement providing
rights to security holders) that will be
triggered by the issuance of the Shares, the
Warrants or Warrant Shares. The Company has
made available to counsel for the Investors
true and correct copies of the Company's
Restated Certificate of Incorporation as in
effect on the date hereof ("Certificate of
Incorporation"), the Company's Bylaws, as in
effect on the date hereof (the "Bylaws"),
and the terms of all securities convertible
into or exercisable for Common Stock of the
Company and the material rights of the
holders thereof in respect thereto except
for stock options granted under any benefit
plan of the Company.
1.4 Issuance of Shares. The Shares are
duly authorized and, upon issuance in
accordance with the terms of this Agreement,
will be validly issued, fully paid and
non-assessable, and free from all taxes,
liens, claims and encumbrances with respect
to the issue thereof and shall not be
subject to preemptive rights or other
similar rights of stockholders of the
Company and will not impose personal
liability upon the holder thereof. The
Warrant Shares are duly authorized and
reserved for issuance and, upon exercise of
the Warrants in accordance with the terms
thereof, will be validly issued, fully paid
and non-assessable, and free from all taxes,
liens, claims and encumbrances and will not
be subject to preemptive rights or other
similar rights of stockholders of the
Company and will not impose personal
liability upon the holder thereof.
1.5 No Conflicts. The execution,
delivery and performance of this Agreement,
the Registration Rights Agreement and the
Warrants by the Company and the consummation
by the Company of the transactions
contemplated hereby and thereby (including,
without limitation, the issuance and
reservation for issuance, as applicable, of
the Warrant Shares) will not (i) conflict
with or result in a violation of any
provision of the Certificate of
Incorporation or Bylaws or (ii) except as
set forth on Schedule 3.5, violate or
conflict with, or result in a breach of any
provision of, or constitute a default (or an
event which with notice or lapse of time or
both could become a default) under, or give
to others any rights of termination,
amendment, acceleration or cancellation of,
any agreement, indenture, patent, patent
license or instrument to which the Company
or any of its Subsidiaries is a party, or
(iii) result in a violation of any law,
rule, regulation, order, judgment or decree
(including federal and state securities laws
and regulations and regulations of any
self-regulatory organizations to which the
Company or its securities are subject)
applicable to the Company or any of its
Subsidiaries or by which any property or
asset of the Company or any of its
Subsidiaries is bound or affected (except
for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and
violations as would not, individually or in
the aggregate, have a Material Adverse
Effect). Neither the Company nor any of its
Subsidiaries is in violation of its
Certificate of Incorporation, Bylaws or
other organizational documents and neither
the Company nor any of its Subsidiaries is
in default (and no event has occurred which
with notice or lapse of time or both could
put the Company or any of its Subsidiaries
in default) under, and neither the Company
nor any of its Subsidiaries has taken any
action or failed to take any action that
would give to others any rights of
termination, amendment, acceleration or
cancellation of, any agreement, indenture or
instrument to which the Company or any of
its Subsidiaries is a party or by which any
property or assets of the Company or any of
its Subsidiaries is bound or affected,
except for possible defaults as would not,
individually or in the aggregate, have a
Material Adverse Effect. The businesses of
the Company and its Subsidiaries, if any,
are not being conducted, and shall not be
conducted so long as a Investor owns any of
the Securities, in violation of any law,
ordinance or regulation of any governmental
entity, except for possible or actual
violations, if any, the sanctions for which
would not, individually or in the aggregate,
have a Material Adverse Effect. Except as
specifically contemplated by this Agreement,
except as set forth on Schedule 3.5 hereto,
and except as required under the Securities
Act and any applicable state securities
laws, the Company is not required to obtain
any consent, authorization or order of, or
make any filing or registration with, any
court, governmental agency, regulatory
agency, self regulatory organization or
stock market or any third party in order for
it to execute, deliver or perform any of its
obligations under this Agreement, the
Registration Rights Agreement or the
Warrants in accordance with the terms hereof
or thereof or to issue and sell the Shares
and Warrants in accordance with the terms
hereof and to issue the Warrant Shares upon
exercise of the Warrants. Except as
disclosed in Schedule 3.5, all consents,
authorizations, orders, filings and
registrations which the Company is required
to obtain pursuant to the preceding sentence
have been obtained or effected on or prior
to the date hereof. The Company is not in
violation of the listing requirements of the
Nasdaq National Market and does not
reasonably anticipate that the Common Stock
will be desisted from the Nasdaq National
Market in the foreseeable future. The
Company and its Subsidiaries are unaware of
any facts or circumstances which might
reasonably be expected to give rise to any
of the foregoing.
1.6 SEC Documents; Financial
Statements. Since January 1, 2000, the
Company has timely filed all reports,
schedules, forms, statements and other
documents required to be filed by it with
the Securities and Exchange Commission
pursuant to the reporting requirements of
the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (all of the
foregoing filed prior to the date hereof and
all exhibits included therein and financial
statements and schedules thereto and
documents (other than exhibits to such
documents) incorporated by reference
therein, being hereinafter referred to
herein as the "SEC Documents"). The Company
has delivered to each Investor true and
complete copies of any SEC Documents,
specifically requested by Investor or not
filed via the Securities and Exchange
Commission's XXXXX database, except for
exhibits and incorporated documents, and the
Company understands that Investor has
secured copies of the remainder of such SEC
Documents from the Securities and Exchange
Commission's XXXXX database through the
world wide web. As of their respective
dates, the SEC Documents complied in all
material respects with the requirements of
the Exchange Act and the rules and
regulations of the Securities and Exchange
Commission promulgated thereunder applicable
to the SEC Documents, and none of the SEC
Documents, at the time they were filed with
the Securities and Exchange Commission,
contained any untrue statement of a material
fact or omitted to state a material fact
required to be stated therein or necessary
in order to make the statements therein, in
light of the circumstances under which they
were made, not misleading. None of the
statements made in any such SEC Documents
is, or has been, required to be amended or
updated under applicable law (except for
such statements as have been amended or
updated in subsequent filings prior to the
date hereof). As of their respective dates,
the financial statements of the Company
included in the SEC Documents complied as to
form in all material respects with
applicable accounting requirements and the
published rules and regulations of the
Securities and Exchange Commission with
respect thereto. Such financial statements
have been prepared in accordance with United
States generally accepted accounting
principles, consistently applied, during the
periods involved (except (i) as may be
otherwise indicated in such financial
statements or the notes thereto, or (ii) in
the case of unaudited interim statements, to
the extent they may not include footnotes or
may be condensed or summary statements) and
fairly present in all material respects the
consolidated financial position of the
Company and its consolidated Subsidiaries as
of the dates thereof and the consolidated
results of their operations and cash flows
for the periods then ended (subject, in the
case of unaudited statements, to normal
year-end audit adjustments). Except as set
forth in the SEC Documents, the Company has
no liabilities, contingent or otherwise,
other than (i) liabilities incurred in the
ordinary course of business subsequent to
the date of such SEC Documents and (ii)
obligations under contracts and commitments
incurred in the ordinary course of business
and not required under generally accepted
accounting principles to be reflected in
such SEC Documents, which liabilities and
obligations referred to in clauses (i) and
(ii), individually or in the aggregate,
would not have a Material Adverse Effect.
1.7 Absence of Certain Changes. Except
as disclosed in the SEC Documents, since
December 31, 2001, there has been no change
or development which individually or in the
aggregate has had or could reasonably be
expected to have a Material Adverse Effect.
1.8 Absence of Litigation. Except as
disclosed in the SEC Documents, there is no
action, suit, claim, proceeding or, to the
knowledge of the Company and its
Subsidiaries, inquiry or investigation
before or by any court, public board,
government agency, self-regulatory
organization or body pending or, to the
knowledge of the Company or any of its
Subsidiaries, threatened against or
affecting the Company or any of its
Subsidiaries, or their officers or directors
in their capacity as such, that could have a
Material Adverse Effect.
1.9 Intellectual Property. The Company
and each of its subsidiaries owns or is
licensed to use all patents, patent
applications, trademarks, trademark
applications, trade names, service marks,
copyrights, copyright applications,
licenses, permits, know-how (including trade
secrets and other unpatented and/or
unpatentable proprietary or confidential
information, systems or procedures) and
other similar rights and proprietary
knowledge (collectively, "Intellectual
Property") necessary for the conduct of its
business as now being conducted and as
proposed to be conducted. Except as
disclosed in the SEC Documents, neither the
Company nor any of its subsidiaries has
received written notice that it is
infringing upon or in conflict with any
third party Intellectual Property. Except
as set forth on Schedule 3.9, neither the
Company nor any of its subsidiaries has
entered into any consent, indemnification,
forbearance to xxx or settlement agreements
with respect to the validity of the
Company's or such subsidiary's ownership or
right to use its Intellectual Property. The
Company's Intellectual Property is valid and
enforceable, and no registration relating
thereto has lapsed, expired or been
abandoned or canceled or is the subject of
cancellation or other adversarial
proceedings, and all applications therefor
are pending and in good standing. The
Company has complied with its contractual
obligations relating to the protection of
the Intellectual Property used pursuant to
licenses. To the Company's knowledge, no
person is infringing on or violating the
Intellectual Property owned or used by the
Company.
1.10 Environment. (i) There is no
environmental liability, nor factors likely
to give rise to any environmental liability,
affecting any of the properties of the
Company or any of its subsidiaries that,
individually or in the aggregate, would have
a Material Adverse Effect and (ii) neither
the Company nor any of the subsidiaries has
violated any environmental law applicable to
it now or previously in effect, other than
such violations or infringements that,
individually or in the aggregate, have not
had and will not have a Material Adverse
Effect.
1.11 Title. The Company and each of its
subsidiaries has good title in fee simple to
all real property and good title to all
personal property owned by it which is
material to its business, free and clear of
all liens, encumbrances and defects except
for such defects in title that, individually
or in the aggregate, could not have a
Material Adverse Effect. Any real property
and facilities held under lease by the
Company or any of its subsidiaries are held
by the Company or such subsidiary under
valid, subsisting and enforceable leases
with such exceptions which have not had and
will not have a Material Adverse Effect.
1.12 Insurance. The Company and its
subsidiaries maintain such insurance
relating to their business, operations and
assets as is appropriate to their business,
assets and operations, in such amounts and
against such risks as are customarily
carried and insured against by owners of
comparable businesses, assets and
operations, and such insurance coverages
will be continued in full force and effect
to and including the Closing Date other than
those insurance coverages in respect of
which the failure to continue in full force
and effect could not reasonably be expected
to have a Material Adverse Effect.
1.13 No Brokers. The Company has not
engaged any person to which or to whom
brokerage commissions, finder's fees,
financial advisory fees or similar payments
are or will become due in connection with
this Agreement or the transactions
contemplated hereby.
1.14 Tax Status. The Company and each
of its subsidiaries has made or filed all
material federal, state and local income and
all other tax returns, reports and
declarations required by any jurisdiction to
which it is subject (unless and only to the
extent that the Company or the applicable
subsidiary has set aside on its books
provisions adequate for the payment of all
unpaid and unreported taxes) and has paid
all taxes and other governmental assessments
and charges that are material in amount,
shown or determined to be due on such
returns, reports and declarations, except
those being contested in good faith and has
set aside on its books provisions adequate
for the payment of all taxes for periods
subsequent to the periods to which such
returns, reports or declarations apply.
There are no material unpaid taxes claimed
to be due by the taxing authority of any
jurisdiction. The Company has not executed
a waiver with respect to any statute of
limitations relating to the assessment or
collection of any federal, state or local
tax. None of the Company's tax returns have
been or is being audited by any taxing
authority.
1.15 No General Solicitation. Neither
the Company nor any person participating on
the Company's behalf in the transactions
contemplated hereby has conducted any
"general solicitation" or "general
advertising" as such terms are used in
Regulation D, with respect to any of the
Securities being offered hereby.
1.16 Securities Laws. 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 require
registration of the Securities being offered
hereby under the Securities Act or cause
this offering of Securities to be integrated
with any prior offering of securities of the
Company for purposes of the Securities Act.
The offer, sale and delivery of shares of
Common Stock upon exercise of the Warrants
will be exempt from the registration
requirements of Section 5 of the Securities
Act. Assuming the truth and accuracy of the
representations and warranties of the
Investors set forth in Section 2 of this
Agreement, the Investors will not be
statutory underwriters within the meaning of
Section 2(a)11 of the Securities Act.
1.17 Form S-3 Eligibility. The Company
is currently eligible to register the resale
of its Common Stock on a registration
statement on Form S-3 under the Securities
Act. Except for obtaining the waivers
disclosed on Schedule 3.5, there exist no
facts or circumstances (including without
limitation any required approvals or waivers
of any circumstances that may delay or
prevent the obtaining of accountant's
consents) that would prohibit or delay the
preparation and filing of a registration
statement on Form S-3 with respect to the
Registrable Securities (as defined in the
Registration Rights Agreement).
1.18 Disclosure. All information
relating to or concerning the Company and
its subsidiaries set forth in this Agreement
or provided to the Investors pursuant to
Section 2.4 hereof and otherwise in
connection with the transactions
contemplated hereby is true and correct in
all material respects and the Company has
not omitted to state any material fact
necessary in order to make the statements
made herein or therein, in light of the
circumstances under which they were made,
not misleading. No event or circumstance
has occurred or exists with respect to the
Company or its subsidiaries or their
businesses, properties, operations,
prospects or financial conditions, which has
not been publicly disclosed but, under
applicable law, rule or regulation, would be
required to be disclosed by the Company in a
registration statement filed on the date
hereof by the Company under the Securities
Act with respect to a primary issuance of
the Company's securities.
1.19 Foreign Corrupt Practices. Neither
the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee
or other person acting on behalf of the
Company or any Subsidiary has, in the course
of his actions for, or on behalf of, the
Company, used any corporate funds for any
unlawful contribution, gift, entertainment
or other unlawful expenses relating to
political activity; made any direct or
indirect unlawful payment to any foreign or
domestic government official or employee
from corporate funds; violated or is in
violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment
to any foreign or domestic government
official or employee.
1.20 No Investment Company. The Company
is not, and upon the issuance and sale of
the Securities as contemplated by this
Agreement and the Warrants will not be, an
"investment company" required to be
registered under the Investment Company Act
of 1940 (an "Investment Company"). The
Company is not controlled by an Investment
Company.
2. Covenants.
1.1 Best Efforts. The parties shall
use their best efforts to satisfy timely
each of the conditions described in Sections
5 and 6 of this Agreement; provided,
however, that the foregoing shall not
obligate the Company to waive any closing
conditions to the Merger.
1.2 Form D; Blue Sky Laws. The Company
agrees to file a Form D with respect to the
Securities as required under Regulation D
and to provide a copy thereof to each
Investor promptly after such filing. The
Company shall, on or before the Closing
Date, take such action as the Company shall
reasonably determine is necessary to qualify
the Securities for sale to the Investors at
the Closing pursuant to this Agreement under
applicable securities or "blue sky" laws of
the states of the United States (or to
obtain an exemption from such
qualification), and shall provide evidence
of any such action so taken to each Investor
on or prior to the Closing Date.
1.3 Reporting Status; Eligibility to
Use Form S-3. The Company's Common Stock is
registered under Section 12(g) of the
Exchange Act. So long as any Investor
beneficially owns any of the Securities, the
Company shall timely file all reports
required to be filed with the SEC pursuant
to the Exchange Act, and the Company shall
not terminate its status as an issuer
required to file reports under the Exchange
Act even if the Exchange Act or the rules
and regulations thereunder would permit such
termination. The Company currently meets,
and will take all necessary action to
continue to meet, the "registrant
eligibility" requirements set forth in the
general instructions to Form S-3 for the
resale of Common Stock by the Investors.
The Company shall issue a press release
describing the materials terms of the
transaction contemplated hereby within one
(1) business of the Closing Date and shall
file with the SEC a Current Report on Form
8-K describing the material terms of the
transaction contemplated hereby within three
(3) business days of the Closing Date, which
press release and Form 8-K shall be subject
to prior review by the Investors.
1.4 Use of Proceeds. The Company shall
use the proceeds from the sale of the Shares
and the Warrants in the manner set forth in
Schedule 4.4.
1.5 Reservation of Shares. The Company
shall at all times have authorized, and
reserved for the purpose of issuance, a
sufficient number of shares of Common Stock
to provide for the full exercise of the
Warrants. The Company shall not reduce the
number of shares of Common Stock reserved
for issuance upon exercise of the Warrants
(except as a result of the issue of the
Warrant Shares upon the exercise of the
Warrants) without the consent of the
Investors
1.6 Listing. On the Closing Date, the
Company shall have applied for the listing
of the Shares and Warrant Shares, in each
case, upon each national securities exchange
and automated quotation system, if any, upon
which shares of Common Stock are then listed
or quoted and shall maintain, so long as any
other shares of Common Stock shall be so
listed, such listing of all Shares from time
to time issuable hereunder and all Warrant
Shares from time to time issuable upon
exercise of the Warrants. The Company shall
use its best efforts to keep its shares of
Common Stock listed in The Nasdaq Stock
Market and will comply in all respects with
the Company's reporting, filing and other
obligations under the bylaws or rules of The
Nasdaq Stock Market.
1.7 No Integration. The Company shall
not make any offers or sales of any security
(other than the Securities) under
circumstances that would require
registration of the Securities being offered
or sold hereunder under the Securities Act
or cause the offering of Securities to be
integrated with any other offering of
securities by the Company for the purpose of
any stockholder approval provision
applicable to the Company or its securities.
2. Conditions to the Company's
Obligation to Sell. The obligation of the
Company hereunder to issue and sell the
Shares and Warrants to the Investors at the
Closing is subject to the satisfaction, at
or before the Closing Date, of each of the
following conditions thereto, provided that
these conditions are for the Company's sole
benefit and may be waived in writing by the
Company at any time in its sole discretion:
1.1 All of the Investors shall have
executed this Agreement and the Registration
Rights Agreement, and delivered the same to
the Company.
1.2 All of the Investors shall have
delivered the Purchase Price in accordance
with Section 1.2 above.
1.3 The representations and warranties
of all of the Investors shall be true and
correct in all material respects as of the
date when made and as of the Closing Date as
though made at that time (except for
representations and warranties that speak as
of a specific date, which representations
and warranties shall be true and correct as
of such date), and all of the Investors
shall have performed, satisfied and complied
in all material respects with the covenants,
agreements and conditions required by this
Agreement to be performed, satisfied or
complied with by the Investors at or prior
to the Closing Date.
1.4 No litigation, statute, rule,
regulation, executive order, decree, ruling
or injunction shall have been enacted,
entered, promulgated or endorsed by or in
any court or governmental authority of
competent jurisdiction or any
self-regulatory organization having
authority over the matters contemplated
hereby which prohibits the consummation of
any of the transactions contemplated by this
Agreement.
1.5 The Company shall have
consummated the transactions contemplated by
the Agreement and Plan of Merger (the
"Merger Agreement") dated on or about
October 9, 2002 by and among the Company,
STI Acquisition, Inc. and Conductus, Inc.
(the "Merger").
1.6 The purchase of the Shares
and Warrants by each Investor shall have
closed, resulting in gross aggregate
proceeds to the Company on the Closing Date
of not less than $15,000,000 nor more than
$20,000,000.
2. Conditions to Each Investor's
Obligation to Purchase. The obligation of
each Investor hereunder to purchase the
Shares and Warrants at the Closing is
subject to the satisfaction, at or before
the Closing Date, of each of the following
conditions, provided that these conditions
are for such Investor's sole benefit and may
be waived in writing by such Investor at any
time in its sole discretion:
1.1 The Company shall have executed
this Agreement and the Registration Rights
Agreement, and delivered the same to the
Investor.
1.2 The Company shall have delivered to
such Investor duly executed certificates (in
such denominations as the Investor shall
request) representing the Shares and duly
executed Warrants in accordance with Section
1.2 above.
1.3 The Shares shall be authorized for
quotation on The Nasdaq Stock Market and
trading in the Common Stock or The Nasdaq
Stock Market generally shall not have been
suspended or be under threat of suspension
by the SEC or any governing body of The
Nasdaq Stock Market.
1.4 The representations and warranties
of the Company shall be true and correct in
all material respects as of the date when
made and as of the Closing Date as though
made at such time (except for
representations and warranties that speak as
of a specific date, which representations
and warranties shall be true and correct as
of such date) and the Company shall have
performed, satisfied and complied in all
material respects with the covenants,
agreements and conditions required by this
Agreement to be performed, satisfied or
complied with by the Company at or prior to
the Closing Date. The Investor shall have
received a certificate or certificates,
executed by the chief executive officer or
chief financial officer of the Company,
dated as of the Closing Date, to the
foregoing effect and as to such other
matters as may be reasonably requested by
such Investor including, but not limited to,
certificates with respect to the Company's
Certificate of Incorporation, Bylaws and
Board of Directors' resolutions relating to
the transactions contemplated hereby.
1.5 No litigation, statute, rule,
regulation, executive order, decree, ruling
or injunction shall have been enacted,
entered, promulgated or endorsed by or in
any court or governmental authority of
competent jurisdiction or any
self-regulatory organization having
authority over the matters contemplated
hereby which prohibits the consummation of
any of the transactions contemplated by this
Agreement.
1.6 The Company shall have provided
advance notice to The Nasdaq Stock Market of
the issuance of the Shares and Warrant
Shares if so required by the rules
applicable thereto.
1.7 The Investor shall have received an
opinion of the Company's counsel, dated as
of the Closing Date, in form, scope and
substance reasonably satisfactory to the
Investor and in substantially the same form
as Exhibit C attached hereto.
1.8 From the date of this Agreement
through the Closing Date, there shall not
have occurred any Material Adverse Effect.
1.9 The Company shall have
consummated the Merger.
1.10 The purchase of the Shares
and Warrants by each Investor shall have
closed, resulting in gross aggregate
proceeds to the Company (including from the
Investor) on the Closing Date of not less
than $15,000,000 nor more than $20,000,000.
2. Confidentiality. Each Investor
severally agrees on behalf of itself to
maintain the confidentiality of the Merger
as follows:
1.1 Definitions. "Disclosing
Parties" means the Company and Conductus,
Inc., the parties to the Merger.
"Confidential Information" means all
information or material concerning the
Merger and the combined operations of the
two companies following the Merger which has
been or is hereafter disclosed to the
Investor by either Disclosing Party, whether
or not such information is identified as
Confidential Information by one or both
Disclosing Parties. "Recipient" means an
Investor and all its affiliates,
subsidiaries, and related companies of
Recipient. "Representative" means
Recipient's directors, officers, employees,
agents, and financial, legal, and other
advisors.
1.2 Expiration Date; Filing of
Merger Announcement. The "Expiration Date"
shall be the date of filing of a Form 8-K
with the Securities Exchange Commission
publicly announcing the Merger or such
earlier date as the Merger is terminated.
The Company shall issue a press release
describing the materials terms of the Merger
and file a copy of such press release with
the SEC on Form 8-K within one (1) business
of execution of the Merger Agreement but in
no event later than five (5) business days
after execution of the Merger Agreement.
1.3 Exclusions. Confidential
Information does not include information
that Recipient can demonstrate: (a) was in
Recipient's possession prior to its being
furnished to Recipient, provided the source
of that information was not known by
Recipient to be bound by a confidentiality
agreement with or other continual, legal or
fiduciary obligation of confidentiality to
either of the Disclosing Parties; (b) is
now, or hereafter becomes, through no act or
failure to act on the part of Recipient,
generally known to the public; (c) is
rightfully obtained by Recipient from a
third party, without breach of any
obligation to either of the Disclosing
Parties; or (d) is independently developed
by Recipient without use of or reference to
the Confidential Information.
1.4 Confidentiality. Recipient agrees
to use the Confidential Information solely
for the purpose of evaluating an investment
in the entity formed upon completion of the
Merger. Prior to the Expiration Date,
Recipient and its Representatives shall not
disclose any of the Confidential Information
in any manner whatsoever, except as
otherwise provided in Sections 7.5 and 7.6
of this Agreement, and shall hold and
maintain the Confidential Information in
confidence.
1.5 Permitted Disclosures. Prior to
the Expiration Date, Recipient may disclose
Confidential Information to Recipient's
Representatives with a bona fide need to
know such Confidential Information, but only
to the extent necessary for such
Representatives to perform services for
Recipient in connection with Recipient's
purpose in obtaining the information.
Recipient shall be fully responsible
hereunder for any unauthorized disclosure or
use of Confidential Information by any of
Recipient's Representatives.
1.6 Required Disclosures. Prior to the
Expiration Date, Recipient may disclose
Confidential Information if and to the
extent that such disclosure is required by
court order, provided that Recipient
provides each of the Disclosing Parties a
reasonable opportunity to review the
disclosure before it is made and to
interpose its own objection to the
disclosure or seek to limit the disclosure
or maintain confidentiality after disclosure.
1.7 Covenant Not to Trade Securities.
Prior to the Expiration Date, Recipient and
its Representatives may not buy, sell, trade
or engage in any other transaction involving
securities issued by either of the
Disclosing Parties, including, without
limitation, any option contract to buy or
sell securities issued by either of the
Disclosing Parties.
1.8 Irreparable Harm. Recipient
understands and acknowledges that any
disclosure or misappropriation of any of the
Confidential Information in violation of
this Agreement may cause either of the
Disclosing Parties irreparable harm, the
amount of which may be difficult to
ascertain, and therefore agrees that each of
the Disclosing Parties shall have the right
to apply to a court of competent
jurisdiction for specific performance and/or
an order restraining and enjoining any such
further disclosure or breach and for such
other relief as such Disclosing Party shall
deem appropriate. Such right of each of the
Disclosing Parties is to be in addition to
the remedies otherwise available to such
Disclosing Party at law or in equity.
Recipient expressly waives the defense that
a remedy in damages will be adequate and any
requirement in an action for specific
performance or injunction for the posting of
a bond by a Disclosing Party.
1.9 Existing Confidentiality
Agreements. The provisions of this Section
7 supersede in their entirety any existing
confidentiality or non-disclosure agreements
in effect concerning the Merger and the
investments contemplated herein, and such
agreements shall terminate upon execution of
this Agreement by the Company. The
termination of such agreements does not
relieve any party from liability for any
breaches prior to the date of this Agreement.
2. Company's Board of Directors.
The Company shall take all steps necessary
to add the following individuals to its
board of directors: (a) Xx. Xxxx Xxxxx, or
another person acceptable to the current
directors of the Company designated by Alloy
Ventures 2002, LLC, as of the date of the
next annual stockholder meeting and (b) one
individual as of the Closing Date acceptable
to the current directors of the Company
designated jointly by Special Situations
Fund III, L.P., Special Situations Fund
Cayman, L.P., Special Situations Private
Equity Fund, L.P. and Special Situations
Technology Fund, L.P.
3. Additional Investors.
3.1 Conditions for
Additional Investors. The transaction
contemplated by this Agreement is intended
to generate a minimum of $15,000,000 and a
maximum of $20,000,000 gross proceeds to the
Company on the Closing Date. The sale of
securities hereunder to the Investors
initially executing this Agreement on the
date hereof (the "Initial Investors") will
meet the minimum gross proceeds requirement.
The Company may add additional Investors
(the "Additional Investors") to this
Agreement prior to the Closing by having
them execute a signature page to this
Agreement for the sale of additional
securities at the price and on the terms
specified herein provided (a) the aggregate
of all sales to Investors hereunder does not
exceed $20,000,000 and (b) the Company has
obtained the consent of Alloy Ventures 2002,
LLC and Wellington Management Company, LLP
(which consent will not be unreasonably
withheld) to the sale of securities
hereunder to the Additional Investors.
Except as permitted in this Section 9 and
subject to Section 9.3, the Company will not
contract with any party to obtain additional
equity financing beginning on the date
hereof and ending on the Closing Date.
3.2 Right of First
Refusal. Each time the Company desires to
add an Additional Investor, the Company will
first deliver to each Initial Investor by
facsimile or email at least forty-eight (48)
hours in advance a notice naming the
Additional Investor and proposed amount of
the investment (such investment to be at the
price and on the terms specified in this
Agreement). The Initial Investors and their
affiliates will have an option for
forty-eight (48) hours to purchase any or
all of the securities being offered to the
Additional Investor on the same price and
terms as specified in this Agreement. Any
Initial Investor may exercise such option by
giving notice by facsimile or email to the
Company's Chief Financial Officer within
such 48-hour period to buy a specified
amount of the offered securities. The
closing of the sale to Additional Investors
and Initial Investors exercising their
option rights shall be contemporaneous with
the Closing under this Agreement. To the
extent that the Initial Investors, in the
aggregate, elect to purchase more than all
of such securities, the amount that each
Initial Investor shall be entitled to
purchase shall be pro rated based on the
Initial Investor's Pro Rata Percentage.
"Pro Rata Percentage" means, with respect to
any Initial Investor, a percentage computed
by dividing the Purchase Price paid
hereunder by such Initial Investor by the
aggregate Purchase Price paid hereunder by
all of the Initial Investors.
3.3 Permitted
Transactions. The limitations referred to
in Sections 9.1 and 9.2 shall not apply to
(i) any transaction involving issuances of
securities as consideration in a merger,
consolidation or acquisition of assets, or
in connection with any strategic
partnership, collaboration or joint venture
(the primary purpose of which is not to
raise capital), or as consideration for the
acquisition of a business, product or
license by the Company, (ii) the issuance of
securities upon exercise or conversion of
the Company's options, warrants or other
convertible securities outstanding as of the
date hereof or issued pursuant to this
Agreement, (iii) the grant of additional
options or warrants, or the issuance of
additional securities, under any duly
authorized Company stock option, stock
purchase or restricted stock plan for the
benefit of the Company's employees,
consultants or directors; (iv) the issuance
of securities in connection with the
settlement of litigation; or (v) the
issuance of warrants incidental to any
revolving credit or similar debt financing
from a financial institution engaged in the
business of lending money such as a bank,
trust company, insurance company or other
institutional lender.
4. Governing Law; Miscellaneous.
1.1 Governing Law. This Agreement
shall be governed by and construed in
accordance with the laws of the State of
Delaware applicable to agreements made and
to be performed in the State of Delaware
(without regard to principles of conflict of
laws). Both parties irrevocably consent to
the exclusive jurisdiction of the United
States federal courts and the state courts
located in Delaware with respect to any suit
or proceeding based on or arising under this
Agreement, the agreements entered into in
connection herewith or the transactions
contemplated hereby or thereby and
irrevocably agree that all claims in respect
of such suit or proceeding may be determined
in such courts. The Company and each
Investor irrevocably waives the defense of
an inconvenient forum to the maintenance of
such suit or proceeding. The Company and
each Investor further agrees that service of
process upon a party mailed by first class
mail shall be deemed in every respect
effective service of process upon the party
in any such suit or proceeding. Nothing
herein shall affect either party's right to
serve process in any other manner permitted
by law. Each of the parties agrees that a
final non-appealable judgment in any such
suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by
suit on such judgment or in any other lawful
manner.
1.2 Counterparts; Signatures by
Facsimile. This Agreement may be executed
in two or more counterparts, all of which
shall be considered one and the same
agreement and shall become effective when
counterparts have been signed by each party
and delivered to the other party. This
Agreement, once executed by a party, may be
delivered to the other parties hereto by
facsimile transmission of a copy of this
Agreement bearing the signature of the party
so delivering this Agreement. In the event
any signature is delivered by facsimile
transmission, the party using such means of
delivery shall cause the manually executed
signature page to be physically delivered to
the other parties within five (5) days of
its execution.
1.3 Headings. The headings of this
Agreement are for convenience of reference
and shall not form part of, or affect the
interpretation of, this Agreement.
1.4 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.
1.5 Entire Agreement; Amendments. This
Agreement and the instruments referenced
herein contain the entire understanding of
the parties with respect to the matters
covered herein and therein and, except as
specifically set forth herein or therein,
neither the Company nor the Investors make
any representation, warranty, covenant or
undertaking with respect to such matters.
No provision of this Agreement may be waived
or amended other than by an instrument in
writing signed by the Company and, by the
Investors as provided in Section 10.14.
1.6 Notices. Any notices required or
permitted to be given under the terms of
this Agreement shall be sent by certified or
registered mail (return receipt requested)
or delivered personally or by courier
(including a recognized overnight delivery
service) or by facsimile and shall be
effective five days after being placed in
the mail, if mailed by regular United States
mail, or upon receipt, if delivered
personally or by courier (including a
recognized overnight delivery service) or by
facsimile, in each case addressed to a
party. The addresses for such
communications shall be:
If to the Company:
Superconductor Technologies
Inc.
000 Xxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx
00000-0000
Attention: President and
Chief Executive Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With copy to:
Xxxx|Xxxxxxxxxxx LLP
00000 Xxxxxxxx
Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx,
Xxxxxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxxxxxxx, Esq.
Facsimile: (310)
470-8354
Telephone: (310)
474-8809
If to an Investor: To the address set forth
immediately next to such Investor's name on the
signature pages hereto.
Each party shall provide notice to the other party of
any change in address.
1.7 Successors and Assigns. This
Agreement shall be binding upon and inure to
the benefit of the parties and their
successors and assigns. Neither the Company
nor any Investor shall assign this Agreement
or any rights or obligations hereunder
without the prior written consent of the
other. Notwithstanding the foregoing,
subject to Section 2.6, any Investor may
assign its rights hereunder to any person
that purchases Securities in a private
transaction from an Investor or to any of
its "affiliates," as that term is defined
under the Exchange Act, without the consent
of the Company.
1.8 Third Party Beneficiaries. This
Agreement is intended for the benefit of the
parties hereto and their respective
permitted successors and assigns, and is not
for the benefit of, nor may any provision
hereof be enforced by, any other person.
1.9 Survival. The representations and
warranties of the Company and the agreements
and covenants of the Company shall survive
the Closing notwithstanding any due
diligence investigation conducted by or on
behalf of the Investors; provided that the
representations and warranties made to any
Investor in Section 3 shall terminate on the
earlier of (i) two (2) years from the date
of discovery by such Investor of a breach
thereof and (ii) three (3) years from the
Closing Date. The Company agrees to
indemnify and hold harmless each Investor
and each of such Investor's officers,
directors, employees, partners, members,
agents and affiliates for loss or damage
relating to the Securities purchased
hereunder arising as a result of or related
to any breach by the Company of any of its
representations or covenants set forth
herein.
1.10 Further Assurances. Each party
shall do and perform, or cause to be done
and performed, all such further acts and
things, and shall execute and deliver all
such other agreements, certificates,
instruments and documents, as the other
party may reasonably request in order to
carry out the intent and accomplish the
purposes of this Agreement and the
consummation of the transactions
contemplated hereby.
1.11 No Strict 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. With respect to
the Company, "knowledge" shall mean the
actual knowledge of the Company's directors,
its Chief Executive Officer, Chief Financial
Officer, Chief Technology Officer or any
Vice President.
1.12 Equitable Relief. Each party
acknowledges that a breach by it of its
obligations hereunder will cause irreparable
harm to the other parties by vitiating the
intent and purpose of the transactions
contemplated hereby. Accordingly, each
party acknowledges that the remedy at law
for a breach of its obligations hereunder
will be inadequate and agrees, in the event
of a breach or threatened breach by such
party of the provisions of this Agreement,
that the other parties shall be entitled, in
addition to all other available remedies, to
an injunction restraining any breach and
requiring immediate issuance and transfer,
without the necessity of showing economic
loss and without any bond or other security
being required.
1.13 Termination. In the event that the
Closing Date shall not have occurred on or
before February 15, 2003 or the Merger
Agreement is terminated prior thereto,
unless the parties agree otherwise, this
Agreement shall terminate at the close of
business on such date. Notwithstanding any
termination of this Agreement, any party not
in breach of this Agreement shall preserve
all rights and remedies it may have against
another party hereto for a breach of this
Agreement prior to or relating to the
termination hereof.
1.14 Determinations. Except as
otherwise expressly provided herein, all
consents, approvals and other determinations
to be made by the Investors pursuant to this
Agreement and all waivers and amendments to
or of any provisions in this Agreement prior
to the Closing Date to be binding upon a
Investors shall be made by such Investor and
except as otherwise expressly provided
herein, all consents, approvals and other
determinations (other than amendments to the
terms and provisions of this Agreement) to
be made by the Investors pursuant to this
Agreement and all waivers and amendments to
or of any provisions in this Agreement after
the Closing Date shall be made by Investors
(excluding Investors who are affiliates of
the Company) that have invested more than
fifty percent (50%) of the aggregate
Investment Amounts invested by all Investors
(excluding Investors who are affiliates of
the Company).
1.15 Expenses. The parties
hereto shall pay their own costs and
expenses in connection herewith, except that
the Company shall (a) pay at the Closing the
reasonable fees and expenses of counsel to
the Investors (not to exceed $30,000 for the
work performed up to and including the date
hereof) related to the negotiation of this
Agreement and the other Transaction
Documents, and (b) reimburse the Investors
upon demand for all reasonable out-of-pocket
expenses incurred by the Investors,
including without limitation reimbursement
of attorneys' fees and disbursements, in
connection with any amendment, modification
or waiver of this Agreement or the other
Transaction Documents.
1.16 Waiver of Conflicts. Each of the
parties acknowledges that Xxxxxx, Xxxxxxxxxx
& Sutcliffe LLP, counsel for the Investors,
has performed legal services for Conductus,
Inc. in a variety of matters including in
connection with the Merger and will serve as
tax counsel to the Company in connection
with the Merger. Accordingly, each Investor
waives any conflict of interest arising from
such representation. Each Investor is
giving such waiver based on the
understanding that Xxxxxx, Xxxxxxxxxx &
Sutcliffe LLP has agreed that it will not
represent the Investors (individually or as
a group) in any litigation matter relating
to the transactions contemplated hereby
without a further waiver from the relevant
Investors and the Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Signature Page to Securities Purchase Agreement
IN WITNESS WHEREOF, the undersigned Investors and the
Company have caused this Agreement to be duly executed
as of the date first above written.
"COMPANY"
SUPERCONDUCTOR TECHNOLOGIES INC.
By:
M. Xxxxx Xxxxxx
President and Chief Executive Officer
"INVESTORS"
RESIDENCE: California ALLOY VENTURES 2002, L.P.
Investment Amount: $4,868,549.55
Common Shares: 5,124,789 By:
Warrant Shares: 1,281,197 Alloy Ventures
2002, LLC
Title: General Partner
Address for Notice: Managing Member of
Xxxx X. Xxxxx, Ph.D. Alloy Ventures 2002, LLC
Alloy Ventures
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxx, XX 00000
RESIDENCE: California ALLOY PARTNERS 2002, L.P.
Investment Amount: $131,450.55
Common Shares: 138,369
Warrant Shares: 34,592 By:
Address for Notice: Alloy Ventures
2002, LLC
Xxxx X. Xxxxx, Ph.D. Title: General Partner
Alloy Ventures
000 Xxxxxx Xxxxxx, 0xx Xxxxx Managing Member of
Xxxx Xxxx, XX 00000 Alloy Ventures 2002, LLC
RESIDENCE: Delaware WILMINGTON SECURITIES, INC.
Investment Amount: $2,116,500
Common Shares: 2,227,895
Warrant Shares: 556,974 By:
Address for Notice: Xxxxxx X.
XxXxxxxxx, President
Wilmington Securities, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. XxXxxxxxx
RESIDENCE: Pennsylvania XXXXX X. XXXXXXX, XXXXX XXXXXXXX
XXXXXXX AND X. X.
XXXXXXXXXXXX, TRUSTEES OF THE
XXXXX X. XXXXXXX TRUST U/A/T
Investment Amount: $187,500 DATED NOVEMBER 18, 1985
Common Shares: 197,368
Warrant Shares: 49,342 By: _________________________________
X. X.
Xxxxxxxxxxxx, Trustee
Address for Notice:
c/o Xxxxxxx X. Xxxxx
The Xxxxxxx Company
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
RESIDENCE: Pennsylvania X.X. XXXXXXXXXXXX AND X.X. XXXXXX,
TRUSTEES U/A/T DATED DECEMBER 30,
1976 FOR THE CHILDREN OF
Investment Amount: $49,000 JULIET XXX XXXXXXX XXXXXXX
Common Shares: 51,57
Warrant Shares: 12,895
By: _________________________________
Address for Notice: X. X.
Xxxxxxxxxxxx, Trustee
c/o Xxxxxxx X. Xxxxx
The Xxxxxxx Company By: _________________________________
0000 Xxxxx Xxxxxxxx X. X. Xxxxxx, Xxxxxxx
Xxxxxxxxxx, XX 00000
RESIDENCE: Pennsylvania X.X. XXXXXXXXXXXX AND X.X. XXXXXX,
TRUSTEES U/A/T DATED DECEMBER 30,
1976 FOR THE CHILDREN OF
Investment Amount: $49,000 XXXXX XXX XXXXXXX, XX.
Common Shares: 51,57
Warrant Shares: 12,895
By:
Address for Notice: X. X.
Xxxxxxxxxxxx, Trustee
c/o Xxxxxxx X. Xxxxx
The Xxxxxxx Company By:
0000 Xxxxx Xxxxxxxx X. X. Xxxxxx, Xxxxxxx
Xxxxxxxxxx, XX 00000
RESIDENCE: Pennsylvania X.X. XXXXXXXXXXXX AND X.X. XXXXXX,
TRUSTEES U/A/T DATED DECEMBER 30, 1976 FOR THE
CHILDREN OF
Investment Amount: $49,000
Common Shares: 51,57 XXXXXXX XXXXXXX XXXXXXX
Warrant Shares: 12,895
Address for Notice: By:
c/o Xxxxxxx X. Xxxxx X. X. Xxxxxxxxxxxx, Trustee
The Xxxxxxx Company
1800 Grant Building By:
Xxxxxxxxxx, XX 00000 X. X. Xxxxxx, Trustee
RESIDENCE: New York SPECIAL SITUATIONS FUND III, L.P.
Investment Amount: $1,199,945
Common Shares: 1,263,100 By:
Name: Xxxxx Greenhouse
Warrant Shares: 315,775 Title: General Partner
Address for Notice:
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
RESIDENCE: New York SPECIAL SITUATIONS FUND CAYMAN, L.P.
Investment Amount: $575,035Common Shares: 605,300
Warrant Shares: 151,325
Address for Notice: By:
000 X. 00xx Xxxxxx, 00xx Xxxxx Name: Xxxxx Greenhouse
Xxx Xxxx, XX 00000 Title: General Partner
RESIDENCE: New York SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.
Investment Amount: $400,045Common Shares: 421,100
Warrant Shares: 105,275
Address for Notice: By:
000 X. 00xx Xxxxxx, 00xx Xxxxx Name: Xxxxx Greenhouse
Xxx Xxxx, XX 00000 Title: General Partner
RESIDENCE: New York SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.
Investment Amount: $300,010Common Shares: 315,800
Warrant Shares: 78,950
Address for Notice: By:
000 X. 00xx Xxxxxx, 00xx Xxxxx Name: Xxxxx Greenhouse
Xxx Xxxx, XX 00000 Title: General Partner
RESIDENCE: California MICRO CAP PARTNERS, L.P.
Investment Amount: $1,000,000Common Shares: 1,052,632 By: Palo Alto Investors LLC
Warrant Shares: 263,158 Title: General Partner
Address for Notice:
Mr. Xxxx Xxxxxxx By: Palo Alto Investors
Palo Alto Investors Title: Manager
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
By:
Name: Xxxxxxx X. Xxxxxxx
Title: President
RESIDENCE: British Columbia Her Majesty the Queen in Right of the Province
British Columbia
Investment Amount: $95,000.00
Common Shares: 100,000 By: Wellington Management Company, LLP
Warrant Shares: 25,000 Title: Investment Adviser
Address for Notice:
Wellington Management Company, LLP
Attn: Xxxx Xx Xxxxx
00 Xxxxx Xxxxxx By:
Xxxxxx, XX 00000 Name: Xxxxx X. Xxxxxxx
Title: Vice President and Counsel
RESIDENCE: Michigan The Dow Chemical Employees' Retirement Plan
Investment Amount: $185,250.00 By: Wellington Management Company, LLP
Common Shares: 195,000 Title: Investment Adviser
Warrant Shares: 48,750
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Michigan The Retirement Program Plan for Employees of
Union Carbide Corporation
Investment Amount: $152,000.00
Common Shares: 160,000 By: Wellington Management Company, LLP
Warrant Shares: 40,000 Title: Investment Adviser
Address for Notice:
Wellington Management Company, LLP
Attn: Xxxx Xx Xxxxx By:
00 Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxxx
Xxxxxx, XX 00000 Title: Vice President and Counsel
RESIDENCE: Singapore Government of Singapore Investment Corporation
Pte Ltd
Investment Amount: $760,000.00
Common Shares: 800,000 By: Wellington Management Company, LLP
Warrant Shares: 200,000 Title: Investment Adviser
Address for Notice:
Wellington Management Company, LLP
Attn: Xxxx Xx Xxxxx By:
00 Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxxx
Xxxxxx, XX 00000 Title: Vice President and Counsel
RESIDENCE: Maryland Xxxxxx Xxxxxx Medical Institute
Investment Amount: $209,000.00 By: Wellington Management Company, LLP
Common Shares: 220,000 Title: Investment Adviser
Warrant Shares: 55,000
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: New York New York State Nurses Association Pension Plan
Investment Amount: $142,500.00 By: Wellington Management Company, LLP
Common Shares: 150,000 Title: Investment Adviser
Warrant Shares: 37,500
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Ohio Ohio Carpenters' Pension Fund
Investment Amount: $95,000.00 By: Wellington Management Company, LLP
Common Shares: 100,000 Title: Investment Adviser
Warrant Shares: 25,000
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Ohio Laborers' District Council and Contractors' of
Ohio Pension Fund
Investment Amount: $61,750.00
Common Shares: 65,000 By: Wellington Management Company, LLP
Warrant Shares: 16,250 Title: Investment Adviser
Address for Notice:
Wellington Management Company, LLP
Attn: Xxxx Xx Xxxxx By:
00 Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxxx
Xxxxxx, XX 00000 Title: Vice President and Counsel
RESIDENCE: Oregon Oregon Investment Council
Investment Amount: $541,500.00 By: Wellington Management Company, LLP
Common Shares: 570,000 Title: Investment Adviser
Warrant Shares: 142,500
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: New Jersey The Xxxxxx Xxxx Xxxxxxx Foundation
Investment Amount: $218,500.00 By: Wellington Management Company, LLP
Common Shares: 230,000 Title: Investment Adviser
Warrant Shares: 57,500
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Massachusetts WTC-CIF Emerging Companies Portfolio
Investment Amount: $228,000.00 By: Wellington Management Company, LLP
Common Shares: 240,000 Title: Investment Adviser
Warrant Shares: 60,000
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Massachusetts WTC-CTF Emerging Companies Portfolio
Investment Amount: $304,000.00 By: Wellington Management Company, LLP
Common Shares: 320,000 Title: Investment Adviser
Warrant Shares: 80,000
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Australia Australian Retirement Fund
Investment Amount: $47,500.00 By: Wellington Management Company, LLP
Common Shares: 50,000 Title: Investment Adviser
Warrant Shares: 12,500
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Alberta, Canada TELUS Corporation
Investment Amount: $6,650.00 By: Wellington Management Company, LLP
Common Shares: 7,000 Title: Investment Adviser
Warrant Shares: 1,750
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Australia JB Were Global Small Companies Fund
Investment Amount: $85,500.00 By: Wellington Management Company, LLP
Common Shares: 90,000 Title: Investment Adviser
Warrant Shares: 22,500
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: New Zealand NZ Funds Global Small Companies Trust
Investment Amount: $23,750.00 By: Wellington Management Company, LLP
Common Shares: 25,000 Title: Investment Adviser
Warrant Shares: 6,250
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Australia Retail Employees' Superannuation Pty Ltd
Investment Amount: $23,750.00 By: Wellington Management Company, LLP
Common Shares: 25,000 Title: Investment Adviser
Warrant Shares: 6,250
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Pennsylvania SEI Institutional Investment Trust, Small Cap
Growth Fund
Investment Amount: $218,500.00
Common Shares: 230,000 By: Wellington Management Company, LLP
Warrant Shares: 57,500 Title: Investment Adviser
Address for Notice:
Wellington Management Company, LLP
Attn: Xxxx Xx Xxxxx By:
00 Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxxx
Xxxxxx, XX 00000 Title: Vice President and Counsel
RESIDENCE: Pennsylvania SEI Institutional Managed Trust, Small Cap
Growth Fund
Investment Amount: $308,750.00
Common Shares: 325,000 By: Wellington Management Company, LLP
Warrant Shares: 81,250 Title: Investment Adviser
Address for Notice:
Wellington Management Company, LLP
Attn: Xxxx Xx Xxxxx By:
00 Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxxx
Xxxxxx, XX 00000 Title: Vice President and Counsel
RESIDENCE: Alberta, Canada TELUS Foreign Equity Active Pool
Investment Amount: $14,250.00 By: Wellington Management Company, LLP
Common Shares: 15,000 Title: Investment Adviser
Warrant Shares: 3,750
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Australia Telstra Super Pty Ltd
Investment Amount: $33,250.00 By: Wellington Management Company, LLP
Common Shares: 35,000 Title: Investment Adviser
Warrant Shares: 8,750
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: District of Columbia Vantagepoint Aggressive Opportunities Fund
Investment Amount: $304,000.00 By: Wellington Management Company, LLP
Common Shares: 320,000 Title: Investment Adviser
Warrant Shares: 80,000
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
RESIDENCE: Ireland WMP (Dublin) Global Smaller Companies Equity
Investment Amount: $8,550.00 By: Wellington Management Company, LLP
Common Shares: 9,000 Title: Investment Adviser
Warrant Shares: 2,250
Address for Notice:
Wellington Management Company, LLP By:
Attn: Xxxx Xx Xxxxx Name: Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Title: Vice President and Counsel
Xxxxxx, XX 00000
Index of Schedules to Securities Purchase Agreement*
Schedule 3.1 . . . . . . . . . . . .
. . . . . . . . . . . .List of
Subsidiaries
Schedule 3.3 . . . . . . . . . . . .
. . . . . . . . . . . .Capitalization
Schedule 3.5 . . . . . . . . . . . .
. . . . . . . . . . . .Required
Consents
Schedule 3.9 . . . . . . . . . . . .
. . . . . . . . . . . .Intellectual
Property Matters
Schedule 4.4 . . . . . . . . . . . .
. . . . . . . . . . . .Use of Proceeds
-----------------------------------
* Schedules omitted from filing
