EXHIBIT 10.24
Execution Copy
EVERGREEN SOLAR, INC.
4.375% CONVERTIBLE SUBORDINATED NOTES DUE 2012
PURCHASE AGREEMENT
June 23, 2005
XX XXXXX & CO., LLC
As Representative of the several Initial Purchasers
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Evergreen Solar, Inc., a Delaware corporation (the "Company"),
proposes to sell, pursuant to the terms of this Agreement, to the several
initial purchasers named in Schedule A hereto (collectively, the "Initial
Purchasers" and, each, an "Initial Purchaser"), $75,000,000 aggregate principal
amount of its 4.375% Convertible Subordinated Notes due 2012 (the "Firm Notes").
In addition, the Company proposes to grant to the Initial Purchasers the option
to purchase from the Company some or all of the Option Notes (as defined in
Section 8 hereof) pursuant to Section 8 hereof. The Firm Notes and the Option
Notes are hereinafter collectively sometimes referred to as the "Notes." The
Notes will have the terms and provisions that are described in the Offering
Circular (as defined below) under the heading "Description of the Notes" and are
to be issued pursuant to an Indenture dated as of the First Closing Date (as
defined in Section 3(a) hereof) to be entered into between U.S. Bank National
Association, as trustee (the "Trustee"), and the Company (the "Indenture").
Subject to certain conditions, the Notes will be convertible into shares of
common stock, par value $.01 per share, of the Company (the "Common Stock"). XX
Xxxxx & Co., LLC is acting as representative of the several Initial Purchasers
and in such capacity is hereinafter referred to as the "Representative."
The Notes will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations promulgated thereunder (the "Rules and
Regulations"), in reliance upon an exemption therefrom. The Company has prepared
a preliminary offering circular dated June 22, 2005 (the "Preliminary Offering
Circular") and will prepare a final offering circular dated the date hereof (the
"Offering Circular" and, together with the Preliminary Offering Circular, the
"Circular") setting forth information concerning the Company and the Notes. The
Circular incorporates by reference the Company's (i) Annual Report on Form 10-K
for the year ended December 31, 2004, as amended, (ii) Quarterly Report on Form
10-Q for the quarter ended April 2, 2005 and (iii) Current Reports on Form 8-K
filed on January 14, 2005 (as amended on January 21, 2005) and February 7, 2005
(all
such documents listed in clauses (i) through (iii) referred to herein as the
"Incorporated Documents"). Any reference to any amendment or supplement to the
Preliminary Offering Circular or the Offering Circular shall be deemed to refer
to and include any documents filed after the date of the Preliminary Offering
Circular or the Offering Circular, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference in the Preliminary Offering Circular or the Offering Circular, as the
case may be. Copies of the Preliminary Offering Circular have been, and copies
of the Offering Circular will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. Any references herein to the
Circular shall be deemed to include all amendments and supplements thereto and
the Incorporated Documents and any amendments thereto, unless otherwise noted.
The Company hereby confirms that it has authorized the use of the Circular in
connection with the offering and resale of the Notes by the Initial Purchasers
in accordance with Section 3 hereof.
Holders of the Notes (including the Initial Purchasers and their direct
and indirect transferees) will be entitled to the benefits of a Registration
Rights Agreement dated as of the First Closing Date to be entered into between
the Company and the Initial Purchasers (the "Registration Rights Agreement")
pursuant to which the Company will agree, among other things, to file a
registration statement on the appropriate form with the Securities and Exchange
Commission (the "Commission") registering the Notes and the shares of Common
Stock issuable upon the conversion thereof (the "Underlying Shares") under the
Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the several Initial Purchasers that:
(a) Each of the Preliminary Offering Circular and the Offering Circular,
as of its respective date, did not, and on the First Closing Date the
Offering Circular will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representation or warranty as to information contained in or omitted from
the Preliminary Offering Circular or the Offering Circular in reliance
upon, and in conformity with, written information furnished to the Company
by an Initial Purchaser specifically for inclusion therein, which
information the parties hereto agree is limited to the Initial Purchasers
Information (as defined in Section 17 hereof).
(b) Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 3 hereof and their compliance with
the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Notes to the Initial Purchasers and the
offer, resale and delivery of the Notes by the Initial Purchasers in the
manner contemplated by this Agreement and the Offering Circular, to
register the Notes under the Securities Act or to qualify the indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(c) The Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder; and any
further documents so filed and incorporated by
-2-
reference in the Offering Circular, when such documents are filed with
Commission, will conform in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder.
(d) The Company and each of its subsidiaries (as defined in Section 1.5
hereof) have been duly incorporated or organized and are validly existing
as corporations or other legal entities in good standing under the laws of
their respective jurisdictions of organization, are duly qualified to do
business and are in good standing as foreign corporations or other legal
entities in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification and have all corporate power and authority (or, in the case
of such subsidiaries, similar power and authority) necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify, be in good
standing or have such power or authority would not have, singularly or in
the aggregate, a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect"). The
Company owns or controls, directly or indirectly, only the following
entities with the indicated percentages of ownership: (i) Evergreen Solar
Securities Corp., a Massachusetts corporation (100%) ("Evergreen
Securities"); (ii) EverQ GmbH (formerly TOPAS 107 V.V. GmbH), a German
limited liability company (75.1%) ("EverQ"); and (iii) Evergreen Solar
GmbH, a German limited liability company (100%) (together with EverQ, the
"German Subsidiaries").
(e) This Agreement has been duly authorized executed and delivered by the
Company.
(f) The Company's authorized, issued and outstanding capital stock
conforms to the description thereof in the Circular, and all of the issued
and outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws. None of
the outstanding shares of the Company's capital stock was issued in
violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or any of its subsidiaries other than those
accurately described in the Circular. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the
options or other rights granted thereunder, included or incorporated by
reference in the Circular accurately and fairly present the information
required to be shown with respect to such plans, arrangements, options and
rights.
(g) The Underlying Shares have been duly reserved by the Company for
issuance. When the Underlying Shares are issued in accordance with the
terms of the Notes and the Indenture, the Underlying Shares will be duly
authorized and validly issued and will be fully paid and nonassessable and
free of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company.
-3-
(h) All the outstanding shares of capital stock or other equity interests
of each subsidiary of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and, except to the extent
described in the Circular, are owned by the Company directly or indirectly
through one or more wholly-owned subsidiaries (it being expressly
understood that the Company does not own all of the outstanding shares of
EverQ), free and clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third party.
(i) Prior to the First Closing Date, the Indenture will have been duly
authorized by the Company and, on the First Closing Date, will have been
duly executed and delivered by the Company. When the Indenture has been
duly executed and delivered by the Company, the Indenture will be the
valid and binding agreement of the Company, enforceable against the
Company in accordance with its respective terms except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability relating
to or affecting creditors' rights and (ii) equitable principles of general
applicability. On the First Closing Date, the Indenture will conform in
all material respects to the requirements of the Trust Indenture Act and
the rules and regulations of the Commission applicable to an indenture
that is qualified thereunder. The Registration Rights Agreement has been
duly and validly authorized by the Company and, when duly executed and
delivered by the Company (assuming the due authorization, execution and
delivery by the Initial Purchasers), will constitute a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms except (i) as the enforceability thereof may be
limited by (A) bankruptcy, insolvency, reorganization, moratorium or other
laws of general applicability relating to or affecting creditors' rights
and (B) equitable principles of general applicability and (ii) as the
enforcement of indemnification and contribution provisions thereof may be
limited by applicable law.
(j) Prior to the First Closing Date, the Notes will have been duly
authorized and, on the First Closing Date, will have been duly executed
and delivered by the Company. When the Notes have been validly issued, and
duly executed and authenticated by the Trustee, in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with this Agreement, the Notes will be entitled
to the benefits of the Indenture and will be valid and binding obligations
of the Company, enforceable in accordance with their terms except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability relating
to or affecting creditors' rights and (ii) equitable principles of general
applicability.
(k) The execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement and the Notes by the Company
and the consummation of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any
of the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions
of the charter or bylaws of the Company or any of its subsidiaries or any
statute or any order, rule
-4-
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets.
(l) No consent, approval, authorization or order of, or filing or
registration with, any court or governmental or regulatory agency or body
is required for the execution, delivery and performance by the Company of
this Agreement, the Indenture, the Registration Rights Agreement or the
Notes and the consummation by the Company of the transactions contemplated
hereby and thereby, except (i) as may be required in connection with the
transactions contemplated by the Registration Rights Agreement, including
the registration of the Notes and the Underlying Shares under the
Securities Act and the qualification of the Indenture under the Trust
Indenture Act, (ii) for the approval of the Underlying Shares for
quotation on the Nasdaq National Market and (iii) such filings as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by the Initial Purchasers.
(m) PricewaterhouseCoopers LLP, who have expressed their opinions on the
audited financial statements included or incorporated by reference in the
Offering Circular and on the Company's internal control over financial
reporting, are independent registered public accountants with respect to
the Company and its subsidiaries as required by the Securities Act and the
Rules and Regulations, including Rule 2-01 of Regulation S-X of the Rules
and Regulations.
(n) The financial statements, together with the related notes, included or
incorporated by reference in the Offering Circular present fairly the
financial position and the results of operations and changes in financial
position of the Company and its consolidated subsidiaries at the
respective dates or for the respective periods therein specified. Such
statements and related notes have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent
basis except as may be set forth in the Offering Circular. The financial
statements, together with the related notes, included in the Offering
Circular comply in all material respects with the Securities Act and the
Rules and Regulations. No other financial statements or exhibits and no
supporting schedules are required by the Securities Act or the Rules and
Regulations to be included in the Offering Circular.
(o) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included or
incorporated by reference in the Offering Circular, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as
described in or contemplated by the Offering Circular; and, since such
date, there has not been any change in the capital stock (other than upon
the issuance of shares pursuant to the Company's stock option and
incentive plan or employee stock purchase plan as in existence on the date
hereof or pursuant to its currently outstanding options, warrants or
rights, in each case as described in the Offering Circular, all of which
issuances have been or will be made in compliance with the Securities Act
and the Rules and Regulations) or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective
-5-
material adverse change, in or affecting the business, general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Offering Circular.
(p) Except as described in the Offering Circular, there is no legal or
governmental proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company
or any of its subsidiaries is the subject that, singularly or in the
aggregate, if determined adversely to the Company or any of its
subsidiaries, would have a Material Adverse Effect or prevent or adversely
affect the ability of the Company to perform its obligations under this
Agreement; and to the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(q) Neither the Company nor any of its subsidiaries (i) is in violation of
its charter or bylaws (or similar organizational documents), (ii) is in
default in any respect, and no event has occurred that, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject or (iii) is in violation in any
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject, except, in
the case of clauses (ii) and (iii) above, any violations or defaults that,
singularly or in the aggregate, would not have a Material Adverse Effect.
(r) The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate state, federal or foreign
regulatory agencies or bodies that are necessary for the ownership of
their respective properties or the conduct of their respective businesses
as described in the Offering Circular except where any failures to possess
or make the same, singularly or in the aggregate, would not have a
Material Adverse Effect, and the Company has not received written
notification or, to its knowledge, other notification of any revocation or
modification of any such license, authorization or permit, except where
such revocation or modification or lack of renewal would not, singularly
or in the aggregate, have a Material Adverse Effect.
(s) The Company is not and, after giving effect to the issuance and sale
of the Notes and the receipt and application of the proceeds thereof as
described in the Offering Circular, will not be an "investment company" or
entity controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
and the rules and regulations of the Commission thereunder.
(t) The Company and its subsidiaries own or possess the right to use all
patents, trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, know-how,
trade secrets and rights (collectively, "Intellectual Property") described
in the Offering Circular as being owned or licensed by them for the
conduct of their respective businesses, and the Company has not received
-6-
written or, to its knowledge, other notice of any claim to the contrary or
any challenge by any other person to the rights of the Company and its
subsidiaries with respect to the foregoing. Except as described in the
Offering Circular, (i) to the Company's knowledge, the conduct of the
Company's business does not and will not infringe or conflict with any
Intellectual Property or franchise right of any person and (ii) no written
or, to the Company's knowledge, other claim has been made against the
Company alleging the infringement by the Company or any of its licensees
or other third parties of any Intellectual Property or franchise right of
any person, except for such as would not have a Material Adverse Effect.
Each employee of and consultant to the Company and its subsidiaries has
entered into a confidentiality and invention assignment agreement in favor
of the Company or its applicable subsidiary as a condition of the
employment or retention of services of such employee or consultant, except
where failure to enter into such an agreement would not have a Material
Adverse Effect. Except for matters relating to third parties expressly
identified and named in the Offering Circular: (A) to the Company's
knowledge, there are no rights of third parties to any Intellectual
Property owned by or licensed to the Company or any of its subsidiaries
that conflict with the rights of the Company or its subsidiaries related
to such Intellectual Property, except for any such rights that, singularly
or in the aggregate, would not have a Material Adverse Effect; (B) to the
Company's knowledge, there is no infringement by third parties of any
Intellectual Property owned by or licensed to the Company or its
subsidiaries that would have a Material Adverse Effect; (C) other than in
connection with assertions or inquiries made by patent office examiners in
the ordinary course of the prosecution of the patent applications of the
Company or its subsidiaries, there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or other claim by others
challenging the rights of the Company or any of its subsidiaries in or to,
or the validity or scope of, any Intellectual Property owned by or
licensed to the Company or its subsidiaries, except for any such claim
that would not have a Material Adverse Effect, and, to the Company's
knowledge, there are no facts that would form a reasonable basis for any
such claim; (D) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or other claim by others that the
Company or any of its subsidiaries, or any of their respective licensees,
infringes or otherwise violates, or would infringe or otherwise violate
upon commercialization of its products and product candidates described in
the Offering Circular, any patent, trademark, copyright, trade secret or
other proprietary rights of others, and there are no facts that would form
a reasonable basis for any such claim by others that the Company or any of
its subsidiaries, or any of their respective licensees, infringes or
otherwise violates, or would infringe or otherwise violate upon
commercialization of its products and product candidates described in the
Offering Circular, any Intellectual Property of others, except, in each
case in this clause (D), for any such claims that would not have a
Material Adverse Effect; and (E) to the Company's knowledge, there is no
patent or patent application that contains claims that conflict with any
Intellectual Property described in the Offering Circular as being owned by
or licensed to the Company or any of its subsidiaries or that is necessary
for the conduct of their respective businesses as currently or
contemplated to be conducted, except for such as would not have a Material
Adverse Effect.
(u) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use,
all items of real or personal property that are material to the business
of the Company and its subsidiaries taken as a whole, in each
-7-
case free and clear of all liens, encumbrances, claims and defects, except
as described in the Offering Circular or for those that would not result
in a Material Adverse Effect.
(v) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the Company's knowledge, is threatened that
would reasonably be expected to have a Material Adverse Effect. To the
Company's knowledge, no key employee or significant group of employees of
the Company or any subsidiary plans to terminate employment with the
Company or any such subsidiary.
(w) No "prohibited transaction" (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code"), and not otherwise exempt from treatment as a "prohibited
transaction") or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan that could have a Material Adverse Effect; each
employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company has not incurred
and does not expect to incur liability under Title IV of ERISA with
respect to the termination of, or withdrawal from, any "pension plan"; and
each "pension plan" (as defined in ERISA) for which the Company would have
any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, that could cause the loss of such
qualification.
(x) Neither the Company nor any of its subsidiaries is in violation of any
foreign, federal, state or local rules, laws or regulations relating to
the use, treatment, storage and disposal of toxic substances and the
protection of health or the environment ("Environmental Laws") that are
applicable to its business, except for any such violations that would not,
singularly or in the aggregate, have a Material Adverse Effect; neither
the Company nor any of its subsidiaries has received any written or, to
their knowledge, other notice from any governmental authority or third
party of an asserted claim under Environmental Laws; each of the Company
and its subsidiaries has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business
and is in compliance with all terms and conditions of any such permit,
license or approval, except for the lack of such permits, licenses or
approvals or for such non-compliance as would not, singularly or in the
aggregate, have a Material Adverse Effect; and to the Company's knowledge,
there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company
or any of its subsidiaries has received notice and no notice by any other
person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising
out of, based on or resulting from the storage, generation,
transportation, handling, treatment, disposal, discharge, emission or
other release of any kind of toxic or other wastes or other hazardous
substances by, due to or caused by the Company or any of its subsidiaries
(or any other entity for whose acts or omissions the Company or any of its
subsidiaries is or may be liable) upon
-8-
any of the property now or previously owned or leased by the Company or
any of its subsidiaries in violation of any statute or any ordinance,
rule, regulation, order, judgment, decree or permit that would, under any
Environmental Law, give rise to any liability, except for any violation or
liability that would not have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect.
(y) The Company has reviewed the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries,
during which the Company identified and evaluated associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties); and on the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a Material Adverse Effect.
(z) Each of the Company and its subsidiaries (i) has filed all necessary
federal, state and foreign income and franchise tax returns that are
required to be filed through the date hereof, (ii) has paid all federal,
state, local and foreign taxes due and payable for which it is liable
through the date hereof and (iii) does not have any tax deficiency or
claims outstanding or assessed or, to the Company's knowledge, proposed
against it other than those filings, payments or deficiencies that would
not, singularly or in the aggregate, have a Material Adverse Effect.
(aa) To the Company's knowledge, the operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively,
the "Money Laundering Laws"), except for any such non-compliance as would
not, singularly or in the aggregate, have a Material Adverse Effect, and
no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any
of it subsidiaries with respect to the Money Laundering Laws is pending
or, to the Company's knowledge, threatened.
(bb) Neither the Company nor any of its subsidiaries nor, to the Company's
knowledge, any director, officer, agent, employee or affiliate of the
Company or any of its subsidiaries is currently subject to any United
States sanctions administered by the Office of Foreign Assets Control of
the United States Treasury Department; and the Company will not directly
or indirectly use the proceeds of the offering of the Notes, or lend,
contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any United
States sanctions administered by such office.
-9-
(cc) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such losses and risks as is prudent
and customary in the businesses in which they are engaged.
(dd) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United
States generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ee) All descriptions of any franchises, leases, contracts, agreements or
documents contained in the Offering Circular are accurate and complete
descriptions of such documents in all material respects. Other than as
described in the Offering Circular, no such franchise, lease, contract or
agreement has been suspended or terminated for convenience or default by
the Company or, to the knowledge of the Company, any of the other parties
thereto, and the Company has not received written or, to its knowledge,
other notice of any such pending or threatened suspension or termination,
except for such pending or threatened suspensions or terminations that
would not reasonably be expected to, singularly or in the aggregate, have
a Material Adverse Effect.
(ff) No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, that is required
to be described in the Offering Circular and that is not so described.
(gg) No person or entity has the right to require registration of shares
of Common Stock or other securities of the Company because of the filing
or effectiveness of a registration statement with the Commission
registering the Notes or the Underlying Shares or otherwise in connection
with the offering and sale of the Notes as contemplated by the Offering
Circular, except for persons and entities who have expressly waived such
right or who have been given timely and proper notice and have failed to
exercise such right within the time or times required under the terms and
conditions of such right or whose right to incidental registration are
solely dependent on the inclusion of any such shares in such registration
by persons or entities who have waived such rights and except as otherwise
set forth in the Offering Circular.
(hh) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give rise
to a valid claim against the Company or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Notes as contemplated by the Offering Circular.
-10-
(ii) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Offering Circular has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(jj) Neither the Company nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined
in the Securities Act) that is or will be integrated with the sale of the
Notes in a manner that would require registration of the Notes under the
Securities Act.
(kk) When the Notes are issued and delivered pursuant to this Agreement,
the Notes will not be of the same class (within the meaning of Rule 144A
of the Rules and Regulations ("Rule 144A")) as any security of the Company
that is listed on a national securities exchange registered under Section
6 of the Exchange Act or that is quoted in a United States automated
inter-dealer quotation system.
(ll) No form of general solicitation or general advertising (within the
meaning of Regulation D of the Rules and Regulations ("Regulation D")) or
in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act was used by the Company or any of its
representatives or affiliates (as defined in Rule 501(b) of Regulation D)
in connection with the offer and sale of the Notes contemplated hereby,
except that no representation or warranty is given with respect to the
Initial Purchasers. No securities of the same class as the Notes have been
issued and sold by the Company within the six-month period immediately
prior to the date hereof, other than the Notes offered or sold to the
Initial Purchasers hereunder. The Company has not distributed and any
offering material in connection with the offering and sale of the Notes
other than the Circular.
(mm) Neither the Company nor any of the Company's subsidiaries or
affiliates has taken, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company in connection
with the offer or sale of the Notes.
(nn) The Company is in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (collectively, the
"Xxxxxxxx-Xxxxx Act") that are currently in effect and is actively taking
steps to ensure that it will be in compliance with other applicable
provisions of the Xxxxxxxx-Xxxxx Act not currently in effect upon and at
all times after the effectiveness of such provisions.
(oo) The Company is in compliance with all applicable corporate governance
requirements set forth in the Nasdaq Marketplace Rules that are currently
in effect and is actively taking steps to ensure that it will be in
compliance with other applicable corporate governance requirements set
forth in the Nasdaq Marketplace Rules not currently in effect upon and at
all times after the effectiveness of such requirements.
(pp) Neither the Company nor any of its subsidiaries nor, to the Company's
knowledge, any employee or agent of the Company or any subsidiary, has
made any contribution or other
-11-
payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Circular.
(qq) There are no transactions, arrangements or other relationships
between or among the Company or, to its knowledge, any of its affiliates
(as such term is defined in Rule 405 of the Rules and Regulations), on the
one hand, and any unconsolidated entity, on the other hand, including,
without limitation, any structured finance, special purpose or limited
purpose entity that could reasonably be expected to materially affect the
Company's liquidity or the availability of or requirements for its capital
resources required to be described in the Offering Circular that have not
been described as required.
3. PURCHASE SALE AND DELIVERY OF NOTES.
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, and each Initial
Purchaser agrees, severally and not jointly, to purchase from the Company,
at a purchase price of 97% of the principal amount thereof, plus accrued
interest, if any, from June 29, 2005 to the First Closing Date (if the
First Closing Date occurs after June 29, 2005), the principal amount of
the Notes set forth opposite the name of such Initial Purchaser in
Schedule A hereto.
The Company will deliver the Firm Notes to the Representative for
the respective accounts of the several Initial Purchasers in the form of
one or more definitive global Notes by book-entry form that will be
deposited by or on behalf of the Company with The Depository Trust Company
("DTC") or its designated custodian for the account of the Initial
Purchasers as the Representative may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York time, on the second full
business day preceding the First Closing Date (as defined below) against
payment of the aggregate purchase price to be paid for the Firm Notes by
wire transfer or transfers in immediately available funds to an account
designated by the Company and reasonably acceptable to the Representative,
payable to the order of the Company, all at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, counsel for the Company, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the
obligations of each Initial Purchaser hereunder. The time and date of the
delivery and closing shall be at 10:00 A.M., New York time, on June 29,
2005. The time and date of such payment and delivery are herein referred
to as the "First Closing Date." The First Closing Date and the location of
delivery of, and the form of payment for, the Firm Notes may be varied by
agreement between the Company and Representative.
The Company shall make the certificates for the Firm Notes available
to the Representative for examination on behalf of the Underwriters in New
York, New York at least twenty-four hours prior to the First Closing Date.
(b) The Initial Purchasers have advised the Company that they propose to
offer the Notes for resale upon the terms and subject to the conditions
set forth herein and in the Circular. Each Initial Purchaser, severally
and not jointly, represents and warrants to, and agrees with,
-12-
the Company that (i) it is purchasing the Notes pursuant to a private sale
exempt from registration under the Securities Act, (ii) it has not
solicited offers for, or offered or sold, and will not solicit offers for,
or offer or sell, the Notes by means of any form of general solicitation
or general advertising within the meaning of Rule 502(c) of Regulation D
or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act, (iii) it has solicited and will solicit offers
for the Notes only from, and has offered or sold and will offer, sell or
deliver the Notes, as part of its initial offering, only to persons whom
it reasonably believes to be qualified institutional buyers within the
meaning of Rule 144A or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such account
is such a qualified institutional buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each
case, in transactions in accordance with Rule 144A and (iv) it is an
accredited investor as defined under Rule 501(a)(1) under the Securities
Act. Each Initial Purchaser, severally and not jointly, agrees, with
respect to any resale of the Notes, other than through The PORTAL Market,
to deliver either with the confirmation of such resale or otherwise prior
to settlement of such resale a notice to the effect that such resale has
been made in reliance upon the exemption from the registration
requirements of the Securities Act afforded by Rule 144A.
(c) The Company acknowledges and agrees that the Initial Purchasers may
sell Notes to any affiliate of an Initial Purchaser and that any such
affiliate may sell Notes purchased by it to an Initial Purchaser.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Initial Purchasers that:
(a) Prior to the expiration of nine months after the date of the Offering
Circular, to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event that makes
any statement of a material fact made in the Offering Circular untrue or
requires the making of any additions to or changes in the Offering
Circular (as amended or supplemented from time to time) in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Initial Purchasers promptly of
any order preventing or suspending the use of the Preliminary Offering
Circular or the Offering Circular, of any suspension of the qualification
of the Notes under any state securities or Blue Sky laws for offering or
sale in any jurisdiction and of the initiation or threatening of any
proceeding for any such purpose; and to use its reasonable best efforts to
prevent the issuance of any such order preventing or suspending the use of
the Preliminary Offering Circular or the Offering Circular or suspending
any such qualification and, if any such suspension is issued, to obtain
the lifting thereof at the earliest possible time.
(b) If, at any time prior to the earlier of (i) the completion of the
resale of the Notes by the Initial Purchasers and (ii) the date that is
nine months after the date of the Offering Circular, any event shall occur
or condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Company, to amend or
supplement the Offering Circular so that the Offering Circular will not
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the
-13-
statements therein, in the light of the circumstances existing at the time
it is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Circular to comply with applicable law,
to promptly prepare such amendment or supplement as may be necessary to
correct such untrue statement or omission or so that the Offering
Circular, as so amended or supplemented, will comply with applicable law.
(c) To use reasonable best efforts to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Circular and for so long
as the Notes are outstanding during the period of two years after the
final Closing Date.
(d) To deliver promptly to the Representative in New York City such number
of the following documents as the Representative shall reasonably request:
(i) each Preliminary Offering Circular, (ii) the Offering Circular (not
later than 10:00 A.M., New York time, of the second business day following
the execution and delivery of this Agreement) and any amended or
supplemented Circular (not later than 10:00 A.M., New York time, on the
business day following the date of such amendment or supplement) and (iii)
any document incorporated by reference in the Offering Circular (excluding
exhibits thereto).
(e) Prior to making any amendment or supplement to the Offering Circular
at any time prior to the earlier of (i) the completion of the resale of
the Notes by the Initial Purchasers and (ii) the date that is nine months
after the date of the Offering Circular, to furnish a copy thereof to each
of the Initial Purchasers and counsel for the Initial Purchasers and not
to effect any such amendment or supplement to which the Initial Purchasers
shall reasonably and promptly object by notice to the Company after a
reasonable period to review.
(f) To make generally available to its stockholders as soon as
practicable, but in any event not later than eighteen months after the
date hereof, an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Rule 158 of the Rules and
Regulations.
(g) The Company will promptly take from time to time such actions as the
Representative may reasonably request to qualify the Notes for offering
and sale under state securities or Blue Sky laws of such jurisdictions
within the United States as the Representative may designate and to
continue such qualifications in effect for so long as required for the
distribution of the Notes; provided that the Company and its subsidiaries
shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified, to file a general consent
to service of process in any jurisdiction or to subject itself to taxation
in any jurisdiction in which it is otherwise not so subject.
(h) During the period of three years from the date hereof, but only to the
extent not available on the Commission's website, the Company will deliver
to the Representative and, upon reasonable request, to each of the other
Initial Purchasers, promptly after they are available, copies of (i) all
reports or other communications furnished to stockholders generally and
(ii) all reports and financial statements furnished or filed with the
Commission
-14-
pursuant to the Exchange Act or any national securities exchange or
automatic quotation system on which the Common Stock is listed or quoted.
(i) For so long as the Notes are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) of the Rules and
Regulations, to furnish to holders of the Notes and prospective purchasers
of the Notes designated by such holders, upon request of such holders or
such prospective purchasers, the information required to be delivered
pursuant to paragraph (d)(4) of Rule 144A, unless the Company is then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act.
(j) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge or contract to sell, or otherwise dispose of, any shares
of or securities convertible into or exercisable or exchangeable for
Common Stock, or announce the offering of or file any registration
statement under the Securities Act in respect of, any shares of or
securities convertible into or exercisable or exchangeable for shares of
Common Stock, in each case for a period of 90 days from the date of the
Offering Circular without the prior written consent of the Representative,
other than the Company's sale of the Notes hereunder and the issuance of
shares of Common Stock pursuant to the Company's stock option and
incentive plan or employee stock purchase plan as in existence on the date
hereof (as such plans may be modified to increase the number of shares of
Common Stock available for grant thereunder as described in the Offering
Circular) or pursuant to its currently outstanding options, warrants or
rights, in each case as described in the Offering Circular, all of which
issuances will be made in compliance with the Securities Act and the Rules
and Regulations; provided, however, that if (A) the Company issues an
earnings release or material news or a material event relating to the
Company occurs during the last 17 days of such 90-day period or (B) prior
to the expiration of such 90-day period, the Company announces that it
will release earnings results during the 16-day period beginning on the
last day of such 90-day period, the restrictions imposed by this Section
4(j) shall continue to apply until the expiration of the 18-day period
beginning on the issuance of such earnings release or the occurrence of
such material news or material event.
(k) The Company will cause each of its officers, directors and
stockholders listed in Schedule B to furnish to the Representative, prior
to the First Closing Date, a letter, substantially in the form of Exhibit
I hereto. The Company agrees that, upon any determination by the Company
that the restrictions imposed by any such letter so furnished by any of
such officers, directors or stockholders will not apply to such number of
shares of Common Stock as is specified in a notice to such officer,
director or stockholder, as provided in such letter during the 60-day
period beginning 31 days after the date of the Offering Circular, the
Company will promptly provide written notice of such determination,
including the number of such shares as to which such restrictions will not
be applicable, to the Representative. The Company agrees that the total
number of shares of Common Stock as to which the restrictions imposed by
all of the letters so furnished by such officers, directors and directors
will not be applicable shall not exceed, during the 30-day period
beginning 31 days after the date of the Offering Circular, an aggregate of
500,000 shares of Common Stock or, during the 60-day period beginning 31
days after the date of the Offering Circular, an aggregate of 1,000,000
shares of Common Stock, provided that no more than 250,000 of
-15-
such shares may be sold by all of such officers, directors and
stockholders in the aggregate during any period of five consecutive
trading days.
(l) To assist the Initial Purchasers in arranging for the Notes to be
designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. (the "NASD") for The PORTAL Market and for the Notes to be eligible
for clearance and settlement through DTC.
(m) Not to, and to cause its subsidiaries and use its reasonable efforts
to cause its other affiliates not to, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as such
term is defined in the Securities Act) that could be integrated with the
sale of the Notes in a manner that would require registration of the Notes
under the Securities Act.
(n) Not to, and to cause its subsidiaries and use its reasonable efforts
to cause its other affiliates not to, and not to authorize or knowingly
permit any person acting on their behalf to, solicit any offer to buy or
offer to sell the Notes by means of any form of general solicitation or
general advertising within the meaning of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act; and not to offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any securities under circumstances
where such offer, sale, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act to cease to be applicable
to the offering and sale of the Notes as contemplated by this Agreement
and the Offering Circular.
(o) During the period from the First Closing Date until two years after
the final Closing Date, without the prior written consent of the Initial
Purchasers, not to, and to cause its subsidiaries and use its reasonable
efforts to cause its other affiliates (as defined in Rule 144 of the Rules
and Regulations) not to, resell any of the Notes that have been reacquired
by them for so long as the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) of the Rules and Regulations, except for Notes
purchased by the Company or any of its subsidiaries and resold in a
transaction registered under the Securities Act.
(p) Prior to each of the Closing Dates, the Company will furnish to the
Representative, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for any
periods subsequent to the periods covered by the financial statements
included or incorporated by reference in the Offering Circular.
(q) Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except for
routine marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the
Representative is notified), without the prior written consent of the
Representative, unless in the judgment of the Company and its counsel, and
after notification to the Representative, such press release or
communication is required by law.
-16-
(r) In connection with the offering of the Notes, until the Representative
shall have notified the Company of the completion of the resale of the
Notes, the Company will not, and will use reasonable efforts to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Notes, or attempt to induce any person to
purchase any Notes; and the Company will not, and will use reasonable
efforts to cause its affiliated purchasers not to, make bids or purchase
for the purpose of creating actual, or apparent, active trading in or of
raising the price of the Notes; provided, however, that if requested in
writing by the Company, the Representative will confirm whether or not the
resale of the Notes by the Representatives is complete.
(s) Not to, and to cause its subsidiaries and use its reasonable efforts
to cause its other affiliates not to, take, directly or indirectly, any
action intended to result in manipulation of the price of any security of
the Company to facilitate the sale or resale of the Notes.
(t) The Company will use its reasonable efforts to obtain approval of the
Underlying Shares for quotation on the Nasdaq National Market in
accordance with the requirements of the Nasdaq National Market's
requirements.
(u) The Company will not, for so long as the Notes are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) of the Rules
and Regulations, be or become, or be or become owned by, an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act, and will not be or become, or be or become owned
by, a closed-end investment company required to be registered, but not
registered thereunder.
(v) The Company shall at all times continue to comply, in all material
respects, with all applicable provisions of the Xxxxxxxx-Xxxxx Act in
effect from time to time.
(w) The Company will apply the net proceeds from the sale of the Notes as
set forth in the Offering Circular under the heading "Use of Proceeds."
5. PAYMENT OF EXPENSES. The Company agrees with the Initial Purchasers to pay
(a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Notes and any taxes payable in that connection; (b) the costs
incident to the preparation, printing and distribution of the Preliminary
Offering Circular and the Offering Circular, any amendments, supplements and
exhibits thereto or any document incorporated by reference therein, this
Agreement, the Indenture and the Registration Rights Agreement; (c) all expenses
incurred in connection with the acceptance of the Notes for The PORTAL Market
and eligibility for clearance and settlement through DTC; (d) the reasonable
fees and expenses (including any related and documented fees and expenses of
counsel for the Initial Purchasers) incurred in connection with filings, if any,
under Conduct Rules 2710 or 2720 of the NASD; (e) any applicable listing or
other fees; (f) the reasonable fees and expenses of qualifying the Notes under
the securities laws of the several jurisdictions as provided in Section 4(g)
hereof and of preparing, printing and distributing Blue Sky Memoranda and Legal
Investment Surveys (including related and documented fees and expenses of
counsel for the Initial Purchasers
-17-
not to exceed $5,000); (g) all fees and expenses of the Trustee or any agent
thereof; (h) any fees charged by securities rating services for rating the
Notes; (i) the costs and expenses relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Notes or related communications to investors (including the reasonable costs and
expenses of the Initial Purchasers), including, without limitation, expenses
associated with the production of presentation slides and graphics, fees and
expenses of any consultants engaged by the Company in connection with such
presentations or communications with the prior approval of the Company, travel
and lodging expenses of representatives and officers of the Company, the Initial
Purchasers and any such consultants and the cost of any aircraft chartered with
the Company's prior approval in connection with such road show; and (j) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement (including, without limitation, the fees and
expenses of the Company's counsel and the Company's independent accountants);
provided that, except as otherwise provided in this Section 5 and in Section 10
hereof, the Initial Purchasers shall pay their own costs and expenses, including
the fees and expenses of their counsel, any transfer taxes on the Notes that
they may sell and the expenses of advertising any offering of the Notes made by
the Initial Purchasers.
6. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The respective obligations of
the several Initial Purchasers hereunder are subject to the accuracy, when made
and on each of the Closing Dates, of the representations and warranties of the
Company contained herein, to the accuracy of the statements of the Company made
in any certificates pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the sale of the Notes in any jurisdiction
shall have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and disclosed to
the Company on or prior to such Closing Date that the Offering Circular or
any amendment or supplement thereto contains an untrue statement of a fact
that, in the opinion of counsel for the Initial Purchasers, is material or
omits to state any fact that, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Notes, the
Indenture and the Registration Rights Agreement and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Company shall have furnished
to such counsel all documents and information that such counsel may
reasonably request to enable them to pass upon such matters.
(d) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx shall have furnished to the
Representative such counsel's written opinion, as counsel for the Company,
addressed to the Initial Purchasers
-18-
and dated such Closing Date, in form and substance reasonably satisfactory
to the Representative, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware. The Company has the corporate power and authority to
own its properties and assets and to carry on its business as
described in the Offering Circular.
(ii) Evergreen Securities has been duly incorporated and is an
existing corporation in good standing under the laws of the
Commonwealth of Massachusetts. Evergreen Securities has the
corporate power and authority to own its properties and assets
and to carry on its business as presently conducted. To such
counsel's knowledge, all of the outstanding shares of capital
stock of Evergreen Securities have been duly authorized; and
except to the extent set forth in the Offering Circular and as
otherwise provided in the Articles of Association of EverQ or
its similar organizational documents such as the Master Joint
Venture Agreement relating to EverQ, the shares of capital
stock of each subsidiary of the Company listed on a schedule
attached to such opinion are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, are
free of any adverse claim under Section 8-303 of the Uniform
Commercial Code and are not subject to any restriction upon
voting or transfer of any third party under any Reviewed
Agreement.
(iii) The Notes issued on such Closing Date have been duly
authorized by the Company and, when they have been executed
and delivered by the Company and duly executed and
authenticated by the Trustee in accordance with the provisions
of the Indenture and delivered by the Initial Purchasers
against payment of the purchase price therefor specified in
this Agreement in accordance with this Agreement, will be
valid and binding obligations of the Company, enforceable in
accordance with their terms except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally and (B) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability.
(iv) Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and
delivery of, in the case of the Indenture, the Indenture by
the Trustee and, in the case of the Registration Rights
Agreement, the Registration Rights Agreement by the Initial
Purchasers) constitutes the valid and binding agreement of the
Company, enforceable against the Company in accordance with
its respective terms except (A) as the enforceability thereof
may be limited by (1) bankruptcy, insolvency, reorganization,
moratorium or other laws of general applicability relating to
or affecting creditors' rights and (2) equitable principles of
general applicability
-19-
and (B) as the enforcement of indemnification and
contribution provisions of the Registration Rights Agreement
may be limited by applicable law.
(v) The authorized capital stock of the Company conforms as to
legal matters to the description thereof under the heading
"Description of Capital Stock" in the Offering Circular. The
Underlying Shares have been duly reserved and authorized by
the Company for issuance upon such conversion and, upon their
issuance in accordance with the terms of the Notes, will be
duly authorized, validly issued and fully paid and
nonassessable. The stockholders of the Company have no
preemptive rights contained in the Company's charter or
bylaws and have no contractual, written preemptive rights
with the Company under any contract or agreement filed as an
exhibit pursuant to Item 601(b)(4) or 601(b)(10) of
Regulation S-K to any document filed by the Company under the
Exchange Act and incorporated by reference in the Offering
Circular (the "Reviewed Agreements") with respect to the
Underlying Shares that have not otherwise been waived.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The execution and delivery by the Company of this Agreement,
the Indenture, the Registration Rights Agreement, and the
performance by the Company of its obligations hereunder and
thereunder (including the obligation of the Company to issue
and sell the Notes and to issue the Underlying Shares upon
the conversion of the Notes), do not (A) violate any
provisions of the Company's charter or bylaws or any
provisions of any applicable United States federal or
California or Delaware state law, rule or regulation known to
us to be customarily applicable to transactions of this
nature, (B) violate, or constitute a default under, any of
the Reviewed Agreements or (C) violate any order known to
such counsel of any United States federal or California or
Delaware state governmental agency or body or court having
jurisdiction over the Company or any of its subsidiaries or
any of their properties or assets.
(viii) No consent, approval or authorization of, or designation,
declaration, filing or registration with, any United States
federal or California or Delaware state court or governmental
agency is required on the part of the Company for the
execution and delivery of this Agreement, the Indenture, the
Registration Rights Agreement, the offer, issuance or sale by
the Company of the Notes and the consummation by the Company
of the transactions contemplated hereby and thereby, except
(A) as may be required in connection with the transactions
contemplated by the this Agreement, the Indenture and the
Registration Rights Agreement, including the registration of
the Notes and the Underlying Shares under the Securities Act
and the qualification of the Indenture under the Trust
Indenture Act, (B) for the approval of the Underlying Shares
for quotation on the Nasdaq National Market and (C) such
consents, approvals, authorizations, registrations or
qualifications as may be
-20-
required by the NASD and under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Notes by the Initial Purchasers.
(ix) The statements in the Offering Circular under the heading
"Description of the Notes," insofar as they purport to
constitute a summary of the terms of the Notes or legal
matters or provisions of the Indenture, the Registration
Rights Agreement or this Agreement, fairly summarize, in all
material respects, such terms.
(x) The statements in the Offering Circular under the heading
"Material U.S. Federal Income Tax Considerations," insofar as
they purport to describe provisions of the United States
federal tax laws referred to therein, accurately summarize,
in all material respects, such laws.
(xi) To such counsel's knowledge and other than as set forth in
the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or asset of
the Company or any of its subsidiaries is the subject that we
believe would have a Material Adverse Effect or would prevent
or adversely affect the ability of the Company to perform its
obligations under this Agreement, the Indenture or the
Registration Rights Agreement; and to such counsel's
knowledge, no such proceedings have been threatened in
writing by governmental authorities or threatened in writing
by others.
(xii) To such counsel's knowledge, no person or entity has the
right to require registration of the Notes or other
securities of the Company in connection with the offering and
sale of the Notes by the Company as contemplated by the
Offering Circular, except for persons and entities who have
expressly waived such right or who have been given timely and
proper notice and have failed to exercise such right within
the time or times required under the terms and conditions of
such right or whose right to incidental registration are
solely dependent on the inclusion of any such shares in such
registration by persons or entities who have waived such
rights and except as otherwise described in the Offering
Circular.
(xiii) The Company is not, and after giving effect to the offering
of the Notes and the receipt and application of the proceeds
thereof as described in the Offering Circular will not be,
required to register as an "investment company" as such term
is defined in the Investment Company Act and the rules and
regulations of the Commission thereunder.
(xiv) Assuming the accuracy of the representations and warranties
of the Initial Purchasers contained in Section 3 hereof and
their compliance with the agreements set forth therein, it is
not necessary, in connection with the issuance and sale of
the Notes by the Company to the Initial Purchasers
-21-
pursuant to this Agreement or for the initial resale of the
Notes by the Initial Purchasers in the manner contemplated by
this Agreement and the Offering Circular (it being understood
that no opinion is expressed as to any subsequent resale of
the Notes or the Underlying Shares), to register the Notes
under the Securities Act or to qualify the indenture under the
Trust Indenture Act.
(xv) The documents incorporated by reference in the Offering
Circular, as amended or supplement, when they were filed (or,
if an amendment with respect to any such document was filed,
when such amendment was filed) with the Commission, appeared
on their face to comply as to form in all material respects
with the applicable requirements of the Exchange Act (it being
understood that such counsel need express no opinion as to the
financial statements or other financial data included or
incorporated by reference therein).
Such counsel shall also have furnished to the Representative a written
statement, addressed to the Initial Purchasers and dated such Closing
Date, in form and substance satisfactory to the Representative, to the
effect that (A) such counsel has acted as counsel for the Company in
connection with the preparation of the Offering Circular and (B) based on
such counsel's examination of the Offering Circular and such counsel's
investigations made in connection with the preparation of the Offering
Circular and conferences with certain officers and employees of and
auditors and patent counsel for the Company and with you and counsel for
the Initial Purchasers, at which conferences the contents of the Offering
Circular and related matters were reviewed and discussed, no facts have
come to such counsel's attention through such review and discussion as
described therein that have caused such counsel to believe that as of its
issue date or the date hereof, the Offering Circular or any amendment or
supplement thereto contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, it being understood that such counsel need express no opinion
as to the financial statements or other financial data included or
incorporated by reference in the Offering Circular.
The foregoing opinion and statement may be qualified by a statement to the
effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Offering
Circular and takes no responsibility therefor except to the extent set
forth in the opinion described in clause (x) above.
(e) Xxxxxx Xxxxxxx shall have furnished to the Representative such
counsel's written opinion, as German counsel for the Company, addressed to
the Initial Purchasers and dated such Closing Date, in form and substance
reasonably satisfactory to the Representative, to the effect that:
(i) The German Subsidiaries have been duly organized and are
validly existing as corporations under the laws of the Federal
Republic of Germany and are duly qualified to do business in
Germany and, to our knowledge, in each jurisdiction in which
their respective ownership or lease of property or the
-22-
conduct of their respective businesses requires such
qualification and have all power and authority necessary to
own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure
to so qualify or have such power or authority would not have,
singularly or in the aggregate a Material Adverse Effect; and
to such counsel's knowledge, the German Subsidiaries are only
engaged in business in Germany.
(ii) All registered shares of capital stock of each of the German
Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are, to such counsel's
knowledge, except to the extent set forth in the Offering
Circular, owned by the Company directly; and to such counsel's
knowledge, all of such outstanding shares are registered or,
with respect to a capital increase contemplated in the
organizational documents of the German Subsidiaries, will be
registered.
(iii) The execution, delivery and performance of this Agreement, the
Indenture and the Registration Rights Agreement by the Company
and the consummation of the transactions contemplated herein
will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default
under any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel after
reasonable investigation to which either German Subsidiary is
a party or by which either German Subsidiary is bound or to
which any of the properties or assets of either German
Subsidiary is subject, nor will such actions result in any
violation of the Articles of Association (or similar
organizational documents such as the Master Joint Venture
Agreement relating to EverQ) of either German Subsidiary or
any statute or law or any order known to such counsel or any
rule or regulation of any governmental agency or body or court
having jurisdiction over either German Subsidiary or any of
their respective properties or assets.
(iv) To such counsel's knowledge, neither German Subsidiary (A) is
in violation of its organizational documents, (B) is in
default, and no event has occurred that, with notice or lapse
of time or both, would constitute a default, in the due
performance or observance of any term, covenant or condition
contained in any agreement or instrument to which it is a
party or by which it is bound or to which any of its
properties or assets is subject or (C) is in violation of any
law, ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject or has
failed to obtain any license, permit, certificate, franchise
or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business
except, in the case of clauses (B) and (C), for those
defaults, violations or failures that, either individually or
in the aggregate, would not have a Material Adverse Effect.
(v) To such counsel's knowledge and other than as set forth in the
Offering Circular, there are no legal or governmental
proceedings pending to which
-23-
either German Subsidiary is a party or of which any property
or asset of either German Subsidiary is the subject that,
singularly or in the aggregate, if determined adversely to
either German Subsidiary, might have a Material Adverse Effect
or would prevent or adversely affect the ability of the
Company to perform its obligations under this Agreement; and
to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
(f) The Representative shall have received a written opinion from
Proskauer Rose LLP, as counsel for the Company as to certain matters
involving Intellectual Property of the Company and its subsidiaries,
addressed to the Initial Purchasers and dated such Closing Date, in
substantially the forms thereof attached as Exhibit II hereto.
(g) The Representative shall have received from Pillsbury Winthrop LLP,
counsel for the Initial Purchasers, such written opinion or opinions,
dated such Closing Date, with respect to such matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to
such counsel such documents as they request for enabling them to pass upon
such matters.
(h) At the time of the execution of this Agreement, the Representative
shall have received from PricewaterhouseCoopers LLP, a letter, addressed
to the Initial Purchasers and dated such date, in form and substance
satisfactory to the Representative (i) confirming that they are
independent registered public accountants with respect to the Company and
its subsidiaries within the meaning of the Securities Act and the Rules
and Regulations and (ii) stating the conclusions and findings of such firm
with respect to the financial statements and certain financial information
included or incorporated by reference in the Offering Circular, including
statements and information of the type ordinarily included in accountant's
"comfort letters" delivered in accordance with Statement of Auditing
Standards No. 72 (or any successor thereto).
(i) On each Closing Date, the Representative shall have received a letter
(each, a "bring-down letter") from PricewaterhouseCoopers LLP, addressed
to the Initial Purchasers and dated such Closing Date confirming, as of
the date of such bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Offering Circular as of a date not
more than three business days prior to the date of such bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by its letter delivered to
the Representative concurrently with the execution of this Agreement
pursuant to Section 6(h) hereof.
(j) The Company shall have furnished to the Representative a certificate,
dated such Closing Date, of its Chairman of the Board, its President or a
Vice President and its chief financial officer stating that (i) such
officers have carefully examined the Offering Circular and, in their
opinion, the Offering Circular, as of its date or at such Closing Date,
did not include any untrue statement of a material fact and did not omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under with they
-24-
were made, not misleading, (ii) since the date of the Offering Circular,
no event has occurred that should have been set forth in a supplement or
amendment to the Offering Circular, (iii) to their knowledge after
reasonable investigation, as of such Closing Date, the other
representations and warranties of the Company set forth in this Agreement
are true and correct and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date and (iv) subsequent to the date
of the most recent financial statements included or incorporated by
reference in the Offering Circular, there has been no material adverse
change in the financial position or results of operation of the Company
and its subsidiaries, or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole, except as set forth in the Offering
Circular.
(k) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Offering Circular any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Offering Circular and (ii) since such date
there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the business,
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Offering Circular, the effect of
which, in any such case described in clause (i) or (ii) above, is, in the
judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Notes on the terms and in the manner contemplated in the Offering
Circular.
(l) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body that would, as of such Closing Date, prevent the issuance
or sale of the Notes or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company;
and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as
of such Closing Date that would prevent the issuance or sale of the Notes
or materially and adversely affect or potentially materially and adversely
affect the business or operations of the Company.
(m) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum range for prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the
-00-
Xxxxxx Xxxxxx, (xxx) xxx Xxxxxx Xxxxxx shall have become engaged in
hostilities, or the subject of an act of terrorism, or there shall have
been an escalation in hostilities involving the United States, or there
shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) so as to make it, in the judgment of the Representative,
impracticable or inadvisable to proceed with the sale or delivery of the
Notes on the terms and in the manner contemplated in the Offering
Circular.
(n) On the First Closing Date, (i) the Indenture shall have been duly
executed and delivered by the Company and the Trustee, (ii) the Notes
shall have been duly executed and delivered by the Company and duly
authenticated by the Trustee and (iii) the Registration Rights Agreement
shall have been duly executed and delivered by the Company and the Initial
Purchasers.
(o) The Notes shall have been accepted for The PORTAL Market and be
eligible for clearance and settlement through DTC.
(p) The Representative shall have received the written agreements,
substantially in the form of Exhibit I hereto, of the officers, directors
and stockholders of the Company listed in Schedule B to this Agreement in
accordance with Section 4(k) hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Initial Purchaser,
its members, officers, employees, representatives and agents and each
person, if any, who controls any Initial Purchaser within the meaning of
the Securities Act (collectively, the "Initial Purchaser Indemnified
Parties" and, each, an "Initial Purchaser Indemnified Party") against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which that Initial Purchaser Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Circular or the Offering Circular or
in any amendment or supplement thereto, (ii) the omission or alleged
omission to state in the Preliminary Offering Circular or the Offering
Circular or in any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act, or any alleged act or
failure to act, by any Initial Purchaser in connection with, or relating
in any manner to, the Notes or the offering contemplated hereby and that
is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause
(i) or (ii) above (provided that the Company shall not be liable in the
case of any matter covered by this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that
such loss, claim,
-26-
damage, liability or action resulted directly from any such act or failure
to act undertaken or omitted to be taken by such Initial Purchaser through
its gross negligence or willful misconduct) and shall reimburse each
Initial Purchaser Indemnified Party promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser Indemnified
Party in connection with investigating or preparing to defend or defending
against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from the Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company through the Representative by or on behalf of any Initial
Purchaser specifically for use therein, which information the parties
hereto agree is limited to the Initial Purchaser's Information.
This indemnity agreement is not exclusive and will be in addition to
any liability that the Company might otherwise have and shall not limit
any rights or remedies that may otherwise be available at law or in equity
to each Initial Purchaser Indemnified Party.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representatives and
agents, each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the
"Company Indemnified Parties" and, each, a "Company Indemnified Party")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Circular or the Offering Circular or
in any amendment or supplement thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through the
Representative by or on behalf of that Initial Purchaser specifically for
use therein, and shall reimburse the Company Indemnified Parties for any
legal or other expenses reasonably incurred by such parties in connection
with investigating or preparing to defend or defending against or
appearing as third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided that
the parties hereto hereby agree that such written information provided by
the Initial Purchasers consists solely of the Initial Purchaser's
Information. This indemnity agreement is not exclusive and will be in
addition to any liability that the Initial Purchasers might otherwise have
and shall not limit any rights or remedies that may otherwise be available
at law or in equity to the Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the
-27-
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability that it may have under this
Section 7 except to the extent it has been materially prejudiced by such
failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability that it may
have to an indemnified party otherwise than under this Section 7. If any
such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Section 7 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that any
indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses
available to it that are different from or additional to those available
to the indemnifying party and in the reasonable judgment of such counsel
it is advisable for such indemnified party to employ separate counsel or
(iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified
party, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense
of the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time for
all such indemnified parties, which firm shall be designated in writing by
the Representative, if the indemnified parties under this Section 7
consist of any Initial Purchaser Indemnified Party, or by the Company if
the indemnified parties under this Section 7 consist of any Company
Indemnified Parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 7(a) and 7(b) hereof, shall use
all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. Subject to the provisions of Section
7(d) hereof, no indemnifying party shall be liable for any settlement of
any such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written consent or
if there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement
or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by this Section 7 effected without
its written consent if (i) such settlement is entered into more than
-28-
45 days after receipt by such indemnifying party of the request for
reimbursement, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(e) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a)
or 7(b) hereof, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage
or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other from the
offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchasers on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Initial Purchasers on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Notes purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Initial Purchasers with respect
to the Notes purchased under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Initial Purchasers on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission;
provided that the parties hereto agree that the written information
furnished to the Company through the Representative by or on behalf of the
Initial Purchasers for use in the Preliminary Offering Circular or the
Offering Circular consists solely of the Initial Purchasers Information.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 7(e) were to be
determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7(e) shall be deemed to
include, for purposes of this Section 7(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(e), no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at
which the Notes purchased by it and distributed to the public were offered
to the public less the amount of any damages that such Initial Purchaser
has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the
-29-
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The Initial Purchasers' obligations to contribute as provided in
this Section 7(e) are several in proportion to their respective purchase
obligations and not joint.
8. OPTION NOTES. The Initial Purchasers may purchase all or less than all of an
additional $15,000,000 aggregate principal amount of 4.375% Convertible
Subordinated Notes due 2012 (the "Option Notes"). The Company agrees to sell to
each Initial Purchaser named in Schedule A hereto, and each such Initial
Purchaser agrees, severally and not jointly, to purchase from the Company, at a
purchase price equal to the same price as the Firm Notes purchased on the
Closing Date, the principal amount of Option Notes (subject to such adjustments
as the Initial Purchasers in their discretion may determine so that no Initial
Purchaser shall be obligated to purchase Option Notes other than in authorized
denominations) that bears the same proportion to the aggregate principal amount
of Option Notes to be purchased as the number of Firm Notes set forth opposite
the name of such Initial Purchaser in Schedule A hereto bears to the aggregate
principal amount of Firm Notes. The option granted hereby may be exercised as to
all or any part of the Option Notes not more than 30 days subsequent to the date
of this Agreement. No Option Notes shall be sold and delivered unless the Firm
Notes have been, or simultaneously are, sold and delivered. The right to place
the Option Notes or any portion thereof may be surrendered and terminated at any
time upon notice by the Representative to the Company.
The option granted hereby may be exercised by written notice being given to
the Company by Representative setting forth the aggregate principal amount of
Option Notes to be purchased by the Initial Purchasers and the date and time for
delivery of and payment for the Option Notes. Each date and time for delivery of
and payment for the Option Notes (which may be the First Closing Date, but not
earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two business days nor later than five business days after written
notice is given. (The Option Closing Date and the First Closing Date are herein
called, collectively, the "Closing Dates" and, each, a "Closing Date"). The
Option Closing Date and the location of delivery of, and the form of payment
for, the Option Notes may be varied by agreement between the Company and the
Representative.
9. TERMINATION. The obligations of the Initial Purchasers hereunder may be
terminated by the Representative, in its absolute discretion by notice given to
and received by the Company prior to delivery of and payment for the Firm Notes
if, prior to that time, any of the events described in Section 6(k) or 6(m)
hereof have occurred or if the Initial Purchasers shall decline to purchase the
Notes for any reason permitted under this Agreement.
10. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If (a) the Company shall fail
to tender the Notes for delivery to the Initial Purchasers for any reason not
permitted under this Agreement, (b) the Initial Purchasers shall decline to
purchase the Notes for any reason permitted under this Agreement or (c) this
Agreement shall have been terminated pursuant to Section 11 hereof, then the
Company shall reimburse the Initial Purchasers for the fees and expenses of
their counsel and for such other out-of-pocket expenses as shall have been
reasonably incurred by them in connection with this Agreement and the proposed
purchase of the Notes, and upon demand the Company shall
-30-
pay the full amount thereof to the Representative. If this Agreement is
terminated pursuant to Section 11 hereof by reason of the default of one or more
Initial Purchasers, the Company shall not be obligated to reimburse any
defaulting Initial Purchaser on account of those expenses.
11. SUBSTITUTION OF INITIAL PURCHASERS. If any Initial Purchaser or Initial
Purchasers shall default in its or their obligations to purchase the Notes
hereunder and the aggregate principal amount of Notes that such defaulting
Initial Purchaser or Initial Purchasers agreed but failed to purchase does not
exceed 10% of the total principal amount of Notes purchased, the other Initial
Purchasers shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Notes that such defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase. If any Initial
Purchaser or Initial Purchasers shall so default and the aggregate principal
amount of Notes with respect to which such default or defaults occur is more
than 10% of the total principal amount of Notes purchased and arrangements
satisfactory to the Representative and the Company for the purchase of such
Notes by other persons are not made within 48 hours after such default, this
Agreement shall terminate.
If the remaining Initial Purchasers or substituted Initial Purchasers are
required hereby or agree to take up all or part of the Notes of a defaulting
Initial Purchaser or Initial Purchasers as provided in this Section 11, (i) the
Company shall have the right to postpone the Closing Dates for a period of not
more than five full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Offering Circular, or in any other
documents or arrangements, and (ii) the respective principal amount of Notes to
be purchased by the remaining Initial Purchasers or substituted Initial
Purchasers shall be taken as the basis of their purchase obligation for all
purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Initial Purchaser of its liability to the Company or the other
Initial Purchasers for damages occasioned by its default hereunder. Any
termination of this Agreement pursuant to this Section 11 shall be without
liability on the part of any non-defaulting Initial Purchaser or the Company,
except expenses to be paid or reimbursed pursuant to Sections 5 and 10 hereof
and except the provisions of Section 7 hereof shall not terminate and shall
remain in effect.
12. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Initial Purchasers, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person, except that (a) the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement shall also be for the benefit of the Initial Purchaser
Indemnified Parties, and the indemnities of the several Initial Purchasers shall
also be for the benefit of the Company Indemnified Parties and (b) the holders
from time to time of the Notes and prospective purchasers of the Notes
designated by such holders shall be entitled to enforce the agreement for their
benefit contained in Section 4(i) hereof as if such holders and prospective
purchasers were parties to this Agreement. It is understood that each Initial
Purchaser's responsibility to the Company is solely contractual in nature and
the Initial Purchasers do not owe the Company, or any other party, any fiduciary
duty as a result of this Agreement.
-31-
13. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Initial Purchasers, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Initial Purchaser, the Company or any person controlling any of
them and shall survive delivery of and payment for the Notes.
14. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to SC Xxxxx & Co., LLC, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Managing
Director (Fax: 000-000-0000), with a copy to XX Xxxxx & Co., LLC at the
same address, Attention: General Counsel (Fax: 000-000-0000); and
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Evergreen Solar, Inc., 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx, Chief
Financial Officer, Vice President, Treasurer and Secretary (Fax:
000-000-0000).
15. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. INITIAL PURCHASERS INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the "Initial Purchasers Information"
consists solely of the following information in the Offering Circular: (i) the
last paragraph on the front cover page of the Offering Circular; and (ii) the
statements contained in the fourth paragraph concerning the Initial Purchasers
and in the fourth sentence of the seventh paragraph under the heading "Plan of
Distribution" in the Offering Circular.
18. AUTHORITY OF THE REPRESENTATIVE. In connection with this Agreement, you will
act for and on behalf of the several Initial Purchasers, and any action taken
under this Agreement by the Representative will be binding on all the Initial
Purchasers.
19. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
20. GENERAL. This Agreement, together with certain letters or other written
agreements between the Company and the Initial Purchasers as of the date hereof,
constitutes the entire agreement of the parties to this Agreement and supersedes
all prior written or oral and all contemporaneous oral
-32-
agreements, understandings and negotiations with respect to the subject matter
hereof. In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representative.
21. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
-33-
If the foregoing is in accordance with your understanding of the agreement
between the Company and the several Initial Purchasers, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
EVERGREEN SOLAR, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
Title: President & CEO
Accepted as of
the date first above written:
XX XXXXX & CO., LLC
Acting on its own behalf
and as Representative of the several
Initial Purchasers referred to in the
foregoing Agreement.
By: XX XXXXX & CO., LLC
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: Managing Director
-34-
SCHEDULE A
Aggregate Principal
Amount of Firm
Notes to
Name be Purchased
---- -------------------
XX Xxxxx & Co., LLC............................. $ 63,750,000
First Albany Capital Inc........................ $ 7,500,000
Xxxxxxxx Curhan Ford & Co....................... $ 3,750,000
-------------------
Total $ 75,000,000
===================
SCHEDULE B
The Representative shall have received the written agreements,
substantially in the form of Exhibit I to this Agreement, of the following
officers, directors and stockholders of the Company in accordance with Section
4(k) of this Agreement:
- Xxxxxxx X. Xxxxx;
- Xxxxxxx X. Xxxxxxxxx;
- Xx. Xxxx X. Xxxxxx;
- Dr. Xxxxx Xxxxxx;
- Xxxx X. Xxxxxx;
- Xx. Xxxxx X. Xxxxxxxx
- Xxxxxxx Xxxxxxxx;
- Xxxxxxx X. Xxxxxx;
- Xxxxxxx El-Hillow;
- Xxxxxxx X. XxXxxxxxx;
- Xx. Xxxxxx X. Xxxx, Xx.;
- Xx. Xxxxxxx X. Xxxxxxx;
- Xxxx Xxxxxxx;
- Nth Power Technologies Entities; and
- RockPort Capital Entities.
