UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 2, 2000
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TERA COMPUTER COMPANY
(Exact name of registrant as specified in its charter)
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Washington 0-26820 93-0962605
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
411 First Avenue South, Suite 600
Seattle, WA 98104-2860
(Address of principal executive offices)
Registrant's telephone number, including area code: (206) 701-2000
Registrant's facsimile number, including area code: (206) 701-2500
None
(Former name or former address, if changed since last report)
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Item 5. Other Events.
Private Placement
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On February 2, 2000, we raised $26,134,375, prior to fees and expenses
estimated at approximately $1,850,000, in a private placement of 5,226,875
shares of our Common Stock to 20 institutional and 8 individual accredited
investors. We sold the shares at a price of $5.00 per share. If, prior to the
date on which we file a registration statement covering the resale of these
shares by the investors, the average closing price of our Common Stock, as
reported on the NASDAQ National Market, is less than $5.00 per share over a
period of five consecutive trading days, then we will lower the effective
purchase price to $4.625 through the issuance of additional shares. Following
the completion of this private placement, as of February 2, 2000, we had issued
and outstanding 31,411,421 shares of Common Stock. We intend to file a
registration statement with the Securities and Exchange Commission in February
2000 covering the resale of the shares of Common Stock sold in this transaction.
These offers and sales were exempt from the registration provisions of the
Securities Act of 1933, as amended, under Sections 4(2) and 4(6) of the
Securities Act, and the rules and regulations under those provisions, because of
the nature of the offerees and investors and the manner in which we conducted
the offering
Item 7. Financial Statements and Exhibits.
(c) Exhibits
10.1 Form of Registration Rights Agreement, dated as of February 2,
2000, between the Company and the Investors.
10.2 Form of Purchase Agreement, dated as of January 21, 2000 between
the Company and the investors (the "Investors").
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TERA COMPUTER COMPANY
February 11, 2000 By: /s/ KENNETH W. JOHNSON
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Kenneth W. Johnson
Vice President - Finance
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of February 2, 2000 (this
"Agreement"), is made by and between TERA COMPUTER COMPANY, a Washington
corporation (the "Company"), and the party named on the signature page hereto
(the "Investor").
W I T N E S S E T H:
WHEREAS, in connection with the Purchase Agreement, dated as January 21,
2000, between the Investor and the Company (the "Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions of the Purchase
Agreement, to issue and sell to the Investor an aggregate of shares (the
"Shares") of Common Stock, $.01 par value (the "Common Stock"); and
WHEREAS, to induce the Investor to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Securities Act"), and applicable state securities laws with
respect to the Shares;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Purchase Agreement.
2. Mandatory Registration for Resale.
(a) The Company shall prepare and, on or before 30 days after the
Closing Date, file with the Securities and Exchange Commission ("SEC") a
Registration Statement on Form S-3 (or, if Form S-3 is not then available, on
such form of Registration Statement as is then available to effect the
registration for resale of the Shares) , which covers the resale by the Investor
of the Shares and the resale by all other Investors of their respective Shares,
and any other securities that are exchange for such Shares (collectively, the
"Registrable Securities").
(b) The Company meets the requirements for the use of Form S-3 for
registration of the Registrable Securities for resale by the Investor. The
Company believes
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that it may register all of the Registrable Securities under the Securities Act
on Form S-3. The Company shall file all reports required to be filed by the
Company with the SEC in a timely manner so as to maintain such eligibility for
the use of Form S-3.
3. Obligations of the Company. In connection with the registration of the
Registrable Securities pursuant to Section 2 hereof, as applicable, the Company
shall:
(a) use its best efforts to cause the Registration Statement required
to filed pursuant to Section 2(a) hereof to become effective as soon as possible
after such filing, and keep each Registration Statement effective pursuant to
Rule 415 at all times during the period from the Closing Date to the earliest of
(i) the date which is two years after the Closing Date, (ii) the date on which
the Investor may sell all of its Registrable Securities without registration
under the Securities Act pursuant to Rule 144, without restriction on the manner
of sale or the volume of securities which may be sold in any period and without
the requirement for the giving of any notice to, or the making of any filing
with, the SEC and (iii) the date on which the Investor no longer beneficially
owns any Registrable Securities (the "Registration Period"); submit to the SEC,
within five business days after the Company learns that no review of a
Registration Statement will be made by the staff of the SEC or that the staff of
the SEC has no further comments on the Registration Statement, as the case may
be, a request for acceleration of effectiveness of such Registration Statement
to a time and date not later than five business days after the submission of
such request; notify the Investors of the effectiveness of such Registration
Statement on the date that the Company is advised by the SEC that the
Registration Statement has been declared effective; and the Company represents
and warrants to, and covenants and agrees with, the Investors that the
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein), at the time it is first filed with the SEC, at
the time it is ordered effective by the SEC and at all times during which it is
required to be effective hereunder (and each such amendment and supplement at
the time it is filed with the SEC and at all times during which it is available
for use in connection with the offer and sale of the Registrable Securities)
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection
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with the Registration Statement as may be necessary to keep such Registration
Statement effective at all times during the Registration Period;
(c) furnish to the Investor (i) upon request after the same is
prepared and publicly distributed, filed with the SEC or received by the
Company, one copy of the Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or supplement thereto,
each letter written by or on behalf of the Company to the SEC or the staff of
the SEC and each item of written correspondence from the SEC or the staff of the
SEC relating to such Registration Statement (other than any portion of any
thereof that contains information for which the Company has sought confidential
treatment) and (ii) such number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;
(d) use reasonable efforts to (i) register and qualify the Registrable
Securities covered by the Registration Statement under such securities or blue
sky laws of such jurisdictions as the Investor reasonably requests, (ii) prepare
and file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof at all times during the
Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto (I) to qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (II) to subject itself to general taxation in any such
jurisdiction, (III) to file a general consent to service of process in any such
jurisdiction, (IV) to provide any undertakings that cause more than nominal
expense or burden to the Company or (V) to make any change in its articles of
incorporation or by-laws, which in each case the Board of Directors of the
Company determines to be contrary to the best interests of the Company and its
shareholders;
(e) as promptly as practicable after becoming aware of such event or
circumstance, notify each Investor of any event or circumstance of which the
Company has knowledge, as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a
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material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement to correct such untrue statement or
omission, file such supplement or amendment with the SEC at such time as shall
permit the Investors to sell Registrable Securities as promptly as practicable,
and deliver a number of copies of such supplement or amendment to each Investor
as such Investor may reasonably request. If such event is the conduct of
negotiations with respect to a transaction, the disclosure of which the Company
reasonably concludes would be detrimental to the Company (each, a "Negotiation
Event"), the Company shall be entitled, upon giving notice of a Negotiation
Event to each holder (the "Negotiation Notice") and upon the reasonable
determination of the Company, after consulting with counsel, that failure to
disclose the Negotiation Event would constitute an omission to state a material
fact required to be stated in the Registration Statement, to require the
Investor to suspend sales of the Common Stock pursuant to the Registration
Statement for a period of up to fifteen (15) days after the giving of the
Negotiation Notice; provided, however, that the Company shall not give more than
two (2) Negotiation Notices in any twelve-month period; and provided further
that, after the expiration of such fifteen (15) period, the Company hall take
all steps necessary to end such required suspension of sales, including by
filing an amendment or supplement to the Registration Statement;
(f) as promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold of the issuance
by the SEC of any stop order or other suspension of effectiveness of the
Registration Statement at the earliest possible time;
(g) make available for inspection by the Investor and its counsel or
other agents retained by any such Investor (collectively, the "Inspectors"), all
pertinent financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records"), as shall be reasonably
necessary to enable the Investor to exercise its due diligence responsibility,
and cause the Company's officers, directors and employees to supply all
information that any Inspector reasonably may request for purposes of such due
diligence; provided, however, that each Inspector shall hold in confidence and
shall not make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (i) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement, (ii) the release of such Records is ordered pursuant
to a subpoena or other
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order from a court or government body of competent jurisdiction or (iii) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential information in such
Records to any Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the Company)
with the Company with respect thereto, substantially in the form of this Section
3(g). The Investor agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at the Company's own expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential;
(h) use its best efforts to cause all the Registrable Securities
covered by the Registration Statement to be listed on Nasdaq or such other
principal securities market on which securities of the same class or series
issued by the Company are then listed or traded;
(i) if the Investor is deemed to be an underwriter under the
Securities Act, the Company shall, upon written request by the Investor, furnish
the Investor on the date of effectiveness of the Registration Statement (a) an
opinion, dated of such applicable date, from counsel representing the Company
addressed to the Investor and in form, scope and substance as is customarily
given in an underwritten public offering, and (b) a letter, dated as of such
applicable date, from the Company's independent certified public accountants
addressed to the Investor and in form, scope and substance as customarily given
to underwriters in an underwritten public offering;
(j) hold in confidence and not make any disclosure of any information
provided by the Investor to the Company and designated by the Investor as its
confidential information unless (i) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (ii) the release of such information is ordered pursuant to a
subpoena or other order from a court or government body of competent
jurisdiction or (iii) the information has been made generally available to the
public other than by disclosure in violation of this Agreement;
(k) take all other actions necessary to comply with federal and any
applicable state securities laws in connection with the obligations of the
Company under this Agreement; and
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(l) take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement.
4. Obligations of the Investor. In connection with the registration of the
Registrable Securities, the Investor shall have the following obligations:
(a) It is a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that the Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least six (6) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify the Investor of the information the Company requires from the
Investor (the "Requested Information") if any of such Investor's Registrable
Securities are eligible for inclusion in the Registration Statement. If at least
one business day prior to the filing date the Company has not received the
Requested Information from the Investor (a "Non-Responsive Investor"), then the
Company may file the Registration Statement without including Registrable
Securities of such Non-Responsive Investor but shall not be relieved of its
obligation to file a Registration Statement with the SEC relating to the
Registrable Securities of such Non- Responsive Investor promptly after such
Non-Responsive Investor provides the Requested Information;
(b) The Investor by such Investor's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested thereby
in connection with the preparation and filing of the Registration Statement
hereunder, unless the Investor has notified the Company in writing of the
Investor's election to exclude all of its Registrable Securities from the
Registration Statement;
(c) The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e) or
3(f), the Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until theInvestor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(e) or 3(f) and, if so directed by
the Company, the Investor shall deliver to the Company (at
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the expense of the Company) or destroy (and deliver to the Company a certificate
of destruction) all copies in the Investor's possession of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice, except that each Investor may retain one copy of such prospectus solely
for its files; and
(d) The Investor agrees that it will not effect any disposition of the
Registrable Securities except as contemplated in the Registration Statement or
as is otherwise in compliance with applicable securities laws and that it will
promptly notify the Company of any material change in the information set forth
in the Registration Statement regarding such Investor's plan of distribution.
The Investor agrees (a) to notify the Company in writing in the event that such
Investor enters into any material agreement with a broker or a dealer for the
sale of the Registrable Securities through a block trade, special offering or
exchange distribution and (b) in connection with such agreement, to provide to
the Company in writing the information necessary to enable the Company to
prepare, at the Company's sole cost and expense, any supplemental prospectus
pursuant to Rule 424(c) under the Securities Act which is required with respect
to such transaction. In connection with any sale of Registrable Securities which
is made pursuant to the Registration Statement, the Investor shall comply with
the prospectus delivery requirements of the Securities Act.
5. Expenses of Registration. All reasonable expenses incurred in effecting
any registration pursuant to this Agreement, including, without limitation, all
registration, listing, qualification, and filing fees, printing and accounting
expenses, fees and disbursements of counsel for the Company, shall be borne by
the Company; provided, however, that the Investor shall pay all brokerage and
selling commissions and associated costs pertaining to the sale of its
Registrable Securities.
6. Indemnification. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Investor and its directors, officers, members, employees,
partners, agents and each person who controls the Investor within the meaning of
the Securities Act or the Exchange Act (each, an "Indemnified Person"), against
any losses, claims, damages, liabilities or expenses (joint or several) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect
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thereof) arise out of or are based upon any of the following statements,
omissions or violations in the Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof or 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, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to the restrictions
set forth in Section 6(c) with respect to the number of legal counsel, the
Company shall reimburse the Indemnified Persons promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (I) shall not apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement, the prospectus or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (II) with respect to any preliminary prospectus
shall not inure to the benefit of any such person from whom the person asserting
any such Claim purchased the Registrable Securities that are the subject thereof
(or to the benefit of any person controlling such person) if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected in the prospectus, as then amended or supplemented, if such
prospectus was timely made available by the Company pursuant to Section 3(c)
hereof; and (III) shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full force and effect regardless of any
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investigation made by or on behalf of the Indemnified Person.
(b) In connection with any Registration Statement in which the
Investor is participating, the Investor agrees to defend, indemnify and hold
harmless, to the same extent and in the same manner set forth in Section 6(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, any other shareholder selling
securities pursuant to the Registration Statement or any of its directors or
officers or any person who controls such shareholder within the meaning of the
Securities Act or the Exchange Act (collectively and together with an
Indemnified Person, an "Indemnified Party"), against any Claim to which any of
them may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such Registration
Statement; and such Investor will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(b) with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented. The obligation of the Investor
under this Section 6(b) shall not exceed the purchase price paid by the Investor
for the Registrable Securities.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel selected by the indemnifying party
but reasonably acceptable to the
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Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. In such event, the Company shall pay for only one separate legal
counsel for the Investors; such legal counsel shall be selected by the Investors
holding a majority in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. Contribution. To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the amount by which the net amount of proceeds received by such seller from
the sale of such Registrable Securities exceeds the purchase price paid by such
seller for such Registrable Securities.
8. Reports under Exchange Act. With a view to making available to the
Investors the benefits of Rule 144, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
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(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company and
(iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration.
9. Assignment of Registration Rights. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investor to any transferee who (1) holds, or upon
such assignment will hold, at least twenty percent (20%) of the Registrable
Securities or (2) is an affiliate of such Investor, provided in the case of (1)
and (2), (a) the Investor agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment; (b) the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice
of (i) the name and address of such transferee or assignee and (ii) the
securities with respect to which such registration rights are being transferred
or assigned; (c) immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is restricted under
the securities act and applicable state securities laws; (d) at or before the
time the Company received the written notice contemplated by clause (b) of this
sentence, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein; (e) such transfer shall have
been made in accordance with the applicable provisions of the Purchase
Agreement; (f) such transferee shall be an "accredited investor" as that term is
defined in Rule 501 of Regulation D under the Securities Act but shall not be a
broker-dealer or a member of the National Association of Securities Dealers,
Inc.; and (g) in the event the assignment occurs subsequent to the date of
effectiveness of the Registration Statement required to be filed pursuant to
Section 2(a), such assignee or transferee agrees to pay all reasonable expenses
of amending or supplementing such Registration Statement to reflect such
assignment. In connection with any such transfer the Company shall promptly
after such assignment take such actions as shall be reasonable required for the
Registration Statement and related prospectus to be available for use by such
transferee for sales of the Registrable Securities in
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respect of which the rights to registration have been assigned.
10. Amendment of Registration Rights. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon the Investor
and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
(by hand or courier) or delivered by facsimile: (i) if to the Company, at Tera
Computer Company, 411 First Avenue South, Suite 600, Seattle, Washington
98104-2860, Attention: Chief Executive Officer, facsimile No. (206) 701-2218,
with a copy to Stoel Rives LLP, One Union Square, 36th Floor, Seattle,
Washington 98101, Attention: Christopher J. Voss, facsimile no. (206) 386-7500;
and (ii) if to the Investor at its addresses set forth on the Purchase
Agreement; or at such other address as each such party furnishes by notice given
in accordance with this Section 11(b), and shall be effective, when personally
delivered, upon receipt, and when sent by facsimile, upon receipt of
confirmation of successful transmission.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of Washington applicable to agreements
made and to be performed entirely within such State. In the event that any
provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid
or unenforceable under any law shall not
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affect the validity or enforceability of any other provision hereof.
(e) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
(f) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(i) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective officers thereunto duly authorized as of day and year first
above written.
TERA COMPUTER COMPANY
By /s/ James E. Rottsolk
-----------------------------------------
Name: James E. Rottsolk
Title: President and CEO
INVESTOR
Name:
-----------------------------------
By:
--------------------------------
Title:
-----------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Telephone:
------------------------------
Facsimile:
------------------------------
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Schedule to Exhibit 10.1
Schedule of Parties to Registration Rights Agreement
Banca del Gottardo
Castle Creek Technology Partners LLC
William David Corbett
Cranshire Capital, L.P.
EDJ Limited
Jack E. Erlanger
Harpel Family Partnership
Harpel International, L.P.
Harpel Partners, L.P.
Harpel Select Growth, L.P.
Headwater Holdings, LLC
William Hott
JMG Capital Partners, L.P.
JMG Triton Offshore Fund Ltd.
Ivan Lieberburg
Christopher A. Marlett Living Trust
MDB Capital Group, LLC
Montrose Investments Ltd.
Nob Hill Capital Associates, L.P.
Nob Hill Capital Partners, L.P.
Timothy R. Pask
Raymond Scott
Gary J. Shemano aka The Shemano Group Investment Account
David Stefansky
Strong River Investments
Trans-Union Group, Inc.
Viviana Partners, L.P.
Von Graffenried AG Privatbank
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of January 21, 2000, is by and between TERA
COMPUTER COMPANY, a Washington corporation, with headquarters located at 411
First Avenue South, Suite 600, Seattle, WA 98104-2860 (the "Company"), and the
party identified on the signature page of this Agreement (the "Investor").
W I T N E S S E T H:
WHEREAS, the Company and the Investor are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 of Regulation D as promulgated by the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, upon the terms and subject to the conditions of this Agreement, or
an agreement substantially similar to this Agreement, the Investor and certain
other parties (collectively, the "Investors") wish to purchase shares of the
common stock, $.01 par value, of the Company (the "Common Stock");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; CLOSING
(a) Subscription for Shares. The Investor hereby agrees to purchase
from the Company, and the Company hereby agrees to issue and sell to the
Investor, the number of shares of Common Stock (the "Shares") set forth on the
signature page hereof by such Investor's name. The purchase price per share
shall be equal to $5.00, subject to adjustment as set forth below (the "Purchase
Price").
If prior to the date the Company files the Registration Statement pursuant
to Section 2(a) of the Registration Rights Agreement the average closing price
of the Company's Common Stock, as reported on Nasdaq, is less than $5.00 per
share over a period of five consecutive trading days, then the effective
Purchase Price under this Agreement shall be lowered to $4.625. In such event,
the Company promptly shall issue additional shares of Common Stock to the
Investor determined by dividing the Investor's aggregate Purchase Price by
$4.625 per share, less the number of shares of Common Stock issued to the
Investor on the Closing Date.
<PAGE>
(b) Form and Method of Payment. The Investor shall pay the Purchase
Price for the number of Shares purchased hereby directly to the Company in
United States Dollars by certified or bank check or wire transfer to an account
designated by the Company against issuance to such Investor of the Shares. The
Company shall deliver the certificates for the Shares directly to each Investor,
against payment of the Purchase Price for the Shares to the Company on the
Closing Date.
(c) Closing. The date and time of the issuance and sale of the Shares
shall be at 10:00 a.m., Seattle Time, on January 24, 2000, at the offices of
Company's counsel in Seattle, Washington, or at such other mutually agreed date,
time and place (the "Closing Date").
(d) The Company's Conditions Precedent to Sale and Issuance of the
Shares. The Investor understands that the Company's obligation to sell and issue
the Shares on the Closing Date is conditioned upon:
(i) Delivery by any or all of the Investors to the Company of
good funds as payment in full for such number of shares of Common Stock as have
an aggregate Purchase Price of not less than $15,000,000;
(ii)The execution and delivery by the Investor of the
Registration Rights Agreement substantially in the form of Appendix I hereto
(the "Registration Rights Agreement"); and
(iii) The accuracy on the Closing Date of the representations and
warranties of the Investor contained in this Agreement as if made on the Closing
Date and the performance by the Investor on or before the Closing Date of all
covenants and agreements of the Investor required to be performed on or before
the Closing Date.
(e) The Investor's Conditions Precedent to the Sale and Issuance of
the Shares. The Company understands that the Investor's obligations to purchase
the Shares on the Closing Date is conditioned upon:
(i) Delivery by the Company to the Investor of the certificates
for the Shares in accordance with this Agreement;
(ii) Delivery by any or all of the Investors to the Company of
good funds as payment in full for such number of shares of Common Stock as have
an aggregate Purchase Price of not less than $15,000,000, including the Shares
to be purchased by the Investor under this Agreement;
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(iii) The execution and delivery by the Company of the
Registration Rights Agreement;
(iv) The accuracy on the Closing Date of the representations and
warranties of the Company contained in this Agreement as if made on the Closing
Date and the performance by the Company on or before the Closing Date of all
covenants and agreements of the Company required to be performed on or before
the Closing Date and receipt by the Investor of a certificate, dated the Closing
Date, of the Chief Executive Officer or the Chief Financial Officer of the
Company confirming such matters and such other matters as the Investor may
reasonably request; and
(v) Receipt by the Investors on the Closing Date of an opinion of
the counsel for the Company, dated the Closing Date, in form, scope and
substance reasonably satisfactory to the Investor, to the effect set forth in
Annex II.
2. INVESTOR'S REPRESENTATIONS AND WARRANTIES
The Investor represents and warrants to, and covenants and agrees with, the
Company as follows:
(a) Purchase for Investment. The Investor is purchasing the Shares for
its own account for investment only and not with a view towards the public sale
or distribution thereof except for sales that are exempt form the registration
requirements of the 1933 Act and/or resales registered under the 1933 Act. The
Investor understands that its investment in the Shares involves a high degree of
risk.
(b) Accredited Investor. The Investor is an "accredited investor" as
that term is defined in Rule 501 of Regulation D under the 1933 Act.
(c) Reoffers and Resales. All subsequent offers and sales of the
Shares by the Investor shall be made pursuant to registration of the Shares
being offered and sold under the 1933 Act or pursuant to an exemption from
registration.
(d) Company Reliance. The Investor understands that the Shares are
being offered to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and the Investor's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of the Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of the Investor to acquire
the Shares.
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(e) Information Provided. The Investor and its advisors, if any, have
been furnished with all materials relating to the business, finances, and
operations of the Company and materials relating to the offer and sale of the
Shares that have been reasonably requested by the Investor. The Investor and its
advisors, if any, have been afforded the opportunity to ask questions of the
management of the Company and have received complete and satisfactory answers to
any such inquiries.
(f) Absence of Approvals. The Investor understands that no federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Shares.
(g) Purchase Agreement. This Agreement has been duly and validly
authorized, executed, and delivered on behalf of the Investor and is a valid and
binding agreement of the Investor enforceable in accordance with its terms,
subject to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally.
3. COMPANY'S REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to, and covenants and agrees with, the
Investor that:
(a) Organization and Authority. The Company is a corporation duly
organized and validly existing under the laws of the State of Washington, and
has all requisite corporate power and authority (i) to own, lease, and operate
its properties and to carry on its business as now being conducted, and (ii) to
execute, deliver, and perform its obligations under this Agreement and the
Registration Rights Agreement, and to consummate the transactions contemplated
hereby and thereby. The Company is duly qualified to do business as a foreign
corporation and is in good standing in all jurisdictions wherein such
qualification is necessary and where failure so to qualify could have a material
adverse effect on the business, properties, operations, condition (financial or
other), results of operations or prospects of the Company. The Company has no
subsidiaries.
(b) Capitalization. The authorized capital stock of the Company
consists of (i) 50,000,000 shares of Common Stock, $.01 par value, and (ii)
5,000,000 shares of Preferred Stock, $.01 par value. The Company's outstanding
securities are as set forth in Schedule 3(b). The Company does not have
outstanding any material amount of securities (or obligations to issue any such
securities) convertible into, exchangeable for or otherwise entitling the
holders
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thereof to acquire shares of Common Stock, except as disclosed in the Disclosure
Documents, in this Agreement or in Schedule 3(b) hereof. The outstanding shares
of Common Stock and outstanding options, warrants, and other securities to
purchase Common Stock have been duly authorized and validly issued. None of such
outstanding shares of Common Stock, options, warrants, and other securities has
been issued in violation of the preemptive rights of any security holder of the
Company.
(c) Concerning the Shares. The Shares have been duly authorized and
the Shares, when issued and paid for in accordance with this Agreement, will be
duly and validly issued, fully paid, non-assessable and free from liens, and
will not subject the holder thereof to personal liability by reason of being
such holder. There are no preemptive or similar rights of any security holder of
the Company or any other person to acquire any securities of the Company. The
Common Stock currently is listed for trading on the Nasdaq National Market
System ("Nasdaq") and, except as set forth in Schedule 3(c), (i) the Company and
the Common Stock meet the currently applicable criteria for continued listing
and trading on Nasdaq; (ii) the Company has not been notified in the last two
years by Nasdaq of any failure or potential failure to meet the criteria for
continued listing and trading on Nasdaq; (iii) no suspension of trading in the
Common Stock is in effect; (iv) the Company knows of no reason that the Common
Stock will not be eligible for listing on Nasdaq; and (v) the Company has
delivered to Nasdaq all required notices.
(d) Purchase Agreement; Registration Rights Agreement. This Agreement
and the Registration Rights Agreement have been duly and validly authorized by
the Company. This Agreement has been duly executed and delivered on behalf of
the Company and this Agreement is, and the Registration Rights Agreement, when
executed and delivered by the Company, will be, valid and binding obligations of
the Company enforceable in accordance with their respective terms, subject to
general principles of equity and to bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and limits
upon rights to indemnity.
(e) Non-Contravention. The execution and delivery of this Agreement by
the Company and the issuance by the Company of the Shares as contemplated by
this Agreement and the completion of the other transactions contemplated in this
Agreement and the Registration Rights Agreement, do not and will not conflict
with or result in a breach by the Company of any of the terms or provisions of,
or constitute a default under, the Restated and Amended Articles of
Incorporation or Bylaws of the Company, or any indenture, mortgage, deed of
trust or other material
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agreement or instrument to which the Company is a party or by which it or any of
its properties or assets are bound which would have a material adverse effect on
the Company, or any applicable law, rule or regulation or any applicable decree,
judgment or order of any court, United States federal or state regulatory body,
administrative agency or other governmental body having jurisdiction over the
Company or any of its properties or assets which would have a material adverse
effect on the Company.
(f) Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency or Nasdaq is required to be obtained by the
Company for the issuance and sale of the Shares, as contemplated by this
Agreement, except for the filing of one or more Forms D with respect to the
Shares as required under Regulation D under the 1933 Act and Listing
Applications on Nasdaq.
(g) Information Provided. The Company has made available to the
Investors copies of all periodic reports, statements and other documents that
the Company has filed with the SEC under the Securities Exchange Act of 1934
(the "1934 Act") since January 1, 1999 (collectively, the "Disclosure
Documents"), each in the form (including exhibits and any amendments thereto)
required to be filed with the SEC. All information provided by or on behalf of
the Company to the Investor in connection with the transactions contemplated by
the Agreement, including, without limitation, the Disclosure Documents, does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading. The Company has publicly
disclosed all material adverse information concerning the Company.
(h) Absence of Certain Changes. Except as disclosed in the Disclosure
Documents, since September 30, 1999, there has been no material adverse change
and no material adverse development in the business, properties, operations,
condition (financial or other), results of operations or prospects of the
Company, and the Company has no material (individually or in the aggregate)
liabilities, debts or obligations whether accrued, absolute, contingent or
otherwise, and whether due or to become due.
(i) Absence of Certain Proceedings. There is no action, suit or
proceeding, before or by any court, public board or body or governmental agency
pending or, to the knowledge of the Company, threatened against the Company and,
to the knowledge of the Company, there is no inquiry or investigation before or
by any court, public board or body or governmental agency pending or threatened
against the Company, in any such case wherein an unfavorable decision,
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ruling or finding would have a material adverse effect on the properties,
business, condition (financial or other), results of operations or prospects of
the Company or the transactions contemplated by this Agreement or any of the
documents contemplated hereby or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of such other documents.
(j) SEC Filings. The Company has timely filed all required forms,
reports and other documents with the SEC. Except as set forth on Schedule 3(j),
all such forms, reports and other documents complied, when filed, in all
material respects, with all applicable requirements of the 1933 Act and the 1934
Act.
(k) No Solicitation. No form of general solicitation or general
advertising was used by the Company or, to the best of its knowledge, any other
person acting on behalf of the Company, in respect of or in connection with the
offer and sale of the Shares. Neither the Company nor any person authorized to
act on its behalf has sold or offered for sale any shares of Common Stock, or
solicited any offers to buy any shares of Common Stock so as thereby to cause
the issuance or sale of the Shares to be in violation of Section 5 of the 1933
Act. The transactions contemplated hereby are exempt from the registration
requirements of the 1933 Act, assuming the accuracy of the representations and
warranties of each of the Investors to the extent relevant for such
determination.
(l) Financial Statements; Contracts. The financial statements of the
Company included in the Disclosure Documents were prepared in accordance with
U.S. generally accepted accounting principles, consistently applied, and the
rules and regulations of the SEC during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto or in a
subsequently filed Disclosure Document, (ii) in the case of unaudited interim
statements, to the extent they do not include footnotes or are condensed or
summary statements, or (iii) as set forth in Schedule 3(j)) and present
accurately and completely the financial position of the Company as of the dates
thereof and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, immaterial year-end
audit adjustments). The Disclosure Documents contain as exhibits all materials
contracts that were required to be filed as exhibits thereto by applicable SEC
regulations (each a "Contract"). Neither the Company nor, to the best knowledge
of the Company, any of the parties thereto, is in breach or violation of any
Contract, which breach or violations relates to indebtedness for borrowed money
or would have a material adverse effect on the Company's
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operations, taken as a whole ("Material Adverse Effect"). No event, occurrence
or condition exists which, with the lapse of time, the giving of notice, or
both, or the happening of any further event or condition, would become a breach
or default by the Company under any Contract which breach or default would have
a Material Adverse Effect.
(m) Intellectual Property. The Company owns or possesses adequate and
enforceable rights to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) and other similar rights and proprietary knowledge (collectively,
"Intangibles") used or necessary for the conduct of its business as now being
conducted and described in the Disclosure Documents. The Company, to the best of
its knowledge, does not infringe any right of any other person with respect to
any Intangibles nor is there any claim of infringement made by a third party
against or involving the Company which infringement or claim, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Advese Effect.
(n) Certain Practices. Neither the Company, nor any director, officer
and, to the best knowledge of the Company, any agent, employee or other person
acting on behalf of the Company has, in the course of his or her actions for, or
on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977,
as amended; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee. Without limited the generality of the foregoing, the Company has not
directly or indirectly made or agreed to make (whether or not said payment is
lawful) any payment to obtain, or with respect to, sales other than usual and
regular compensation to its or their employees and sales representatives with
respect to such sales.
(o) Key Employees. Each Key Employee (as defined below) is currently
serving the Company in the capacity disclosed in Section 3(o). No Key Employee,
to the best of the knowledge of the Company is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each Key Employee does not
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subject the Company to any liability with respect to any of the foregoing
matters. No Key Employee has, to the best of the knowledge of the Company, any
intention to terminate or limit his or her employment with, or services to, the
Company, nor is any such Key Employee subject to any constraints which would
cause such employee to be unable to devote his or her full time and attention to
such employee or services. The term "Key Employee" means each of: Burton J.
Smith, James E. Rottsolk, Charles D. Callahan, Susan L. Coatney, Kenneth W.
Johnson, Brian D. Koblenz, Gerald E. Loe, Katherine L. Rowe and Richard M.
Russell.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS
(a) Transfer Restrictions. The Investor acknowledges that (i) except
as provided in the Registration Rights Agreement, the Shares have not been and
are not being registered under the 1933 Act, and may not be transferred unless
(i) subsequently registered thereunder; (ii) such Investor shall have delivered
to the Company an opinion of counsel, reasonably satisfactory in form, scope,
and substance to the Company, to the effect that the Shares to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration other than Rule 144 under the 1933 Act; or (iii) in compliance with
Rule 144 under the 1933 Act. In addition, the Investor acknowledges that neither
the Company nor any other person is under any obligation to register the Shares
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder (other than
pursuant to Section 4(d) hereof and pursuant to the Registration Rights
Agreement).
(b) Restrictive Legend. The Investor acknowledges and agrees that,
until such time as any of the Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the certificates for the such
Shares shall bear a restrictive legend in substantially the following form (and
a stop-transfer order may be placed against transfer of the certificates for
such Shares):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SHARES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.
Once the applicable Registration Statement required to be filed by the Company
pursuant to Section 2 of the Registration Rights Agreement has been declared
effective,
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thereafter (i) upon request of the Investor the Company will substitute
certificates without the above-referenced legend for certificates for any Shares
issued prior to the date such Registration Statement is declared effective by
the SEC which bear such legend and promptly remove any stop-transfer restriction
relating to such Shares, but in no event later than three business days after
surrender of such certificates by the Investor, and (ii) the Company shall not
place any restrictive legend on certificates for any Shares issued or impose any
stop-transfer restriction thereon.
(c) Form D. The Company agrees to file a Form D with the SEC with
respect to the Shares as required under Regulation D promulgated under the 1933
Act and, upon request, to provide a copy thereof to the Investor. Each Investor
agrees to cooperate with the Company in connection with such filing and, upon
request of the Company, to provide all information relating to such Investor
reasonably required for such filing.
(d) Registration; Authorization for Trading; Reporting Status. On or
before the date that is 30 days after the Closing Date, the Company shall
prepare and file, at its expense, a Registration Statement on Form S-3 with the
SEC pursuant to the Registration Rights Agreement and a listing application with
Nasdaq with respect to the Shares. From the Closing Date until such time as the
Registration Statement is no longer required to be in effect, the Company shall
file all reports required to be filed with the SEC pursuant to Section 13 or
15(d) of the 1934 Act and the Company shall not terminate its status as an
issuer required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would permit such termination. The Company
shall take all reasonable steps within the control of the Company to maintain
the listing of the Common Stock on Nasdaq.
(e) Use of Proceeds. The proceeds of sale of the Shares will be used
for general working capital purposes and in the operation of the Company's
business. Neither the Company nor any agent acting on its behalf has taken or
will take any action which might cause this Agreement or the transactions
contemplated hereby to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the 1934 Act, in each case as in effect now or as the same may hereafter be in
effect.
(f) Blue Sky Laws. On or before the Closing Date, the Company shall
take such action as shall be necessary to qualify, or to obtain an exemption
from qualification for, the Shares for sale to the Investor pursuant to this
Agreement under such of the Shares or "blue sky" laws of jurisdictions as shall
be applicable
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to the offer and sale of the Shares pursuant to this Agreement. The Company
shall furnish copies of all filings, applications, orders, and grants or
confirmations of exemptions relating to such Shares or "blue sky" laws to the
Investors within five days of filing or receipt thereof, as the case may be.
(g) Best Efforts. Each of the parties shall use its best efforts
timely to satisfy each of the conditions to the other party's obligations to
sell and purchase the Shares on the Closing Date.
(h) Brokers' or Finders' Fees. Each party agrees to indemnify and hold
the other parties harmless from and against any obligation or liability for
brokers' or finders' fees or agents' commissions or other like payment based in
any way on agreements, arrangements or understandings claimed to have been made
by such indemnifying party with any third party.
(i) Expenses. The Company agrees to pay the reasonable and documented
fees and expenses of counsel for the Investor in connection with the
negotiation, preparation, execution and delivery of this Agreement and other
Registration Rights Agreement.
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5. MISCELLANEOUS
(a) Governing Law. This Agreement shall be governed by and interpreted
in accordance with the internal laws of the State of Washington.
(b) Counterparts. This Agreement may be executed in counterparts and
by the parties hereto on separate counterparts, all of which together shall
constitute one and the same instrument. A facsimile copy of this Agreement
bearing a signature on behalf of a party hereto shall be legal and binding on
such party.
(c) Headings, etc. The headings, captions and footers of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
(e) Amendments. No amendment, modification, waiver, discharge or
termination of any provision of this Agreement nor consent to any departure by
the Investor or the Company therefrom shall in any event be effective unless the
same shall be in writing and signed by the party to be charged with enforcement,
and then shall be effective only in the specific instance and for the purpose
for which given. No course of dealing between the parties hereto shall operate
as an amendment of this Agreement.
(f) Waivers. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, or any course of dealings between the parties, shall not operate as a
waiver thereof or an amendment hereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
exercise of any other right or power.
(g) Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be delivered personally (which shall include
telephone line facsimile transmission) or by courier and shall be effective upon
receipt (or on the next business day, if the date of such receipt is not a
business day), if delivered personally or by courier, in the case of the Company
addressed to the Company at its address shown in the introductory paragraph
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of this Agreement, Attention: Chief Financial Officer (facsimile number (206)
701-2218), with a copy to Stoel Rives LLP, Suite 3600, One Union Square, 600
University Street, Seattle, WA 98101, Attn: Christopher J. Voss, Esq. (facsimile
number (206) 386-7500) or, in the case of each Investor, at its address shown on
the signature page of this Agreement, or such other address or telephone line
facsimile transmission number as a party shall have provided by notice to the
other party in accordance with this provision.
(h) Survival. The respective representations, warranties, covenants,
and agreements of the Investor and the Company contained in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
survive the delivery of and payment for the Shares, and shall remain in full
force and effect regardless of any investigation made by or on behalf of them or
any person controlling or advising any of them.
(i) Entire Agreement. This Agreement and the annexes and schedules
attached hereto set forth the entire agreement between the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, whether written or oral, with respect thereto.
(j) Termination. The Company and Investor shall have the right to
terminate this Agreement if the Closing Date shall not have occurred on or
before January 28, 2000, other than solely by reason of a breach of this
Agreement by the terminating party. Any such termination shall be effective upon
the giving of notice thereof by the Company or the Investor, as applicable. Upon
such termination, the terminating party shall have no further obligation to the
other party hereunder and the other party shall remain liable for any breach of
this Agreement or the other documents contemplated hereby which occurred on or
prior to the date of such termination.
(k) Further Assurances. Each party to this Agreement will perform any
and all acts and execute any and all documents as may be necessary and proper
under the circumstances in order to accomplish the intents and purposes of this
Agreement and to carry out its provisions.
(l) Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
(m) Failure to Pay. The failure to pay any amounts due under this
Agreement or the Registration Rights Agreement when they come due shall result
in the imposition of interest on such amounts at a rate equal to the lesser of
13
<PAGE>
(i) 18% per annum and (ii) the highest amount permitted by law.
(n) Remedies; Characterization. The remedies provided in this
Agreement shall be cumulative and in addition to all other remedies available
under this Agreement, at law or in equity (including a decree of specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy and
nothing herein shall limit a party's right to actual damages for any failure by
the other party to comply with the terms of this Agreement. The parties covenant
to each other that there shall be no characterization concerning this Agreement
other than as expressly provided herein. Each party acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the other
party and that the remedy at law for any such breach may be inadequate. Each
party therefore agrees that, in the event of any such breach or threatened
breach, the other party shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being required.
(o) Binding Nature. This Agreement shall be binding up and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement shall be construed so as to confer any
benefit on any person other than the parties hereto and their respective
successors and permitted assigns.
14
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by the Investor
and the Company by their respective officers thereunto duly authorized as of the
date set forth above.
TERA COMPUTER COMPANY
By /s/ JAMES E. ROTTSOLK
-----------------------------------------
Name: James E. Rottsolk
Title: President and CEO
INVESTOR
Name:
-----------------------------------
By:
--------------------------------
Title:
-----------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Telephone:
------------------------------
Facsimile:
------------------------------
Federal Tax ID No.:
--------------------
No. of Shares:
-------------------------
15
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Schedule to Exhibit 10.2
Schedule to Parties to Purchase Agreement
Banca del Gottardo
Castle Creek Technology Partners LLC
William David Corbett
Cranshire Capital, L.P.
EDJ Limited
Jack E. Erlanger
Harpel Family Partnership
Harpel International, L.P.
Harpel Partners, L.P.
Harpel Select Growth, L.P.
Headwater Holdings, LLC
William Hott
JMG Capital Partners, L.P.
JMG Triton Offshore Fund Ltd.
Ivan Lieberburg
Christopher A. Marlett Living Trust
MDB Capital Group, LLC
Montrose Investments Ltd.
Nob Hill Capital Associates, L.P.
Nob Hill Capital Partners, L.P.
Timothy R. Pask
Raymond Scott
Gary J. Shemano aka The Shemano Group Investment Account
David Stefansky
Strong River Investments
Trans-Union Group, Inc.
Viviana Partners, L.P.
Von Graffenried AG Privatbank
