EXHIBIT 10.26
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is made and
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entered into as of August 25, 1999, among SatCon Technology Corporation, a
Delaware corporation (the "Company"), and the parties who have executed this
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Agreement and whose names appear on Schedule I hereto (each party listed on
Schedule I hereto is sometimes individually referred to herein as a "Purchaser"
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and all such parties are sometimes collectively referred to herein as the
"Purchasers").
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This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the "Purchase
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Agreement").
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The Company and the Purchasers hereby agree as follows:
1. Definitions
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Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
"Advice" has meaning set forth in Section 3(o) hereof.
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"Affiliate" means, with respect to any Person, any other Person that
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directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
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respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," controlling" and "controlled" have meanings
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correlative to the foregoing.
"Aggregate Price" has the meaning set forth in Section 2(d) hereof.
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"AMEX" shall mean the American Stock Exchange.
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"Business Day" means any day except Saturday, Sunday and any day which
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shall be a legal holiday or a day on which banking institutions in the State of
New York generally are authorized or required by law or other government actions
to close.
"Closing Date" shall mean the Closing Date as defined in the Purchase
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Agreement.
"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the Company's Common Stock, par value $0.01 per
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share.
"Effectiveness Date" means the earlier of (i) the 120th day following
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the Closing Date, or (ii) the fifth day after the Company has received notice
(written or oral) from the Commission that the Commission Staff will not be
reviewing the Registration Statement or has no further comments on the
Registration Statement.
"Effectiveness Period" has the meaning set forth in Section 2(a)
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hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Event" has the meaning set forth in Section 2(d) hereof.
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"Filing Date" means as soon as practicable but in no event later than
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the 30th day following the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case may be,
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from time to time of Registrable Securities.
"Indemnified Party" has the meaning set forth in Section 5(c) hereof.
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"Indemnifying Party" has the meaning set forth in Section 5(c) hereof.
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"Initial Registration Statement" has the meaning set forth in Section
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2(a) hereof.
"Losses" has the meaning set forth in Section 5(a) hereof.
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"Nasdaq" shall mean the Nasdaq Stock Market.
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"NYSE" shall mean the New York Stock Exchange.
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"Person" means an individual or a corporation, partnership, trust,
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incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
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(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
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Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the
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Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock issued or
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issuable upon (i) conversion of or with respect to the Securities, (ii) payment
of interest or any other payments in respect of the Securities, (iii) exercise
of the Warrants, and (iv) any shares of the Company's capital stock issued with
respect to (i), (ii) or (iii) as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise; provided, that
Registrable Securities shall not include any such shares that are eligible for
sale under Rule 144(k).
"Registration Delay Payment" has the meaning set forth in Section 2(d)
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hereof.
"Registration Statement" means the Initial Registration Statement and
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any additional registration statements contemplated by Sections 2(a), 2(b) and
7(d), including (in each case) the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference in
such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
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the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to
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the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
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the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities" means the Company's Convertible Redeemable Preferred
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Stock issuable pursuant to the Purchase Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
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"Special Counsel" means one special counsel to the Holders, for which
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the Holders will be reimbursed by the Company to the extent provided in Section
4.
"Standstill Notice" has the meaning set forth in Section 2(e).
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"Standstill Period" has the meaning set forth in Section 2(e).
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"Trading Day" means a day on which the Nasdaq (or in the event the
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Common Stock is not traded on Nasdaq, such other securities market on which the
Common Stock is listed) is open for trading.
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"Underlying Shares" means the shares of Common Stock issuable upon
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conversion of the Securities and exercise of the Warrants.
"Underwritten Registration or Underwritten Offering" means a
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registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective registration
statement.
"Warrants" means the warrants issuable pursuant to the Purchase
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Agreement.
2. Registration Requirements
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(a) Filing and Effectiveness Obligations. On or prior to the Filing
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Date, the Company shall prepare and file with the Commission a Registration
Statement (the "Initial Registration Statement") which shall cover all
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Registrable Securities for an offering to be made on a continuous basis pursuant
to a "Shelf" registration statement under Rule 415. The Initial Registration
Statement shall be on Form S-3 or any successor form (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith, subject to the reasonable consent of the original Holders
of the Registrable Securities). The Company shall (i) not permit any securities
other than the Registrable Securities and securities with respect to which there
are outstanding demand or "piggy-back" registration rights as of the date of
this Agreement to be included in the Initial Registration Statement and (ii) use
commercially reasonable efforts to cause the Initial Registration Statement to
be declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event on or prior to the Effectiveness Date, and,
except as provided herein, to keep such Initial Registration Statement
continuously effective under the Securities Act until the date which is two
years after the date that such Initial Registration Statement is declared
effective by the Commission or such earlier date when all Registrable Securities
covered by such Initial Registration Statement have been sold or may be sold
without volume restrictions pursuant to Rule 144 as determined by counsel to the
Company pursuant to a written opinion letter, addressed to the Holders and the
Company's transfer agent to such effect (the "Effectiveness Period"). The
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number of shares of Common Stock initially included in the Initial Registration
Statement shall be no less than 1.2 times the sum of the number of Securities
and Warrants that are then issuable upon conversion of the Securities (based on
the Conversion Price (as defined in the Securities) as would then be in effect
at such time) and the exercise of the Warrants, without regard to any limitation
on the Investor's ability to convert the Securities or exercise the Warrants.
If at any time the number of shares of Common Stock issuable pursuant to the
Securities is adjusted pursuant to the Certificate of Designation, or to the
Warrant is adjusted in accordance with the terms thereof, and more shares are
issuable pursuant to the Securities and Warrants then remain available for sale
pursuant to the Initial Registration Statement, the Company shall immediately,
but in no more than five (5) Business Days, file a Registration Statement
sufficient to register such additional shares of Common Stock.
(b) Underwritten Offering. Prior to the third anniversary of the
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Closing Date, in addition to the Initial Registration Statement, if the Holders
of a majority of the Registrable Securities covered by a Registration Statement
so elect, an offering of Registrable Securities
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pursuant to such Registration Statement may be effected on one (1) occasion in
the form of an Underwritten Offering, provided that the offering is at least
fifteen million dollars ($15,000,000), with net proceeds to the Company of at
least five million dollars ($5,000,000). In such event, and if the managing
underwriters advise the Company and such Holders in writing that in their
opinion the amount of Registrable Securities proposed to be sold in such
Underwritten Offering exceeds the amount of Registrable Securities which can be
sold in such Underwritten Offering, so long as the offering is at least fifteen
million dollars ($15,000,000), with net proceeds to the Company of at least five
million dollars ($5,000,000), there shall be included in such Underwritten
Offering the amount of such Registrable Securities which in the opinion of such
managing underwriters can be sold, and such amount shall be allocated pro rata
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among the Holders proposing to sell Registrable Securities in such Underwritten
Offering.
(c) Underwriter. If any of the Registrable Securities are to be sold
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in an Underwritten Offering, the investment banker in interest that will
administer the offering will be selected by the Holders of a majority of the
Registrable Securities included in such offering, provided that such investment
banker is reasonably satisfactory to the Company. No Holder may participate in
any Underwritten Offering hereunder unless such Holder (i) agrees to sell its
Registrable Securities on the basis provided in any underwriting agreements
approved by the Persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
arrangements.
(d) Penalties. Subject to Sections 3(r) and 3(s) hereof, if (i) the
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Initial Registration Statement covering all the applicable Registrable
Securities and required to be filed by the Company pursuant to this Agreement is
not filed with the Commission on or before the Filing Date or (B) declared
effective by the Commission on or before the applicable Effectiveness Date, (ii)
on any day after the Registration Statement has been declared effective by the
Commission (A) sales of all the Registrable Securities required to be included
on a Registration Statement cannot be made pursuant to the Registration
Statement (including, without limitation, because of a failure to keep the
Registration Statement effective, to disclose such information as is necessary
for sales to be made pursuant to the Registration Statement, or to register
sufficient shares of Common Stock) or (iii) the Company shall otherwise fail to
file a Registration Statement required by Section 2(a) hereof, (each such event
specified in (i), (ii) and (iii) above, an "Event"), then, as partial relief for
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the damages to any Holder by reason of any such delay in or reduction of its
ability to sell the Registrable Securities (which remedy shall not be exclusive
of any other remedies available at law or in equity) after a 60-day period
commencing on the date of the Event], the Company shall pay to each Holder an
amount in cash (a "Registration Delay Payment") equal to the purchase price of
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Securities as set forth in Schedule I the Purchase Agreement (the "Aggregate
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Price") multiplied by one hundredth (.010) times the sum of: (i) the number of
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months (prorated for partial months) after the end of the Effectiveness Date and
prior to the date the Registration Statement is declared effective by the
Commission, provided, however, that there shall be excluded from such period any
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delays which are solely attributable to changes required by the Purchasers in
the Registration Statement with respect to information relating to the
Purchasers, or to the failure of the Purchasers to conduct their review of the
Registration Statement pursuant to Section 3(a); and (ii) the number of months
(prorated for partial months) that sales cannot be made pursuant to the
Registration Statement after the Registration Statement has been declared
effective (including, without
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limitation, when sales cannot be made by reason of the Company's failure to
properly supplement or amend the Prospectus in accordance with the terms of this
Agreement, or otherwise, but excluding when such sales cannot be made solely by
reason of any act or omission solely attributable to the Purchasers or by reason
of the circumstances contemplated by Section 3(r) or 3(s) hereof). The Company
shall pay any Required Registration Delay Payments to each Holder in cash on the
last Business Day of each month during which an Event has occurred and is
continuing. In the event the Company fails to make a Registration Delay Payment
in a timely manner, such Registration Delay Payment shall bear interest at the
rate of 1.0% per month (prorated for partial months) until paid in full.
Notwithstanding anything in this Agreement to the contrary, in lieu of the
Registration Delay Payment during the sixty (60) day period described below, if
the Event is the Company's failure to file the Initial Registration Statement on
or before the Filing Date, the Company shall issue to the Holders Warrants to
purchase additional 33,750 shares of Common Stock for each 30-day period that
passes following the Filing Date up to a maximum of two such 30-day periods, if
the Event is the failure to have the Registration Statement declared effective
on or before the Effectiveness Date, the Company shall issue to the Holders
Warrants to purchase an additional 33,750 shares of Common Stock for each 30-day
period that passes following the Effectiveness Date up to a maximum of two such
30-day periods. The Warrant issued to each Holder shall be to purchase a portion
of the aggregate number of shares of Common Stock on a pro rata basis equal to
its percentage ownership of the then outstanding number of shares of Preferred
Stock. The exercise price, expiration date and other terms of the warrants
(other than the number of shares of common stock for which it is exercisable)
shall be substantially identical to the Warrants issued to the Holders on the
Closing Date.
(e) Form S-3 Eligibility. The Company represents and warrants that it
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currently meets the registrant eligibility and transaction requirements for the
use of Form S-3 (for primary and secondary offerings) for the registration of
the sale of Registrable Securities by the Purchasers and any other Holders and
the Company shall file all reports required to be filed by the Company with the
Commission in a timely manner so as to maintain such eligibility for the use of
Form S-3.
3. Registration Procedures
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In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Preparation of Registration Statement. Prepare and file with the
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Commission on or prior to the Filing Date a Registration Statement on Form S-3
or its successor form (or if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3 such registration shall be on
another appropriate form in accordance herewith (which shall include a Plan of
Distribution substantially in the form of Exhibit A annexed hereto, unless in
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connection with an Underwritten Offering) or in connection with an Underwritten
Offering hereunder, such other form agreed to by the Company and by a majority-
in-interest of Holders of Registrable Securities to be covered by such
Registration Statement) (except if otherwise directed by the Holders), and cause
the Registration Statement to become effective and remain effective as provided
herein; provided, however, that not less than three (3) Business Days prior to
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the filing of the Registration Statement or any related Prospectus or any
amendment or
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supplement thereto (including any document that would be incorporated therein by
reference), the Company shall, if reasonably practicable (i) furnish to the
Holders, their Special Counsel and any managing underwriters, copies of all such
documents proposed to be filed (including documents incorporated by reference),
which documents will be subject to the review of such Holders, their Special
Counsel and such managing underwriters, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to such Holders and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities, their Special Counsel or any managing underwriters shall reasonably
object, and will not request acceleration of such Registration Statement without
prior notice to such counsel; provided, however, any failure of the Company to
file such a Registration Statement or amendment or to request acceleration
following an objection by any such person should not constitute a breach of the
Company's obligation under this Agreement or cause the imposition of any
penalties set forth herein. The sections of such Registration Statement covering
information with respect to the Holders, the Holder's beneficial ownership of
securities of the Company or the Holders intended method of disposition of
Registrable Securities shall conform to the information provided to the Company
by each of the Holders.
(b) Amendments. (i) Prepare and file with the Commission such
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amendments, including post-effective amendments, to the Registration Statement
as may be necessary to keep the Registration Statement continuously effective
for the Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities Act; (iii)
respond as promptly as possible to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and as
promptly as possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) Notifications. Notify the Holders of Registrable Securities to be
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sold, their Special Counsel and any managing underwriters as promptly as
possible (and, in the case of (i)(A) below, not less than five (5) days prior to
such filing and, in the case of (i)(C) below, not later than the first Business
Day after effectiveness) and (if requested by any such Person) confirm such
notice in writing no later than one (1) Business Day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a "review" of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement and (C) with respect to the Registration Statement or any post-
effective amendment, when the same has become effective; (ii) of any request by
the
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Commission or any other Federal or state governmental authority for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (vi) of the occurrence of
any event that makes any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) Suspensions. Use its reasonable efforts to avoid the issuance
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of, or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of the Registration Statement or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(e) Supplements and Post-Effective Amendments. If requested by any
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managing underwriter or the Holders of a majority in interest of the Registrable
Securities to be sold in connection with an Underwritten Offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the Company reasonably agrees should
be included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; provided, however, that the
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Company shall not be required to take any action pursuant to this Section 3(e)
that would, in the opinion of counsel for the Company, violate applicable law or
if the Holders of a majority of the Registrable Securities consent to the delay
in taking, or the failure to take, any such action, which consent shall not be
unreasonably withheld.
(f) Copies of Registration Statement. Furnish to each Holder, their
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Special Counsel, and any managing underwriters, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.
(g) Copies of Prospectus. Promptly deliver to each Holder, their
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Special Counsel, and any underwriters, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders and any underwriters in
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connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.
(h) Blue Sky. Prior to any public offering of Registrable Securities,
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use commercially reasonable efforts to register or qualify or cooperate with the
selling Holders, any underwriters and their Special Counsel in connection with
the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Holder or underwriter requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by a
Registration Statement; provided, however, that the Company shall not be
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required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action that would subject it to general service
of process in any such jurisdiction where it is not then so subject or subject
the Company to any material tax in any such jurisdiction where it is not then so
subject.
(i) Certificates. Cooperate with the Holders and any managing
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underwriters to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to a Registration
Statement, which certificates shall be free, to the extent permitted by
applicable law and the Purchase Agreement, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in
such names as any such managing underwriters or Holders may request at least two
(2) Business Days prior to any sale of Registrable Securities.
(j) Supplements and Amendments. Upon the occurrence of any event
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contemplated by Section 3(c)(vi), as promptly as possible, prepare a supplement
or amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration Statement
nor such Prospectus will contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(k) Listing. Cause all Registrable Securities relating to such
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Registration Statement to be listed on Nasdaq and any other securities exchange,
quotation system, market or over-the-counter bulletin board, if any, on which
similar securities issued by the Company are then listed as and when required
pursuant to the Purchase Agreement.
(l) Underwriting Agreement. Enter into such underwriting agreements
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in form, scope and substance as is customary in Underwritten Offerings and
pursuant thereto to, (i) make such representations and warranties to such
underwriters as are customarily made by issuers to underwriters in underwritten
public offerings, obtain and deliver copies thereof to the managing
underwriters, of opinions of counsel to the Company addressed to each such
underwriter, in form, scope and substance reasonably satisfactory to any such
managing underwriters covering the matters customarily covered in opinions
requested in Underwritten
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Offerings; (iii) immediately prior to the effectiveness of the Registration
Statement, and, at the time of delivery of any Registrable Securities sold
pursuant thereto, and, in the case of non-Underwritten Offerings, obtain and
deliver copies to the managing underwriters, if any, of "cold comfort" letters
and updates thereof from the independent certified public accountants of the
Company (and, if required, any other independent certified public accountants of
any subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be, included
in the Registration Statement), addressed to each of the underwriters, in form
and substance as are customary in connection with Underwritten Offerings; (iv)
indemnification provisions and procedures no less favorable to the underwriters,
if any, than those set forth in Section 5 (or such other provisions and
procedures acceptable to the managing underwriters, and (v) deliver such
documents and certificates as may be reasonably requested by any managing
underwriters to evidence the continued validity of the representations and
warranties made pursuant to clause 3(1)(i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
(m) Due Diligence. Make available for inspection by the selling
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Holders, any representative of such Holders, any underwriter participating in
any disposition of Registrable Securities, and any attorney or accountant
retained by such selling Holders or underwriters, at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors, agents and employees of the
Company and its subsidiaries to supply all information in each case reasonably
requested by any such Holder, representative, underwriter, attorney or
accountant in connection with the Registration Statement; provided, however,
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that if any information is determined in good faith by the Company in writing to
be of a confidential nature at the time of delivery of such information, then
prior to delivery of such information, the Company and the Holders shall enter
into a confidentiality agreement reasonably acceptable to the Company and the
Holders providing that such information shall be kept confidential, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities (provided,
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however, that the Company shall be given notice of any such pending disclosure
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so that the Company may seek a protective order); (ii) disclosure of such
information, in the opinion of counsel to such Person, is required by law; (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by such Person; or (iv) such
information becomes available to such Person from a source other than the
Company and such source is not known by such Person to be bound by a
confidentiality agreement with the Company.
(n) Earnings Statement. Comply in all material respects with all
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applicable rules and regulations of the Commission and make generally available
to its securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 not later than 45 days after the end of
any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment or
best efforts Underwritten Offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
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(o) Information. The Company may require each selling Holder to
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furnish to the Company information regarding such Holder and the distribution of
such Registrable Securities as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
The Company shall hold in confidence and not make any disclosure of
information concerning a Holder provided to the Company unless (i) disclosure of
such information, in the opinion of counsel to the Company, is required by law,
(ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities (provided, however, that the
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Holder shall be given notice of any such pending disclosure so that the Holder
may seek a protective order), or (iv) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning a Holder is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Holder prior to making such disclosure, and allow the Holder, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar Federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(g) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.
Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
------
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. Notwithstanding anything to the
11
contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of a Holder in accordance with the terms
of the Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Holder has entered into a contract for sale
prior to the Holder's receipt of a notice from the Company of the happening of
any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv),
3(c)(v) or 3(c)(vi) and for which the Holder has not yet settled.
(p) Responses to the Commission. The Company agrees to respond
---------------------------
fully and completely to any and all comments on a Registration Statement
received from the Commission staff as promptly as possible but, for non-
Underwritten Offerings, in no event later than ten (10) Business Days of the
receipt of such comments, regardless of whether such comments are in oral or
written form.
(q) Confirmation of Effectiveness. Within two (2) Business Days
-----------------------------
after a Registration Statement which covers applicable
Registrable Securities is ordered effective by the Commission,
the Company shall deliver, and shall cause legal counsel for
the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Holders whose
Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has
been declared effective by the Commission in the form attached
hereto as Exhibit B.
---------
(r) Notwithstanding any other provision of this Section 3, the
Company may delay the filing or effectiveness of any
Registration Statement or any amendment or supplement thereto
and suspend the right of the Holders to effect sales of
Registrable Securities thereunder for one or more periods
(each a "Suspension Period") of up to 60 calendar days in the
aggregate per twelve (12) month period in the event that such
filing, effectiveness or sale would require the Company to
disclose any non-public information that the Company is not
otherwise required to disclose or to file any financial
statements that the Company is not otherwise required to file,
provided however, that no Suspension Period shall exceed 45
consecutive calendar days.
(s) Notwithstanding any other provision of this Section 3, the
Holders shall not be permitted to effect sales of the
Registrable Securities under a Registration Statement during a
period in which the Company is engaged in the process of
registering under the Securities Act an underwritten offering,
for as long as the underwriter reasonably considers is
necessary.
4. Registration Expenses
---------------------
All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company,
whether or not pursuant to an Underwritten Offering and whether or not the
Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
12
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with Nasdaq
and each other securities exchange or market on which Registrable Securities are
required hereunder to be listed and (B) in compliance with state securities or
Blue Sky laws (including, without limitation, fees and disbursements of counsel
for the Holders in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the managing
underwriters, if any, or the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the managing underwriters, if any,
or by the holders of a majority of the Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
reasonable fees and disbursements of counsel for the Company and Special Counsel
for the Holders, (v) Securities Act liability insurance, if the Company so
desires such insurance, and (vi) fees and expenses of all other Persons retained
by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. The Company shall not be required to
pay selling concessions, discounts or other compensation paid to brokers,
underwriters or other agents in connection with the sale of any Registrable
Securities, whether or not incurred in an Underwritten Offering, or fees and
expenses incurred by a Holder that are not specified in this Section.
5. Indemnification
---------------
(a) Indemnification by the Company. The Company shall,
------------------------------
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents (including any underwriters
retained by such Holder in connection with the offer and sale of Registrable
Securities), investment advisors and employees of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all joint or several losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened, "Losses"), as incurred, arising out of or
------
relating to (i) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made),
except to the extent, but only to the extent, that such untrue statements or
omissions are based upon and in conformity with
13
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or (ii) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of Registrable Securities, provided,
however, that the Company shall not be required to indemnify any person with
respect to a loss arising out of a sale of any Registrable Securities during any
period during which the Company has advised the Holders to suspend sales
pursuant to a registration statement. The Company shall not, however, be liable
for any Losses to any Holder with respect to any untrue or alleged untrue
statement of material fact or omission or alleged omission of material fact if
such statement or omission was made in a preliminary Prospectus and such Holder
did not receive a copy of the final Prospectus (or any amendment or supplement
thereto) at or prior to the confirmation of the sale of the Registrable
Securities in any case where such delivery is required by the Securities Act and
the untrue or alleged untrue statement of material fact or omission or alleged
omission of material fact contained in such preliminary Prospectus was corrected
in the final Prospectus (or any amendment or supplement thereto), unless the
failure to deliver such final Prospectus (as amended or supplemented) was a
result of noncompliance by the Company with Section 3(g) of this Agreement. The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and
--------------------------
not jointly, indemnify and hold harmless the Company, the directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon (i) any untrue statement of
a material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the extent, that
such untrue statement or omission is contained in any information so furnished
in writing by such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus or (ii) any violation or alleged violation
by the Holders of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of Registrable Securities;
provided, however, that the indemnity agreement contained in this Section 5(b)
-------- -------
shall not apply to amounts paid in settlement of any Losses if such settlement
is effected without the prior written consent of such Holder. In no event shall
the liability of any selling Holder hereunder be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
14
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
--------------------------------------
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
-----------------
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
------------------
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided,
--------
however, that the failure of any Indemnified Party to give such notice shall not
-------
relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a)
------------
or 5(b) is unavailable to an Indemnified Party because of a failure or refusal
of a court of competent jurisdiction to enforce such indemnification in
accordance with its terms (by reason of public policy or otherwise), then each
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
15
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,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault 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 of a material fact, has been
taken or 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, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms. In no
event shall any selling Holder be required to contribute an amount under this
Section 5(d) in excess of the net proceeds received by such Holder upon sale of
the Registrable Securities pursuant to the Registration Statement giving rise to
such contribution obligation.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Rule 144
--------
During the Effectiveness Period, as long as any Holder owns
Registrable Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
Section 13(a) or l5(d) of the Exchange Act. During the Effectiveness Period, as
long as any Holder owns Registrable Securities, if the Company is not required
to file reports pursuant to Section 13(a) or l5(d) of the Exchange Act, it will
prepare and furnish to the Holders and make publicly available in accordance
with Rule 144(c) promulgated under the Securities Act annual and quarterly
financial statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required thereby, in
the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will use
commercially reasonable efforts to take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Person to sell Underlying Shares without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 promulgated under
the Securities Act, including requesting of its counsel
16
to provide any legal opinions referred to in the Purchase Agreement. Upon the
request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with
such requirements of this Section 6.
7. Miscellaneous
-------------
(a) Remedies. In the event of a breach by the Company or by a
--------
Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
--------------------------
subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with or limits the
provisions hereof. Except as disclosed in Schedule 2.1(r) of the Purchase
Agreement, neither the Company nor any of its subsidiaries has previously
entered into any agreement granting any registration rights with respect to any
of its securities to any Person. This Agreement, together with the Purchase
Agreement, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters.
(c) Piggy-Back Registrations. Except as provided herein if, at any
------------------------
time when there is not an effective Registration Statement covering the
Registrable Securities, the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Holder of Registrable Securities
written notice of such determination and, if within ten (10) days after receipt
of such notice, any such Holder shall so request in writing, (which request
shall specify the Registrable Securities intended to be disposed of by the
Purchasers), the Company will use reasonable efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by the Holder, to the extent requisite to permit
the disposition of the Registrable Securities so to be registered, provided that
if at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to such Holder and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable
17
Securities in connection with such registration (but not from its obligation to
pay expenses in accordance with Section 4 hereof), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities being registered pursuant to this Section 7(d) for the
same period as the delay in registering such other securities. The Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided, however, that the
-------- -------
Company shall not be required to register any Registrable Securities pursuant to
this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the
Securities Act. In the case of an underwritten public offering, if the managing
underwriter(s) or underwriter(s) should reasonably object to the inclusion of
the Registrable Securities in such registration statement, then if the Company
after consultation with the Underwriter's representative should reasonably
determine that the inclusion of such Registrable Securities would materially
adversely affect the offering contemplated in such registration statement, and
based on such determination recommends inclusion in such registration statement
of fewer Registrable Securities then proposed to be sold by the Holders, then
(x) the number of Registrable Securities of the Holders and other holders of
piggy-back registration rights included in such registration statement shall be
reduced pro rata among such Holders and other holders of piggy-back registration
rights (based upon the number of Registrable Securities requested to be included
in the registration) or, in the case of other holders of piggy-back registration
rights, in the manner provided for in that applicable agreement, or (y) none of
the Registrable Securities of the Holders shall be included in such registration
statement if the Company, after consultation with the underwriter(s), recommends
the inclusion of none of such Registrable Securities; provided, however, that if
-------- -------
securities are being offered for the account of other persons or entities as
well as the Company, such reduction shall not represent a greater fraction of
the number of Registrable Securities intended to be offered by the Holders than
the fraction of similar reductions imposed on such other persons or entities
(other than the Company). Notwithstanding the foregoing, the Company shall not
file any registration statement under the Securities Act (other than on Form S-4
or Form S-8) relating to the offer and sale of any equity securities of the
Company, or offer or sell any equity securities of the Company in a transaction
exempt from registration pursuant to Regulation S under the Securities Act,
until such time as the Initial Registration Statement has been effective for a
period of sixty (60) Trading Days, which period shall be tolled if the
effectiveness of the Initial Registration Statement is suspended for any reason
whatsoever.
(d) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of at least two thirds of the then outstanding Registrable
Securities; provided, however, that for the purposes of this sentence,
-------- -------
Registrable Securities that are owned, directly or indirectly, by the Company,
or an Affiliate of the Company are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions of this
-------- -------
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
18
(e) Notices. Any notice or other communication required or permitted
-------
to be given hereunder shall be in writing and shall be deemed to have been
received (a) upon hand delivery (receipt acknowledged) or delivery by telex
(with correct answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if received by
5:00 p.m. eastern time where such notice is to be received), or the first
Business Day following such delivery (if received after 5:00 p.m. eastern time
where such notice is to be received) or (b) on the second Business Day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications are (i) if to the Company to SatCon
Technology Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn:
President and Chief Executive Officer, fax no. (▇▇▇) ▇▇▇-▇▇▇▇, with copies to
▇▇▇▇ & ▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. Carp, Esq.,
fax no. (▇▇▇) ▇▇▇-▇▇▇▇ and (ii) if to any Purchaser to the address set forth on
Schedule I hereto with copies to those specified on the signature pages hereto
and to Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇, Esq., fax no. (▇▇▇) ▇▇▇-▇▇▇▇ or such other
address as may be designated in writing hereafter, in the same manner, by such
Person.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign its rights hereunder in the manner and to
the Persons as permitted under the Purchase Agreement. In addition, the rights
of each Holder hereunder, including the right to have the Company register for
resale Registrable Securities in accordance with the terms of this Agreement,
shall be automatically assignable by each Holder if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment the further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and applicable
state securities laws, (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this Section, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
of this Agreement, and (v) such transfer shall have been made in accordance with
the applicable requirements of the Purchase Agreement. The rights to assignment
shall apply to the Holders (and to subsequent) successors and assigns.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.
19
(h) Governing Law. The corporate laws of the State of Delaware shall
-------------
govern all issues concerning the relative rights of the Company and the
Purchasers as its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without regard to principles of conflicts of law. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consent to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.
(i) Cumulative Remedies. The remedies provided herein are cumulative
-------------------
and not exclusive of any remedies provided by law.
(j) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(k) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(l) Shares Held by The Company and its Affiliates. Whenever the
---------------------------------------------
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(m) Revision of SEC Position on Warrants. In the event the rules and
------------------------------------
regulations of the Commission or the policies of the staff of the Commission are
modified and as a result thereof the Company determines in good faith that it
may be practicable and in the interests of the Company and the Holders to
register the exercise of the Warrants so that the Warrant Shares may be freely
resold without maintaining an effective registration statement under the
Securities Act for resales, the Company and the Holders agree to cooperate in
good faith to effect such amendments to this Agreement as may be appropriate to
provide that the Company may fulfill its obligations hereunder with respect to
the Warrants and the Warrant
20
Shares by maintaining an effective registration statement under the Securities
Act covering the exercise of the Warrants rather than the resale of the Warrant
Shares.
21
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
SATCON TECHNOLOGY CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Vice President, Chief Financial Officer
22
▇▇▇▇▇ ▇▇▇▇▇▇▇ STRATEGIC GROWTH FUND, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal
▇▇▇▇▇ ▇▇▇▇▇▇▇ STRATEGIC GROWTH FUND, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal
23
SCHEDULE I
-----------
Company
-------
SatCon Technology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President and Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Purchasers:
----------
▇▇▇▇▇ ▇▇▇▇▇▇▇ Strategic Growth Fund, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ Strategic Growth Fund, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
24
EXHIBIT A
PLAN OF DISTRIBUTION
Our company is registering the shares of common stock on behalf of the
selling stockholders. All costs, expenses and fees in connection with the
registration of the shares offered by this prospectus will be borne by the
Company, other than brokerage commissions and similar selling expenses, if any,
attributable to the sale of shares which will be borne by the selling
stockholders. Sales of shares may be effected by selling stockholders from time
to time in one or more types of transactions (which may include block
transactions) on the Nasdaq National Market, in the over-the-counter market, in
negotiated transactions, through put or call options transactions relating to
the shares, through short sales of shares, or a combination of such methods of
sale, at market prices prevailing at the time of sale, or at negotiated prices.
Such transactions may or may not involve brokers or dealers. The selling
stockholders have advised our company that they have not entered into any
agreements, understandings or arrangements with any underwriters or broker-
dealers regarding the sale of their securities, nor is there an underwriter or
coordinated broker acting in connection with the proposed sale of shares by the
selling stockholders.
The selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of the shares or of securities convertible into or exchangeable for the
shares in the course of hedging positions they assume with selling stockholders.
The selling stockholders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealers or other financial institutions of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as amended or supplemented to reflect such
transaction).
The selling stockholders may make these transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular broker-
dealer might be in excess of customary commissions).
The selling stockholders and any broker-dealers that act in connection
with the sale of shares are "underwriters" within the meaning of Section 2(11)
of the Securities Act, and any commissions received by such broker-dealers or
any profit on the resale of the shares sold by them while acting as principals
might be deemed to be underwriting discounts or commissions under the Securities
Act. The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
25
Because selling stockholders are "underwriters" within the meaning of
Section 2(11) of the Securities Act, the selling stockholders will be subject to
the prospectus delivery requirements of the Securities Act. Our company has
informed the selling stockholders that the anti-manipulative provisions of
Regulation M promulgated under the Exchange Act may apply to their sales in the
market.
Selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
Upon our company being notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
. the name of each such selling stockholder and of the
participating broker-dealer(s);
. the number of shares involved;
. the initial price at which such shares were sold;
. the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
. that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and
. other facts material to the transactions.
In addition, upon our company being notified by a selling stockholder that a
donee or pledgee intends to sell more than 500 shares, a supplement to this
prospectus will be filed.
26
EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn.:
Re: SatCon Technology Corporation
Ladies and Gentlemen:
We are counsel to SatCon Technology Corporation, a Delaware corporation
(the "Company"), and have represented the Company in connection with that
certain Securities Purchase Agreement (the "Purchase Agreement") entered into by
and among the Company and the buyers named therein (collectively, the "Holders")
pursuant to which the Company issued to the Holders its [Insert Security (the
"Securities")] convertible into shares of the Company's common stock, par value
$0.01 per share (the "Common Stock"), and Warrants (the "the Warrants") to
acquire shares of Common Stock. Pursuant to the Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the
"Registration Rights Agreement") pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common Stock issuable
upon conversion of the Securities and exercise of the Warrants, under the
Securities Act of 1933, as amended (the "1933 Act"). In connection with the
Company's obligations under the Registration Rights Agreement, on
_______________, 1999, the Company filed a Registration Statement on Form S-3
(File No. 333-_____________) (the "Registration Statement") with the Securities
and Exchange Commission (the "SEC") relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
cc: [LIST NAMES OF HOLDERS]
27