Exhibit 10.4
BOUNDLESS TECHNOLOGIES, INC.
BOUNDLESS MANUFACTURING SERVICES, INC.
BOUNDLESS ACQUISITION CORP.
BOUNDLESS CORPORATION
June 27, 2002
JPMorgan Chase Bank, as Administrative Agent
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx
Re: Term Loans made by JPMorgan Chase Bank, Silicon Valley Bank and
National Bank of Canada (collectively, the "Banks") to Boundless
Technologies, Inc., Boundless Manufacturing Services, Inc.,
Boundless Acquisition Corp. and Boundless Corporation (collectively,
the "Co-Borrowers")
Gentlemen:
1. Reference is made to the Term Loans in the aggregate principal amount
of $2,950,000 made this date by the Banks to the Co-Borrowers and evidenced by
term notes issued by the Co-Borrowers to the Lenders in the aggregate principal
amount of $2,950,000 (the "Notes").
2. We agree to deliver to each Bank, within ten (10) business days of the
date hereof, 1,250,000 redeemable, convertible preferred stock of Boundless
Corporation ("BC"), substantially on the terms described on Exhibit 1 hereto,
and distributable to the Banks as follows: JPMorgan, 500,000 shares, SVB,
500,000 shares, and NBC, 250,000 shares.
3. The undersigned further acknowledge and agree that if the Co-Borrowers
shall fail to do so, then the Banks shall have the right to take such reasonable
action in order to effectuate compliance with the terms and provisions of this
letter.
4. BC agrees to deliver to the Banks within ten (10) business days of the
date hereof an aggregate of 750,000 shares (the "Bank Shares") of BC common
stock, $0.01 par value ("BC Common Stock"), as follows: 300,000 Shares of BC
Common Stock to JPMorgan, 300,000 Shares of BC Common Stock to SVB and 150,000
Shares of BC Common Stock to NBC.
5. BC agrees to (a) prepare and file with the Securities and Exchange
Commission (the "Commission") as soon as possible and in no event later than 90
days from the date hereof an appropriate registration statement (the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act") and use its best efforts to cause the Registration Statement to become
effective within 150 days of the date hereof in order that the Banks may sell or
distribute the Bank Shares (as so registered, the Registered Shares") (b)
prepare and file with the Commission such amendments and post-effective
amendments to the Registration
Statement and supplements to the prospectus used in connection therewith as may
be necessary to keep the Registration Statement effective for a period of two
(2) years following the date on which the Registration Statement is declared
effective by the Commission, and to comply with the provisions of the Securities
Act and the rules thereunder with respect to the offer or distribution of the
Registered Shares covered by the Registration Statement during the period
permitted for sale or distribution of such Registered Shares; and (c) use its
best efforts to comply with the rules of any exchange on which the Registered
Shares are listed.
6. BC will bear all expenses incurred by it in connection with the
Registration Statement, excluding underwriters' discounts, selling commissions
and counsel fees of the Banks.
7. BC will notify the Banks promptly, (i) when the Registration Statement
has been declared effective and when any post-effective amendment thereto is
declared effective, (ii) of any request by the Commission for amendments to the
Registration Statement or supplements to the related prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the receipt by BC of any
notification with respect to the suspension of the qualification of any of the
registered Registered Shares for sale in any jurisdiction or the initiation of
any proceedings for that purpose, and (v) of the happening of any event the
result of which the Registration Statement or the related prospectus contains
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances under which they were made (in the case of the
prospectus) not misleading. If at any time the Commission shall issue any order
suspending the effectiveness of the Registration Statements, BC will make every
reasonable effort to obtain the withdrawal of such order as soon as practicable.
8. BC will furnish to the Banks without charge one (1) signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and all exhibits (including those
incorporated therein by reference to the extent not previously furnished to the
Banks), and such numbers of copies of the prospectus, including each preliminary
prospectus and any amendments or supplements thereto, as any Bank may reasonably
request in order to facilitate the disposition of Registered Shares owned by
such Bank.
9. BC consents, in connection with the offering and sale of any Registered
Shares covered by any prospectus or any amendment or supplement thereto and for
any such period of time thereafter as such prospectus is required by law to be
delivered in connection therewith, to the use of such prospectus or such
amendment or supplement thereto by the Banks. If during such period of time any
event shall occur which should be set forth in any prospectus in order to make
the statements therein not misleading in the light of the circumstances under
which they were made, or if it is necessary to supplement or amend any
prospectus to comply with law, BC will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
the selling Banks, without charge, such number of copies thereof as they may
reasonably request.
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10. Prior to any public offering or distribution of any Registered Shares
pursuant to this Agreement, BC will cooperate with the Banks in connection with
the registration or qualification of such Registered Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Banks may
reasonably request in writing, provided that in no event shall BC be obligated
to qualify to do business in any jurisdiction where it is not now so qualified,
subject itself to taxation in any such jurisdiction or to take any action which
would subject it to general service of process in any jurisdiction where it is
not now so subject. BC will pay all fees and expenses (including counsel fees
and expenses) relating to the qualification of the Registered Shares under such
securities or Blue Sky laws.
11. BC shall use its best efforts to ensure that the preliminary
prospectus filed as part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 of the of the rules
and regulations promulgated under the Securities Act by the Commission ("Rule
424"), will comply when so filed in all material respects with the Securities
Act, and when the Registration Statement becomes effective and at all times
subsequent thereto, shall use its best efforts to ensure that the Registration
Statement and the prospectus, and any supplements or amendments thereto, will
fully comply with the provisions of the Securities Act, and that the
Registration Statement and the prospectus at all such times will not contain an
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 not misleading,
except that this representation and warranty does not apply to statements or
omissions in any registration statement or any prospectus or any preliminary
prospectus made in reliance upon information furnished to BC in writing by the
Banks expressly for use therein.
12. BC shall indemnify and hold harmless the Banks, each of their
directors and officers, and each other person, if any, who controls any Bank
(collectively, the "Indemnified Persons"), against any losses, claims, damages,
liabilities or expenses, joint or several, to which any Indemnified Person may
become subject under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or other federal or state laws, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of, or are based upon any of the following statements or omissions
(collectively, a "Violation"), (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or (ii) arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements made therein not misleading, and will
reimburse such Indemnified Person, as incurred, for any legal or other expenses,
reasonably incurred by them in connection with investigating or defending any
such action or claim, excluding any amounts paid in settlement of any loss,
claim, damage, liability or expense, if such settlement is effected without the
prior written consent of BC; provided that BC need not indemnify any such person
for any such loss, claim, damage, liability or expense which arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished to BC by such person or its affiliates or
representatives expressly for use in the preparation thereof.
13. BC or its transfer agent will as promptly as practicable following the
effectiveness of the Registration Statement deliver to the Banks or the Banks'
designee or
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designees new certificates not bearing any restrictive legend, as applicable, or
cause the delivery of such opinions of counsel as may be required to allow the
Registered Shares to be sold in compliance with all relevant securities laws.
14. In the event of any issuances of shares of BC Common Stock or other
securities exchangeable or convertible into shares of BC Common Stock at a price
per share or at a conversion price per share (in either case, the "Dilutive
Price") that is less than the then current market price per share of BC Common
Stock, BC shall issue to each of the Banks an additional number of shares of BC
Common Stock equal to the number of additional shares of BC Common Stock that
would have been issuable to such Banks hereunder had the number of Bank Shares
issuable hereunder to the Banks been calculated at the Dilutive Price. For
purposes of this paragraph the purchase price per share of Convertible
Securities shall be determined on the date such securities are issued by BC and
not on the date of conversion into common stock.
15. We further agree to deliver to the Banks, within ten (10) business
days of the date hereof evidence that all taxes due and owing for the second
half town and school tax, due May 1, 2002, in the approximate amount of
$125,746.75 plus penalties and interest have been paid in full.
16. It is further expressly understood and agreed that failure on the part
of the undersigned to comply with the terms and provisions of this undertaking
shall constitute an event of default under the Notes.
Very truly yours,
BOUNDLESS TECHNOLOGIES, INC.
BOUNDLESS MANUFACTURING SERVICES, INC.
BOUNDLESS ACQUISITION CORP.
BOUNDLESS CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, the Vice President
of each of the foregoing corporations
Acknowledged:
JPMORGAN CHASE BANK, as
Administrative Agent for the Banks
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
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EXHIBIT 1
BOUNDLESS CORPORATION
PREFERRED STOCK TRADE SETTLEMENT
Offering: Issuance of Authorized and Unissued Preferred Stock
Security: Redeemable, Convertible Preferred Stock
Term: Mandatory Redemption 6/30/12
Common Stock Preferred Stock will be convertible into common stock at $3.00
Conversion: per share. The Preferred Stock is convertible commencing one
year after issuance.
Investors: Offering only available to "Accredited Investors".
Registration Rights: The common stock into which the Preferred Stock is
convertible will be registered for resale under the securities laws the earlier
of one year from issuance of the Preferred Stock, or 150 days after the closing
price of the common stock exceeds $1.50 a share for ten consecutive days.
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