EXHIBIT 1
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STOCK AND WARRANT PURCHASE AGREEMENT
among
EVERGREEN SOLAR, INC.
and
THE PURCHASERS NAMED HEREIN
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Dated: March 21, 2003
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Table of Contents
Page
ARTICLE I DEFINITIONS..........................................................................2
1.1 Definitions..........................................................................2
ARTICLE II PURCHASE AND SALE OF PREFERRED STOCK AND BEACON WARRANT.............................11
2.1 Purchase and Sale of Preferred Stock................................................11
2.2 Certificates of Designations........................................................11
2.3 Purchase and Sale of Beacon Warrant.................................................11
2.4 Use of Proceeds.....................................................................11
2.5 Closing.............................................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................11
3.1 Corporate Existence and Power.......................................................12
3.2 Authorization; No Contravention.....................................................12
3.3 Governmental Authorization; Third Party Consents....................................13
3.4 Binding Effect......................................................................13
3.5 Litigation..........................................................................13
3.6 Compliance with Laws................................................................13
3.7 Capitalization......................................................................14
3.8 No Default or Breach; Contractual Obligations.......................................15
3.9 Title to Properties.................................................................16
3.10 SEC Documents; Proxy Statement; Financial Statements................................16
3.11 Taxes...............................................................................17
3.12 No Material Adverse Change; Ordinary Course of Business.............................17
3.13 Investment Company..................................................................18
3.14 Private Offering....................................................................18
3.15 Labor Relations.....................................................................18
3.16 Employee Benefit Plans..............................................................18
3.17 Title to Assets.....................................................................19
3.18 Liabilities.........................................................................19
3.19 Intellectual Property...............................................................19
3.20 Trade Relations.....................................................................22
3.21 Insurance...........................................................................22
3.22 Environmental Matters...............................................................22
3.23 Related Party Transactions..........................................................22
3.24 Broker's, Finder's or Similar Fees..................................................23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS....................................23
4.1 Existence and Power.................................................................23
4.2 Authorization; No Contravention.....................................................23
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4.3 Governmental Authorization; Third Party Consents....................................23
4.4 Binding Effect......................................................................23
4.5 Purchase for Own Account............................................................24
4.6 Restricted Securities...............................................................24
4.7 Accredited Investor.................................................................25
4.8 Broker's, Finder's or Similar Fees..................................................25
ARTICLE V CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE.............................25
5.1 Representations and Warranties......................................................25
5.2 Compliance with this Agreement......................................................25
5.3 Officer's Certificate...............................................................25
5.4 Secretary's Certificate.............................................................25
5.5 Filing of Certificate of Incorporation and Certificate of Designations..............26
5.6 Purchased Shares....................................................................26
5.7 Beacon Warrant......................................................................26
5.8 Registration Rights Agreement.......................................................26
5.9 Indemnification Agreements..........................................................26
5.10 Opinion of Counsel..................................................................26
5.11 No Material Adverse Change..........................................................26
5.12 Consents and Approvals..............................................................27
5.13 No Material Judgment or Order.......................................................27
5.14 No Litigation.......................................................................27
5.15 No Delisting Notice.................................................................27
5.16 Stockholder Approval................................................................27
5.17 Board of Directors..................................................................27
5.18 Compensation Committee..............................................................28
ARTICLE VI CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CLOSE................................28
6.1 Representations and Warranties......................................................29
6.2 Payment of Purchase Price...........................................................29
6.3 Registration Rights Agreement.......................................................29
ARTICLE VII INDEMNIFICATION.....................................................................29
7.1 Indemnification.....................................................................29
7.2 Notification........................................................................30
7.3 Contribution........................................................................30
ARTICLE VIII AFFIRMATIVE COVENANTS...............................................................31
8.1 Preservation of Existence...........................................................31
8.2 Stockholders Meeting................................................................32
8.3 Board of Directors..................................................................33
8.4 Nasdaq Listing......................................................................34
8.5 Reservation of Common Stock.........................................................34
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8.6 Restrictions on Public Sale.........................................................34
8.7 Stand Still.........................................................................34
ARTICLE IX TERMINATION OF AGREEMENT............................................................35
9.1 Termination.........................................................................35
9.2 Survival............................................................................35
9.3 Alternative Transaction Fee.........................................................36
ARTICLE X MISCELLANEOUS.......................................................................36
10.1 Survival of Representations and Warranties..........................................37
10.2 Notices.............................................................................37
10.3 Successors and Assigns; Third Party Beneficiaries...................................38
10.4 Amendment and Waiver................................................................38
10.5 Counterparts........................................................................38
10.6 Headings............................................................................38
10.7 GOVERNING LAW; CONSENT TO JURISDICTION..............................................38
10.8 Severability........................................................................39
10.9 Rules of Construction...............................................................39
10.10 Approval or Waiver by Purchasers....................................................39
10.11 Entire Agreement....................................................................40
10.12 Fees................................................................................40
10.13 Publicity...........................................................................40
10.14 Further Assurances..................................................................40
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EXHIBITS
A Form of Beacon Warrant
B Voting Agreement
C Form of By-laws
D-1 Third Amended and Restated Certificate of Incorporation
D-2 Form of Certificate of Amendment
E Form of Certificate of Designations
F Form of Registration Rights Agreement
G Form of Indemnification Agreement
H Form of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP Opinion
I Company Disclosure Letter
SCHEDULES
2.1 Purchase Price for the Purchased Shares
5.17 Board of Directors at Closing
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STOCK AND WARRANT PURCHASE AGREEMENT
STOCK AND WARRANT PURCHASE AGREEMENT, dated March 21, 2003 (this
"Agreement"), among Evergreen Solar, Inc., a Delaware corporation (the
"Company"), Perseus 2000, L.L.C. ("Perseus"), Nth Power Technologies Fund II, LP
("Nth Power II"), Nth Power Technologies Fund II-A, LP ("Nth Power II-A" and
together with Nth Power II, "Nth Power"), RockPort Capital Partners, L.P.
("Rockport"), RP Co-Investment Fund, I ("RP Co-Investment"), Micro-Generation
Technology Fund, LLC ("Micro-Generation"), UVCC Fund II ("UVCC II"), UVCC II
Parallel Fund, L.P. ("UVCC II Parallel" and together with Micro-Generation and
UVCC II, "Arete Funds"), Caisse de depot et placement du Quebec ("CDP"), CDP
Capital - Technology Ventures U.S. Fund 2002 L.P. ("CDP Capital"), Beacon Power
Corporation ("Beacon"), Massachusetts Technology Park Corporation ("MTPC"), Zero
Stage Capital VII, L.P. ("Zero Stage"), Zero Stage Capital (Cayman) VII, L.P.
("Zero Stage Cayman"), Zero Stage Capital SBIC VII, L.P. ("Zero Stage SBIC"),
IMPAX Environmental Markets plc ("Impax"), Xxxxxxx Xxxxx New Energy Technology
Fund ("Xxxxxxx Xxxxx New Energy Fund"), MLIIF New Energy Fund ("MLIIF"), PNE
Invest Limited ("PNE"), Odyssey Fund ("Odyssey"), XXX Private Equity Energy Fund
LP ("XXX Energy Fund"), XXX Sustainability Private Equity LP ("XXX Private
Equity") and XXX Xxxxx Energy ("XXX Xxxxx Energy" and together with Perseus, Nth
Power, Rockport, RP Co-Investment, Arete Funds, CDP, CDP Capital, Beacon, MTPC,
Zero Stage, Zero Stage Cayman, Zero Stage SBIC, Impax, Xxxxxxx Xxxxx New Energy
Fund, MLIIF, PNE, Odyssey, XXX Energy Fund, XXX Private Equity and XXX Xxxxx
Energy, the "Purchasers").
WHEREAS, upon the terms and conditions set forth in this Agreement, the
Company proposes to issue and sell (i) to each of the Purchasers the aggregate
number of shares, par value $0.01 per share, of Series A Convertible Preferred
Stock of the Company (the "Preferred Stock") determined by dividing the
aggregate purchase price set forth opposite such Purchaser's name on Schedule
2.1 hereto by the Price Per Share, and (ii) to Beacon, a warrant to purchase
2,400,000 shares of Common Stock, at an exercise price per share equal to the
Price Per Share plus $2.25, containing the terms and conditions set forth in the
form of warrant attached hereto as Exhibit A (the "Beacon Warrant"), for an
aggregate purchase price of $100,000;
WHEREAS, each share of Preferred Stock is convertible (subject to
adjustment) into one share, par value $0.01 per share, of common stock of the
Company (the "Common Stock"); and
WHEREAS, concurrently with the execution of this Agreement, as a
condition to the willingness of the Purchasers to enter into this Agreement,
certain stockholders of the Company are entering into the Voting Agreement with
the Company, attached hereto as Exhibit B (the "Voting Agreement").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" means any Person who is an "affiliate" as defined in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Alternative Transaction" has the meaning set forth in Section 9.3 of
this Agreement.
"Alternative Transaction Fee" has the meaning set forth in Section 9.3
of this Agreement.
"Arete Corporation" means Arete Corporation, the manager of the Arete
Funds.
"Arete Funds" has the meaning set forth in the preamble to this
Agreement.
"Assets" has the meaning set forth in Section 3.17 of this Agreement.
"Beacon" has the meaning set forth in the preamble to this Agreement.
"Beacon Warrant" has the meaning set forth in the recitals to this
Agreement.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"By-laws" means the Second Amended and Restated By-laws of the Company
in effect on the Closing Date substantially in the form attached hereto as
Exhibit C, as the same may be amended from time to time.
"CDP" has the meaning set forth in the preamble to this Agreement.
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"CDP Capital" has the meaning set forth in the preamble to this
Agreement.
"Certificate of Amendment" means the Form of Certificate of Amendment
attached hereto as Exhibit D-2.
"Certificate of Designations" means the Certificate of Designations
with respect to the Preferred Stock adopted by the Board of Directors and duly
filed with the Secretary of State of the State of Delaware on or before the
Closing Date substantially in the form attached hereto as Exhibit E.
"Certificate of Incorporation" means the Third Amended and Restated
Certificate of Incorporation of the Company, as amended by the Certificate of
Amendment, in effect on the Closing Date substantially in the form attached
hereto as Exhibit D-1, as the same may be amended from time to time.
"Claims" has the meaning set forth in Section 3.5 of this Agreement.
"Closing" has the meaning set forth in Section 2.5 of this Agreement.
"Closing Date" has the meaning set forth in Section 2.5 of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Commission" means the United States Securities and Exchange Commission
or any similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Commonly Controlled Entity" means any entity which is under common
control with the Company within the meaning of Code section 414(b), (c), (m),
(o) or (t).
"Company" has the meaning set forth in the preamble to this Agreement.
"Company Disclosure Letter" means the disclosure letter delivered by
the Company to the Purchasers on the date hereof and attached hereto as Exhibit
I.
"Company Intellectual Property" has the meaning set forth in Section
3.19 of this Agreement.
"Company Plans" has the meaning set forth in Section 3.16 of this
Agreement.
"Condition of the Company" means the assets, business, properties,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
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"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, guaranty, letter of credit or other obligation, contractual or
otherwise (the "primary obligation") of another Person (the "primary obligor"),
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss or failure or inability to perform in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument to which such Person is a
party or by which it or any of its property is bound.
"Copyrights" means any foreign or United States copyrights and mask
works, including all renewals and extensions thereof, copyright registrations
and applications for registration thereof, and any non-registered copyrights.
"D&O Policies" has the meaning set forth in Section 3.21 of this
Agreement.
"Designated Purchasers" means Perseus, Nth Power, Rockport, Arete
Corporation and CDP.
"Environmental Laws" means federal, state, local and foreign laws,
principles of common laws, civil laws, regulations and codes, as well as orders,
decrees, judgments or injunctions, issued, promulgated, approved or entered
thereunder relating to pollution, protection of the environment or public health
and safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Financial Statements" has the meaning set forth in Section 3.10(c) of
this Agreement.
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"GAAP" means United States generally accepted accounting principles in
effect from time to time.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Impax" has the meaning set forth in the preamble to this Agreement.
"Indebtedness" means, as to any Person, (a) all obligations of such
Person for borrowed money (including, without limitation, reimbursement and all
other obligations with respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured), (b) all obligations of such Person to pay
the deferred purchase price of property or services, except trade accounts
payable and accrued commercial or trade liabilities arising in the ordinary
course of business, (c) all interest rate and currency swaps, caps, collars and
similar agreements or hedging devices under which payments are obligated to be
made by such Person, whether periodically or upon the happening of a
contingency, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person under leases which have been or
should be, in accordance with GAAP, recorded as capital leases, (f) all
indebtedness secured by any Lien (other than Liens in favor of lessors under
leases other than leases included in clause (e)) on any property or asset owned
or held by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is non-recourse to the credit of that
Person, and (g) any Contingent Obligation of such Person.
"Indemnified Party" has the meaning set forth in Section 7.1 of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 7.1 of this
Agreement.
"Intellectual Property" means Copyrights, Patents, Trademarks, Trade
Secrets, Internet Assets, Software and any proprietary rights related thereto.
"Internet Assets" means any Internet domain names and other computer
user identifiers and any rights in and to sites on the worldwide web, including
rights in and to any text, graphics, audio and video files and html or other
code incorporated in such sites.
"IP Licenses" has the meaning set forth in Section 3.19 of this
Agreement.
5
"Investors" has the meaning set forth in the Registration Rights
Agreement.
"Knowledge" means the knowledge of the directors and executive officers
of the Company after due inquiry.
"Liabilities" has the meaning set forth in Section 3.18 of this
Agreement.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever.
"Losses" has the meaning set forth in Section 7.1 of this Agreement.
"Market Price" means, with respect to the Common Stock, as of the date
of determination, (a) if the Common Stock is listed on a national securities
exchange, the closing price per share of the Common Stock on such date published
in The Wall Street Journal (National Edition) or, if no such closing price on
such date is published in The Wall Street Journal (National Edition), the
average of the closing bid and asked prices on such date, as officially reported
on the principal national securities exchange on which the Common Stock is then
listed or admitted to trading; or (b) if the Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the National Association of Securities
Dealers, Inc., the last trading price of the Common Stock on such date; or (c)
if there shall have been no trading on such date or if the Common Stock is not
designated as a national market system security by the National Association of
Securities Dealers, Inc., the average of the reported closing bid and asked
prices of the Common Stock on such date as shown by the National Market System
of the National Association of Securities Dealers, Inc. Automated Quotations
System and reported by any member firm of the New York Stock Exchange selected
by the Company; or (d) if none of (a), (b) or (c) is applicable, a market price
per share determined mutually by the Board of Directors (acting in good faith
pursuant to the exercise of its fiduciary duties) and the Purchasers.
"Maximum Price Per Share" means $1.12.
"Xxxxxxx Xxxxx New Energy Fund" has the meaning set forth in the
preamble to this Agreement.
"Micro-Generation" has the meaning set forth in the preamble to this
Agreement.
"Minimum Ownership Percentage" means beneficial ownership in the
aggregate of not less than 5% of the shares of Common Stock outstanding as of
any date, including shares of Preferred Stock on an as-converted basis.
"Minimum Price Per Share" means $0.68.
6
"MLIIF" has the meaning set forth in the preamble to this Agreement.
"MTPC" has the meaning set forth in the preamble to this Agreement.
"Nasdaq Stock Market" has the meaning set forth in Section 3.6(b) of
this Agreement.
"Nth Power" has the meaning set forth in the preamble to this
Agreement.
"Nth Power II" has the meaning set forth in the preamble to this
Agreement.
"Nth Power II-A" has the meaning set forth in the preamble to this
Agreement.
"Odyssey" has the meaning set forth in the preamble to this Agreement.
"Options" has the meaning set forth in Section 3.7(a) of this
Agreement.
"Orders" has the meaning set forth in Section 3.2 of this Agreement.
"Patents" means any foreign or United States patents and patent
applications, including any divisions, continuations, continuations-in-part,
substitutions, reissues or interferences thereof, whether or not patents are
issued on such applications and whether or not such applications are modified,
withdrawn or resubmitted.
"Payment Date" has the meaning set forth in Section 9.3 of this
Agreement.
"Permits" has the meaning set forth in Section 3.6 of this Agreement.
"Perseus" has the meaning set forth in the preamble to this Agreement.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"Plan" means any employee benefit plan, arrangement, policy, program,
agreement or commitment (whether or not an employee plan within the meaning of
section 3(3) of ERISA), including, without limitation, any employment,
consulting or deferred compensation agreement, executive compensation, bonus,
incentive, pension, profit-sharing, savings, retirement, stock option, stock
purchase or severance pay plan, any life, health, disability or accident
insurance plan, whether oral or written, whether or not subject to ERISA, as to
which the Company or any Commonly Controlled Entity has or could have any direct
or indirect, actual or contingent liability.
"PNE" has the meaning set forth in the preamble to this Agreement.
7
"Preferred Stock" has the meaning set forth in the recitals to this
Agreement.
"Price Per Share" means (i) the average of the Market Price for a share
of Common Stock for the sixty (60) consecutive trading day period ending two
trading days prior to the Closing Date multiplied by (ii) 0.85; provided, that
(x) if such product is greater than or equal to the Maximum Price Per Share,
then the Price Per Share shall be the Maximum Price Per Share, or (y) if such
product is less than or equal to the Minimum Price Per Share, then the Price Per
Share shall be the Minimum Price Per Share.
"Proxy Statement" has the meaning set forth in Section 3.10(b) of this
Agreement.
"Purchased Shares" has the meaning set forth in Section 2.1 of this
Agreement.
"Purchased Warrants" has the meaning set forth in Section 2.3 of this
Agreement.
"Purchasers" has the meaning set forth in the preamble to this
Agreement.
"Registrable Shares" has the meaning set forth in the Series D Purchase
Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement
substantially in the form attached hereto as Exhibit F.
"Requirement of Law" means, as to any Person, any law, Environmental
Law, statute, treaty, rule, regulation, right, privilege, qualification, license
or franchise or determination of an arbitrator or a court or other Governmental
Authority or stock exchange, in each case applicable or binding upon such Person
or any of its property or to which such Person or any of its property is subject
or pertaining to any or all of the transactions contemplated or referred to
herein.
"Retiree Welfare Plan" means any welfare plan (as defined in Section
3(1) of ERISA) that provides benefits to current or former employees beyond
their retirement or other termination of service (other than coverage mandated
by Section 4980B of the Code, commonly referred to as "COBRA").
"Rockport" has the meaning set forth in the preamble to this Agreement.
"RP Co-Investment" has the meaning set forth in the preamble to this
Agreement.
"XXX Energy Fund" has the meaning set forth in the preamble to this
Agreement.
8
"XXX Private Equity" has the meaning set forth in the preamble to this
Agreement.
"XXX Xxxxx Energy" has the meaning set forth in the preamble to this
Agreement.
"SEC Documents" has the meaning set forth in Section 3.10(a) of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Series D Purchase Agreement" means that certain Series D Preferred
Stock Purchase Agreement, dated as of December 28, 1999, by and among the
Company and the other parties thereto.
"Software" means any computer software programs, source code, object
code, data and documentation, including, without limitation, any computer
software programs that incorporate and run the Company's pricing models,
formulae and algorithms.
"Special Committee" has the meaning set forth in Section 3.2 of this
Agreement.
"Stock Equivalents" means any security or obligation which is by its
terms, directly or indirectly, convertible into or exchangeable or exercisable
for shares of common stock or other capital stock of the Company, and any
option, warrant or other subscription or purchase right with respect to common
stock or such other capital stock.
"Stockholder Approval" has the meaning set forth in Section 8.2 of this
Agreement.
"Stockholders" has the meaning set forth in the Series D Purchase
Agreement.
"Stockholders Meeting" has the meaning set forth in Section 8.2 of this
Agreement.
"Stock Option Plans" means, collectively, the Company's 1994 Stock
Option Plan, 2000 Stock Option and Incentive Plan and 2000 Employee Stock
Purchase Plan.
"Subsidiaries" means, as of the relevant date of determination, with
respect to any Person, a corporation or other Person of which 50% or more of the
voting power of the outstanding voting equity securities or 50% or more of the
outstanding economic equity interest is held, directly or indirectly, by such
Person. Unless otherwise qualified, or the context otherwise requires, all
references to a "Subsidiary" or to
9
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.
"Taxes" means any federal, state, provincial, county, local, foreign
and other taxes (including, without limitation, income, profits, windfall
profits, alternative, minimum, accumulated earnings, personal holding company,
capital stock, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing.
"Tax Return" has the meaning set forth in Section 3.11 of this
Agreement.
"Trade Secrets" means any trade secrets, research records, processes,
procedures, manufacturing formulae, technical know-how, technology, blue prints,
designs, plans, inventions (whether patentable and whether reduced to practice),
invention disclosures and improvements thereto.
"Trademarks" means any foreign or United States trademarks, service
marks, trade dress, trade names, brand names, designs and logos, corporate
names, product or service identifiers, whether registered or unregistered, all
registrations and applications for registration thereof and all goodwill related
thereto.
"Transaction Documents" means, collectively, this Agreement, the Beacon
Warrant, the Voting Agreement and the Registration Rights Agreement.
"UVCC II" has the meaning set forth in the preamble to this Agreement.
"UVCC II Parallel" has the meaning set forth in the preamble to this
Agreement.
"Voting Agreement" has the meaning set forth in the recitals to this
Agreement.
"Warrant Shares" has the meaning set forth in Section 2.3 of this
Agreement.
"Zero Stage" has the meaning set forth in the preamble to this
Agreement.
"Zero Stage Cayman" has the meaning set forth in the preamble to this
Agreement.
"Zero Stage SBIC" has the meaning set forth in the preamble to this
Agreement.
10
ARTICLE II
PURCHASE AND SALE OF PREFERRED STOCK AND BEACON WARRANT
2.1 Purchase and Sale of Preferred Stock. Subject to the terms and
conditions set forth herein, the Company agrees to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, agrees to purchase
from the Company, on the Closing Date the aggregate number of shares of
Preferred Stock determined by dividing the aggregate purchase price set forth
opposite such Purchaser's name on Schedule 2.1 hereto by the Price Per Share and
rounding down to the nearest whole share (all of the shares of Preferred Stock
being purchased pursuant hereto being referred to herein as the "Purchased
Shares").
2.2 Certificates of Designations. The Purchased Shares shall have the
preferences and rights set forth in the Certificate of Designations.
2.3 Purchase and Sale of Beacon Warrant. Subject to the terms and
conditions set forth herein, the Company agrees to issue and sell to Beacon, and
Beacon agrees to purchase from the Company, on the Closing Date, the Beacon
Warrant to purchase 2,400,000 shares of Common Stock, for an aggregate purchase
price of $100,000 (all of the shares of Common Stock issuable upon the exercise
of the Beacon Warrant being purchased pursuant hereto being referred to herein
as the "Warrant Shares").
2.4 Use of Proceeds. The Company shall use the proceeds from the sale
of the Purchased Shares and the Beacon Warrant to the Purchasers to fund the
Company's working capital and for general corporate purposes.
2.5 Closing. Unless this Agreement shall have terminated pursuant to
Article IX, and subject to the satisfaction or waiver of the conditions set
forth in Articles V and VI, the closing of the sale and purchase of the
Purchased Shares and the Beacon Warrant (the "Closing") shall take place at the
offices of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP, at 10:00 a.m., local
time, on the third Business Day following the date upon which the conditions set
forth in Articles V and VI shall be satisfied or waived in accordance with this
Agreement, or at such other time, place and date that the Company and the
Purchasers may agree in writing (the "Closing Date"). On the Closing Date, the
Company shall deliver to each of the Purchasers a certificate or certificates in
definitive form and registered in the name of each such Purchaser, representing
its Purchased Shares and, in the case of Beacon, the Beacon Warrant against
delivery by each of the Purchasers to the Company of the aggregate purchase
price therefor by wire transfer of immediately available funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company represents and warrants to each of the Purchasers as of the
date hereof and as of the Closing Date as follows:
3.1 Corporate Existence and Power. The Company and each Subsidiary (a)
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) has all requisite corporate
power and authority to own, operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently, or is
proposed to be, engaged; and (c) is duly qualified as a foreign corporation,
licensed and in good standing under the laws of each jurisdiction in which its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be so qualified could
not reasonably be expected to have a material adverse effect on the Condition of
the Company. The Company has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement and each of the other
Transaction Documents.
3.2 Authorization; No Contravention. Except as set forth on Schedule
3.2 of the Company Disclosure Letter, the execution, delivery and performance by
the Company of this Agreement and each of the other Transaction Documents and
the transactions contemplated hereby and thereby, including the issuance and
sale of the Purchased Shares and the Beacon Warrant, (a) have been duly
authorized by all necessary corporate action of the Company, including all
actions, consents and approvals required by the Company's Board of Directors and
stockholders, other than the Stockholder Approval; (b) do not contravene the
terms of the Certificate of Incorporation or the By-laws or the organizational
documents of any Subsidiary; (c) do not violate, conflict with or result in any
breach, default or contravention of (or with due notice or lapse of time or both
would result in any breach, default or contravention of), or the creation of any
Lien under, any Contractual Obligation of the Company or any Subsidiary or any
Requirement of Law applicable to the Company or any Subsidiary; and (d) do not
violate any judgment, injunction, writ, award, decree or order of any nature
(collectively, "Orders") of any Governmental Authority against, or binding upon,
the Company or any Subsidiary. The Board of Directors, at a meeting duly called
and held and acting on the unanimous recommendation of a special committee of
the Board of Directors comprised entirely of directors who do not have a direct
interest in the transactions contemplated hereby (the "Special Committee"), has
(i) determined that this Agreement, the other Transaction Documents and the
transactions contemplated hereby and thereby are fair to and in the best
interests of the Company's stockholders, (ii) approved and adopted this
Agreement, the other Transaction Documents and the transactions contemplated
hereby and thereby in accordance with all applicable Requirements of Law and
(iii) resolved to recommend that its stockholders approve the issuance and sale
of the Purchased Shares and the Beacon Warrant, elect the designees of Perseus,
Nth Power, Rockport, Arete Corporation and CDP to the Board of Directors (unless
the appointment of such designees is accomplished by resolution of the Board of
Directors outside of the Stockholders Meeting) and approve and adopt the
Certificate of Amendment, in each case in the manner described in Section 8.2.
Revolution Partners, LLC has delivered to the Board of Directors its written
opinion that the issuance and sale of the Purchased
12
Shares and the Beacon Warrant is fair, from a financial point of view, to the
Company and its stockholders.
3.3 Governmental Authorization; Third Party Consents. Other than the
Stockholder Approval or except as set forth on Schedule 3.3 of the Company
Disclosure Letter, no approval, consent, compliance, exemption, authorization or
other action by, or notice to, or filing with, any Governmental Authority or any
other Person, and no lapse of a waiting period under a Requirement of Law, is
necessary or required in connection with the execution, delivery or performance
(including, without limitation, the sale, issuance and delivery of the Purchased
Shares and the Beacon Warrant) by, or enforcement against, the Company of this
Agreement and the other Transaction Documents or the transactions contemplated
hereby and thereby.
3.4 Binding Effect. This Agreement has been, and as of the Closing Date
each of the other Transaction Documents will have been, duly executed and
delivered by the Company, and this Agreement constitutes, and as of the Closing
Date each of the other Transaction Documents will constitute, the legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
3.5 Litigation. There are no actions, suits, proceedings, claims
(including, without limitation, claims involving the prior employment of any of
the Company's or any Subsidiary's employees, their use in connection with the
Company's or any Subsidiary's business of any information or techniques
allegedly proprietary to any of their former employers or their obligations
under any agreements with prior employers), complaints, disputes, arbitrations
or investigations (collectively, "Claims") pending or, to the Knowledge of the
Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against the Company or any Subsidiary, nor is the Company
aware that there is any basis for any of the foregoing. No Order has been issued
by any court or other Governmental Authority against the Company or any
Subsidiary purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any of the other Transaction Documents.
3.6 Compliance with Laws.
(a) The Company and each Subsidiary is in compliance in all material
respects with all Requirements of Law and all Orders issued by any court or
Governmental Authority against the Company or any Subsidiary. To the Company's
Knowledge, there is no existing or proposed Requirement of Law which could
reasonably be expected to prohibit or restrict the Company or any Subsidiary
from, or otherwise materially adversely effect the Company or any Subsidiary in,
conducting its
13
business in any jurisdiction in which it now conducts or proposes to conduct its
business.
(b) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act, and is listed on The Nasdaq National Market (the "Nasdaq Stock
Market"), and neither the Company nor any Subsidiary has taken any action
designed to, or reasonably likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq Stock Market. Subject to obtaining the Stockholder
Approval, the Company has complied with all requirements of the National
Association of Securities Dealers, Inc. with respect to the issuance of the
Purchased Shares and the Beacon Warrant. Neither the Company nor any Subsidiary
has taken any action designed to or that might reasonably be expected to cause
or result in unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Purchased Shares, the Beacon Warrant or the
Warrant Shares.
(c) (i) The Company and each Subsidiary has all material licenses,
permits and approvals of any Governmental Authority (collectively, "Permits")
that are necessary for the conduct of the business of the Company and its
Subsidiaries; (ii) such Permits are in full force and effect; and (iii) no
violations are or have been recorded in respect of any Permit, other than such
violations that could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the Condition of the Company or
except as set forth on Schedule 3.6(c) of the Company Disclosure Letter.
3.7 Capitalization.
(a) On the Closing Date, after giving effect to the transactions
contemplated by this Agreement, the authorized capital stock of the Company
shall consist of (i) 95,000,000 shares of Common Stock, of which 11,410,826
shares were issued and outstanding as of March 13, 2003, and (ii) 46,000,000
shares of preferred stock, par value $0.01 per share, (A) 45,000,000 shares of
which are designated as Series A Convertible Preferred Stock, of which no shares
are issued and outstanding as of the date hereof, and (B) 1,000,000 shares of
which are undesignated "blank check" preferred stock, of which no shares are
issued and outstanding as of the date hereof. As of the date of this Agreement,
the aggregate number of options to purchase shares of Common Stock which may be
issued under the Stock Option Plans is 2,435,625, of which 1,156,225 are
outstanding as of the date hereof (the "Options") and 682,353 of which
outstanding Options have vested as of the date hereof. The Company has reserved
an aggregate of 60,000,000 shares of Common Stock for issuance upon conversion
of the Purchased Shares and 2,400,000 shares of Common Stock for issuance upon
exercise of the Beacon Warrant. Except for the Options and the transactions
contemplated hereby, there are no options, warrants, conversion privileges,
subscription or purchase rights or other rights presently outstanding to
purchase or otherwise acquire (i) any authorized but unissued, unauthorized or
treasury shares of the Company's capital stock, (ii) any Stock Equivalents or
(iii) any other securities of the Company, and there are no commitments,
contracts, agreements, arrangements or understandings by the
14
Company to issue any shares of the Company's capital stock or any Stock
Equivalents or other securities of the Company. No anti-dilution rights of any
capital stock or other securities issued by the Company shall be triggered as a
result of the transactions contemplated hereby.
(b) The Purchased Shares and the Beacon Warrant are duly authorized,
and when issued and sold to the Purchasers after payment therefor, will be
validly issued, fully paid and non-assessable, will be issued in compliance with
the registration and qualification requirements of all applicable federal, state
and foreign securities laws and will be free and clear of all other Liens, other
than any Liens created by the Purchasers. The shares of Common Stock issuable
upon conversion of the Purchased Shares and exercise of the Beacon Warrant have
been duly reserved for issuance upon conversion of the Purchased Shares and
exercise of the Beacon Warrant and, when issued in compliance with the
provisions of the Certificate of Designations and the Beacon Warrant, will be
validly issued, fully paid and non-assessable and not subject to any preemptive
rights or similar rights that have not been satisfied and will be free and clear
of all other Liens, other than any Liens created by the Purchasers. All of the
issued and outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and non-assessable, and were issued in compliance with the
registration and qualification requirements of all applicable federal, state and
foreign securities laws.
(c) Schedule 3.7(c) of the Company Disclosure Letter sets forth a true
and complete list of (x) each of the Subsidiaries of the Company and (y) the
aggregate number of authorized shares of capital stock of such Subsidiary. The
Company owns all of the issued and outstanding capital stock of the
Subsidiaries, free and clear of all Liens. All of such shares of capital stock
are duly authorized, validly issued, fully paid and non-assessable, and were
issued in compliance with the registration and qualification requirements of all
applicable federal, state and foreign securities laws. There are no options,
warrants, conversion privileges, subscription or purchase rights or other rights
presently outstanding to purchase or otherwise acquire any authorized but
unissued, unauthorized or treasury shares of capital stock or other securities
of, or any proprietary interest in, any of the Subsidiaries, and there is no
outstanding security of any kind convertible into or exchangeable for such
shares or proprietary interest.
3.8 No Default or Breach; Contractual Obligations. Neither the Company
nor any Subsidiary has received notice of a default and is not in material
default under, or with respect to, any Contractual Obligation filed as an
exhibit to or described in the SEC Documents or which is otherwise material to
the Condition of the Company, nor does any condition exist that with notice or
lapse of time or both would constitute a material default thereunder. All of
such Contractual Obligations are valid, subsisting, in full force and effect and
binding upon the Company or such Subsidiary and the other parties thereto, and
the Company or such Subsidiary has paid in full or accrued all amounts due
thereunder and has satisfied in full or provided for all of its liabilities and
obligations thereunder. To the Knowledge of the Company, no other party to any
such Contractual Obligation is in material default thereunder, nor does any
condition exist
15
that with notice or lapse of time or both would constitute a material default by
such other party thereunder.
3.9 Title to Properties. The Company and each Subsidiary holds
interests as lessee under leases in full force and effect in all real property
used in connection with its business or otherwise leased by it.
3.10 SEC Documents; Proxy Statement; Financial Statements.
(a) Since November 1, 2000, the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Commission pursuant to the reporting requirements of the Exchange Act (all
of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the "SEC
Documents"). As of their respective dates, the SEC Documents complied with the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) The proxy or information statement of the Company to be filed with
the Commission in connection with the transactions contemplated herein (the
"Proxy Statement") and any amendments or supplements thereto will, when filed,
comply as to form with the applicable requirements of the Exchange Act. At the
time the Proxy Statement or any amendment or supplement thereto is first mailed
to stockholders of the Company, and at the time such stockholders vote on the
matter as described in Section 8.2, the Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
(c) As of their respective dates, the financial statements of the
Company and its Subsidiaries (the "Financial Statements") included in the SEC
Documents complied as to form with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto. The
Financial Statements have been prepared in accordance with GAAP, consistently
applied, during the periods involved (except in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present the financial position of the Company and
its Subsidiaries as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
16
3.11 Taxes.
(a) The Company and each Subsidiary has paid all Taxes which have come
due and are required to be paid by it, and all deficiencies or other additions
to Tax, interest and penalties owed by it in connection with any such Taxes,
other than Taxes being disputed by the Company or any Subsidiary in good faith
for which adequate reserves have been made in accordance with GAAP; (b) the
Company and each Subsidiary has timely filed or caused to be filed all Tax
returns, reports, forms and other such documents ("Tax Returns") that it is
required to file (including all applicable extensions), and all such Tax Returns
are accurate and complete in all material respects; (c) with respect to all Tax
Returns of the Company and each Subsidiary, (i) there is no unassessed Tax
deficiency proposed or, to the Knowledge of the Company, threatened against the
Company or any Subsidiary and (ii) no audit is in progress with respect to any
Tax Return, no extension of time is in force with respect to any date on which
any Tax Return was or is to be filed and no waiver or agreement is in force for
the extension of time for the assessment or payment of any Tax; (d) all
provisions for Tax liabilities of the Company and its Subsidiaries with respect
to the Financial Statements have been made in accordance with GAAP consistently
applied, and all liabilities for Taxes of the Company and its Subsidiaries
attributable to periods prior to or ending on the Closing Date have been
adequately provided for on the Financial Statements; (e) there are no Liens for
Taxes on the assets of the Company or any Subsidiary; and (f) the Company is not
a "United States real property holding corporation" as that term is defined in
Section 897(c)(2) of the Code and the regulations promulgated thereunder.
3.12 No Material Adverse Change; Ordinary Course of Business. Since
December 31, 2001, there has not been any material adverse change in the
Condition of the Company, except to the extent any such change results from or
is attributable to changes in general economic or political conditions or
changes affecting the industry generally in which the Company operates (provided
that such changes do not affect the Company in a disproportionate manner);
provided, that in no event shall any matter specifically disclosed in any SEC
Document filed prior to the date hereof be considered a material adverse change
in the Condition of the Company. Except as set forth in the SEC Documents filed
prior to the date hereof or as set forth on Schedule 3.12 of the Company
Disclosure Letter, since December 31, 2001, (a) neither the Company nor any
Subsidiary has participated in any transaction material to the Condition of the
Company or otherwise acted outside the ordinary course of business, (b) neither
the Company nor any Subsidiary has increased the compensation of any of its
officers or the rate of pay of any of its employees, except as part of regular
compensation increases in the ordinary course of business, (c) neither the
Company nor any Subsidiary has created or assumed any Lien on a material asset
of the Company or any Subsidiary and (d) neither the Company nor any Subsidiary
has entered into any material Contractual Obligation, other than in the ordinary
course of business. Since December 31, 2001, there has not occurred a material
change in the Company's or any Subsidiary's accounting principles or practice
except as required by reason of a change in GAAP.
17
3.13 Investment Company. The Company is not and is not controlled by or
affiliated with an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
3.14 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer, sale or issuance of the Purchased Shares or the Beacon Warrant. No
registration of the Purchased Shares or the Beacon Warrant, pursuant to the
provisions of the Securities Act or any state securities or "blue sky" laws,
will be required by the offer, sale or issuance of the Purchased Shares or the
Beacon Warrant. The Company agrees that neither it, nor anyone acting on its
behalf, shall offer to sell the Purchased Shares or the Beacon Warrant or any
other securities of the Company so as to require the registration of the
Purchased Shares or the Beacon Warrant pursuant to the provisions of the
Securities Act or any state securities or "blue sky" laws, unless such Purchased
Shares, the Beacon Warrant or other securities are so registered.
3.15 Labor Relations. Except as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Condition of the Company, (a) neither the Company nor any Subsidiary is engaged
in any unfair labor practice; (b) there is (i) no grievance or arbitration
proceeding arising out of or under collective bargaining agreements pending or,
to the Knowledge of the Company, threatened against the Company or any
Subsidiary, and (ii) no strike, labor dispute, slowdown or stoppage pending or,
to the Knowledge of the Company, threatened against the Company or any
Subsidiary; (c) neither the Company nor any Subsidiary is a party to any
collective bargaining agreement or contract; (d) there is no union
representation question existing with respect to the employees of the Company or
any Subsidiary; and (e) no union organizing activities are taking place.
3.16 Employee Benefit Plans.
(a) Neither the Company nor any Commonly Controlled Entity maintains or
contributes to, or has within the preceding six years maintained or contributed
to, or may have any liability with respect to any Plan subject to Title IV of
ERISA or Section 412 of the Code or any "multiple employer plan" within the
meaning of the Code or ERISA. Each Plan that the Company maintains or
contributes to, or is a party to or otherwise has any liability in respect of
(collectively, "Company Plans") (and related trust, insurance contract or fund)
has been established and administered in accordance with its terms, and complies
in all material respects in form and in operation with the applicable
requirements of ERISA and the Code and other applicable Requirements of Law. All
contributions (including all employer contributions and employee salary
reduction contributions) which are due have been paid to each Company Plan.
(b) No Claim with respect to the administration or the investment of
the assets of any Company Plan (other than routine claims for benefits) is
pending.
18
(c) Each Company Plan that is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
since its adoption and each trust created under any such Company Plan is exempt
from tax under Section 501(a) of the Code and has been so exempt since its
creation.
(d) No Company Plan is a Retiree Welfare Plan.
(e) Neither the consummation of the transactions contemplated by this
Agreement nor any termination of employment following such transactions will
accelerate the time of the payment or vesting of, or increase the amount of,
compensation due to any employee or former employee whether or not such payment
would constitute an "excess parachute payment" under Section 280G of the Code.
(f) There are no unfunded obligations under any Company Plan which are
not fully reflected on the Financial Statements, to the extent required by GAAP.
(g) To the Knowledge of the Company, neither the Company nor any
Subsidiary has any liability, whether absolute or contingent, including any
obligations under any Company Plan, with respect to any misclassification of any
person as an independent contractor rather than as an employee.
3.17 Title to Assets. Except as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Condition of the Company, the Company and each Subsidiary owns and has good,
valid, and marketable title to all of its properties and assets used in its
business and reflected as owned on the Financial Statements or so described in
any schedule hereto (collectively, the "Assets"), in each case free and clear of
all Liens, except for Liens specifically described on the notes to the Financial
Statements.
3.18 Liabilities. Neither the Company nor any Subsidiary has any direct
or indirect obligation or liability ("Liabilities") which if known would be
required to be reflected in the Company's or any Subsidiary's financial
statements in accordance with GAAP other than (a) Liabilities fully and
adequately reflected or reserved against on the Financial Statements and (b)
Liabilities incurred since September 30, 2002 in the ordinary course of
business. Schedule 3.18 of the Company Disclosure Letter sets forth all of the
outstanding Indebtedness of the Company and its Subsidiaries as of the date
hereof.
3.19 Intellectual Property.
(a) (i) Except as set forth on Schedule 3.19(a)(i) of the Company
Disclosure Letter, the Company or one of its Subsidiaries is the owner of all,
or has the license or right to use, sell and license all Intellectual Property
used in connection with its business as presently conducted or contemplated in
its business plan ("Company Intellectual Property"), free and clear of all
Liens.
19
(ii) Schedule 3.19(a)(ii) of the Company Disclosure Letter sets forth
all of the Company Intellectual Property, including filings, registrations and
applications for any Intellectual Property filed by, the Company and its
Subsidiaries. None of the Company Intellectual Property listed on Schedule
3.19(a)(ii) of the Company Disclosure Letter is subject to any outstanding
Order, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the Knowledge of the Company,
threatened, which challenges the validity, enforceability, use or ownership of
the item.
(iii) Schedule 3.19(a)(iii) of the Company Disclosure Letter sets forth
all Intellectual Property licenses, sublicenses, distributor agreements and
other agreements or permissions ("IP Licenses") under which the Company or one
of its Subsidiaries is either a licensor, licensee or distributor, except such
licenses, sublicenses and other agreements relating to off-the-shelf software,
which is commercially available on a retail basis and used solely on the
computers of the Company or one of its Subsidiaries. The Company or its relevant
Subsidiary has substantially performed all obligations imposed upon it
thereunder, and is not, nor to the Knowledge of the Company is any other party
thereto, in breach of or default thereunder in any material respect, nor is
there any event which with notice or lapse of time or both would constitute a
default thereunder. All of the IP Licenses listed on Schedule 3.19(a)(iii) of
the Company Disclosure Letter are valid, enforceable and in full force and
effect, and will continue to be so on identical terms immediately following the
Closing except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
(b) To the Knowledge of the Company, none of the Company Intellectual
Property, products or services used, developed, provided, imported, made, sold,
licensed or otherwise exploited by the Company and its Subsidiaries or made for,
or sold or licensed to the Company or any Subsidiary by any Person infringes
upon or otherwise violates any Intellectual Property rights of others.
(c) Except as set forth on Schedule 3.19(c) of the Company Disclosure
Letter, no litigation is pending and no Claim has been made against the Company
or any Subsidiary or, to the Knowledge of the Company, is threatened, contesting
the right of the Company or any Subsidiary to sell or license to any Person or
use the Company Intellectual Property presently sold or licensed to such Person
or used by the Company or any Subsidiary.
(d) To the Knowledge of the Company, no Person is infringing upon or
otherwise violating the Company Intellectual Property.
(e) Except as set forth on Schedule 3.19(e) of the Company Disclosure
Letter, all the Company Intellectual Property is valid and enforceable. Except
as set forth on Schedule 3.19(e) of the Company Disclosure Letter, the Company
and its Subsidiaries have taken all necessary and desirable actions to maintain
and protect each
20
item of Company Intellectual Property, and to protect the secrecy,
confidentiality and value of the Company's and its Subsidiaries' Trade Secrets.
(f) No former employer of any employee of the Company or any
Subsidiary, and no current or former client of any consultant of the Company or
any Subsidiary, has made a claim against the Company or any Subsidiary or, to
the Knowledge of the Company, against any other Person, that such employee or
such consultant is utilizing Intellectual Property of such former employer or
client.
(g) Except as set forth on Schedule 3.19(g) of the Company Disclosure
Letter, neither the Company nor any Subsidiary is a party to or bound by any
license or other agreement requiring the payment by the Company or any
Subsidiary of any royalty payment, excluding such agreements relating to
software licensed for use solely on the computers of the Company or any
Subsidiary.
(h) Except as set forth on Schedule 3.19(h) of the Company Disclosure
Letter, to the Knowledge of the Company, no employee of the Company or any
Subsidiary is in violation of any Requirement of Law applicable to such employee
relating to the Company Intellectual Property, or any term of any employment
agreement, patent or invention disclosure agreement or other contract or
agreement relating to the Company Intellectual Property and the relationship of
such employee with the Company or any Subsidiary or any prior employer.
(i) Except as set forth on Schedule 3.19(i) of the Company Disclosure
Letter, to the Knowledge of the Company, none of the Company's or any
Subsidiary's Trade Secrets, wherever located, the value of which is contingent
upon maintenance of confidentiality thereof, has been disclosed to any Person
other than employees, representatives and agents of the Company and its
Subsidiaries, except as required pursuant to the filing of a patent application
by the Company or any Subsidiary.
(j) Except as set forth on Schedule 3.19(j) of the Company Disclosure
Letter, it is not necessary for the Company's or any Subsidiary's business to
use any Intellectual Property owned by any director, officer, employee or
consultant of the Company or any Subsidiary (or persons the Company or any
Subsidiary presently intends to hire). Except as set forth on Schedule 3.19(j)
of the Company Disclosure Letter, to the Company's Knowledge, at no time during
the conception or reduction to practice of any of the Company's or any
Subsidiary's Intellectual Property was any developer, inventor or other
contributor to such Intellectual Property operating under any grants from any
Governmental Authority or subject to any employment agreement, invention
assignment, nondisclosure agreement or other Contractual Obligation with any
Person that could adversely affect the Company's or any Subsidiary's rights to
the Company Intellectual Property.
(k) All present and former employees, consultants and any other Person
who developed any part of the Intellectual Property that is, or will be, used or
sold by the Company or any Subsidiary have executed and delivered valid and
enforceable proprietary invention agreements with the Company or such
Subsidiary,
21
and are obligated under the terms thereof to assign all right, title and
interest to any Intellectual Property developed by such Person in connection
with such Person's employment or contract to the Company or any Subsidiary.
Except as set forth on Schedule 3.19(k) of the Company Disclosure Letter, no
such employee or present consultant of the Company or any Subsidiary has
excluded works or inventions made prior to his employment with or work for the
Company or such Subsidiary from his assignment of inventions pursuant to such
proprietary invention agreements.
(l) The Company and its Subsidiaries do not use any information they
collect from web site visitors or other parties in an unlawful manner or in a
manner that in any way violates a stated privacy policy of the Company or any
Subsidiary or the privacy rights of their customers.
3.20 Trade Relations. Except as set forth on Schedule 3.20 of the
Company Disclosure Letter, there exists no actual or, to the Knowledge of the
Company, threatened termination, cancellation or limitation of, or any adverse
modification or change in, the business relationship of the Company, or the
business of the Company or any Subsidiary, with any customer or supplier or any
group of customers or suppliers whose purchases or inventories provided to the
Company's business are individually or in the aggregate material to the
Condition of the Company.
3.21 Insurance. The Company maintains and will continue to maintain
insurance of the types and in the amounts that the Company reasonably believes
are adequate for its business, including, but not limited to, directors and
officers insurance ("D&O Policies") and insurance covering all real and personal
property owned or leased by the Company or any Subsidiary against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against
in the industry, all of which insurance is in full force and effect. Schedule
3.21 of the Company Disclosure Letter sets forth a description and the amounts
of the Company's D&O Policies.
3.22 Environmental Matters. The Company and each Subsidiary is in
compliance with all applicable Environmental Laws. Except as set forth on
Schedule 3.22 of the Company Disclosure Letter, there is no civil, criminal or
administrative judgment, action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter pending or, to the
Knowledge of the Company or any Subsidiary, threatened against the Company or
any Subsidiary pursuant to Environmental Laws and, to the Knowledge of the
Company, there are no past or present events, conditions, circumstances,
activities, practices, incidents, agreements, actions or plans which could
reasonably be expected to prevent compliance with, or which have given rise to
or will give rise to liability under, Environmental Laws.
3.23 Related Party Transactions. Except as described in the SEC
Documents or except as contemplated hereby, there are no existing material
arrangements or proposed material transactions between the Company or any
Subsidiary and (i) any officer, director or equityholder of the Company or any
Subsidiary or any member of the immediate family of any of the foregoing Persons
or (ii) any business (corporate or
22
otherwise) which any of the foregoing Persons owns, directly or indirectly, or
in which any of the foregoing Persons has an ownership interest.
3.24 Broker's, Finder's or Similar Fees. Except as set forth on
Schedule 3.24 of the Company Disclosure Letter, there are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
in connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with the Company or any action taken by any such
Person.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby represents and warrants, severally and
not jointly, to the Company as of the date hereof and as of the Closing Date as
follows:
4.1 Existence and Power. Such Purchaser (a) is a limited partnership,
corporation, partnership or limited liability company duly organized and validly
existing under the laws of the jurisdiction of its formation and (b) has the
requisite partnership, corporate or limited liability company, as the case may
be, power and authority to execute, deliver and perform its obligations under
this Agreement and each of the other Transaction Documents to which it is a
party.
4.2 Authorization; No Contravention. The execution, delivery and
performance by such Purchaser of this Agreement and each of the other
Transaction Documents to which it is a party and the transactions contemplated
hereby and thereby, (a) have been duly authorized by all necessary partnership,
corporate or limited liability company, as the case may be, action, (b) do not
contravene the terms of such Purchaser's organizational documents, or any
amendment thereof, (c) do not violate, conflict with or result in any breach or
contravention of, or the creation of any Lien under, any Contractual Obligation
of such Purchaser or any Requirement of Law applicable to such Purchaser, and
(d) do not violate any Orders of any Governmental Authority against, or binding
upon, such Purchaser.
4.3 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization or other action by, or notice to,
or filing with, any Governmental Authority or any other Person, and no lapse of
a waiting period under any Requirement of Law, is necessary or required in
connection with the execution, delivery or performance (including, without
limitation, the purchase of the Purchased Shares or, in the case of Beacon, the
Beacon Warrant) by, or enforcement against, such Purchaser of this Agreement and
each of the other Transaction Documents to which it is a party or the
transactions contemplated hereby and thereby.
4.4 Binding Effect. This Agreement and each of the other Transaction
Documents to which it is a party have been duly executed and delivered by such
Purchaser and constitutes the legal, valid and binding obligations of such
Purchaser, enforceable against it in accordance with its terms, except as
enforceability may be
23
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
4.5 Purchase for Own Account. The Purchased Shares and, in the case of
Beacon, the Beacon Warrant to be acquired by such Purchaser pursuant to this
Agreement are being or will be acquired for its own account and with no
intention of distributing or reselling such Purchased Shares or, in the case of
Beacon, the Beacon Warrant or any part thereof in any transaction that would be
in violation of the securities laws of the United States of America, any state
of the United States or any foreign jurisdiction, without prejudice, however, to
the rights of such Purchaser at all times to sell or otherwise dispose of all or
any part of such Purchased Shares or, in the case of Beacon, the Beacon Warrant
under an effective registration statement under the Securities Act, or under an
exemption from such registration available under the Securities Act, and
subject, nevertheless, to the disposition of such Purchaser's property being at
all times within its control. If such Purchaser should in the future decide to
dispose of any of such Purchased Shares or, in the case of Beacon, the Beacon
Warrant, such Purchaser understands and agrees that it may do so only in
compliance with the Securities Act and applicable state and foreign securities
laws, as then in effect. Such Purchaser agrees to the imprinting, so long as
required by law, of a legend on certificates representing all of its Purchased
Shares or, in the case of Beacon, the Beacon Warrant and shares of Common Stock
issuable upon conversion of its Purchased Shares or, in the case of Beacon,
exercise of the Beacon Warrant to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY FOREIGN JURISDICTION. THE SECURITIES
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR PURSUANT TO
AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS.
4.6 Restricted Securities. Such Purchaser understands that the
Purchased Shares and, in the case of Beacon, the Beacon Warrant will not be
registered at the time of their issuance under the Securities Act for the reason
that the sale provided for in this Agreement is exempt pursuant to Section 4(2)
of the Securities Act and that the reliance of the Company on such exemption is
predicated in part on such Purchaser's representations set forth herein.
24
4.7 Accredited Investor. Such Purchaser is an "Accredited Investor"
within the meaning of Rule 501 of Regulation D under the Securities Act, as
presently in effect.
4.8 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by such
Purchaser in connection with the transactions contemplated hereby based on any
agreement, arrangement or understanding with such Purchaser or any action taken
by such Purchaser.
ARTICLE V
CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO CLOSE
The obligation of the Purchasers to purchase the Purchased Shares and,
in the case of Beacon, the Beacon Warrant, to pay the purchase price therefor at
the Closing and to perform any obligations hereunder shall be subject to the
satisfaction as determined by, or waiver by, the Purchasers of the following
conditions on or before the Closing Date.
5.1 Representations and Warranties. The representations and warranties
of the Company contained in Article III hereof shall be true and correct in all
material respects (except for any such representations and warranties which are
qualified by their terms by a reference to materiality or material adverse
effect, which representation as so qualified shall be true and correct in all
respects) at and on the Closing Date as if made at and on such date, except for
those representations and warranties that are expressly limited by their terms
to dates or times other than the Closing Date, which representations or
warranties need only be true and correct as aforesaid as of such other dates or
times.
5.2 Compliance with this Agreement. The Company shall have performed
and complied in all material respects with all of its agreements set forth
herein that are required to be performed by the Company on or before the Closing
Date.
5.3 Officer's Certificate. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchasers, dated the Closing Date, and signed by the Chief Executive Officer
and Chief Financial Officer of the Company, certifying as to the matters set
forth in Section 5.1 and 5.2.
5.4 Secretary's Certificate. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchasers, dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the Company, certifying (a) that the Company is in good standing
with the Secretary of State of the State of Delaware, (b) that the attached
copies of the Certificate of Incorporation, the By-laws and resolutions of the
Board of Directors of the Company and the Special Committee approving this
Agreement and each of the other Transaction Documents and the transactions
contemplated hereby and thereby, are all true, complete and correct and
25
remain unamended and in full force and effect and (c) as to the incumbency and
specimen signature of each officer of the Company executing this Agreement, each
other Transaction Document and any other document delivered in connection
herewith on behalf of the Company.
5.5 Filing of Certificate of Amendment and Certificate of Designations.
The Certificate of Amendment in substantially the form attached hereto as
Exhibit D-2 and the Certificate of Designations in substantially the form
attached hereto as Exhibit E, shall have been duly filed by the Company with the
Secretary of State of the State of Delaware in accordance with the General
Corporation Law of the State of Delaware, and the Purchasers shall have received
evidence of such filing in form and substance reasonably satisfactory to the
Purchasers.
5.6 Purchased Shares. The Company shall have delivered to each of the
Purchasers certificates in definitive form representing the number of Purchased
Shares being purchased by such Purchaser pursuant hereto, registered in the name
of such Purchaser.
5.7 Beacon Warrant. The Company shall have duly executed and delivered
to Beacon the Beacon Warrant in substantially the form attached hereto as
Exhibit A, registered in the name of Beacon.
5.8 Registration Rights Agreement. The Company shall have duly executed
and delivered the Registration Rights Agreement in substantially the form
attached hereto as Exhibit F and (i) shall have obtained the prior written
consent of the Stockholders holding at least a majority of the Registrable
Shares to enter into the Registration Rights Agreement and (ii) shall have
amended subsection 8(d) of the Series D Purchase Agreement granting the
Investors the right to include their securities of the Company in any
registration filed under subsection 8(d) of the Series D Purchase Agreement pro
rata with the Stockholders based on the number of securities of the Company
requested to be included in such offering by the Investors and Stockholders,
together as a group.
5.9 Indemnification Agreements. The Company shall have duly executed
and delivered to each of the designees of the Designated Purchasers elected or
appointed to the Board of Directors pursuant to Section 5.17 hereof an
indemnification agreement substantially in the form attached hereto as Exhibit
G.
5.10 Opinion of Counsel. The Purchasers shall have received an opinion
of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, dated the Closing Date, relating to the
transactions contemplated by or referred to herein, substantially in the form
attached hereto as Exhibit H.
5.11 No Material Adverse Change. Since the date hereof, there shall
have been no material adverse change in the Condition of the Company.
26
5.12 Consents and Approvals. All consents, exemptions, authorizations,
or other actions by, or notice to, or filings with, Governmental Authorities and
other Persons in respect of all Requirements of Law and with respect to those
Contractual Obligations of the Company which are necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Company of this Agreement and each of the other Transaction
Documents shall have been obtained and be in full force and effect, and the
Purchasers shall have been furnished with appropriate evidence thereof and all
applicable waiting periods shall have expired without any action being taken or
threatened which would have a material adverse effect on the Condition of the
Company.
5.13 No Material Judgment or Order. There shall not be on the Closing
Date any Order of a court of competent jurisdiction or any ruling of any
Governmental Authority or any condition imposed under any Requirement of Law
which would (a) prohibit or restrict (i) the purchase of the Purchased Shares or
the Beacon Warrant or (ii) the consummation of the transactions contemplated by
this Agreement, (b) subject the Purchasers to any material penalty or onerous
condition under or pursuant to any Requirement of Law if the Purchased Shares or
the Beacon Warrant were to be purchased hereunder or (c) restrict the operation
of the business of the Company or any Subsidiary as conducted on the date hereof
in a manner that would have a material adverse effect on the Condition of the
Company.
5.14 No Litigation. No action, suit, proceeding, claim or dispute shall
have been brought or otherwise arisen at law, in equity, in arbitration or
before any Governmental Authority against the Company or any Subsidiary which
would, if adversely determined (a) have a material adverse effect on the
Condition of the Company or (b) have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement or each of the other
Transaction Documents.
5.15 No Delisting Notice. The Company shall not have received any
notice from the Nasdaq Stock Market that the Company may be delisted, which
notification has not been resolved in favor of the Company, other than any such
notice that the Common Stock failed to (i) maintain a market value of $5,000,000
over the previous 30 consecutive trading days pursuant to Marketplace Rule
4450(a)(2), (ii) maintain stockholders' equity of at least $10,000,000 pursuant
to Marketplace Rule 4450(a)(3) or (iii) maintain a minimum bid price of $1.00
over the previous 30 consecutive trading days pursuant to Marketplace Rule
4450(a)(5).
5.16 Stockholder Approval. The Company shall have obtained the
Stockholder Approval in connection with the issuance of the Purchased Shares and
the Beacon Warrant in accordance with the terms of this Agreement at a duly
called meeting of the stockholders of the Company.
5.17 Board of Directors. The Board of Directors shall be comprised of
eight (8) directors and (a) the Company shall have caused (i) one representative
designated by Perseus, (ii) one representative designated by Nth Power, (iii)
one
27
representative designated by Rockport, (iv) one representative designated by
Arete Corporation and (v) one representative designated by CDP to be elected to
the Board of Directors at the Stockholders Meeting or shall have appointed such
representatives to fill any vacancies on the Board of Directors and (b) the
Company shall have caused the members of the Board of Directors to be elected or
appointed to the respective classes set forth on Schedule 5.17 hereto.
5.18 Compensation Committee. The Board of Directors shall have
appointed the designees of Perseus and Nth Power to the compensation committee
of the Board of Directors pursuant to Section 8.3(c) and shall have adopted a
resolution establishing that, for a period of two (2) years following the
Closing Date, the duties and powers of the compensation committee of the Board
of Directors shall include the sole authority to hire or fire the chief
executive officer of the Company; provided, that the compensation committee in
its sole discretion may elect to refer a decision on such matter to the Board of
Directors.
ARTICLE VI
CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE
The obligation of the Company to issue and sell the Purchased Shares
and the Beacon Warrant and the obligation of the Company to perform its other
obligations hereunder shall be subject to the satisfaction as determined by, or
waiver by, the Company of the following conditions on or before the Closing
Date:
28
6.1 Representations and Warranties. The representations and warranties
of each Purchaser contained in Article IV hereof shall be true and correct in
all material respects (except for any such representations and warranties which
are qualified by their terms by a reference to materiality or material adverse
effect, which representation as so qualified shall be true and correct in all
respects) at and on the Closing Date as if made at and on such date, except for
those representations and warranties that are expressly limited by their terms
to dates or times other than the Closing Date, which representations or
warranties need only be true and correct as aforesaid as of such other dates or
times.
6.2 Payment of Purchase Price. Each Purchaser shall be prepared to pay
the aggregate purchase price for the Purchased Shares to be purchased by such
Purchaser and, in the case of Beacon, the aggregate purchase price for the
Beacon Warrant.
6.3 Registration Rights Agreement. Each Purchaser shall have duly
executed and delivered the Registration Rights Agreement.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification. Except as otherwise provided in this Article VII,
the Company (the "Indemnifying Party") agrees to indemnify, defend and hold
harmless each of the Purchasers and its Affiliates and their respective
officers, directors, agents, employees, subsidiaries, partners, members and
controlling persons (each, an "Indemnified Party") to the fullest extent
permitted by law from and against any and all losses, Claims, or written threats
thereof (including, without limitation, any Claim by a third party), damages,
expenses (including reasonable fees, disbursements and other charges of counsel
incurred by the Indemnified Party in any action between the Indemnifying Party
and the Indemnified Party or between the Indemnified Party and any third party
or otherwise) or other liabilities (collectively, "Losses") resulting from or
arising out of any breach of any representation or warranty, covenant or
agreement by the Company in this Agreement or the other Transaction Documents.
The amount of any payment to any Indemnified Party herewith in respect of any
Loss shall be of sufficient amount to make such Indemnified Party whole for any
diminution in value of the Purchased Shares or the Beacon Warrant to the extent
such diminution in value is attributable to such breach. In connection with the
obligation of the Indemnifying Party to indemnify for expenses as set forth
above, the Indemnifying Party shall, upon presentation of appropriate invoices
containing reasonable detail, reimburse each Indemnified Party for all such
expenses (including reasonable fees, disbursements and other charges of counsel
incurred by the Indemnified Party in any action between the Indemnifying Party
and the Indemnified Party or between the Indemnified Party and any third party)
as they are incurred by such Indemnified Party; provided, however, that if an
Indemnified Party is reimbursed under this Article VII for any expenses, such
reimbursement of expenses shall be refunded to the extent it is finally
judicially
29
determined that the Losses in question resulted primarily from the willful
misconduct or gross negligence of such Indemnified Party.
7.2 Notification. Each Indemnified Party under this Article VII shall,
promptly after the receipt of notice of the commencement of any Claim against
such Indemnified Party in respect of which indemnity may be sought from the
Indemnifying Party under this Article VII, notify the Indemnifying Party in
writing of the commencement thereof. The omission of any Indemnified Party to so
notify the Indemnifying Party of any such action shall not relieve the
Indemnifying Party from any liability which it may have to such Indemnified
Party (a) other than pursuant to this Article VII or (b) under this Article VII
unless, and only to the extent that, such omission results in the Indemnifying
Party's forfeiture of substantive rights or defenses. In case any such Claim
shall be brought against any Indemnified Party, and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to assume the defense thereof at its own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment; provided,
however, that any Indemnified Party may, at its own expense, retain separate
counsel to participate in such defense at its own expense. Notwithstanding the
foregoing, in any Claim in which both the Indemnifying Party, on the one hand,
and an Indemnified Party, on the other hand, are, or are reasonably likely to
become, a party, such Indemnified Party shall have the right to employ separate
counsel and to control its own defense of such Claim if, in the reasonable
opinion of counsel to such Indemnified Party, either (x) one or more defenses
are available to the Indemnified Party that are not available to the
Indemnifying Party or (y) a conflict or potential conflict exists between the
Indemnifying Party, on the one hand, and such Indemnified Party, on the other
hand, that would make such separate representation advisable; provided, however,
that the Indemnifying Party (i) shall not be liable for the fees and expenses of
more than one counsel to all Indemnified Parties and (ii) shall reimburse the
Indemnified Parties for all of such fees and expenses of such counsel incurred
in any action between the Indemnifying Party and the Indemnified Parties or
between the Indemnified Parties and any third party, as such expenses are
incurred. The Indemnifying Party agrees that it will not, without the prior
written consent of the Purchasers, settle, compromise or consent to the entry of
any judgment in any pending or threatened Claim relating to the matters
contemplated hereby (if any Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising or that may arise out of such Claim. The
Indemnifying Party shall not be liable for any settlement of any Claim effected
against an Indemnified Party without its written consent. The rights accorded to
an Indemnified Party hereunder shall be in addition to any rights that any
Indemnified Party may have at common law, by separate agreement or otherwise;
provided, however, that notwithstanding the foregoing or anything to the
contrary contained in this Agreement, nothing in this Article VII shall restrict
or limit any rights that any Indemnified Party may have to seek equitable
relief.
7.3 Contribution. If the indemnification provided for in this Article
VII from the Indemnifying Party is unavailable to an Indemnified Party hereunder
30
in respect of any Losses referred to herein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Losses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in
such Losses, as well as any other relevant equitable considerations. The
relative faults of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the Losses referred to above shall be deemed to include, subject to
the limitations set forth in Sections 7.1 and 7.2, any legal or other fees,
charges or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees with the Purchasers as follows:
8.1 Preservation of Existence. Between the date hereof and the Closing
Date, the Company and each Subsidiary shall:
(a) preserve and maintain in full force and effect its existence and
good standing under the laws of its jurisdiction of formation or organization;
(b) preserve and maintain in full force and effect all material rights,
privileges, qualifications, applications, licenses and franchises necessary in
the normal conduct of its business;
(c) use its reasonable best efforts to preserve its business
organization;
(d) conduct its business in the ordinary course in accordance with
sound business practices, keep its properties in good working order and
condition (normal wear and tear excepted), and from time to time make all needed
repairs to, renewals of or replacements of its properties so that the efficiency
of its business operation shall be reasonably maintained and preserved;
(e) take all reasonable actions to protect and maintain the Company
Intellectual Property, including, without limitation, prosecuting all pending
applications for Patents or registration of Trademarks and Copyrights and
maintaining, to the extent permitted by law, each Patent or registration owned
by the Company or any Subsidiary;
31
(f) comply in all material respects with all Requirements of Law and
with the directions of any Governmental Authority having jurisdiction over the
Company or any Subsidiary or its business or property, and shall not take any
action designed to or that might reasonably be expected to cause or result in
unlawful manipulation of the price of the Common Stock to facilitate the sale or
resale of the Purchased Shares, the Beacon Warrant or the Warrant Shares;
(g) file or cause to be filed in a timely manner all reports,
applications, estimates and licenses that shall be required by a Governmental
Authority;
(h) conduct its business in a manner such that the representations and
warranties of the Company contained in Article III shall continue to be true and
correct in all material respects on and as of the Closing Date as if made on and
as of the Closing Date, and shall not undertake, without the written consent of
the Purchasers, any of the actions specified in the last two sentences of
Section 3.12;
(i) use its best efforts to cause the closing conditions contained in
Article 5 to be satisfied on or before the Closing Date; and
(j) not issue, deliver, sell or authorize, or propose the issuance,
delivery, sale or purchase of, any additional shares of capital stock, Stock
Equivalents or any other security of the Company or such Subsidiary, other than
(i) the issuance of Common Stock pursuant to the exercise of any Options
outstanding as of the date hereof, (ii) the increase in the aggregate number of
options which may be issued under the Stock Option Plans in an amount not to
exceed 6,000,000 and (iii) the issuance of options to purchase shares of Common
Stock issued under the Stock Option Plans in an amount not to exceed 400,000 in
the aggregate.
8.2 Stockholders Meeting. The Company shall cause a meeting of its
stockholders (the "Stockholders Meeting") to be duly called and held as soon as
reasonably practicable after the date hereof for the purpose of voting on (i)
the approval of the issuance of the Purchased Shares and the Beacon Warrant
(which vote shall be taken in a manner that complies with the rules and
regulations of the Nasdaq Stock Market), (ii) the election of the designees of
Perseus, Nth Power, Rockport, Arete Corporation and CDP to the Board of
Directors (unless the appointment of such designees is accomplished by
resolution of the Board of Directors outside of the Stockholders Meeting), (iii)
the adoption and approval of the Certificate of Amendment and (iv) the increase
in the aggregate number of options which may be issued under the Stock Option
Plans in accordance with the limitations set forth in Section 8.1(j). At the
Stockholders Meeting, the Board of Directors shall recommend approval by the
Company's stockholders of the matters described in clauses (i), (ii), (iii) and
(iv) of the preceding sentence (the "Stockholder Approval"). In connection with
the Stockholders Meeting, the Company will (i) promptly, but in no event more
than 30 days, following the date hereof, prepare and file with the SEC, use its
commercially reasonable efforts to have cleared by the SEC and thereafter mail
to its stockholders as promptly as practicable the Proxy Statement and all other
proxy materials for such meeting, (ii) use its reasonable best efforts to obtain
the Stockholder Approval and (iii) otherwise comply with all legal
32
requirements applicable to the Stockholders Meeting. As soon as practicable, but
in no event later than two Business Days, following receipt of the Stockholder
Approval, the Company shall file the Certificate of Amendment with the Delaware
Secretary of State and will, promptly thereafter, provide to each Purchaser
satisfactory evidence of such filing.
8.3 Board of Directors.
(a) As long as any Designated Purchaser continues to beneficially own
not less than the Minimum Ownership Percentage, such Designated Purchaser shall
be entitled to designate one designee to be nominated by the Company to serve as
a director of the Company. The Company shall cause each such designee to be
included in the slate of nominees recommended by the Board of Directors to the
Company's stockholders for election as a director, and the Company shall use its
reasonable best efforts to cause the election of each such designee, including
using its reasonable best efforts to cause officers of the Company who hold
proxies (unless otherwise directed by the stockholder submitting such proxy) to
vote such proxies in favor of the election of each such designee. As long as any
Designated Purchaser continues to beneficially own not less than the Minimum
Ownership Percentage, (i) upon the written request of such Designated Purchaser,
the Company shall use its reasonable best efforts to cause the Board of
Directors to remove the designee of such Designated Purchaser from the Board of
Directors (with or without cause), and (ii) in the event that such Designated
Purchaser's designee shall cease to serve as a director for any reason, the
Company shall use its reasonable best efforts to cause any vacancy resulting
thereby to be filled by another designee of such Designated Purchaser.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Company shall provide such reimbursement and compensation to the
designees of each of the Designated Purchasers as is consistent with the
reimbursement and compensation provided to other members of the Board of
Directors. The Company shall maintain its D&O Policies at least in such amounts
and covering such risks as in effect as of the date hereof.
(c) Subject to applicable corporate and securities laws and Nasdaq
Stock Market regulations, for a period of two years following the Closing Date,
for so long as either Perseus or Nth Power continues to beneficially own not
less than the Minimum Ownership Percentage, the compensation committee of the
Board of Directors shall be comprised of three members and the designee of such
Designated Purchaser shall be a member of such committee.
(d) For a period of two years following the Closing Date, the Company
shall not revoke, modify or otherwise amend the authority granted to the
compensation committee of the Board of Directors pursuant to Section 5.18
without the affirmative vote or written consent of the holders of eighty-five
percent (85%) of the outstanding shares of Series A Preferred Stock, voting as a
separate class.
33
(e) For purposes of determining whether any Designated Purchaser
continues to own not less than the Minimum Ownership Percentage, any shares of
Common Stock or Preferred Stock beneficially owned by Affiliates of such
Designated Purchaser shall be included in such determination.
8.4 Nasdaq Listing. The Company shall use its reasonable best efforts
to maintain the listing of the Common Stock on the Nasdaq Stock Market,
including, without limitation, (i) taking all actions reasonably related to
maintaining Nasdaq Stock Market listing standards, including, but not limited
to, the actions required pursuant to Section 8.2 and (ii) refraining from taking
actions reasonably expected to cause the Company to not meet Nasdaq Stock Market
listing standards. The Company shall provide the Purchasers copies of all
correspondence between the Company and the Nasdaq Stock Market promptly upon
receipt thereof.
8.5 Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized shares of Common Stock, solely for the
purpose of issue or delivery upon conversion of the Purchased Shares and
exercise of the Beacon Warrant, as provided in the Certificate of Designations
and the Beacon Warrant, the maximum number of shares of Common Stock that may be
issuable or deliverable upon such conversion or exercise. Such shares of Common
Stock are duly authorized and, when issued or delivered in accordance with the
Certificate of Designations and the Beacon Warrant, shall be validly issued,
fully paid and non-assessable. The Company shall issue such shares of Common
Stock in accordance with the terms of the Certificate of Designations and the
Beacon Warrant, and otherwise comply with the terms hereof and thereof.
8.6 Restrictions on Public Sale. The Company agrees (i) not to effect
any public offering or distribution of any equity securities of the Company or
securities convertible into or exchangeable or exercisable for equity securities
of the Company, and (ii) not to register any shares of equity securities of the
Company or securities convertible into or exchangeable or exercisable for equity
securities of the Company (except pursuant to registration on Form S-8 or any
successor thereto), in each case, during the period beginning on the date hereof
and ending on the earlier to occur of the termination of this Agreement pursuant
to Section 9.1 or 90 days after the effective date of the shelf registration
statement to be filed in accordance with Article III of the Registration Rights
Agreement, except as part of such registration.
Each of the Purchasers hereby covenants and agrees with the Company as
follows:
8.7 Stand Still. Other than pursuant to this Agreement, the conversion
of the Purchased Shares or any distribution or dividend by the Company, each of
the Purchasers agrees, for itself and for its Affiliates, that it shall not, and
shall not permit any of its respective Affiliates to, and its respective
Affiliates shall not, without the prior written consent of the Company, purchase
or otherwise acquire, directly or indirectly, or sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or
34
securities exercisable for or convertible into shares of Common Stock prior to
the earlier of (i) the termination of this Agreement pursuant to Section 9.1 and
(ii) the Closing Date.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 Termination. This Agreement may be terminated prior to the Closing
as follows:
(a) at any time on or prior to the Closing Date, by mutual written
consent of the Company and the Purchasers;
(b) at the election of the Company or the Purchasers by written notice
to the other parties hereto after 5:00 p.m., New York time, on July 15, if the
Closing shall not have occurred, unless such date is extended by the mutual
written consent of the Company and the Purchasers; provided, however, that the
right to terminate this Agreement under this Section 9.1(b) shall not be
available (i) to any party whose breach of any representation, warranty,
covenant or agreement under this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date or (ii) if the
Closing has not occurred solely because any party hereto has not yet obtained a
necessary approval from any Governmental Authority;
(c) at the election of the Company, if there has been a material breach
of any representation, warranty, covenant or agreement on the part of any of the
Purchasers contained in this Agreement, which breach has not been cured within
fifteen (15) Business Days of notice to the Purchasers of such breach;
(d) at the election of the Purchasers, if there has been a material
breach of any representation, warranty, covenant or agreement on the part of the
Company contained in this Agreement, which breach has not been cured within
fifteen (15) Business Days of notice to the Company of such breach; or
(e) at the election of the Company or the Purchasers, if the Company
does not receive the Stockholder Approval described in Section 8.2.
If this Agreement so terminates, it shall become null and void and have
no further force or effect, except as provided in Section 9.2.
9.2 Survival. If this Agreement is terminated and the transactions
contemplated hereby are not consummated as described above, this Agreement shall
become void and of no further force and effect, except for the provisions of
Article I, this Section 9.2, Section 9.3, Section 10.7, Section 10.11 and
Section 10.12; provided, however, that, except for the payment of the
Alternative Transaction Fee in accordance with Section 9.3 and the payment of
fees and expenses pursuant to Section 10.12, (a) none of the parties hereto
shall have any liability in respect of a termination of this Agreement pursuant
to Section 9.1(a), Section 9.1(b) or Section 9.1(e) and (b) nothing
35
shall relieve any of the parties from liability for actual damages resulting
from a termination of this Agreement pursuant to Section 9.1(c) or Section
9.1(d); and provided, further, that none of the parties hereto shall have any
liability for speculative, indirect, unforeseeable or consequential damages or
lost profits resulting from any legal action relating to any termination of this
Agreement.
9.3 Alternative Transaction Fee. The Company agrees that, from the date
hereof through the Closing Date or the termination of this Agreement, whichever
occurs first, it will not initiate, solicit, encourage, discuss, negotiate or
accept any offers from any third party or indicate any interest to any third
party with respect to (i) the sale of capital stock of the Company, (ii) the
sale of all or substantially all of the assets of the Company, (iii) any merger
or consolidation of the Company with any other person or (iv) any material
financing transaction (each, an "Alternative Transaction"); provided, however,
that the Company may, if the Board of Directors of the Company determines in
good faith, based upon the advice of its outside legal counsel, that the failure
to do so would be reasonably likely to result in a breach of its fiduciary
duties under applicable law, participate in discussions regarding any such
Alternative Transaction and furnish information with respect to the Company and
its Subsidiaries pursuant to a customary confidentiality agreement. The Company
agrees to notify the Purchasers promptly if any third party contacts the Company
regarding any Alternative Transaction and to provide to the Purchasers such
information with respect thereto as the Purchasers request. In the event that
(i) (x) the Company terminates this Agreement pursuant to Section 9.1 for any
reason other than pursuant to Section 9.1(c), including the failure to obtain
the Stockholder Approval, or (y) the Purchasers terminate this Agreement
pursuant to Section 9.1 for any reason other than pursuant to Section 9.1(d),
including the failure to obtain the Stockholder Approval, and (ii) the Company
enters into any binding or non-binding term sheet, letter of intent or agreement
relating to an Alternative Transaction within twelve (12) months after such
termination and consummates an Alternative Transaction within twenty-four (24)
months after such termination, then the Company shall pay an alternative
transaction fee equal to $1,000,000 (the "Alternative Transaction Fee") within
two Business Days after the consummation of such Alternative Transaction (the
"Payment Date") to the Designated Purchasers, which are the Purchasers who
executed the term sheet with the Company, dated January 14, 2003, relating to
the transactions contemplated by this Agreement. Such Alternative Transaction
Fee shall be paid to the Designated Purchasers pro rata with their respective
commitments set forth in such term sheet. The Company also shall be obligated to
reimburse the Purchasers for their out-of-pocket fees and expenses as provided
in Section 10.11. From and after the Payment Date, to the extent that the
Alternative Transaction Fee has not been paid, the Company shall continue to be
obligated to immediately pay the Alternative Transaction Fee and such payment
will be made together with interest at 10% compounded daily beginning on the
Payment Date and ending on the date of payment. Payments must be made by wire
transfer of cash or other immediately available funds.
ARTICLE X
MISCELLANEOUS
36
10.1 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement until twelve (12) months following the Closing Date,
except for (a) Sections 3.1, 3.2, 3.4, 3.7, 3.14 and 3.24, which representations
and warranties shall survive until the third anniversary of the Closing Date,
and (b) Section 3.11, which shall survive until the later to occur of (i) the
lapse of the statute of limitations with respect to the assessment of any Tax to
which such representation and warranty relates (including any extensions or
waivers thereof) and (ii) sixty (60) days after the final administrative or
judicial determination of the Taxes to which such representation and warranty
relates, and no claim with respect to Section 3.11 may be asserted thereafter
with the exception of claims arising out of any fact, circumstance, action or
proceeding to which the party asserting such claim shall have given notice to
the other parties to this Agreement prior to the termination of such period of
reasonable belief that a tax liability will subsequently arise therefrom.
10.2 Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
if to the Company:
Evergreen Solar, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Gold, Esq.
if to the Purchasers:
to the address set forth under each Purchaser's name on
Schedule 2.1 hereto
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
37
All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial courier service; five (5)
Business Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically acknowledged, if telecopied. Any party may by
notice given in accordance with this Section 10.2 designate another address or
Person for receipt of notices hereunder.
10.3 Successors and Assigns; Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto. Subject to applicable securities laws and the
terms and conditions thereof, the Purchasers may assign any of their rights
under this Agreement or the other Transaction Documents to any of their
respective Affiliates. The Company may not assign any of its rights under this
Agreement without the written consent of the Purchasers. Except as provided in
Article VII, no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.
10.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the Purchasers in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
the Purchasers at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement, and any consent
to any departure by the Company or the Purchasers from the terms of any
provision of this Agreement, shall be effective (i) only if it is made or given
in writing and signed by the Company and the Purchasers and (ii) only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on the Company in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances.
10.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
10.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
10.7 GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
38
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. The parties hereto
irrevocably submit to the non-exclusive jurisdiction of any state or federal
court sitting in the County of New York, in the State of New York over any suit,
action or proceeding arising out of or relating to this Agreement, the other
Transaction Documents, the Purchased Shares, the Beacon Warrant or the affairs
of the Company. To the fullest extent they may effectively do so under
applicable law, the parties hereto irrevocably waive and agree not to assert, by
way of motion, as a defense or otherwise, any claim that they are not subject to
the jurisdiction of any such court, any objection that they may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
10.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
10.9 Rules of Construction. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
10.10 Approval or Waiver by Purchasers. Whenever pursuant to any
provision of this Agreement any consent, approval or waiver is required to be
made or given by the Purchasers, including, without limitation, (i) the
determination of the satisfaction or waiver of any condition pursuant to Article
V, (ii) the approval of any amendment, supplement or modification of or to any
provision of this Agreement pursuant to Section 10.4 and (iii) the approval of
any publicity release or announcement pursuant to Section 10.13, such consent,
approval or waiver shall be deemed made or given when made or given in writing
by Purchasers committing to purchase a majority of the Purchased Shares, as set
forth on Schedule 2.1 hereto; provided, that if any proposed waiver, amendment
or departure by the Company or the Purchasers from the terms of any provision of
this Agreement, or any other proposed action requiring the consent, approval or
waiver by the Purchasers hereunder, would adversely affect the rights,
preferences or privileges of any Purchaser disproportionately with respect to
the rights, preferences and privileges of the other Purchasers, such Purchaser's
consent, approval or waiver shall be required; and provided, further, that the
consent, approval or waiver of each Purchaser shall be required in respect of
any proposed waiver, amendment or departure by the Company or the Purchasers
from the terms of any provision of this Agreement, or other proposed action
requiring the consent, approval or waiver by the Purchasers hereunder, that
would (x) increase the Price Per Share of the Series A Preferred Stock to be
paid by the Purchasers at Closing or (y) reduce the rate of dividends payable on
the Series A Preferred Stock or the liquidation preference or conversion price
of the Series A Preferred Stock.
39
10.11 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, and the other Transaction Documents are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, representations, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, together with
the exhibits and schedules hereto, and the other Transaction Documents supersede
all prior agreements and understandings among the parties with respect to such
subject matter.
10.12 Fees. Upon the Closing, the Company shall reimburse each of the
Purchasers for their out-of-pocket fees and expenses incurred in connection with
the transactions contemplated by this Agreement, including the fees,
disbursements and other charges of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP,
counsel to Perseus; provided, that the aggregate amount of such fees and
expenses to be reimbursed shall not exceed $350,000.
10.13 Publicity. The initial publicity release or announcement
concerning this Agreement and the transactions contemplated hereby shall be in a
form mutually agreed by the parties hereto. Except as may be required by
applicable Requirements of Law, the parties agree that no other publicity
release or announcement concerning this Agreement or the transactions
contemplated hereby shall be made without prior approval thereof by the other
parties hereto. If any public announcement is required by any applicable
Requirement of Law or any listing agreement with any national securities
exchange to be made by any party hereto, prior to making such announcement, such
party will deliver a draft of such announcement to the other parties hereto and
shall give the other parties reasonable opportunity to comment thereon.
10.14 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
[Remainder of page intentionally left blank]
40
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Stock and Warrant Purchase Agreement on the date first written
above.
EVERGREEN SOLAR, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief
Executive Officer
PERSEUS 2000, L.L.C.
By: Perseus 2000 Management, L.L.C.,
its Manager
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
NTH POWER TECHNOLOGIES FUND II, LP
By: Nth Power LLC,
its General Partner
By: /s/ Xxx Xxxxxxxx
----------------------------------
Name: Xxx Xxxxxxxx
Title: Managing Director
NTH POWER TECHNOLOGIES FUND II-A, LP
By: Nth Power LLC,
its General Partner
By: /s/ Xxx Xxxxxxxx
----------------------------------
Name: Xxx Xxxxxxxx
Title: Managing Director
ROCKPORT CAPITAL PARTNERS, L.P.
By: RockPort Capital I, LLC,
its General Partner
41
By: /s/ Xxxxxxx X. XxXxxxxxx
Name: Xxxxxxx X. XxXxxxxxx
----------------------------------
Title: Partner
42
MICRO-GENERATION TECHNOLOGY FUND, LLC
By: Arete Corporation, Manager
By: /s/ Xxxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: President
UVCC FUND II
By: Arete Venture Investors II, L.P.
By: /s/ Xxxxxx X. Xxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: General Partner
UVCC II PARALLEL FUND, L.P.
By: Arete Ventures L.P. III
By: /s/ Xxxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: General Partner
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
By: /s/ Xxx Xxxxxxx
----------------------------------
Name: Xxx Xxxxxxx
Title:
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title:
43
CDP CAPITAL - TECHNOLOGY VENTURES
U.S. FUND 2002 L.P.
By: Management U.S. Fund 2002 Inc.,
its General Partner
By: /s/ Xxx Xxxxxxx
---------------------------------
Name: Xxx Xxxxxxx
Title: Senior Partner
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Name: Partner
Title:
BEACON POWER CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
MASSACHUSETTS TECHNOLOGY PARK
CORPORATION
By: /s/ Xxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxx Xxxxx
Title: Executive Director
ZERO STAGE CAPITAL VII, L.P.
By: Zero Stage Capital Associates VII,
L.P., its General Partner
By: Zero Stage Capital Associates
GP VII, Inc., its General Partner
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Partner and Chief
Executive Officer
44
ZERO STAGE CAPITAL (CAYMAN) VII, L.P.
By: Zero Stage Capital Associates VII,
L.P., its General Partner
By: Zero Stage Capital GP VII, Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Partner and Chief
Executive Officer
ZERO STAGE CAPITAL SBIC VII, L.P.
By: Zero Stage Capital SBIC VII
Associates, L.P., its General
Partner
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Partner and
Chief Executive Officer
IMPAX ENVIRONMENTAL MARKETS PLC
By: /s/ Xxx Xxxx
----------------------------------
Name: Xxx Xxxx
Title: Investment Manager
XXXXXXX XXXXX NEW ENERGY TECHNOLOGY
FUND
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
45
MLIIF NEW ENERGY FUND
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
PNE INVEST LIMITED
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chairman of the Board of
Directors
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
ODYSSEY FUND
By: Rockefeller & Co., Inc.,
its Investment Manager
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Investment Officer
XXX PRIVATE EQUITY ENERGY FUND LP
By: XXX Equity Partners Limited,
its General Partner
By: /s/ Xxxx Domanig
----------------------------------
Name: Xxxx Domanig
Title: Director
46
XXX SUSTAINABILITY PRIVATE EQUITY LP
By: XXX Equity Partners Limited,
its General Partner
By: /s/ Xxxx Domanig
----------------------------------
Name: Xxxx Domanig
Title: Director
XXX XXXXX ENERGY
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
RP CO-INVESTMENT FUND I GP, LLC
By: RP Co-Investment Fund I GP, LLC
By: /s/ Xxxxxxx X. XxXxxxxxx
----------------------------------
Name: Xxxxxxx X. XxXxxxxxx
Title: Partner
47
Schedule 2.1
Purchase Price for the Purchased Shares
--------------------------------------------------------------------------------
Purchaser Purchase Price
---------------------------------------------------------------- ---------------
PERSEUS 2000, L.L.C. $ 3,000,000
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
---------------------------------------------------------------- ---------------
Nth POWER TECHNOLOGIES FUND II, LP $ 2,000,000
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxxx
---------------------------------------------------------------- ---------------
Nth POWER TECHNOLOGIES FUND II-A, LP $ 2,000,000
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxxx
---------------------------------------------------------------- ---------------
ROCKPORT CAPITAL PARTNERS, L.P. $ 4,000,000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx
---------------------------------------------------------------- ---------------
RP CO-INVESTMENT FUND, I $ 1,250,000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx
--------------------------------------------------------------------------------
48
--------------------------------------------------------------------------------
Purchaser Purchase Price
---------------------------------------------------------------- ---------------
MICRO-GENERATION TECHNOLOGY FUND, LLC $ 2,000,000*
If by US mail:
c/o Arete Corporation
X.X. Xxx 0000
Xxxxxx Xxxxxx, XX 00000
If by courier:
x/x Xxxxx Xxxxxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Xx.
---------------------------------------------------------------- ---------------
UVCC FUND II $ 750,000*
If by US mail:
c/o Arete Corporation
X.X. Xxx 0000
Xxxxxx Xxxxxx, XX 00000
If by courier:
x/x Xxxxx Xxxxxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Xx.
---------------------------------------------------------------- ---------------
UVCC II PARALLEL FUND. L.P. $ 750,000*
If by US mail:
c/o Arete Corporation
X.X. Xxx 0000
Xxxxxx Xxxxxx, XX 00000
If by courier:
x/x Xxxxx Xxxxxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Xx.
--------------------------------------------------------------------------------
* Purchaser reserves the right, prior to Closing, to reallocate the amount of
its investment among its Affiliates which are Purchasers hereunder.
49
-------------------------------------------------------------------------------
Purchaser Purchase Price
---------------------------------------------------------------- ---------------
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC $ 2,550,000
0000, XxXxxx Xxxxxxx xx.,
0xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Telecopy: (000) 000-0000
Attention: President of Capital Technologies CDPQ Inc.
---------------------------------------------------------------- ---------------
CDP CAPITAL - TECHNOLOGY VENTURES U.S. FUND 2002 L.P. $ 450,000
0000, XxXxxx Xxxxxxx xx.,
0xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Telecopy: (000) 000-0000
Attention: President of Capital Technologies CDPQ Inc.
---------------------------------------------------------------- ---------------
BEACON POWER CORPORATION $ 1,000,000
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: F. Xxxxxxx Xxxx, CEO
with a copy to:
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx, CFO
---------------------------------------------------------------- ---------------
MASSACHUSETTS TECHNOLOGY PARK CORPORATION $ 2,500,000
00 Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx, Senior Counsel
---------------------------------------------------------------- ---------------
ZERO STAGE CAPITAL VII, L.P. $ 638,200
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx, CFO
--------------------------------------------------------------------------------
50
--------------------------------------------------------------------------------
ZERO STAGE CAPITAL (CAYMAN) VII, L.P. $ 235,400
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx, CFO
---------------------------------------------------------------- ---------------
ZERO STAGE CAPITAL SBIC VII, L.P. $ 126,400
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx, CFO
--------------------------------------------------------------------------------
51
--------------------------------------------------------------------------------
Purchaser Purchase Price
---------------------------------------------------------------- ---------------
IMPAX ENVIRONMENTAL MARKETS PLC $ 500,000
Xxxxxxxxx Xxxxx
0-0 Xxxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
Telecopy: x00 00 0000 0000
Attention: Xxx Xxxx, Investment Manager
---------------------------------------------------------------- ---------------
XXXXXXX XXXXX NEW ENERGY TECHNOLOGY FUND $ 1,500,000
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Telecopy: x00 00 0000 0000
Attention: Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxxxx
---------------------------------------------------------------- ---------------
MLIIF NEW ENERGY FUND $ 125,000
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Telecopy: x00 00 0000 0000
Attention: Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxxxx
---------------------------------------------------------------- ---------------
PNE INVEST LIMITED $ 000,000
Xxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx
St. Xxxxx Port
Guernsey, Channel Islands
Telecopy: x00 0 000 00 00
Attention: Xxxxxxx Xxxxxx
with a copy to:
Telecopy: x00 0 000 00 00
Attention: Xxxxxxx Xxxx
---------------------------------------------------------------- ---------------
ODYSSEY FUND $ 500,000
Rockefeller & Co., Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Chief Investment Officer
--------------------------------------------------------------------------------
52
--------------------------------------------------------------------------------
Purchaser Purchase Price
---------------------------------------------------------------- ---------------
XXX PRIVATE EQUITY ENERGY FUND LP $ 2,160,000
X.X. Xxx 000
Trafalgar Court/Les Banques
Xx. Xxxxx Xxxx/Xxxxxxxx XX0 0XX
Xxxxxxx Xxxxxxx
Telecopy: x00 0000 000 000
Attention: Xxxx Domanig
---------------------------------------------------------------- ---------------
XXX SUSTAINABILITY PRIVATE EQUITY LP $ 840,000
X.X. Xxx 000
Trafalgar Court/Les Banques
Xx. Xxxxx Xxxx/Xxxxxxxx XX0 0XX
Xxxxxxx Xxxxxxx
Telecopy: x00 0000 000 000
Attention: Xxxx Domanig
---------------------------------------------------------------- ---------------
XXX XXXXX ENERGY $ 250,000
Xxxxxxxxxxxxxxx 00
0000 Xxxxxxxx-Xxxxxx
Xxxxxxxxxxx
Telecopy: x00 (0) 000 0000
Attention:
---------------------------------------------------------------- ---------------
Total: $ 29,375,000
--------------------------------------------------------------------------------
53
Schedule 5.17
Board of Directors as of Closing
Class I Directors
-----------------
Xxx Xxxxxxx (or other CDP designee)
Xxxxxxx X. Xxxxxxx
Class II Directors
------------------
Xxxxxxx X. XxXxxxxxx (or other Rockport designee)
Xxxxxx X. Xxxx, Xx. (or other Arete Corporation designee)
Xxxxx X. Xxxxxxxx
Class III Directors
-------------------
Xxxxxx X. Xxxxxx (or other Perseus designee)
Xxx Xxxxxxxx (or other Nth Power designee)
Xxxx X. Xxxxxx
54
