PURCHASE AGREEMENT

 

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                                                                   EXHIBIT 10.24

 

                                                                  Execution Copy

 

                              EVERGREEN SOLAR, INC.

 

                 4.375% CONVERTIBLE SUBORDINATED NOTES DUE 2012

 

                               PURCHASE AGREEMENT

 

                                                                   June 23, 2005

 

SG COWEN & CO., LLC

   As Representative of the several Initial Purchasers

c/o    SG Cowen & Co., LLC

      1221 Avenue of the Americas

      New York, New York 10020

 

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"). SG

Cowen & 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

 

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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-

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      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-

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      (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-

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      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-

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      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 mark

      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-

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      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-

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      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-

<PAGE>

 

      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-

<PAGE>

 

      (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-

<PAGE>

 

      (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

      Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated

      thereunder or implementing the provisions thereof (collectively, the

      "Sarbanes-Oxley 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 Sarbanes-Oxley 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-

<PAGE>

 

      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 Wilson Sonsini

      Goodrich & Rosati, counsel for the Company, 12 East 49th Street, New York,

      New York. 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-

<PAGE>

 

      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-

<PAGE>

 

      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 applicab