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