Exhibit 10.1.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT ("Agreement") dated as of the 28th
day of May, 1997, is entered into by and among SatCon Technology Corporation, a
Delaware corporation (the "Company"), Beacon Power Corporation, a Delaware
corporation ("BPC"), and Duquesne Enterprises, a Pennsylvania corporation (the
"Purchaser").
WITNESSETH:
WHEREAS, the Company is in need of capital in order to develop BPC and,
subject to the fulfillment of the terms and conditions set forth herein, the
Purchaser is willing to provide such capital by purchasing shares of the
Company's common stock, $.01 par value per share ("Common Stock"), at a purchase
price determined in accordance with the terms set forth herein, in connection
with which BPC shall issue to the Company and the Company shall transfer to the
Purchaser a warrant substantially in the form attached hereto as Exhibit A (the
---------).
NOW THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
I. Preambles; Purchase and Sale; Issuance of Warrant; Closing;
Termination of Agreement.
1.1 Preambles. The preambles are incorporated herein as fully as if set
forth herein.
1.2 Purchase and Sale; Issuance of Warrant. Subject to the terms and
conditions set forth in this Agreement, on the Closing Date (as hereinafter
defined): (a) the Purchaser shall purchase from the Company and the Company
shall issue, sell and deliver to the Purchaser the number of shares of Common
Stock which shall be equal to $5,000,000 divided by the average last sales price
for shares of the Common Stock as reported on the Nasdaq National Market on the
30 trading days immediately prior to the earlier of (i) the fifth trading day
prior to the Closing (as hereinafter defined) under this Agreement, or (ii) the
public announcement of the transactions contemplated by this Agreement, and (b)
the Company shall deliver to the Purchaser the Warrant previously issued to the
Company by BPC.
1.3 Closing. The consummation of the transactions referred to in
Section 1.2 shall constitute the closing (the "Closing"). The date on which the
Closing takes place is referred to herein as the "Closing Date". The Closing
shall take place at the offices of Xxxxx Xxxxxx Xxxxxx & Xxxxxxxxx, a
Professional Corporation, Xxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, on
or before May 31, 1997, or at such other place and time or on such other date as
the Purchaser and the Company may agree.
1.4 Termination of Agreement. In the event that the Closing of the
transactions contemplated hereby are not consummated on or before May 31, 1997
for any reason whatsoever, including without limitation, the fulfillment of the
condition set forth in Section 5.12
(unless this Agreement is extended by the mutual written agreement of the
Company and the Purchaser), this Agreement shall automatically and without
further action on the part of any party hereto, be deemed terminated and neither
the Company or BPC nor the Purchaser shall have any further liability or
obligation whatsoever under this Agreement or otherwise in connection with the
transactions contemplated hereby.
II. Representations and Warranties of the Company and BPC.
Subject to and except as disclosed by the Company or BPC on Schedule I,
the Company and BPC hereby represent and warrant to the Purchaser as follows:
2.1 Organization and Good Standing. Each of the Company and BPC is a
corporation validly existing and in good standing under the laws of the State of
Delaware. Each of the Company and BPC has all requisite corporate power and
authority and holds all material licenses, permits and other required
authorizations from governmental authorities necessary to own its respective
properties and assets and to conduct its respective businesses as presently
conducted, except where the failure to have any licenses, permits or
authorizations does not have a material adverse effect upon the operations or
financial conditions of the Company and BPC. Each of the Company and BPC is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on the operations or financial condition of the Company or BPC,
as the case may be. True and complete copies of the Company's and BPC's
Certificates of Incorporation, and bylaws, as presently in effect, have been
delivered to counsel for the Purchaser.
2.2 Capitalization.
(a) At the date hereof, the Company's authorized capital stock consists
of 1,000,000 shares of preferred stock, $.01 par value per share, of which no
shares are issued and outstanding, and 15,000,000 shares of Common Stock, $.01
par value per share, of which 7,908,075 shares are issued and outstanding. All
of the issued and outstanding shares of Common Stock have been duly authorized
and validly issued and are fully paid and nonassessable and were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.
(b) At the date hereof, BPC's authorized capital stock consists of
1,000,000 shares of preferred stock, $.01 par value per share ("BPC Preferred
Stock"), of which 1,000,000 shares are issued and outstanding and owned by the
Company, and 5,000,000 shares of common stock, $.01 par value per share ("BPC
Common Stock"), of which 1,000,000 shares are reserved for issuance upon
conversion of the BPC Preferred Stock and 500,000 shares are reserved for
issuance upon exercise of the Warrant. All of the issued and outstanding shares
of BPC Preferred Stock have been duly authorized and validly issued and are
fully paid and nonassessable and were issued in compliance with all applicable
state and federal laws concerning the issuance of securities. As of the date
hereof, BPC is a wholly-owned subsidiary of the Company.
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(c) The shares of Common Stock which are being issued and sold
hereunder have been duly and validly authorized and, when issued, sold and
delivered in accordance with the terms hereof for the consideration provided for
herein, will be validly issued, fully paid and nonassessable and will not be
subject to any lien, encumbrance or restriction in favor of the Company except
for restrictions upon transfer imposed by this Agreement or federal and state
securities laws. The shares of BPC Common Stock issuable upon exercise of the
Warrant have been duly and validly authorized and, upon exercise of the Warrant
and payment of the exercise price, will be validly issued, fully paid and
nonassessable and will not be subject to any lien, encumbrance or restriction in
favor of BPC except for restrictions upon transfer imposed by federal and state
securities laws. No further approval or authorization of the stockholders or the
directors of the Company or BPC is required for the issuance and sale of the
Common Stock as contemplated herein, the issuance of the Warrant or the issuance
of shares of BPC Common Stock upon exercise of the Warrant. BPC shall, at all
times during the term of the Warrant, reserve and keep available out of its
authorized but unissued shares of BPC Common Stock, solely for the purpose of
effecting the exercise of the Warrant, such number of shares of BPC Common Stock
as shall from time to time be sufficient to effect the exercise of the Warrant.
(d) Except for (i) the Common Stock to be issued pursuant to this
Agreement, (ii) the shares of BPC Common Stock reserved for issuance upon
exercise of the Warrant, (iii) shares of Common Stock reserved for issuance to
employees, directors or consultants of or to the Company upon exercise of
options granted pursuant to the Company's stock option plans in effect on the
Closing Date (the "SOPs"), (iv) 3,000,000 shares of BPC Common Stock to be
issued to the Company, and (v) except as otherwise provided in this Agreement,
including Schedule I and the Exhibits hereto, (A) no subscription, warrant,
option, convertible security or other right (contingent or otherwise) to
purchase or acquire any securities of the Company or BPC is authorized or
outstanding, (B) neither the Company nor BPC has any obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its respective
securities or to pay any dividends or make any other distributions in respect
thereof, (C) no person or entity is entitled to any preemptive or similar right
with respect to the issuance of any securities of the Company or BPC, and (D) no
person or entity has any rights to require the registration of any securities of
the Company or BPC under the Securities Act of 1933, as amended (the "Securities
Act").
(e) Except for BPC, K&D MagMotor Corp. and SatCon Film
Microelectronics, Inc., the Company has no subsidiaries and does not own or
control, directly or indirectly, any other corporation, association or business
entity.
2.3 Authorization, Validity and Enforceability. Each of the Company has
all requisite corporate power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby. The execution, delivery and
performance by the Company and BPC of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. The execution and delivery of this Agreement, including the
Exhibits hereto, the issuance of the Common Stock by the Company, the issuance
of the Warrant by BPC and the issuance of the shares of BPC Common Stock upon
exercise of the Warrant, will not violate any material provision of law
applicable to the Company or BPC and will not conflict with, or result in a
breach of any of the terms of, or constitute a default
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under, the Company's or BPC's respective Certificate of Incorporation, bylaws or
any material agreement, instrument or other restriction to which the Company or
BPC, as the case may be, is a party or by which the Company, BPC or any of their
respective properties or assets is bound, except, in each case, for such
violations, conflicts, breaches or defaults that do not have a material adverse
effect upon the Company's or BPC's operations or financial conditions. This
Agreement and the Exhibits hereto, when executed, will constitute the legal,
valid and binding obligations of the Company and BPC, enforceable against the
Company and BPC in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
2.4 Government Consents, Etc. Except as disclosed on Schedule I, no
consent, approval or authorization of, or declaration, registration or filing
with, any person, entity or governmental authority on the part of the Company or
BPC is required on or prior to the Closing Date for the valid execution,
delivery and performance of this Agreement, including the Exhibits hereto, or
the valid consummation of the transactions contemplated hereby, except for
filings and registrations pursuant to federal and state securities laws, and
filings with the National Association of Securities Dealers, Inc., if any, which
filings and registrations have been or will be made in a timely manner.
2.5 Securities Laws. Subject to the accuracy of the Purchaser's
representations and warranties set forth in Article III hereof, the offer, sale
and issuance of the Common Stock and the Warrant, as provided in this Agreement,
is and is intended to be: (i) exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof or Regulation D promulgated
thereunder, and (ii) exempt from the registration or qualification requirements
of applicable state securities laws.
2.6 No Defaults in Agreements. Except as disclosed on Schedule I,
neither the Company nor BPC is in violation of its Certificate of Incorporation
or its bylaws, nor is the Company or BPC in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, lease, note, or other
instrument to which it is a party or by which it may be bound, the effect of
which, upon default or upon the passage of time, would have a material adverse
effect on the operations or financial conditions of the Company or BPC, as the
case may be.
2.7 Material Transactions. Except as disclosed on Schedule I, neither
the Company nor BPC has during the past 12 months (i) borrowed any funds or
incurred or become subject to any material obligations or liabilities (absolute
or contingent), except as incurred in the ordinary course of business, (ii)
discharged or satisfied any material lien or encumbrance or paid any obligation
or liability (absolute or contingent) other than current liabilities in the
ordinary course of business and obligations incurred in the ordinary course of
business referred to in clause (i) above, (iii) entered into any agreements or
arrangements granting any rights to purchase all or substantially all of the
assets of the Company or BPC, or providing for the merger or consolidation of
the Company or BPC into or with another corporation, or sold any substantial
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product line, or (iv) suffered any material losses, or cancelled any debts or
claims outside of the ordinary course of business.
2.8 Litigation. Except as disclosed on Schedule I, there is no action
or proceeding at law or in equity pending against the Company or BPC or any of
their respective properties before any court or governmental commission, foreign
or domestic; and, except as disclosed on Schedule I, there is no such proceeding
pending in arbitration or before any administrative agency. Except as disclosed
on Schedule I, there is no judgment, consent decree, injunction, rule or other
judicial or administrative order outstanding against the Company or BPC.
2.9 Compliance. To the best of the Company's and BPC's knowledge, each
of the Company and BPC has complied in all material respects with all laws,
regulations and orders, foreign or domestic, applicable to its respective
business, and the uses by the Company and BPC of its respective properties, and
the conduct by the Company and BPC of its respective business does not in any
material respect violate any laws, regulations or orders, except for such
violations and non-compliance that the Company does not reasonably expect to
have a materially adverse affect on its financial condition.
2.10 Intellectual Properties. Set forth on Schedule I is a true and
complete list of all material patents, trademarks, service marks, trade names,
copyrights, licenses and proprietary rights owned, licensed or used by the
Company and BPC. Each of the Company and BPC owns or possesses, or can obtain by
payment of royalties in amounts which, in the aggregate, do not adversely affect
the business and the prospects of the Company and BPC, all of the patents,
trademarks, service marks, trade names, copyrights, proprietary rights, trade
secrets, and licenses or rights to the foregoing, necessary for the conduct of
the business of the Company and BPC as currently conducted. To the best of the
Company's and BPC's knowledge, the business of each of the Company and BPC does
not cause the Company or BPC to infringe or violate any of the patents,
trademarks, service marks, trade names, copyrights, licenses or proprietary
rights of any person or entity.
2.11 Environmental. The Company and BPC, the operation of their
respective businesses, and all real property that the Company and BPC own, lease
or otherwise occupy or use (the "Premises") are in material compliance with all
applicable Environmental Laws (as hereinafter defined) and orders or directives
of any governmental authorities having jurisdiction under such Environmental
Laws, except for such non-compliance that the Company does not reasonably expect
to have a material adverse effect upon its operations or financial condition.
Neither the Company nor BPC has received any citation, directive, letter or
other communication, whether written or oral, or any notice of any proceeding,
claim or lawsuit, from any person arising out of the ownership or occupation of
the Premises, or the conduct of its respective operations, and neither the
Company nor BPC is aware of any basis therefor. For the purposes of this
Agreement, the term "Environmental Laws" shall mean any federal, state or local
law or ordinance or regulation pertaining to the protection of human health or
the environment, including without limitation, the Comprehensive Environmental
Response Compensation and Liability Act, the Emergency Planning and Community
Right-to-Know Act and the Resource Conservation and Recovery Act.
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2.12 Disclosure. The Company has provided the Purchaser with copies of
its Annual Report on Form 10-K for the fiscal year ended September 30, 1996, its
Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1996 and
March 31, 1997, its proxy statement for the Company's 1997 annual meeting of
stockholders and any Form 8-K filed with the Securities and Exchange Commission
(the "Commission") since September 30, 1996 (collectively, the "Disclosure
Documents"). The Disclosure Documents, as of their respective dates, did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statement therein, in
light of the circumstances under which it was made, not misleading. Since the
filing of the most recent Disclosure Document with the Commission, no event or
development has occurred which requires the Company to amend or supplement any
Disclosure Document or to file a current report on Form 8-K. The audited and
unaudited financial statements included in the Disclosure Documents have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis.
2.13 Survival of Representations and Warranties. The representations
and warranties of the Company and BPC contained herein shall survive the
execution and delivery of this Agreement and the issuance of the Common Stock
and the Warrant, but shall terminate on the one year anniversary of the Closing
Date.
III. Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants to the Company and BPC as
follows:
3.1 Organization; Good Standing. The Purchaser is duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania, and has all requisite power and authority to carry on its business
as now conducted.
3.2 Authorization; Validity and Enforceability. All action, corporate
or otherwise, on the part of the Purchaser necessary for the authorization,
execution and delivery of this Agreement and the performance of all obligations
of the Purchaser hereunder, has been taken or will be taken prior to the Closing
Date. The execution, delivery and performance by the Purchaser of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized and approved by all necessary corporate action, and this Agreement
and the Exhibits hereto, when executed, constitute valid and legally binding
obligations of the Purchaser, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The execution and delivery of this Agreement,
including the Exhibits hereto, will not violate any material provision of law
and will not conflict with, or result in a breach of any of the terms of, or
constitute a default under, the charter, bylaws or other organizational
documents of the Purchaser, or any material agreement, instrument or other
restriction to which the Purchaser is a party or by which the Purchaser is
bound.
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3.3 Purchase for Investment. The Purchaser represents that it is
purchasing and acquiring the Common Stock and the Warrant for its own account
for investment and not with a view to the resale or distribution, in whole or in
part, in violation of the Securities Act or applicable state securities law.
3.4 Access to Information. The Purchaser has had access during the
course of this transaction and prior to the acquisition of the Common Stock and
the Warrant, to such information relating to the Company and BPC as it has
desired, and has been given the opportunity to ask questions of, and receive
answers from, the Company and BPC and their respective representatives
concerning the Company and BPC and the terms and conditions of the issuance of
the Common Stock and the Warrant, and to obtain any additional information which
the Company and BPC possess or can reasonably obtain which is necessary to
verify the accuracy of the information furnished to the Purchaser.
3.5 Restrictions on Transfer. The Purchaser understands that (i) the
Common Stock, the Warrant and the BPC Common Stock issuable upon exercise of the
Warrant (collectively, the "Securities"), have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) thereof
or Regulation D promulgated under the Securities Act, (ii) the Securities must
be held indefinitely unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration, (iii) certificates
evidencing the Securities will bear a legend to such effect and to the effect
that the Securities are subject to this Agreement, and (iv) the Company and BPC
will make a notation on their respective transfer books to such effect.
3.6 Accredited Investor. The Purchaser represents and warrants that it
is an "accredited investor" within the definition set forth in Rule 501(a) of
Regulation D promulgated under the Securities Act. The Purchaser represents and
warrants that it has a sufficient net worth to bear the loss of the entire
investment should such loss occur.
3.7 Survival. The representations and warranties of the Purchaser
contained herein shall survive the execution and delivery of this Agreement and
the acquisition of the Common Stock and the Warrant, but shall terminate on the
one year anniversary of the Closing Date.
IV. Covenants and Agreements of the Company and BPC.
4.1 Access to Information and Staff. The Purchaser and any authorized
representatives thereof shall have access to information regarding BPC, its
products and the marketplace for such products, including without limitation,
access to visit the properties of BPC, and to discuss its business with its
employees, management and staff; provided, however, that at BPC's request as a
condition to such access, the Purchaser and its authorized representatives shall
execute a non-disclosure and non-use agreement in form and substance agreed upon
by the Purchaser and BPC; and provided further that the Purchaser shall not be
entitled to such access at any time that BPC is registered under the Securities
Exchange Act of 1934.
4.2 Restrictions On Equity Sales. So long as the Purchaser is the owner
of at least (i) 50% of the shares of Common Stock acquired pursuant to this
Agreement, or (ii) 50% of the total
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number of shares of BPC Common Stock that may be acquired pursuant to the
Warrant, prior to the five year anniversary of the Closing Date, BPC shall not
issue or sell any equity securities of BPC in any private securities transaction
to any domestic entity or any of its parent, subsidiaries or affiliates, which
derived during its most recently completed fiscal year revenues of $10,000,000
or more from the distribution of electricity or natural gas, without the prior
written consent of the Purchaser.
4.3 Use of Proceeds. The entire $5,000,000 purchase price delivered by
the Purchaser to the Company pursuant to Article I hereof shall be used solely
for the acquisition by the Company of 3,000,000 shares of BPC Common Stock. BPC
covenants and agrees that all of the purchase price paid by the Company for the
aforestated shares shall be used for the purpose of developing and conducting
BPC's business, which shall include the development, manufacture and marketing
of flywheel energy storage systems for use in energy storage applications.
Except as provided on Schedule 4.3, BPC further covenants and agrees that no
part of the aforestated purchase price shall be used to repay the Company for
any funds expended by the Company on behalf of BPC prior to the Closing without
the prior written consent of the Purchaser. The Purchaser acknowledges and
agrees that Schedule 4.3 shall include, without limitation, the reasonable
expenses incurred by the Company from May 1, 1997 to May 31, 1997 in connection
with activities undertaken by the Company for or on behalf of BPC, excluding any
expenses related to the consummation of the transactions contemplated by this
Agreement. The Company and BPC also covenant and agree that no portion of the
purchase price paid by the Purchaser shall be used to pay broker's fees or
commissions or similar payments of any kind whatsoever.
4.4 Protective Provisions. The Company and BPC covenant and agree that
so long as the Purchaser is the owner of at least 50% of the shares of the
Company's Common Stock acquired pursuant to this Agreement, neither the Company
nor BPC shall, without the prior written consent of the Purchaser:
(a) Make any material change in the principal business activity of BPC
as currently contemplated to be conducted; or
(b) Enter into any license, arrangement or agreement pursuant to which
the Company grants rights in or to intellectual property of the Company or BPC
relating to flywheel technology to a competitor of BPC.
The provisions of this Section 4.4 shall terminate effective upon the
closing of BPC's initial public offering pursuant to a registration statement
under the Securities Act of 1933, as amended.
4.5 Company Board of Directors.
(a) The Company covenants and agrees that immediately following the
Closing, the Company shall propose to the nominating committee of its Board of
Directors the nomination and appointment to the Company's Board of Directors of
one of the two nominees designated by the Purchaser (the "Purchaser
Representative"). Thereafter, so long as the Purchaser is the owner of at least
5% of the Company's issued and outstanding Common Stock, the Company covenants
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and agrees that it shall, at each meeting of the stockholders of the Company at
which the Purchaser Representative's term of office as a director expires (or in
the event that a Purchaser Representative vacates such office at any time for
any reason whatsoever), (i) recommend that the Company's stockholders vote for
the Purchaser Representative, and (ii) cause to be voted for the Purchaser
Representative the shares of Common Stock for which the Company's management or
Board of Directors holds proxies or are otherwise entitled to vote.
(b) The Purchaser covenants and agrees to provide the Company with the
names of two nominees from which the Company shall select the Purchaser
Representative.
(c) The Company and the Purchaser covenant and agree that the initial
Purchaser Representative shall be Xxxxxxx X. Xxxxxxxxx.
4.6 BPC Board of Directors.
(a) The Company, BPC and the Purchaser covenant and agree that the
Board of Directors of BPC shall consist of 7 members. The Company and the
Purchaser hereby agree to vote for, and BPC agrees to recommend that BPC's
stockholders vote for, and cause the shares of BPC Common Stock for which BPC's
management or Board of Directors holds proxies or are otherwise entitled to vote
to be voted for, the following candidates to the Board of Directors:
(i) So long as the Purchaser is the owner of at least (i) 50% of
the shares of the Company's Common Stock acquired pursuant to this Agreement, or
(ii) 50% of the total number of shares of BPC Common Stock that may be acquired
pursuant to the Warrant, one director designated by the Purchaser (the "BPC
Purchaser Representative");
(ii) Four directors designated by the Company;
(iii) One director who shall be an executive officer of BPC; and
(iv) One independent outside director mutually selected upon by a
majority of the other directors.
(b) If any of the directors designated pursuant to Section 4.6(a)
hereof is removed or vacates such position for any reason whatsoever, such
vacancy shall be filled as soon as practicable with a new designee satisfying
the requirements of Section 4.6(a).
(c) The Company, BPC and the Purchaser covenant and agree that
immediately following the Closing, an Executive Committee of the BPC Board of
Directors shall be established, which shall be comprised of one director
designated by the Company, the BPC Purchaser Representative and a director who
is an executive officer of BPC. The purpose of the Executive Committee shall be
to exercise Board authority between meetings of the Board of Directors, to
handle routine matters and to operate in emergency situations.
4.7 Strategic Relationships. The Company covenants and agrees that for
a period of 5 years following the Closing Date, if the Company seeks to enter
into a strategic relationship with
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a third party with respect to the development of technology for the stationary
terrestrial energy industry, the Company shall, in good faith, first pursue
discussions with the Purchaser with respect to entering into such a
relationship. The foregoing shall in no way obligate the Company to enter into
an agreement with the Purchaser with respect to the development of such
technology or to continue such discussion for a period of more than 30 business
days. Once the Company or the Purchaser shall have discontinued such
negotiations, the Company shall have no obligation to develop such technology
with or sell such technology to the Purchaser, whether the terms of any
transaction that the Company enters into with a third party are more or less
favorable than the terms discussed with the Purchaser.
4.8 Development Contracts. The Company covenants and agrees that it
shall offer to BPC to be retained as a contractor for any development contracts
existing on the date hereof held by the Company which are related to terrestrial
applications of flywheel technology, upon terms and conditions which are
mutually agreed upon by the Company and BPC, acting in good faith. The Company
further covenants and agrees that it shall not, at any time and from time to
time, compete with BPC, directly or indirectly, for new development contracts
which are related specifically to stationary terrestrial applications of
flywheel technology.
4.9 Strategic Product Development. BPC covenants and agrees that for
the period of 6 months following the Closing, BPC shall cooperate and work with
the Purchaser to develop a business plan for the development of new products of
strategic importance to the Purchaser. The aforestated business plan shall be
promptly reviewed and evaluated by BPC's Board of Directors upon its completion.
4.10 U.S. Marine Corps Development Agreement. The Company covenants and
agrees that from and after the Closing Date, any revenues that are received, and
any expenses that have been or are incurred (other than expenses which have been
offset by revenues received), by the Company pursuant to that certain Agreement
between the Company and the U.S. Marine Corps shall be paid and delivered by the
Company to BPC within 5 days after receipt thereof.
4.11 Letter Agreement. The Purchaser and BPC agree to enter into the
Letter Agreement attached hereto as Exhibit E. The Purchaser acknowledges that
the Company and BPC are entering into this Letter Agreement on the basis of the
Purchaser's intent to actively market and distribute BPC's products.
4.12 Remedies. Each of the Company, BPC and the Purchaser acknowledge
and agree that the parties to this Agreement would be irreparably damaged in the
event that any of the provisions of this Article IV were not performed in
accordance with their specific terms or were otherwise breached. Accordingly, it
is agreed that each party to this Agreement shall be entitled to an injunction
to prevent breaches of this Article IV and to specifically enforce any section
of this Article IV in any action instituted in any court of the United States or
any state thereof having jurisdiction, in addition to any other remedy to which
such party may be entitled at law or in equity.
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4.13 Survival of Covenants and Agreements of the Company. Except as
otherwise set forth herein, the covenants and agreements of the Company set
forth in Article IV are continuing covenants and agreements and shall survive
the Closing Date. V. Conditions to the Purchaser's Obligations at Closing. The
obligations of the Purchaser under Article I of this Agreement are subject to
the fulfillment, or the waiver by the Purchaser, of the following conditions on
or before the Closing Date:
5.1 Representations and Warranties; Conditions. The representations and
warranties set forth in Article II hereof shall be true and correct in all
material respects on and as of the date hereof and as of the Closing Date and
the Company and BPC shall have complied in all material respects with all
agreements and satisfied all material conditions on their part to be performed
or satisfied prior to the Closing Date.
5.2 No Adverse Change. Since the date of the latest financial
statements included in the Disclosure Documents, there shall have been no
material adverse change in the business, financial condition or results of
operations of the Company and no material litigation or other proceeding shall
have been commenced by any person, including, without limitation, any
governmental agency, relating to any of the proposed transactions.
5.3 Legal Opinion. The Purchaser shall have received an opinion from
Xxxx and Xxxx LLP, counsel to the Company and BPC, dated the Closing Date,
addressed to the Purchaser, and reasonably satisfactory in form and substance to
the Purchaser's counsel, in substantially the form attached hereto as Exhibit G.
5.4 Registration Rights Agreement. The Company, BPC and the Purchaser
shall have executed and delivered the Registration Rights Agreement in
substantially the form attached hereto as Exhibit B, which Registration Rights
Agreement shall be in form and substance acceptable to the Purchaser.
5.5 Consulting Agreement. BPC and the Purchaser shall have executed and
delivered the Consulting Agreement in substantially the form attached hereto as
Exhibit C, which Consulting Agreement shall be in form and substance acceptable
to the Purchaser.
5.6 Services Agreement. The Company and BPC shall have executed and
delivered the Services Agreement in substantially the form attached hereto as
Exhibit D, which Services Agreement shall be in form and substance acceptable to
the Purchaser.
5.7 Organizational Documents of BPC. The Certificate of Incorporation,
bylaws and other organizational documents of BPC shall be complete and shall be
in form and substance acceptable to the Purchaser.
5.8 Letter Agreement. BPC and the Purchaser shall have executed and
delivered the Letter Agreement in substantially the form attached as Exhibit E,
which Letter Agreement shall be in form and substance acceptable to the
Purchaser.
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5.9 Employment Agreements. BPC shall have (either directly or by
assignment to BPC by the Company) employment agreements with key management
personnel, the identity of which personnel, and the contractual terms and
conditions of which employment agreements, are acceptable to the Purchaser.
5.10 License. The Company and BPC shall have entered into the License
Agreement (the "License") in substantially the form attached hereto as Exhibit
5.11 Certificates and Documents. The Company and BPC shall have
delivered to counsel to the Purchaser:
(a) A certificate executed by the President of the Company, dated the
Closing Date, certifying that the conditions specified in Section 5.1 have been
satisfied;
(b) A certificate executed by the President of BPC, dated the Closing
Date, certifying that the conditions specified in Section 5.1 have been
satisfied;
(c) Certificates, as of the most recent practicable dates as to the
corporate good standing of the Company and BPC issued by the Secretary of State
of the State of Delaware, and any other state in which each of the Company and
BPC is required to be qualified to do business, confirming such good standing on
or immediately prior to the Closing Date.
5.12 Approval of Board of Directors. The Board of Directors of the
Purchaser shall have approved this Agreement and the consummation of the
transactions contemplated hereby, which approval may be granted or denied in the
sole and absolute discretion of the Board of Directors of the Purchaser. In the
event that the Board of Directors of the Purchaser shall not have approved this
Agreement and the transactions contemplated hereby on or before May 31, 1997,
this Agreement shall be automatically terminated as set forth in Section 1.4
hereof.
VI. Conditions to the Company's and BPC's Obligations at Closing.
The obligations of the Company and BPC under Article I of this
Agreement are subject to the fulfillment, or the waiver by the Company or BPC,
on or before the Closing Date, of each of the following:
6.1 Agreements. The Services Agreement, the Letter Agreement and the
License in the forms attached hereto as Exhibits D, E and F shall have been
executed and delivered to the Company by the other parties thereto.
6.2 No Litigation. No material litigation or other proceeding shall
have been commenced by any person, including without limitation, any
governmental agency, relating to the proposed transaction.
6.3 Representations and Warranties; Conditions. The representations and
warranties of the Purchaser set forth in Article III hereof shall be true and
correct in all material respects on and as of the date hereof and as of the
Closing Date, and the Purchaser shall have performed and
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complied in all material respects with all agreements and material conditions on
its part to be performed or complied with prior to the Closing.
6.4 Deliveries. The Purchaser shall have delivered to the Company the
purchase price to be delivered by the Purchaser pursuant to Article I hereof.
6.5 Certificates. The Purchaser shall have delivered to counsel to the
Company a certificate executed by a duly authorized officer of the Purchaser,
dated the Closing Date, certifying that the conditions specified in Section 6.3
have been satisfied.
VII. Miscellaneous.
7.1 Expenses. Each party hereto shall bear its own costs and expenses
that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
provided, however, that in the event of a Closing under this Agreement, BPC
shall pay the legal and closing fees and expenses of the Purchaser in an amount
not to exceed $50,000 (which payment may be made out of the proceeds of the sale
of BPC Common Stock to the Company).
7.2 Finder's Fees.
(a) The Company and BPC (i) represent and warrant that neither the
Company nor BPC has retained any finder, agent or broker in connection with the
transactions contemplated by this Agreement, and (ii) hereby agree to indemnify
and hold harmless the Purchaser of and from any liability for any commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which the Company or BPC or any of their respective employees or
representatives is responsible.
(b) The Purchaser (i) represents and warrants that it has retained no
finder or broker in connection with the transactions contemplated by this
Agreement, and (ii) hereby agrees to indemnify and to hold harmless the Company
and BPC of and from any liability for any commission or compensation in the
nature of a finder's fee to any broker or other person or firm (and the costs
and expenses of defending against such liability or asserted liability) for
which the Purchaser or any of the Purchaser's employees or representatives is
responsible.
7.3 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be personally delivered or delivered by
overnight courier or mailed by first-class registered or certified mail, postage
prepaid, return receipt requested,
(a) If to the Purchaser, to:
Xxxxxxx X. Xxxxxxxxx
Vice President
Duquesne Enterprises
One Xxxxxxxxxx Xxxxxx
-00-
Xxxxx 000
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxx Xxxxxx & Xxxxxxxxx
A Professional Corporation
00xx Xxxxx, Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
(b) If to the Company, to:
Xxxxx X. Xxxxxxxxxx
President
SatCon Technology Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
with a copy to:
Xxxxxxx X. Carp, Esq.
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx Xxxxxx, XX 00000
Any party may change his or its address by notifying the other parties in
accordance with the provisions set forth herein.
7.4 Integration; Amendments and Waiver. This Agreement, together with
all Schedules and Exhibits hereto, embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. Any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company, BPC and the Purchaser.
No waivers of or exceptions to any term, condition or provision of this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such term, condition or provision.
7.5 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement.
7.6 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
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7.7 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall be binding upon, and inure to the
benefit of, the respective representatives, successors and assigns of the
parties hereto. This Agreement may not be assigned by either party without the
prior written consent of the other party hereto; provided, however, that this
Agreement may be assigned by the Purchaser to an affiliate of the Purchaser
without the prior written consent of the Company or BPC.
7.8 Exhibits, Schedules, and Headings. Each Exhibit and Schedule to
this Agreement is made a part of this Agreement as though set forth in full
herein. The headings in this Agreement are for convenience of reference only,
and shall not limit or otherwise affect the meaning hereof.
7.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.10 Publicity. The Company, BPC and the Purchaser shall each obtain
the other's consent before issuing any press release or otherwise making any
public announcement with respect to this Agreement and no party shall issue any
press release or make such public announcement prior to obtaining the other
parties' consent, unless such release or announcement is required pursuant to
applicable state or federal laws.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year written above.
SATCON TECHNOLOGY CORPORATION
/s/ Xxxxx X. Xxxxxxxxxx
By:________________________________
President
Title:_____________________________
BEACON POWER CORPORATION
/s/ Xxxxx X. Xxxxxxxxxx
By:________________________________
President
Title:__________________________
DUQUESNE ENTERPRISES
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Omitted Schedules and Exhibits
Pursuant to Item 601(b)(2) of Regulation S-K promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended and the Securities Exchange Act of 1934, Beacon Power
Corporation has, with respect to the Securities Purchase Agreement (the
"Agreement") by and among Beacon Power Corporation, Duquesne Enterprises,
Inc. and SatCon Technology Corporation dated May 28, 1997, omitted to file
the schedules and exhibits listed in the Agreement herewith. These schedules
and exhibits will be supplementally furnished to the Commission upon request.
