EXHIBIT 2.1
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
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This Agreement dated as of September 20th 1989 is entered into by and among
Astropower Inc., a Delaware corporation (the "Company"), Astrosystems
Incorporated, a Delaware corporation, on behalf of itself and its subsidiary ASI
Solar Energy Corporation ("Astrosystems"), Essex Vencap, Inc., a New Jersey
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corporation ("Essex"), and Xxxxx X. Xxxxxxx ("Xxxxxxx") (each of a, Essex and
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Xxxxxxx are referred to herein individually as a "Founder", and collectively as
the "Founders"), and the Purchasers listed on Exhibit A hereto.
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In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. Authorization and Sale of Shares.
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1.1 Authorization. The Company has, or before the First Closing (as
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defined in Section 2.1) will have, duly authorized the sale and issuance of
1,775,000 shares of its Series A Convertible Preferred Stock, $.0l par value per
share (the "Series A Preferred"), having the rights, restrictions, privileges
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and preferences set forth in the Certificate of Amendment attached hereto as
Exhibit B (the "Certificate of Amendment"). The Company has, or on or before the
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First Closing will have, adopted and filed the Certificate of Amendment with the
Secretary of State of the State of Delaware.
1.2 Sale of Shares. Subject to the terms and conditions of this
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Agreement, at each Closing the Company will sell and issue to each of the
Purchasers listed on Exhibit A, and each of the Purchasers listed on Exhibit A
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will purchase, the number of shares of Series A Preferred set forth opposite
such Purchaser's name on Exhibit A for the purchase price set forth thereon.
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The shares of Series A Preferred being sold under this Agreement are referred to
as the "Shares".
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1.3 Separate Agreements. The Company's agreement with each of the
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Purchasers is a separate agreement, and the sale of the Shares to each of the
Purchasers is a separate sale.
1.4 Use of Proceeds. The Company will use the proceeds from the sale
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of the Shares for product development and other working capital purposes.
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2. Closings.
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2.1 First Closing. The closing of the sale and purchase of the
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Shares as set forth on Exhibit A under the heading "First Closing" (the "First
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Closing") is taking place simultaneously with the execution of this Agreement at
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the offices of a Handler Xxxxxxxx x Xxxxxx & Xxxxxx, 00 Xxxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx at 10:00 A.M. on ___________ _____, 1989.
At the First Closing, the Company will deliver to each of the Purchasers a
certificate for the number of Shares being purchased by such Purchaser,
registered in the name of such Purchaser, against payment to the Company of
$1.85 per share (the "First Closing Price") by wire transfer, check, or other
method acceptable to the Company. The date of the First Closing is hereinafter
referred to as the "First Closing Date". If at the First Closing any of the
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conditions specified in Section 6 shall not have been fulfilled, each of the
Purchasers shall, at his or its election, be relieved of all of his or its
obligations under this Agreement without thereby waiving any other rights he or
it may have by reason of such failure or such non-fulfillment.
2.2 Second Closing.
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(a) The Closing of the sale and purchase of the Shares as set
forth on Exhibit A under the heading "Second Closing" (the "Second Closing")
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shall take place at the offices of a Handler Xxxxxxxx Xxxxxx Landau &
Xxxxxx, 00 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, within thirty (30) days after
the Second Closing Conditions (as defined below) are met (the "Second Closing
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Date"). The First Closing and the Second Closing are sometimes referred to
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hereinafter collectively as the "Closings" and individually as a "Closing". The
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parties hereto acknowledge that the price per Share to be paid by the Purchasers
at the Second Closing (the "Second Closing Price") shall be $15,000,000 divided
by (4,595,066+a) if the Purchasers reasonably determine that the milestone
conditions set forth as paragraphs 1 and 2 of Exhibit C have been fulfilled
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within 90 days after the First Closing and $12,000,000 divided by (4,595,066+x)
per Share if the Purchasers reasonably determine that the milestone conditions
set forth as paragraphs 1 and 2 of Exhibit C have been fulfilled 90 days or more
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after the First Closing. As used in the preceding sentence, 'x' equals the
number of Shares sold at the First Closing. Thus, if 540,541 Shares are sold at
the First Closing and the milestone conditions set forth on Exhibit C are
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fulfilled within 90 days after the First Closing, the price per Share payable by
the Purchasers at the Second Closing shall be $2.92 per Share.
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(a) The obligation of the Purchasers to purchase Shares at the Second
Closing is conditioned upon fulfillment of the milestone conditions set forth on
Exhibit C hereto (the "Second Closing Conditions"). At the Second Closing, the
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Company will deliver to each of the Purchasers a certificate for the number of
shares being purchased by such Purchaser, registered in the name of such
Purchaser, against payment to the Company of the purchase price therefor, by
wire transfer, check, or other method acceptable to the Company. If at the
Second Closing any of the conditions specified in Section 7 shall not have been
fulfilled, each of the Purchasers shall, at his or its election, be relieved of
all of his or its obligations under this Agreement without thereby waiving any
of the rights he or it may have by reason of such failure or such non-
fulfillment.
(c) Notwithstanding the provisions of Sections 2.2(a) and (a) above,
upon a reasonable determination by the Purchasers prior to December 31, 1989
that the milestone conditions set forth as paragraphs 1 and 2 of Exhibit C have
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been fulfilled, the Purchasers shall deposit with Xxxx and Xxxx ("Escrow Agent")
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the amount of the purchase price set forth on Exhibit A under the heading
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"Second Closing." Such amount shall be held by Escrow Agent pursuant to the
terms of an Escrow Agreement in the form of Exhibit D until the earlier of (a)
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receipt by Escrow Agent of a notice signed on behalf of the Company and each
Purchaser that the milestone condition set forth as paragraph 3 of Exhibit C has
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been fulfilled (the "Confirmation Notice"), or (ii) June 30, 1990. If the
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Escrow Agent receives the Confirmation Notice prior to June 30, 1990, the Escrow
Agent shall pay such escrowed amount, plus all interest earned thereon, to the
Company. If the Escrow Agent does not receive the Confirmation Notice prior to
June 30, 1990, the Escrow Agent shall pay such escrowed amount, plus all
interest earned thereon, to the Purchasers and all obligations of the Purchasers
with respect to the Second Closing shall cease.
(a) Notwithstanding the provisions of Section 2.2(a), affiliates of
GenAm (U.S.), Inc., Advent International Corporation, a Venture Capital
Corporation, Xxxxxx Xxxxxxxxx Associates or Ventures West Management III, Ltd.
shall have the right to purchase Shares at the First Closing Price and shall be
deemed to have purchased such Shares at the First Closing, if such Shares are
purchased within thirty (30) days after the First Closing. The parties hereto
acknowledge that the Company shall have the right prior to December 31, 1989 to
issue and sell Shares to entities who are not parties to this Agreement, which
such entities shall be entitled to all of the rights of Purchasers hereunder,
provided that the purchase of Shares by such entities is approved by at least
two-thirds (2/3) of the Purchasers, that such entities pay the Second Closing
Price for such Shares and
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that such entities agree to be bound by all of the obligations of Purchasers
hereunder.
3. Representations of the Company. Subject to and except as disclosed by
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the Company in Exhibit E hereto, the Company hereby represents and warrants to
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each of the Purchasers as follows:
3.1 Organization and Standing. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted by it and to enter into and
perform this Agreement and to carry out the transactions contemplated by this
Agreement. The Company is duly qualified to do business as a foreign
corporation and is in good standing in every jurisdiction in which the failure
to so qualify would have a material adverse effect on the operations or
financial condition of the Company. The Company has furnished to the Purchasers
true and complete copies of its Certificate of Incorporation and By-Laws, each
as amended to date and presently in effect.
3.2 Capitalization. The authorized capital stock of the Company
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(immediately prior to the First Closing) will consist of 10,000,000 shares of
Common Stock, of which 4,444,444 shares are issued and outstanding, and
1,775,000 shares of Preferred Stock, $.0l par value per share, none of which are
issued and outstanding. All of the issued and outstanding shares of Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in Exhibit E hereto or provided in this
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Agreement, (i) no subscription, warrant, option, convertible security or other
right (contingent or otherwise) to purchase or acquire any shares of capital
stock of the Company is authorized or outstanding, (ii) there is not any
commitment of the Company to issue any subscription, warrant, option,
convertible security or other such right or to issue or distribute to holders of
any shares of its capital stock any evidences of indebtedness or assets of the
Company, and (iii) the Company has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof. Except as provided in this Agreement, no person or entity is
entitled to (i) any preemptive or similar right with respect to the issuance of
any capital stock of the Company, or (ii) any rights with respect to the
registration of any capital stock of the Company under the Securities Act of
1933, as amended (the "Securities Act"). All of the issued and outstanding
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shares of Common Stock have been offered, issued and sold by the Company in
compliance with applicable Federal and state securities laws.
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To the best of the Company's knowledge, no stockholder of the Company has
granted options or other rights to purchase any shares of Common Stock from such
stockholder.
3.3 Subsidiaries. Except as set forth on Exhibit E, the Company has
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no subsidiaries and does not own or control, directly or indirectly, any other
corporation, association or business entity.
3.4 Stockholder List and Agreements. Attached as Exhibit F is a true
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and complete list of the stockholders of the Company, showing the number of
shares of Common Stock or other securities of the Company held by each
stockholder as of the date of this Agreement and the consideration paid to the
Company, if any, for such shares. Except as contemplated by this Agreement,
there are no agreements, written or oral, between the Company and any holder of
its capital stock, or, to the best knowledge of the Company, among any holders
of its capital stock, relating to the acquisition, disposition or voting of the
capital stock of the Company.
3.5 Issuance of Shares. The issuance, sale and delivery of the
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Shares in accordance with this Agreement and the issuance and delivery of the
shares of Common Stock issuable upon conversion of the Shares, have been, or
will be on or prior to the First Closing, duly authorized and reserved for
issuance, as the case may be, by all necessary corporate action on the part of
the Company, and the Shares when so issued, sold and delivered against payment
therefor in accordance with the provisions of this Agreement, and the shares of
Common Stock issuable upon conversion of the Shares when issued upon such
conversion, will be duly and validly issued, fully paid and non-assessable.
3.6 Authority for Agreement. The execution, delivery and performance
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by the Company of this Agreement have been duly authorized by all necessary
corporate action, and this Agreement has been duly executed and delivered by the
Company. This Agreement constitutes the valid and binding obligation of the
Company enforceable in accordance with its terms. The execution of and
performance of the transactions contemplated by this Agreement and compliance
with its provisions by the Company will not violate any provision of law and
will not conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, nor is the Company otherwise in
default under its Certificate of Incorporation or By-Laws or any indenture,
lease, agreement or other instrument to which the Company is a party or by which
it or any of its properties is bound, or any decree, judgment, order, statute,
rule or regulation applicable to the Company.
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3.7 Governmental Consents. No consent, approval, order or
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authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority is required on the part of the Company
in connection with the execution and delivery of this Agreement, the offer,
issue, sale and delivery of the Shares, or the other transactions to be
consummated at the First Closing, as contemplated by this Agreement, except such
filings as shall have been made prior to and shall be effective on and as of the
First Closing. Based on the representations made by each of the Purchasers in
Section 5 of this Agreement, the offer and sale of the Shares to each of the
Purchasers will be in compliance with applicable Federal and state securities
laws.
3.8 Litigation. There is no action, suit, proceeding or
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investigation pending, or, to the best of the Company's knowledge, any basis
therefor or threat thereof, against the Company or any of the Founders, which
questions the validity of this Agreement or the right of the Company or any of
the Founders to enter into it, or which might result, either individually or in
the aggregate, in any material adverse change in the assets, condition
(financial or otherwise), business or prospects of the Company, nor is there any
litigation pending, or, to the best of the Company's knowledge, any basis
therefor or threat thereof, against the Company or any of the Founders by reason
of the past employment relationships of any of the Founders, the proposed
activities of the Company, or negotiations by the Company and/or any of the
Founders with possible investors in the Company.
3.9 Financial Statements. The Company has furnished to each of the
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Purchasers a complete and correct copy of the audited balance sheet of the
Company as at December 31, 1988 and the related statements of operations and
cash flows compiled by the Company and reviewed by a, Xxxxxx, Xxxxxx &
Xxxxxxxx, P.A., and the unaudited balance sheet of the Company (the Balance
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Sheet) as at March 31, 1989 (the "Balance Sheet Date") and the related
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statements of operations and cash flows compiled by the Company (collectively,
the "Financial Statements"). The Financial Statements are complete and correct,
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are in accordance with the books and records of the Company and present fairly
the financial condition and results of operations of the Company, as at the
dates and for the periods indicated, and have been prepared in accordance with
generally accepted accounting principles consistently applied, except that the
Financial Statements have been prepared for the internal use of management and
may not be in accordance with generally accepted accounting principles because
of the absence of footnotes normally contained therein and are subject to normal
year-end audit adjustments which in the aggregate will not be material.
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3.10 Absence of Liabilities. Except as disclosed in Exhibit E, the
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Company did not have, at the Balance Sheet Date, any liabilities of any type
which in the aggregate exceeded $5,000, whether absolute or contingent, which
were not fully reflected on the Balance Sheet, and, since the Balance Sheet
Date, the Company has not incurred or otherwise become subject to any such
liabilities or obligations except in the ordinary course of business.
3.11 Taxes. The amount shown on the Balance Sheet as provision for
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taxes is sufficient in all material respects for payment of all accrued and
unpaid Federal, state, county, local and foreign taxes for the period then ended
and all prior periods. The Company has filed or has obtained presently
effective extensions with respect to all Federal, state, county, local and
foreign tax returns which are required to be filed by it, such returns are true
and correct and all taxes shown thereon to be due have been timely paid with
exceptions not material to the Company. Federal income tax returns of the
Company have not been audited by the Internal Revenue Service, and no
controversy with respect to taxes of any type is pending or, to the knowledge of
the Company, threatened.
3.12 Property and Assets. The Company has good title to all of its
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material properties and assets, including all properties and assets reflected in
the Balance Sheet, except those disposed of since the date thereof in the
ordinary course of business, and none of such properties or assets is subject to
any mortgage, pledge, lien, security interest, lease, charge or encumbrance
other than those the material terms of which are described in the Balance Sheet
or in Exhibit E.
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3.13 Patents and Trademarks. Set forth on Exhibit E is a true and
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complete list of all patents, patent applications, trademarks, service marks,
trademark and service xxxx applications, trade names, copyrights and licenses
presently owned or held by the Company or any or all of the Founders. The
Company owns or possesses all of the patents, trademarks, service marks, trade
names, copyrights, proprietary rights, trade secrets, and licenses or rights to
the foregoing, necessary for the conduct of the Company's business as conducted
and as proposed to be conducted. To the best of the Company's knowledge, the
business proposed by the Company will not cause the Company to infringe or
violate any of the patents, trademarks, service marks, trade names, copyrights,
licenses, trade secrets or other proprietary rights of any other person or
entity. The Company is not aware that any Founder or employee is obligated
under any contract (including any license, covenant or commitment of any
nature), or
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subject to any judgment, decree or order of any court or administrative agency,
that would interfere with the use of such Founder's or a best efforts
to promote the interests of the Company or would conflict with the Company's
business as proposed to be conducted. To the best of the Company's knowledge,
no prior employer of any Founder or any other employee of the Company has any
right to or interest in any inventions, improvements, discoveries or other
information assigned to the Company by such Founder or employee pursuant to the
nondisclosure and assignment of invention agreement (in the form attached hereto
as Exhibit G) executed by such Founder or employee, or otherwise so assigned.
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3.14 Insurance. The Company maintains valid policies of workers'
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compensation insurance and of insurance with respect to its properties and
business of the kinds and in the amounts not less than is customarily obtained
by corporations of established reputation engaged in the same or similar
business and similarly situated, including, without limitation, insurance
against loss, damage, fire, theft, public liability and other risks.
3.15 Material Contracts and Obligations. Exhibit E sets forth a list
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of all material agreements of any nature to which the Company is a party or by
which it is bound, including without limitation (a) each agreement which
requires future expenditures by the Company in excess of $5,000, (b) all
employment and consulting agreements, employee benefit, bonus, pension,
a, stock option, stock purchase and similar plans and arrangements,
and distributor and sales representative agreements, and (c) any agreement to
which any stockholder, officer or director of the Company, or any "affiliate" or
"associate" of such persons (as such terms are defined in the rules and
regulations promulgated under the Securities Act), is presently a party,
including without limitation any agreement or other arrangement providing for
the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person or entity. The Company has
delivered to the Purchasers copies of such of the foregoing agreements as they
have requested. All of such agreements and contracts are valid, binding and in
full force and effect.
3.16 Compliance. The Company has, in all material respects, complied
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with all laws, regulations and orders applicable to its present and proposed
business and has all material permits and licenses required thereby. There is
no term or provision of any material mortgage, indenture, contract, agreement or
instrument to which the Company is a party or by which it is bound, or, to the
knowledge of the Company, of any provision of any state or
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Federal judgment, decree, order, statute, rule or regulation applicable to or
binding upon the Company, which materially adversely affects or, so far as the
Company may now foresee, in the future is reasonably likely to materially
adversely affect, the business, prospects, condition, affairs or operations of
the Company or any of its properties or assets. To the best of the knowledge of
the Company, none of the Founders or any of the employees of the Company is in
violation of any term of any employment contract, patent or other proprietary
information disclosure agreement or any other contract or agreement relating to
the employment of such Founder or employee by the Company.
3.17 Absence of Changes. Except as set forth on Exhibit E, since the
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Balance Sheet Date, there has been no material adverse change in the condition,
financial or otherwise, net worth or results of operations of the Company, other
than changes occurring in the ordinary course of business which changes have
not, individually or in the aggregate, had a materially adverse effect on the
business, prospects, properties or condition, financial or otherwise, of the
Company.
3.18 Employees. All employees of the Company whose employment
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responsibility requires access to confidential or proprietary information of the
Company have executed and delivered nondisclosure and assignment of invention
agreements in the form of Exhibit G, and all of such agreements are in full
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force and effect. None of the employees of the Company is represented by any
labor union, and there is no labor strike or other labor trouble pending with
respect to the Company (including, without limitation, any organizational drive)
or, to the best knowledge of the Company, threatened.
3.19 Books and Records. The minute books of the Company contain
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complete and accurate records of all meetings and other corporate actions of its
stockholders and its Board of Directors and committees thereof. The stock
ledger of the Company is complete and reflects all issuances, transfers,
repurchases and cancellations of shares of capital stock of the Company.
3.20 ERISA. The Company has no employee benefit plan subject to the
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Employee Retirement Income Security Act of 1974.
3.21 Disclosures. Neither this Agreement nor any exhibit hereto, nor
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any report, certificate or instrument furnished to any of the Purchasers or
their special counsel in connection with the transactions contemplated by this
Agreement, including, without limitation, the Business Plan of the Company dated
November 1988 (the "Plan"), when read together, contains or will contain any
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material misstatement of fact or omits or will omit to
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state a material fact necessary to make the statements contained herein or
therein not misleading. The Company knows of no information or fact which has
or would have a material adverse effect on the financial condition, business or
prospects of the Company which has not been disclosed to the Purchasers. Each
projection furnished in the Plan was prepared with due care based on reasonable
assumptions and represents the Company's best estimate of future results based
on information available as of the date of the Plan. No projection referred to
in the preceding sentence shall be deemed to be misleading unless it is shown
that any such projection was made without a reasonable basis or was disclosed
other than in good faith.
4. Representations and Warranties of Founders. Each of the Founders
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severally represents and warrants to the Purchasers as follows:
4.1 Conflicting Agreements. Such Founder is not in violation of any
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fiduciary or confidential relationship or term of any employment contract,
patent or other proprietary information disclosure or assignment agreement or
any other contract, agreement, or any judgment, decree or order of any court or
administrative agency relating to or affecting the right of such Founder to be
employed by the Company because of the nature of the business conducted or
proposed to be conducted by the Company or for any other reason. No such
relationship, term, judgment, decree, or order conflicts with such Founder's
obligations to use his best efforts to promote the interests of the Company nor
does the execution and delivery of this Agreement, nor the carrying on of the
Company's business as an officer or key employee of the Company, conflict with
any such relationship, term, judgment, decree or order.
4.2 Conflict of Interests. If and while employed by the Company, and
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without the prior written consent of the Purchasers, such Founder will devote
himself to the Company on a full-time basis and will not engage in any other
business activity, either on a full-time or part-time basis, as an employee, a
consultant or in any other capacity, and whether or not he receives any
compensation therefor; provided, however, the Purchasers recognize that Xxxxxxx
is and will continue following the execution of this Agreement to be a tenured
member of the faculty of the University of Delaware with responsibilities for
teaching, research and service and the Purchasers hereby consent to such
activities by Xxxxxxx so long as they do not interfere with Xxxxxxx'x
performance of his duties to the Company; and further provided, however, that
nothing herein shall prohibit such Founder from making and managing passive
investments, which activities do not, in the aggregate, materially interfere
with
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such Founder's performance of his duties to the Company. Xxxxxxx does not own,
directly or indirectly, of record or beneficially more than one percent (1%) of
the outstanding voting securities (which shall include any security or option
convertible into or exercisable for voting securities) of any corporation other
than the Company, nor is Xxxxxxx a general partner or limited partner in a
partnership in which he has a direct or indirect interest in more than one
percent (1%) of the profits of such partnership.
4.3 Litigation. There is no action, suit or proceeding, or
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governmental inquiry or investigation, pending or, to the knowledge of such
Founder, threatened against such Founder, and, to the knowledge of such Founder,
there is no basis for any such action, suit, proceeding, or governmental inquiry
or investigation.
4.4 Stockholder Agreements. Except as contemplated by this
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Agreement, such Founder is not a party to and has no knowledge of any
agreements, written or oral, relating to the acquisition, disposition or voting
of the capital stock of the Company. All previous agreements relating to the
acquisition, disposition or voting of the capital stock of the Company,
including, without limitation, the Amended and Restated Xxxxxxx Agreement
between Astrosystems and Xxxxxxx, the Management Agreement among Astrosystems,
Xxxxxxx and Essex, the Option Agreement With Respect to Partnership Interest in
Voltek Associates, L.P. among Astropower, Inc. and Essex (the "Essex Voltek
Option"), and the Equity Security holders' Agreement among Astrosystems,
Astropower, Inc., Xxxxxxx and Essex, all dated as of January 31, 1986, have been
terminated.
4.5 Disclosure. To the best of such Founder's knowledge, neither
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this Agreement nor any Exhibit hereto, nor any report, certificate or instrument
furnished to any of the Purchasers or their special counsel in connection with
the transactions contemplated by this Agreement, including the Plan, when read
together, contains or will contain any material misstatement of fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
5. Representations of the Purchasers. Each of the Purchasers severally
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represents and warrants to the Company as follows:
5.1 Investment. Such Purchaser is acquiring the Shares, and the
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shares of Common Stock into which the Shares may be converted, for his or its
own account for investment and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present intention of distributing
or selling the same; and, except as contemplated by this Agreement and the
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Exhibits hereto, such Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof.
5.2 Authority. Such Purchaser has full power and authority to enter
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into and to perform this Agreement in accordance with its terms. Any Purchaser
which is a corporation, partnership or trust represents that it has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company.
5.3 Experience. Such Purchaser has carefully reviewed the
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representations concerning the Company contained in this Agreement, has read the
Plan and has made detailed inquiry concerning the Company, its business and its
personnel; the officers of the Company have made available to such Purchaser any
and all written information which he or it has requested and have answered to
such Purchaser's satisfaction all inquiries made by such Purchaser; and such
Purchaser has adequate net worth and means of providing for his or its current
needs and personal contingencies to sustain a complete loss of his or its
investment in the Company; such Purchaser's overall commitment to investments
which are not readily marketable is not disproportionate to his or its net worth
and such Purchaser's investment in the Shares will not cause such overall
commitment to become excessive.
5.4 Accredited Investor. Unless otherwise indicated in writing by
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such Purchaser to the Company, such Purchaser is an Accredited Investor within
the definition set forth in Securities Act Rule 501(a).
6. Conditions to the Obligations of the Purchasers at First Closing. The
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obligation of each of the Purchasers to purchase Shares at the First Closing is
subject to the fulfillment, or the waiver by such Purchaser, of the following
conditions on or before the First Closing Date:
6.1 Accuracy of Representations and Warranties. The representations
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and warranties contained in Sections 3 and 4 shall be true on and as of the
First Closing Date with the same effect as though such representations and
warranties had been made on and as of that date.
6.2 Performance. The Company shall have performed and complied with
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all agreements and conditions contained in this Agreement required to be
performed or complied with by the Company prior to or at the First Closing.
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6.3 Opinion of Counsel. Each Purchaser shall have received an
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opinion from Opton Handier Xxxxxxxx Xxxxxx Xxxxxx & Xxxxxx, counsel for the
Company, dated the First Closing Date, addressed to the Purchasers, and
satisfactory in form and substance to each Purchaser, to the effect that:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority to conduct its business as presently conducted, to
enter into and perform this Agreement and to carry out the transactions
contemplated by this Agreement. The Company is duly qualified to do business as
a foreign corporation and is in good standing in every jurisdiction in which the
failure to so qualify would have a material adverse effect on the operations or
financial condition of the Company.
(b) Except for changes contemplated by this Agreement, the
authorized capital stock of the Company is as described in subsection 3.2 of
this Agreement and, to the knowledge of such counsel, the other representations
and warranties contained in subsection 3.2 are true and correct (other than the
last sentence thereof, as to which no opinion need be expressed, and other than
the next to last sentence thereof, as to which an opinion need only be expressed
that no registration was required for the offer, issuance and sale of such
Common Stock under applicable Federal and state securities laws).
(c) The issuance, sale and delivery of the Shares by the Company
in accordance with this Agreement, and the issuance and delivery of the shares
of Common Stock issuable upon conversion of the Shares, have been duly
authorized and reserved for issuance, as the case may be, by all necessary
corporate action on the part of the Company, and the Shares when so issued, sold
and delivered against payment therefor in accordance with the provisions of this
Agreement, and the shares of Common Stock issuable upon conversion of the
Shares, when issued upon such conversion, will be duly and validly issued, fully
paid and non-assessable.
(d) The execution, delivery and performance by the Company and
the Founders of this Agreement and of the Shareholders' Agreement described in
Section 6.8 below (the "Shareholders' Agreement") and the exercise of the option
-----------------------
described in Section 6.9 below (the "Option Exercise") have been duly authorized
---------------
by all necessary corporate action, and this Agreement, the Shareholders'
Agreement and the Option Exercise have been duly executed and delivered by the
Company and the Founders. This Agreement (other than subsections 9.7 and 9.8
hereof, as to which no opinions need be expressed), the Shareholders' Agreement
and the Option Exercise constitute the
13
valid and binding obligation of the Company and the Founders, enforceable in
accordance with their respective terms, subject as to enforcement of remedies to
applicable bankruptcy, insolvency, reorganization or similar laws affecting
generally the enforcement of creditors' rights and subject to a court's
discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies. The execution and delivery of
this Agreement, the Shareholders' Agreement and the Option Exercise and the
offer, issue and sale of the Shares hereunder will not conflict with, or result
in any breach of any of the terms, conditions, or provisions of, or constitute a
default under, the Certificate of Incorporation or By-Laws of the Company, or
any indenture, lease, agreement, or other instrument known to such counsel to
which the Company or any of the Founders is a party or by which any of them or
any of their respective properties are bound, or any decree, judgment or order
specifically naming the Company or any of the Founders and known to such
counsel.
(e) Except as obtained and in effect at the First Closing, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration, or filing with, any governmental authority (other than
filings required to be made after the First Closing under applicable federal and
state securities laws) is required on the part of the Company in connection with
the execution and delivery of this Agreement or the Shareholders' Agreement, or
the Option Exercise or the offer, issue, sale and delivery of the Shares, or the
other transactions to be consummated at the Closing pursuant to this Agreement.
(f) Based on the representations of each of the Purchasers in
Section 5, the offer, issuance and sale of the Shares pursuant to this Agreement
are exempt from registration under the Securities Act.
(g) To the best of such counsel's knowledge, except as set forth
in Exhibit E to this Agreement, there is no action, suit or proceeding, or
---------
governmental inquiry or investigation, pending or threatened against the
Company or any of the Founders.
(h) The sublicense between the Company and Astrosystems in the
form attached hereto as Exhibit H is not in violation of the terms of that
---------
certain License Agreement dated May 1, 1983 between Astrosystems and the
University of Delaware (the "Delaware License").
6.4 Blue Sky Approvals. The Company shall have received any
------------------
requisite approvals of the securities commissioners of
14
Maryland, Massachusetts, New York, Washington and British Columbia and such
approvals shall be in full force and effect on the Closing Date.
6.5 Certificates and Documents. The Company shall have delivered to
--------------------------
the Purchasers:
(i) The Certificate of Incorporation of the Company, as amended
and in effect immediately prior to the First Closing Date, certified by the
Secretary of State of the State of Delaware;
(ii) Certificates, as of the most recent practicable dates, as
to the corporate good standing of the Company issued by the Secretary of State
of the State of Delaware, confirming such good standing on or immediately prior
to the First Closing Date;
(iii) By-laws of the Company, certified by its Secretary or
Assistant Secretary as of the First Closing Date; and
(iv) Resolutions of the Board of Directors of the Company,
authorizing and approving all matters in connection with this Agreement and the
transactions contemplated hereby, certified by the Secretary or Assistant
Secretary of the Company as of the First Closing Date.
6.6 Board of Directors. Immediately after the First Closing, the
------------------
Board of Directors of the Company shall consist of Xxxxx X. Xxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxxx and Xxxxxx X. Xxxx, Xx., or if he is unwilling or
unable to serve, another person designated by Arete Ventures, Inc.
6.7 Shareholders' Agreement. The Company, ASI Solar Energy
-----------------------
Corporation, and each Founder other than Astrosystems shall have executed and
delivered to the Purchasers the Shareholders' Agreement in the form attached
hereto as Exhibit I.
---------
6.8 Option Agreement. The Company shall have exercised the option to
----------------
acquire the assets of the Astropower Division of Astrosystems provided for in
that certain Amended and Restated Option Agreement with Astrosystems dated
January 31, 1986 in the form attached hereto as Exhibit J and Astrosystems shall
---------
have complied with its obligations under such Option Agreement.
6.9 Essex Options. The Essex Voltek Option shall have been
-------------
terminated and replaced by the Option Agreement in the form attached hereto as
Exhibit K.
---------
15
6.10 Employment Agreement. The Company and Xxxxxxx shall have
--------------------
entered into the Employment Agreement in the form attached hereto as Exhibit L.
---------
6.11 BP Letter. The Company shall have executed and delivered to the
---------
Purchasers the letter in the form attached hereto as Exhibit M.
---------
6.12 Option Plan. The Company shall have agreed to amend and restate
-----------
any existing stock option plan it may have so that such plan shall be in the
form attached hereto as Exhibit N.
---------
6.13 Minimum and Maximum Investment. The Purchasers shall have
------------------------------
agreed to invest at the First and Second Closings an aggregate of not more than
$3,500,000 and not less than $2,500,000.
6.14 Other Matters. All corporate and other proceedings in
-------------
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchasers, and the Purchasers shall
have received all such counterpart originals or certified or other copies of
such documents as they may reasonably request.
7. Conditions to the Obligations of the Purchasers at the Second Closing.
---------------------------------------------------------------------
In addition to the conditions set forth in subsection 2.2(b) above, the
obligation of each of the Purchasers to purchase Shares at the Second Closing is
subject to the fulfillment, or the waiver by such Purchaser, of the following
conditions on or before the Second Closing Date:
7.1 First Closing. The First Closing shall have taken place
-------------
pursuant to the terms of this Agreement.
7.2 Representations and Warranties; Performance of Obligations. The
----------------------------------------------------------
representations and warranties made by the Company in Section 3 shall be true
and correct when made, and shall be true and correct on the Second Closing Date
with the same force and effect as if they had been made on and as of said date
giving effect to the First Closing and transactions in the ordinary course of
business or approved by the Board of Directors of the Company subsequent to the
First Closing; and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
Second Closing Date.
16
7.3 Conditions of First Closing. All conditions of Section 6 shall
---------------------------
continue to be fulfilled and the Certificate of Amendment shall not have been
amended and shall remain in full force and effect.
7.4 Board of Directors. Immediately after the Second Closing, the
------------------
Board of Directors of the Company shall include Xxxxxx X. Xxxx, Xx., or if he is
unwilling or unable to serve, another person designated by Arete Ventures, Inc.,
and Xxxxxx X. Xxxxxxxxxxx, or if he is unwilling or unable to serve, another
person designated by Advent International Corporation.
7.5 Opinion of Counsel. The Purchasers shall have received from
------------------
Opton Handler Xxxxxxxx Xxxxxx Xxxxxx & Xxxxxx, counsel to the Company, an
opinion dated as of the Second Closing Date, substantially the same in form as
that delivered pursuant to Section 6.3.
7.6 Compliance Certificate. The Company shall have delivered to the
----------------------
Purchasers a Compliance Certificate, executed by the President, dated as of the
Second Closing Date, certifying as to the fulfillment of the conditions
specified in Sections 7.1, 7.2, 7.3 and 7.4.
8. Conditions to the Obligations of the Company at the First Closing.
-----------------------------------------------------------------
The obligations of the Company at the First Closing under subsection 1.2 of this
Agreement are subject to fulfillment, on or before the First Closing Date, of
each of the following conditions:
8.1 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of the Purchasers contained in Section 5 shall be true on and as
of the First Closing Date with the same effect as though such representations
and warranties had been made on and as of that date.
8.2 Blue Sky Approvals. The Company shall have received any
------------------
requisite approvals of the securities commissioners of Maryland, Massachusetts,
New York, Washington and British Columbia and such approvals shall be in full
force and effect on the First Closing Date.
9. Conditions to the Obligations of the Company at the Second Closing.
------------------------------------------------------------------
The obligations of the Company at the Second Closing under subsection 1.2 of
this Agreement are subject to fulfillment, on or before the Second Closing Date,
of each of the following conditions:
17
9.1 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of the Purchasers contained in Section 5 shall be true on and as
of the Second Closing Date with the same effect as though such representations
and warranties had been made on and as of that date.
9.2 Blue Sky Approvals. The Company shall have received any
------------------
requisite approvals of the securities commissioners of Maryland, Massachusetts,
New York, Washington and British Columbia and such approvals shall be in full
force and effect on the Second Closing Date.
9.3 First Closing. The First Closing shall have taken place
-------------
pursuant to the terms of this Agreement.
10. Covenants of the Company.
------------------------
10.1 Inspection. The Company shall permit each Purchaser or any
----------
authorized representative thereof, to attend, as observers and without the right
to vote, meetings of the Board of Directors of the Company, to visit and inspect
the properties of the Company, including its corporate and financial records,
and to discuss its business and finances with officers of the Company, during
normal business hours following reasonable notice and as often as may be
reasonably requested, and to receive copies of all notices of meetings and other
notices, minutes, consents and other materials that the Company provides to its
directors.
10.2 Financial Statements and Other Information.
------------------------------------------
(a) The Company will deliver to each Purchaser:
(i) within 120 days after the end of each fiscal year of
the Company, an audited balance sheet of the Company as at the end of such year
and audited statements of income and of changes in financial condition of the
Company for such year, examined or reviewed, at the option of the Board of
Directors of the Company, by certified public accountants selected by the
Company, all of such documents to be prepared in accordance with generally
accepted accounting principles;
(ii) within 45 days after the end of each fiscal quarter
of the Company, an unaudited balance sheet of the Company as at the end of such
quarter, and unaudited statements of income and cash flow of the Company for
such fiscal quarter and for the current fiscal year to the end of such fiscal
quarter and including an aging of the Company's accounts receivable and accounts
payable and a statement of the number of employees of the Company as at the end
of such quarter;
18
(iii) within 30 days after the end of each month, an
unaudited balance sheet of the Company as at the end of such month and unaudited
statements of income and cash flow of the Company for such month and for the
current fiscal year to the end of such month, setting forth in comparative form
the Company's projected financial statements for the corresponding periods for
the current fiscal year;
(iv) as soon as available, but in any event within 30
days after commencement of each new fiscal year, a business plan and projected
financial statements for such fiscal year and projected financial statements for
the two years following such new fiscal year; and
(v) with reasonable promptness, such other notices,
information and data with respect to the Company as the Company delivers to the
holders of its Common Stock, and such other information and data as such
Purchaser may from time to time reasonably request.
(b) The foregoing financial statements shall be prepared on a
consolidated basis if the Company then has any subsidiaries. The financial
statements delivered pursuant to clause (ii) and (iii) of paragraph (a) shall be
accompanied by a certificate of the chief financial officer of the Company
stating that such statements have been prepared in accordance with generally
accepted accounting principles consistently applied (except as noted) and fairly
present the financial condition of the Company at the date thereof and for the
periods covered thereby.
10.3 Material Changes and Litigation. The Company will promptly
-------------------------------
notify the Purchasers of any material adverse change in the business,
properties, assets or condition, financial or otherwise, of the Company and of
any litigation or governmental proceeding or investigation pending or, to the
best knowledge of the Company, threatened against the Company, or against any
officer, director, key employee or principal stockholder of the Company
materially affecting or which, if adversely determined, would materially
adversely affect its present or proposed business, properties, assets or
condition taken as a whole.
10.4 Key Man Insurance. For a period of three years after the
-----------------
Closing Date, the Company will maintain term life insurance upon the life of
Xxxxxxx in the amount of $500,000.
10.5 Nondisclosure Agreements. The Company will require all persons
------------------------
now or hereafter employed by the Company who
19
have access to confidential and proprietary information of the Company to enter
into nondisclosure and assignment of inventions agreements substantially in the
form of Exhibit G.
---------
10.6 Right of First Refusal.
----------------------
(a) The Company hereby grants to each Purchaser a right of
first refusal to purchase, on a pro rata basis, all or any part of New
Securities (as defined below) which the Company may, from time to time, propose
to sell and issue, subject to the terms and conditions set forth below. A
Purchaser's pro rata share, for purposes of this subsection 10.6, shall equal a
fraction, the numerator of which is the number of shares of Series A Preferred
purchased by such Purchaser pursuant to this Agreement, and the denominator of
which is the total number of shares of Series A Preferred purchased by the
Purchasers pursuant to this Agreement.
(b) "New Securities" shall mean any capital stock of the
--------------
Company whether now authorized or not, and rights, options or warrants to
purchase capital stock, and securities of any type whatsoever which are, or may
become, convertible into capital stock; provided, however, that the term "New
-------- -------
Securities" does not include (i) the Shares issuable under this Agreement or the
shares of Common Stock issuable upon conversion of the Shares; (ii) securities
offered to the public pursuant to a Registration Statement (as defined in
subsection 11.1); (iii) securities issued for the acquisition of another
corporation by the Company by merger, purchase of substantially all the assets
of such corporation or other reorganization resulting in the ownership by the
Company of not less than 51% of the voting power of such corporation; (iv) not
more than 500,000 shares of Common Stock issued to employees or consultants of
the Company pursuant to a stock option plan, employee stock purchase plan,
restricted stock plan or other employee stock plan or agreement; or (v)
securities issued as a result of any stock split, stock dividend or
reclassification of Common Stock, distributable on a pro rata basis to all
holders of Common Stock.
(c) In the event the Company intends to issue New Securities,
it shall give each Purchaser written notice of such intention, describing the
amount and type of New Securities to be issued, the price thereof and the
general terms upon which the Company proposes to effect such issuance. Each
Purchaser shall have 20 days from the date of any such notice to agree to
purchase all or part of its or his pro rata share of such New Securities for the
price and upon the general terms and conditions specified in the Company's
notice by giving written notice to the Company stating the quantity of New
Securities to be so purchased. Each
20
Purchaser shall have a right of overallotment such that if any Purchaser fails
to exercise his or its right hereunder to purchase his or its total pro rata
portion of New Securities, each other Purchaser may purchase a portion of such
unpurchased New Securities equal to a fraction, the numerator of which is such
Purchaser's pro rata share, as defined in Section 10.6(a), and the denominator
of which is the sum of such pro rata shares of such other Purchasers, by giving
written notice to the Company within five days from the date that the Company
provides written notice to the other Purchasers of the amount of New Securities
with respect to which such nonpurchasing Purchaser has failed to exercise its or
his right hereunder.
(d) In the event the Purchasers fail to exercise the foregoing
right of first refusal with respect to any New Securities specified in the
notice within such 20-day period (or the additional five-day period provided for
overallotments), the Company may within 120 days thereafter sell any or all of
such New Securities not agreed to be purchased by the Purchasers, at a price, in
the amount and upon general terms no more favorable to the purchasers thereof
than specified in the notice given to each Purchaser pursuant to paragraph (c)
above. In the event the Company has not sold such New Securities within such
120-day period, the Company shall not thereafter issue or sell any New
Securities without first offering such New Securities to the Purchasers in the
manner provided above. The Purchasers shall, where possible, attempt, but shall
not be obligated, to avoid applying the provisions of this Section 10.6 so as to
preclude the sale of a specified block of New Securities to a third party.
(e) For purposes of this subsection 10.6, "Purchaser" shall
include the general partners, officers or other affiliates of a Purchaser, and a
Purchaser may apportion its pro rata share among itself and such general
partners, officers and other affiliates in such proportions as it deems
appropriate.
10.7 Negative Covenants. So long as any Shares are outstanding,
------------------
neither the Company nor any subsidiary thereof shall, without the approval of
the Board of Directors of the Company and the prior written consent of the
holders of not less than sixty-six and two-thirds percent (66 2/3%) of the
outstanding Shares (or their duly appointed attorney-in-fact, if any), which
consent shall not be unreasonably withheld:
(a) Declare or pay any dividends on Common Stock or Preferred
Stock other than dividends payable solely in Common Stock;
21
(b) Make any loan or advance to any subsidiary or other
corporation, partnership, or other entity unless it is wholly owned by the
Company, provided, that the Company shall have the right to make loans and
advances to AstroPower Canada Ltd. ("Canada") in an amount not to exceed $10,000
in any one case or $100,000 in the aggregate;
(c) Make any loan or advance to any person, including, without
limitation, any employee or director of the Company or any subsidiary, except
advances and similar expenditures in the ordinary course of business, loans
under the terms of an employee stock or option plan authorized pursuant to
Section 10.7(h) or loans to employees in an amount not to exceed $10,000 per
employee or $50,000 for all employees;
(d) Incur, create, assume or otherwise become primarily or
secondarily liable with respect to, or absolutely or contingently liable with
respect to, or permit to exist any indebtedness except for trade accounts of the
Company and other indebtedness not to exceed $100,000 in the aggregate;
(e) Guarantee directly or indirectly, any indebtedness except
for trade accounts of the Company or any wholly-owned subsidiary arising in the
ordinary course of business, provided that the Company shall have the right to
guarantee indebtedness of Canada in an amount not to exceed $100,000;
(f) Merge with or into or consolidate with any other
corporation or purchase or own any stock or other securities of or interest in
any subsidiary or other corporation, partnership, or other entity, or sell,
lease, or otherwise dispose of all or substantially all of its properties or
assets, provided that the Company shall have the right (i) to merge with another
corporation pursuant to a merger in which the Company is the surviving
corporation and following which the stockholders of the Company immediately
prior to such merger own at least a majority of the outstanding stock and voting
power of the Company, (ii) to acquire at least a majority of the outstanding
stock and voting power of any corporation or (iii) to acquire the management
control and at least a majority of the general partnership interest in any
general or limited partnership, if, in the case of any merger or acquisition
permitted pursuant to the foregoing clauses (i), (ii) or (iii), such merger or
acquisition would not result in a decrease in the Company's net tangible book
value per share and any such corporation with which the Company merges or any
such corporation or partnership in which the Company acquires an interest is at
the time of such merger or acquisition (x) engaged in a business or activity
contemplated by the Business
22
Plan as a business or activity of the Company or (y) otherwise engaged in
research, development or commercial exploitation of solar energy;
(g) Effect any reverse stock split, stock combination,
reclassification or similar event which would result in a reduction of the
number of shares of Series A Preferred then owned by any holder thereof or a
reduction of the number of shares of Common Stock into which Series A Preferred
is convertible;
(h) Authorize or establish any stock option plan, employee
stock purchase plan, restricted stock plan or other employee stock plan or
agreement other than the stock option plan in the form attached hereto as
Exhibit N (the "1989 Plan") or amend the 1989 Plan;
---------
(i) Engage in any business or activity other than as
contemplated by the Business Plan;
(j) Amend or repeal any provision of, or add any provision to,
its Certificate of Incorporation, any Certificate of Designation or By-Laws if
such action will alter or change the preferences, rights, privileges or powers
of, or the restrictions provided for the benefit of, any Series A Preferred
Stock or otherwise adversely affect the rights of the holders of the Series A
Preferred Stock;
(k) Repurchase any shares of its capital stock; or
(1) Amend or waive any of its rights under the Employment
Agreement.
10.8 Termination of Covenants. Unless earlier terminated, the
------------------------
covenants of the Company contained in Sections 10.1 through 10.7 of this
Agreement shall terminate, and be of no further force or effect, upon the
effective date of a Registration Statement (as defined in subsection 11.1)
covering the Company's first bona fide firm commitment public offering of Common
Stock, resulting in gross proceeds to the Company of at least $12,000,000, at a
price per share of at least $7.50 (as adjusted for stock splits, stock
dividends, recapitalizations and similar events); provided, however, that if the
Board of Directors of the Company determines in good faith that it is in the
best interest of the Company to undertake a bona fide underwritten public
offering of the Company's Common Stock at a price per share of less than $7.50
and resulting in gross proceeds of less than $12,000,000, and the underwriter of
such offering requires as a condition thereof that any covenant set forth in
Section 10.7
23
above be terminated, any such covenant, other than the covenant contained in
subsection 10.7(j), shall be terminated upon the closing of such offering if the
holders of at least 66 2/3% of the Shares consent to such termination, which
such consent shall not be unreasonably withheld. If there is no alternative
course of financing under substantially the same terms as the proposed
underwriting, refusal to so consent shall be deemed unreasonable. In addition,
the covenants set forth in Section 10.7 shall terminate, and be of no further
force or effect, if the Second Closing does not occur in accordance with the
terms of this Agreement or if at least 66 2/3% of the aggregate number of Shares
purchased at the First Closing and the Second Closing are converted to Common
Stock.
11. Registration Rights.
-------------------
11.1 Certain Definitions. As used in this Section 9 and elsewhere in
-------------------
this Agreement, the following terms shall have the following respective
meanings:
"Commission" means the Securities and Exchange Commission, or
----------
any other Federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended, or any similar Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Registration Statement" means a registration statement filed
----------------------
by the Company with the Commission for a public offering and sale of securities
of the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors or any other form for a limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in
---------------------
subsection 11.6.
"Registrable Shares" means (i) the shares of Common Stock
------------------
issued or issuable upon conversion of the Shares, (ii) any shares of Common
Stock owned by Astrosystems, (iii) any shares of Common Stock of the Company
acquired by the Purchasers pursuant to subsection 10.6 hereof, and (iv) any
other shares of Common Stock of the Company issued in respect of such shares
(because of stock splits, stock dividends, reclassifications, recapitalizations,
or similar events); provided, however, that shares of Common Stock which are
-------- -------
Registrable Shares shall cease to
24
be Registrable Shares upon any sale pursuant to a Registration Statement,
Section 4 (l) of the Securities Act or Rule 144 under the Securities Act, or any
sale in any manner to a person or entity which, by virtue of Section 11 of this
Agreement, is not entitled to the rights provided by this Section 11. Wherever
reference is made in this Agreement to a request or consent of holders of a
certain percentage of Registrable Shares, the determination of such percentage
shall include shares of Common Stock issuable upon conversion of the Shares even
if such conversion has not yet been effected.
"Securities Act" means the Securities Act of 1933, as amended,
--------------
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Shares" shall have the meaning specified in subsection 1.2.
------
"Stockholders" means the Purchasers, the Founders and any
------------
persons or entities to whom the rights granted under this Section 11 are
transferred by any Purchasers, their successors or assigns pursuant to Section
11 hereof; provided, however, that the Founders, shall not have any of the
rights granted to Stockholders pursuant to Section 11.3 below, except that
Astrosystems shall have the rights granted to Stockholders pursuant to Section
11.3(a).
11.2 Sale or Transfer of Shares; Legend.
----------------------------------
(a) The Shares and the Registrable Shares and shares issued in
respect of the Shares or the Registrable Shares shall not be sold or transferred
unless either (i) they first shall have been registered under the Securities
Act, or (ii) the Company first shall have been furnished with an opinion of
legal counsel, reasonably satisfactory to the Company, to the effect that such
sale or transfer is exempt from the registration requirements of the Securities
Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Purchaser which is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner, if the transferee agrees in writing to be subject to
the terms of this Section 11 to the same extent as if he were an original
Purchaser hereunder, or (ii) a transfer made in accordance with Rule 144 under
the Securities Act.
25
(c) Each certificate or other instrument representing the Shares
and the Registrable Shares and shares issued in respect of the Shares or the
Registrable Shares shall bear a legend substantially in the following form:
"The securities represented by this instrument have not been
registered under the Securities Act of 1933, as amended, and may not
be offered, sold or otherwise transferred, pledged or hypothecated
unless and until such shares are registered under such Act or an
opinion of counsel satisfactory to the Company is obtained to the
effect that such registration is not required."
The foregoing legend shall be removed from the certificates representing
any Registrable Shares, at the request of the holder thereof, at such time as
they become eligible for resale pursuant to Rule 144(k) under the Securities
Act.
11.3 Required Registrations.
----------------------
(a) At any time after the earlier of December 31, 1992, or the
closing of the Company's first underwritten public offering of shares of Common
Stock pursuant to a Registration Statement, a Purchaser or Purchasers holding in
the aggregate at least 33% of the Shares may request, in writing, that the
Company effect the registration on Form S-1 or Form S-2 (or any successor form)
of Registrable Shares owned by such Stockholder or Stockholders having an
aggregate offering price of at least $750,000 (based on the then current market
price or fair value). If the holders initiating the registration intend to
distribute the Registrable Shares by means of an underwriting, they shall so
advise the Company in their request. In the event such registration is
underwritten, the right of other Stockholders to participate shall be
conditioned on such Stockholders' participation in such underwriting. Upon
receipt of any such request, the Company shall promptly give written notice of
such proposed registration to all Stockholders. Such Stockholders shall have the
right, by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such Stockholders may request in such notice of
election, subject to the approval of the underwriter, if any, managing the
offering; provided, that, in the event the Company is unable to effect the
registration of all Registrable Shares which it is requested to register, each
Stockholder who has requested to have shares registered shall have the right to
have registered no more than its pro rata share (i.e., a fraction, the numerator
of which is
26
the number of Registrable Shares owned by such Stockholder and the denominator
of which is the total number of Registrable Shares owned by the Stockholders
requesting registration) of the shares being registered. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration, on Form S-1 or Form S-2 (or any successor form), of all
Registrable Shares which the Company has been requested to so register.
(b) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Stockholder or Stockholders holding in the aggregate at least 25%
of the Registrable Shares may request the Company, in writing, to effect the
registration on Form S-3 (or such successor form), of Registrable Shares having
an aggregate offering price of at least $250,000 (based on the current public
market price). Upon receipt of any such request, the Company shall promptly
give written notice of such proposed registration to all Stockholders. Such
Stockholders shall have the right, by giving written notice to the Company
within 30 days after the Company provides its notice, to elect to have included
in such registration such of their Registrable Shares as such Stockholders may
request in such notice of election. Thereupon, the Company shall, as
expeditiously as possible, use its best efforts to effect the registration on
Form S-3, or such successor form, of all Registrable Shares which the Company
has been requested to register.
(c) The Company shall not be required to effect more than two
registrations pursuant to paragraph (a) above or more than four registrations
pursuant to paragraph (b) above. The Company shall not be obligated to file or
seek to be declared effective any Registration Statement if the Company would
be required by the Commission to include audited financial statements as of any
date other than the end of its fiscal year. In addition, the Company shall not
be required to effect any registration (other than on Form S-3 or any successor
form relating to secondary offerings) within six months after the effective
date of any other Registration Statement of the Company.
(d) If at the time of any request to register Registrable Shares
pursuant to this subsection 11.3, the Company is engaged or has fixed plans to
engage within 30 days of the time of the request in a registered public
offering as to which the Stockholders may include Registrable Shares pursuant
to subsection 11.4 or is engaged in any other activity which, in the good faith
determination of the Company's Board of Directors, would be adversely affected
by the requested registration to the material detriment of the Company, then
the Company may at its option direct that such request be delayed for a period
not in
27
excess of six months from the effective date of such offering or the date of
commencement of such other material activity, as the case may be, such right to
delay a request to be exercised by the Company not more than once in any two
year period.
11.4 Incidental Registration.
-----------------------
(a) Whenever the Company proposes to file a Registration
Statement (other than pursuant to subsection 11.3) at any time and from time to
time, it will, prior to such filing, give written notice to all Stockholders of
its intention to do so and, upon the written request of a Stockholder or
Stockholders given within 20 days after the Company provides such notice (which
request shall state the intended method of disposition of such Registrable
Shares), the Company shall use its best efforts to cause all Registrable Shares
which the Company has been requested by such Stockholder or Stockholders to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Stockholder or Stockholders;
provided that the Purchasers and their successors and assigns shall be entitled
to include two Registrable Shares in any such registration for every one share
of the Founder's Registrable Shares included in such registering; and further
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this subsection 11.4 without obligation to any
Stockholder.
(b) In connection with any offering under this subsection 11.4
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such underwriting unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in the
opinion of the underwriters, jeopardize the success of the offering by the
Company. If in the opinion of the managing underwriter the registration of all,
or part of, the Registrable Shares which the holders have requested to be
included would materially and adversely affect such public offering, then the
Company shall be required to include in the underwriting only that number of
Registrable Shares, if any, which the managing underwriter believes may be sold
without causing such adverse effect, but in no event shall the amount of
Registrable Shares included in the offering be reduced below 30% of the total
amount of securities included in the offering, unless such offering is the
initial public offering of the Company's securities. If the number of
Registrable Shares to be included in the underwriting in accordance with the
foregoing is less than the total number of shares which the holders of
Registrable Shares have requested to be included, then the holders of
28
Registrable Shares who have requested registration and other holders of shares
of Common Stock entitled to include shares of Common Stock in such registration
shall participate in the underwriting pro rata based upon their total ownership
of shares of Common Stock of the Company. If any holder would thus be entitled
to include more shares than such holder requested to be registered, the excess
shall be allocated among other requesting holders pro rata based upon their
total ownership of Registrable Shares.
11.5 Registration Procedures. If and whenever the Company is
-----------------------
required by the provisions of this Agreement to use its best efforts to effect
the registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective for a period of not less than 120 days from
the effective date;
(c) as expeditiously as possible furnish to each selling
Stockholder such reasonable numbers of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as the selling Stockholder may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Shares owned by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register
or qualify the Registrable Shares covered by the Registration Statement under
the securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company shall not be
-------- -------
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the
29
prospectus is amended to comply with the requirements of the Securities Act, the
Company shall promptly notify the selling Stockholders and, if requested, the
selling Stockholders shall immediately cease making offers of Registrable Shares
and return all prospectuses to the Company. The Company shall promptly provide
the selling Stockholders with revised prospectuses and, following receipt of the
revised prospectuses, the selling Stockholders shall be free to resume making
offers of the Registrable Shares.
11.6 Allocation of Expenses. The Company will pay all Registration
----------------------
Expenses of all registrations under this Agreement; provided, however, that if a
registration is withdrawn at the request of the Stockholders requesting such
registration (other than as a result of information concerning the business or
financial condition of the Company which is made known to the Stockholders after
the date on which such registration was requested) and if the requesting
Stockholders elect not to have such registration counted as a registration
requested under subsection 11.3, the requesting Stockholders shall pay the
Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. No
Registration Statement shall be withdrawn by the Stockholders except for a bona
fide purpose. For purposes of this Section, the term "Registration Expenses"
shall mean all expenses incurred by the Company in complying with this Section
11, including, without limitation, all registration and filing fees, exchange
listing fees, printing expenses, fees and disbursements of counsel for the
Company and the fees and expenses of one counsel selected by the selling
Stockholders to represent the selling Stockholders, state Blue Sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, but excluding underwriting discounts, selling commissions and
the fees and expenses of selling Stockholders' own counsel (other than the
counsel selected to represent all selling Stockholders).
11.7 Indemnification. In the event of any registration of any of the
---------------
Registrable Shares under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless the seller of such Registrable Shares,
each underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue Sky
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable
30
Shares were registered under the Securities Act, any preliminary prospectus or
final prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse such seller, underwriter and each such controlling person
for any legal or any other expenses reasonably incurred by such seller,
underwriter or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
-------- -------
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or omission made in such Registration Statement, preliminary prospectus or
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by or on
behalf of such seller, underwriter or controlling person specifically for use in
the preparation thereof.
In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, each seller of Registrable Shares,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors and officers and each underwriter (if any) and each person, if
any, who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company, such directors and
officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of such seller, specifically for use in connection with the preparation
of such Registration Statement, prospectus, amendment or supplement; provided,
--------
however, that the obligations of such Stockholders hereunder shall be limited to
-------
an amount equal to the proceeds to each Stockholder of Registrable Shares sold
as contemplated herein.
31
Each party entitled to indemnification under this subsection 11.7 (the
"Indemnified Party") shall give notice to the party required to provide
-----------------
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
------------------
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
--------
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
-------- -------
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 11. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
-------- -------
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
11.8 Indemnification with Respect to Underwritten Offering. In the
-----------------------------------------------------
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to subsection 11.3(a), the Company agrees to
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of an issuer of the
securities being registered and customary covenants and agreements to be
performed by such issuer, including without limitation customary provisions with
respect to indemnification by the Company of the underwriters of such offering.
11.9 Information by Holder. Each holder of Registrable Shares
---------------------
included in any registration shall furnish to the Company such information
regarding such holder and the distribution proposed by such holder as the
Company may request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Section 11.
11.10 "Stand-Off" Agreement. Each Stockholder, if requested by the
---------------------
Company and an underwriter of Common Stock or other
32
securities of the Company, shall agree not to sell or otherwise transfer or
dispose of any Registrable Shares or other securities of the Company held by
such Stockholder for a specified period of time (not to exceed 90 days)
following the effective date of a Registration Statement; provided, that:
--------
(a) such agreement shall only apply to the first such
Registration Statement covering Common Stock of the Company to be sold on its
behalf to the public in an underwritten offering; and
(b) all Stockholders holding not less than the number of shares
of Common Stock held by such Stockholder (including shares of Common Stock
issuable upon the conversion of Shares, or other convertible securities, or upon
the exercise of options, warrants or rights) and all officers and directors of
the Company enter into similar agreements.
Such agreement shall be in writing in a form satisfactory to the Company and
such underwriter. The Company may impose stop-transfer instructions with
respect to the Registrable Shares or other securities subject to the foregoing
restriction until the end of the stand-off period.
11.11 Limitations on Subsequent Registration Rights. The Company
---------------------------------------------
shall not, without the prior written consent of Stockholders holding at least 66
2/3% of the Shares, enter into any agreement (other than this Agreement) with
any holder or prospective holder of any securities of the Company which would
allow such holder or prospective holder (a) to include securities of the Company
in any registration filed under subsection 11.3 or 11.4, or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to December 31, 1992.
11.12 Rule 144 Requirements. After the earliest of (i) the closing
---------------------
of the sale of securities of the Company pursuant to a Registration Statement,
(ii) the registration by the Company of a class of securities under Section 12
of the Exchange Act, or (iii) the issuance by the Company of an offering
circular pursuant to Regulation A under the Securities Act, the Company agrees
to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at
33
any time after it has become subject to such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after 90 days following the closing
of the first sale of securities by the Company pursuant to a Registration
Statement), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as such holder may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell any such
securities without registration.
11.13 Selection of Underwriter.
------------------------
(a) In the case of any registration effected pursuant to
subsection 11.3, the requesting Stockholders shall have the right to designate
the managing underwriter in any underwritten offering.
(b) In the case of any registration initiated by the Company, the
Company shall have the right to designate the managing underwriter in any
underwritten offering, subject to the approval of a majority of the Registrable
Shares to be included in such offering, which approval shall not be unreasonably
withheld.
12. Delaware License. Astrosystems shall indemnify and hold harmless the
----------------
Company and the Purchasers from all claims, damages, losses or liabilities,
including attorneys' fees, to which the Company or the Purchasers may become
subject as a result of any claim made or action brought by the University of
Delaware (or its successor) under the Delaware License.
13. Successors and Assigns. Except as provided in Section 14, the
----------------------
provisions of this Agreement shall be binding upon, and inure to the benefit of,
the respective successors, assigns, heirs, executors and administrators of the
parties hereto.
14. Transfers of Certain Rights.
---------------------------
(a) The rights granted to a Purchaser under subsections 10.1, 10.2 and
10.6 and Section 11 may be transferred by such Purchaser to another Purchaser,
to any affiliate of the Purchaser or to any person or entity acquiring at least
Fifty Thousand (50,000) Shares or Registrable Shares; provided, however, that
-------- -------
the Company is given written notice by the transferee at the
34
time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which such rights are being assigned.
(b) Transferees. Any transferee (other than a Purchaser) to whom
-----------
rights under subsection 10.1, subsection 10.2, subsection 10.6 or Section 11 are
transferred shall, as a condition to such transfer, deliver to the Company a
written instrument by which such transferee agrees to be bound by the
obligations imposed upon Purchasers under Section 15, subsection 10.6 or Section
11, as the case may be, to the same extent as if such transferee were a
Purchaser hereunder.
(c) Subsequent Transferees. A transferee to whom rights are
----------------------
transferred pursuant to this Section 14 may not again transfer such rights to
any other person or entity, other than as provided in (a) or (b) above.
(d) Partners and Stockholders. Notwithstanding anything to the
-------------------------
contrary herein, any Purchaser which is a partnership or corporation may
transfer rights granted to such Purchaser under subsection 10.2, subsection 10.6
or Section 11 to any partner or stockholder thereof to whom Shares are
transferred pursuant to subsection 11.2 and who delivers to the Company a
written instrument in accordance with subparagraph (b) above and containing the
representation that the transfer is exempt from registration under the
Securities Act of 1933, as amended. In the event of such transfer, such partner
or stockholder shall be deemed a Purchaser for purposes of this Section 14 and
may again transfer such rights to any other person or entity which acquires
Shares or Registrable Shares from such partner or stockholder, in accordance
with, and subject to, the provisions of subparagraphs (a), (b) and (c) above.
15. Confidentiality. Each Purchaser agrees that he or it will keep
---------------
confidential and will not disclose or divulge any confidential, proprietary or
secret information which such Purchaser may obtain from the Company pursuant to
financial statements, reports and other materials submitted by the Company to
such Purchaser pursuant to this Agreement, or pursuant to visitation or
inspection rights granted hereunder, unless such information is known, or until
such information becomes known, to the public.
16. Survival of Representations and Warranties. All agreements,
------------------------------------------
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the closing of the transactions contemplated
hereby.
35
17. Expenses. The Company shall pay the reasonable costs and expenses of
--------
Xxxx and Xxxx, special counsel to the Purchasers in connection with the
preparation of this Agreement and the closing of the transactions contemplated
hereby.
18. Notices. All notices, requests, consents, and other communications
-------
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company, at 00 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, Attention:
President, or at such other address or addresses as may have been furnished in
writing by the Company to the Purchasers; or
If to a Founder, at his address set forth below his signature to this
Agreement; or
If to a Purchaser, at his or its address set forth on Exhibit A, or at such
---------
other address or addresses as may have been furnished to the Company in writing
by such Purchaser, with a copy to Xxxxxxx X. Xxxxxxx, Esq., Xxxx and Xxxx, 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
Notices provided in accordance with this Section 18 shall be deemed
delivered upon personal delivery or 48 hours after deposit in the mail.
19. Brokers. The Company, each Founder and each Purchaser (i) represents
-------
and warrants to the other parties hereto that he or it has retained no finder or
broker in connection with the transactions contemplated by this Agreement, and
(ii) will indemnify and save the other parties harmless from and against any and
all claims, liabilities or obligations with respect to brokerage or finders'
fees or commissions, or consulting fees in connection with the transactions
contemplated by this Agreement asserted by any person on the basis of any
statement or representation alleged to have been made by such indemnifying
party.
20. Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
36
21. Amendments and Waivers. Except as otherwise expressly set forth in
----------------------
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the holders of at least 66 2/3% of the Shares. Any amendment or
waiver effected in accordance with this Section 22 shall be binding upon each
holder of any Shares (including shares of Common Stock into which such Shares
have been converted), each future holder of all such securities and the Company.
No waivers of or exceptions to any term, condition or provision of this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such term, condition or provision.
22. Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23. Headings. The headings of the sections, subsections, and paragraphs
--------
of this Agreement have been added for convenience only and shall not be deemed
to be a part of this Agreement.
24. Severability. The invalidity or unenforceability of any provision of
------------
this Agreement shall not affect the validity or enforceability of any other
provision.
37
25. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
day and year first above written.
COMPANY:
ASTROPOWER INC.
By: /S/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
----------------
Title: President
---------
FOUNDERS:
ASTROSYSTEMS INCORPORATED
By: /S/ Xxxxxxx Xxxxxxxxx, Vice President
-------------------------------------
Address:
ESSEX VENCAP, INC.
By: /S/ Xxxxxxx X. Xxxxxxxx, President
----------------------------------
Address:
PURCHASERS:
ADVAL LIMITED PARTNERSHIP
By: /S/ Xxxxxx X. Xxxxxxxxxxx
-------------------------
Vice President
38
ADVENT FUTURE LIMITED PARTNERSHIP
By: AVENT INTERNATIONAL CORPORATION
General Partner
By: /S/ Xxxxxx X. Xxxxxxxxxxx
-------------------------
Vice President
ADVENT PERFORMANCE MATERIALS LIMITED PARTNERSHIP
By: /S/ Xxxxxx X. Xxxxxxxxxxx
-------------------------
Attorney-in-Fact
WORLD TECHNOLOGY LIMITED PARTNERSHIP
By: ADVENT INTERNATION CORPORATION
General Partner
By: /S/ Xxxxxx X. Xxxxxxxxxxx
-------------------------
Vice President
ADHILL LIMITED PARTNERSHIP
By: ADVENT INTERNATIONAL CORPORATION
General Partner
By: /S/ Xxxxxx X. Xxxxxxxxxxx
--------------------------
Vice President
ADWEST LIMITED PARTNERSHIP
By: ADVENT INTERNATIONAL CORPORATION
General Partner
By: /S/ Xxxxxx X. Xxxxxxxxxxx
--------------------------
Vice President
39
ADVENT INTERNATIONAL INVESTORS LIMITED PARTNERSHIP
By: ADVENT INTERNATIONAL CORPORATION
General Partner
By: /S/ Xxxxxx X. Xxxxxxxxxxx
-------------------------
Vice President
UVCC FUND I
By: ARETE VENTURE MANAGEMENT ASSOCIATES
L.P., Managing General Partner
By: ARETE VENTURES, INC.,
PARTNERSHIP, General Partner
By: /S/ Xxxxxx X. Xxxx, Xx.
-----------------------
President
By: /S/ Xxxxxx X. Xxxx, Xx.
-----------------------
General Partner
UVCC I PARALLEL FUND, L.P.
By: ARETE VENTURES, X.X. XX,
General Partner
By: ARETE VENTURES, INC.
General Partner
By: /S/ Xxxxxx X. Xxxx, Xx.
-----------------------
President
By: /S/ Xxxxxx X. Xxxx, Xx.
-----------------------
General Partner
40
XXXXXX XXXXXXXXX PARTNERS, L.P.
By: XXXXXX XXXXXXXXX ASSOCIATES,
General Partner
By: /S/ Xxxxx X. Xxxxxxxxx
--------------------------------
XXXXXX XXXXXXXXX PARTNERS II, L.P.
By: XXXXXX XXXXXXXXX ASSOCIATES,
General Partner
By: /S/ Xxxxx X. Xxxxxxxxx
--------------------------------
VENTURES WEST III-U.S. LIMITED PARTNERSHIP
By: VENTURES WEST MANAGEMENT III, LTD.,
General Partner
By:/S/ Xxxxxxx Xxxxx
--------------------------
41
