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EXHIBIT 10.29
STRATEGIC ALLIANCE AGREEMENT
This Agreement dated as of April 1, 1997 is entered into by and among
AMERICAN SUPERCONDUCTOR CORPORATION, a Delaware corporation (the "Company"), and
CHARTH (COMPAGNIE HOLDING D' APPLICATIONS ET DE REALISATIONS THERMIQUES ET
HYDRAULIQUES) S.A. (the "Purchaser"), a wholly-owned subsidiary of Electricite
de France ("EDF").
WHEREAS, the Company is engaged in the research, development,
commercialization, production and marketing of superconductor products for the
electric power industry;
WHEREAS, the Purchaser is an affiliate of an electric utility that
seeks to provide the best possible service to its customers at the lowest
possible cost and to enhance its competitive position;
WHEREAS, the Purchaser believes that high temperature superconductivity
is and will be one of the most significant technological developments affecting
the electricity industry;
WHEREAS, the Purchaser believes that the Company is and will be a
leader in the development and commercialization of high temperature
superconductor products;
WHEREAS, the Company desires to (a) gain access to the Purchaser's
understanding of the electricity market, including the Purchaser's knowledge of
new technologies and market information and (b) obtain additional financing for
future development of its high temperature superconductor products; and
WHEREAS, the Company and the Purchaser desire to form a strategic
alliance to exchange information relating to high temperature superconductivity
products, other emerging technologies affecting the electricity industry and
market information regarding the electricity industry;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Advisory Board.
1.1 Establishment of Advisory Board; Appointment of
Representatives.(a) Promptly following the execution of this Agreement, the
parties shall establish an advisory board (the "Advisory Board"). The Advisory
Board shall be comprised of six members, of which three members shall be
designated by the Company and three members shall be designated by the
Purchaser. The initial representatives of the Company shall be ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. The initial representatives of the Purchaser shall
be ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and Pierre-▇▇▇ ▇▇▇▇▇▇▇. The Company and the
Purchaser shall have the right at any time to replace its representatives with
representatives of its choosing.
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(b) The Advisory Board shall meet at least two times per year
and at such times as the Purchaser and the Company shall agree. The meetings of
the Advisory Board shall take place at the main offices of the Company in
Westborough, MA or at such other place in or outside the United States as the
Company and the Purchaser shall agree.
(c) The parties agree to prepare and distribute to each other an
agenda for each meeting at least one month prior to such meeting and to consult
and agree on the form of such agenda prior to each meeting. Each of the Company
and the Purchaser may nominate and list on such agenda appropriate members of
its scientific, engineering, marketing and business development staff to attend
the meetings of the Advisory Board and to advise the Advisory Board with respect
to certain items on the agenda. The topics for discussion at the meetings of the
Advisory Board shall include those items listed on Appendix 1 attached hereto.
1.2 Purpose. The purpose of the Advisory Board shall be to (i)
establish a framework for the exchange of information relating to developments
in the field of high temperature superconductivity as well as other emerging
technologies affecting the electricity industry; (ii) provide a forum for
reviewing various technical, industrial and commercial topics relating to the
development of high temperature superconductivity products as well as other
emerging technologies affecting the electricity industry; and (iii) exchange
market research information regarding current and future trends in the
electricity industry.
1.3 Confidential Information. The Purchaser acknowledges that
the Company is and may be in the future subject to certain laws and regulations
restricting transfers of confidential information and is and may be in the
future a party to agreements with certain strategic partners and governmental
agencies that contain restrictions and limitations on the Company's ability to
disclose certain confidential information to the Purchaser. The Company has
previously provided to the Purchaser the text of such restrictions existing
today. Subject to the Company's compliance with its obligations under such laws,
regulations and agreements, the Company agrees to disclose to the Purchaser as
much information as permissible with respect to the research and development
being conducted and products being developed pursuant to such agreements. If
there is any disagreement as to whether certain information may be disclosed,
the parties agree to negotiate in good faith to resolve such disagreement.
1.4 Intellectual Property. The parties agree that any
intellectual property that is created or developed by the Advisory Board,
including trade secrets and know-how and intellectual property that may be
protected by means of copyrights and patents, shall be jointly-owned by the
Company and the Purchaser. The parties agree to consult with each other
regarding the most appropriate methods for protecting their rights with respect
to such property. It is the intention of EDF and the Company that the Company
will be the primary means for developing and commercializing any such new
technology.
1.5 Sharing of Information. The Company will make its best
efforts in good faith and consistent with applicable laws, regulations, and
contractual provisions to provide the Purchaser with as detailed a summary as
possible, covering the state-of-the-art progress in superconductivity
technology, the key project progress and status from existing
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current and new strategic agreements that the Company enters into which may
involve confidentiality undertakings concerning information developed solely by
the Company. For new strategic agreements that the Company enters into, the
Company will take into account in good faith its commitment to share information
with the Purchaser at the level of detail presented in Appendix 1. It is
understood that the Company has contracts with and will continue to pursue
contracts with agencies of the U.S. government (e.g., the Department of
Defense). These contracts may impose limitations on the Company's ability to
provide certain information related to these contracts to the Purchaser, and the
Company is obliged, under U.S. law, to observe these limitations.
1.6 Access to New Technologies. To the extent permitted by
applicable laws and regulations governing technology transfer, the Company
agrees to offer the Purchaser the right to test any new product or technology
developed or manufactured by or for the Company on terms reasonably acceptable
to both parties simultaneously with or within 90 days of providing any such new
product or technology to any third party; provided that the Company shall not be
required to offer the Purchaser this right if and to the extent any such new
product or technology has been developed by the Company pursuant to an agreement
prohibiting the disclosure of such new product or technology to the Purchaser.
To the extent permitted by applicable laws and regulations governing technology
transfer, in connection with any agreement entered into by the Company after the
date hereof with a third party regarding the development of any new products or
technologies, the Company agrees to use good faith efforts in the negotiation of
the terms of such agreements to obtain or preserve the Company's right to allow
the Purchaser to test such new products and technologies.
1.7 Access by the Purchaser to new products and technologies and
other information disclosed to the Purchaser during Advisory Board meetings or
otherwise pursuant to this Agreement shall be subject to the Confidential
Disclosure Agreement dated November 13, 1996.
2. Authorization and Sale of Shares; Closing.
2.1 Authorization. The Company has duly authorized the sale and
issuance to the Purchaser of 1,000,000 shares (the "Shares") of its Common
Stock, $.01 par value per share ("Common Stock"), at a price of $10.00 per share
(the "Purchase Price").
2.2 Closing. The closing ("Closing") of the sale and purchase of
the Shares under this Agreement shall take place at the offices of ▇▇▇▇ and
▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, or at such other place as is
mutually agreeable to the Company and the Purchaser at 10:00 a.m. on April 4,
1997 or at such other time and date as are mutually agreeable to the Company and
the Purchaser. Subject to the terms and conditions of this Agreement, at the
Closing, the Company will sell, issue and deliver to the Purchaser a certificate
for the Shares, registered in the name of the Purchaser, against payment to the
Company by the Purchaser of the Purchase Price therefor, by wire transfer,
check, or other method acceptable to the Company. The date of the Closing is
hereinafter referred to as the "Closing Date." If at the Closing any of the
conditions specified in Section 5 shall not have been fulfilled, the Purchaser
shall, at its election, be relieved of all of its obligations under this
Agreement without thereby waiving any other rights it may have by reason of such
failure or such non-fulfillment.
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3. Representations of the Company. The Company hereby represents and
warrants to the Purchaser as follows:
3.1 Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company is duly qualified to conduct business and is in corporate and tax
good standing under the laws of each jurisdiction in which the nature of its
businesses or the ownership or leasing of its properties requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the assets, business, financial condition or results
of operations of the Company. The Company has all requisite corporate power and
authority to carry on the business in which it is engaged and to own and use the
properties owned and used by it. The Company has furnished to the Purchaser true
and complete copies of its Certificate of Incorporation and By-laws, each as
amended and as in effect on the date hereof. The Company is not in default under
or in violation of any provision of its Certificate of Incorporation or By-laws.
3.2 Capitalization. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, of which 9,562,157 shares were
issued and outstanding as of February 28, 1997. As of February 28, 1997, other
than options to acquire 1,906,635 shares of Common Stock issued to employees,
directors and consultants of the Company, warrants to purchase in the aggregate
350,500 shares of Common Stock and the Company's obligation to issue shares of
Common Stock and assume warrants pursuant to the Agreement and Plan of Merger
among the Company, ASC Merger Corp. and Superconductivity, Inc., there are
outstanding no options, warrants, convertible securities or other rights to
acquire any capital stock of the Company. Neither the Company nor, to the
Company's knowledge, any securityholder of the Company is a party to any
agreement or instrument relating to the voting of the Common Stock or pursuant
to which any other person has with respect to the Common Stock any preemptive
right, right of first refusal, right of first offer, buy-sell agreement, right
to require the Company to file a registration statement or other similar right
(except registration rights agreements related to the warrants described above
and registration rights agreements to be executed in connection with the
Company's pending acquisition of Superconductivity, Inc.). All of the issued and
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and nonassessable. The Shares, when issued in accordance with this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable. The Shares, when issued in accordance with this Agreement, will
be listed on the Nasdaq National Market or such other securities exchange on
which Common Stock of the Company is then listed.
3.3 Authorization of Transaction. The execution and delivery of
this Agreement by the Company, the performance by the Company of this Agreement
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of the Company. This Agreement has been duly and validly executed and delivered
by the Company and constitutes the valid and binding obligation of the Company,
enforceable against it in accordance with its terms. The execution of and
performance of the transactions contemplated by this Agreement and compliance
with its provisions by the Company will not violate any provision of law and
will not, with or without the passage of time, conflict with or result in any
breach of any of
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the terms, conditions or provisions of, or constitute a default under, its
Certificate of Incorporation or its By-Laws or any indenture, lease, agreement
or other instrument to which the Company is a party or by which it or any of its
properties is bound, or any decree, judgment, order, statute, rule or regulation
applicable to the Company, except where such conflict, breach or default would
not have a material adverse effect on the assets, business, financial condition
or results of operations of the Company.
3.4 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority is required on the part of the Company
in connection with the execution and delivery of this Agreement, the offer,
issuance, sale and delivery of the Shares, or the other transactions to be
consummated at the Closing, except such filings as shall have been made prior to
and shall be effective on and as of the Closing or as are permitted to be made
after the Closing. Based on the representations made by the Purchaser in Section
4 of this Agreement, the offer, sale and issuance of the Shares to the Purchaser
will be in compliance with applicable federal securities laws.
3.5 Reports and Financial Statements. The Company has previously
furnished to the Purchaser complete and accurate copies, as amended or
supplemented, of its (a) Annual Report on Form 10-K for the fiscal years ended
March 31, 1994, 1995 and 1996, as filed with the Securities and Exchange
Commission (the "SEC"), and (b) all other reports filed by the Company under
Section 13 and Section 14 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with the SEC since March 31, 1996 (such reports are
collectively referred to herein as the "Company Reports"). The Company Reports
constitute all of the documents required to be filed by the Company under
Section 13 of the Exchange Act with the SEC since March 31, 1996. Each Company
Report, as of its respective date, did not contain any untrue statement of a
material fact and did not 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. The audited financial
statements and unaudited interim financial statements of the Company included in
the Company Reports (i) comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, (ii) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby (except as may be indicated therein or in
the notes thereto, and in the case of quarterly financial statements, as
permitted by Form 10-Q under the Exchange Act), (iii) fairly present the
consolidated financial condition, results of operations and cash flows of the
Company as of the respective dates thereof and for the periods referred to
therein, and (iv) are consistent with the books and records of the Company.
3.6 Absence of Material Adverse Changes. Since December 31,
1996, there has not been any material adverse change in the assets, business,
financial condition or results of operations of the Company, nor has there
occurred any event or development which could reasonably be foreseen to result
in such a material adverse change in the future.
3.7 Litigation. The Company is not a party to and, to the
knowledge of the Company, is not threatened to be made a party to (a) any
unsatisfied judgment, order, decree, stipulation or injunction or (b) any claim,
complaint, action, suit, proceeding, hearing or
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investigation of, in or before any court, administrative agency or commission,
other governmental or regulatory authority, or arbitrator which, if determined
adversely, would result in a material adverse change in the assets, business,
financial condition or results of operations of the Company.
3.8 Compliance. The Company, and the conduct and operations of
its business, are in compliance with each law (including rules and regulations
thereunder) of any federal, state, local or foreign government, which (a)
affects or relates to this Agreement or the sale and issuance of the Shares
hereunder or (b) is applicable to the Company or its business, except for any
violation of or default under a law which would not result in a material adverse
change in the assets, business, financial condition or results of operations of
the Company. The Company and, to the Company's knowledge, each other party
thereto is not in default in any material respect and has received no notice
that it is in default under any material agreement or instrument to which the
Company is a party or by which it or its property may be bound.
3.9 Disclosure. No representation or warranty by the Company
contained in this Agreement, and no statement contained in any document,
certificate or other instrument delivered to or to be delivered by or on behalf
of the Company pursuant to this Agreement (including without limitation the
Company Reports), when read together, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary, in light of the circumstances under which it was or will be made, in
order to make the statements herein or therein not misleading.
4. Representations of the Purchaser. The Purchaser hereby represents
and warrants to the Company as follows:
4.1 Investment. The Purchaser is acquiring the Shares for its
own account for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof (within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), nor with any present
intention of distributing or selling the same; and, except as contemplated by
this Agreement, such Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof.
4.2 Authority. The Purchaser has full power and authority to
enter into and to perform this Agreement in accordance with its terms. The
Purchaser represents that it has not been organized, reorganized or
recapitalized specifically for the purpose of investing in the Company.
4.3 Experience. The Purchaser has carefully reviewed the Company
Reports and the representations concerning the Company contained in this
Agreement and has made detailed inquiry concerning the Company, its business and
its personnel; the officers of the Company have made available to such Purchaser
the opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of the Shares made hereby and to obtain any
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of
information provided by the Company to the Purchaser; in evaluating the
suitability of an
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investment in the Company, the Purchaser has not relied upon any representations
or other information (whether oral or written) other than as set forth in this
Agreement; the Purchaser has adequate net worth and means of providing for its
current needs and personal contingencies to sustain a complete loss of its
investment in the Company; and the Purchaser's overall commitment to investments
which are not readily marketable is not disproportionate to its net worth and
the Purchaser's investment in the Shares will not cause such overall commitment
to become excessive.
4.4 Accredited Investor. The Purchaser is an Accredited Investor
within the definition set forth in Securities Act Rule 501(a).
5. Conditions to the Obligations of the Purchaser. The obligation of
the Purchaser to purchase the Shares at the Closing is subject to the
fulfillment, or the waiver by the Purchaser, of the following conditions on or
before the Closing Date:
5.1 Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 4 (disregarding any
qualification contained therein with respect to materiality and material adverse
affect) shall be true on and as of the Closing Date with the same effect as
though such representation and warranty had been made on and as of that date
with only such exceptions as would not in the aggregate have a material adverse
effect on the assets, business, financial condition or results of operations of
the Company.
5.2 Performance. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by it prior to or at the Closing.
5.3 Opinion of Counsel. The Purchaser shall receive an opinion
from ▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Company, on the Closing Date, addressed
to the Purchaser, in form and substance satisfactory to the Purchaser.
5.4 Certificates and Documents. The Company shall have delivered
to the Purchaser:
(a) Certificates, as of the most recent practicable dates,
as to the corporate good standing of the Company issued by the Secretary of
State of the State of Delaware and the Secretary of State of the Commonwealth of
Massachusetts, confirming such good standing on or immediately prior to the
Closing Date;
(b) A certificate of the Secretary of the Company, dated
as of the Closing Date, certifying as to (i) the By-laws of the Company, (ii)
the Certificate of Incorporation of the Company, and (iii) resolutions of the
Board of Directors of the Company authorizing and approving all matters in
connection with this Agreement and the transactions contemplated hereby; and
(c) A certificate, executed by the President or an
Executive Vice President of the Company, dated as of the Closing Date,
certifying to the fulfillment of the conditions specified in subsections 5.1 and
5.2 of this Agreement.
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5.5 Other Matters. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser and the Purchaser shall have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.
6. Conditions to the Obligations of the Company. The obligation of
the Company to sell the Shares to the Purchaser on the Closing Date is subject
to fulfillment, or the waiver by the Company, on or before the Closing Date, of
the following condition:
6.1 Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 3 shall be true on and as of
the Closing Date with the same effect as though such representation and warranty
had been made on and as of that date.
7. Registration Rights
7.1 Demand Registration Rights. At any time after the Closing
and prior to the third anniversary of the Closing, the Purchaser may request the
Company in writing to effect the registration on Form S-3 (or any successor form
or, if the Company shall be ineligible to use Form ▇-▇, ▇▇▇▇ ▇-▇ or Form S-2) of
at least 30% of the Shares purchased hereby (subject to appropriate adjustment
in the event of any stock split, stock dividend, combination or similar event
affecting the Common Stock) or all remaining shares held by the Purchaser if the
Purchaser holds less than 30% of the Shares purchased hereby. Within 30 days of
receipt of such notice, the Company shall file a registration statement (a
"Purchaser Registration Statement") on Form S-3 (or such successor form or Form
S-1 or Form S-2) registering under the Securities Act all shares that the
Purchaser has requested be registered and, thereafter, shall use its best
efforts to cause such Purchaser Registration Statement to become effective as
soon as practicable. The Company shall cause each Purchaser Registration
Statement to remain effective for a period of six months from the date of
effectiveness of such Purchaser Registration Statement; provided that if the
Company shall have suspended the effectiveness of the Purchaser Registration
Statement pursuant to the provisions of Section 7.2(a), such six month period
shall be increased by one day for each day the Purchaser Registration Statement
was so suspended. Notwithstanding the foregoing, the Company shall not be
required to effect more than three registrations pursuant to this Section 7.1
and shall not be required to file any Purchaser Registration Statement within
nine months after the effective date of any previous Purchaser Registration
Statement.
7.2 Limitations on Registration Rights.
(a) Subject to the provisions of Section 7.2(c), the
Company may, by written notice to the Purchaser, (i) delay the filing or
effectiveness of any Purchaser Registration Statement or (ii) suspend any
Purchaser Registration Statement after effectiveness and require that the
Purchaser immediately cease sales of shares of Common Stock pursuant to the
Purchaser Registration Statement, in the event that (A) the Company files a
registration statement (other than a registration statement on Form S-8 or its
successor form) with the SEC for a public offering of its securities or (B) the
Company is engaged in any activity or transaction or preparations or
negotiations for any activity or transaction that the Company desires to keep
confidential for business reasons, if the Company determines in
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good faith that the public disclosure requirements imposed on the Company under
the Securities Act in connection with the Purchaser Registration Statement would
require disclosure of such activity, transaction, preparations or negotiations.
(b) If the Company delays or suspends any Purchaser Registration
Statement or requires the Purchaser to cease sales of shares pursuant to
paragraph (a) above, the Company shall, as promptly as practicable following the
termination of the circumstance which entitled the Company to do so, take such
actions as may be necessary to file or reinstate the effectiveness of the
Purchaser Registration Statement and/or give written notice to the Purchaser
authorizing it to resume sales pursuant to the Purchaser Registration Statement.
If as a result thereof the prospectus included in the Purchaser Registration
Statement has been amended to comply with the requirements of the Securities
Act, the Company shall enclose such revised prospectus with the notice to the
Purchaser given pursuant to this paragraph (b), and the Purchaser shall make no
offers or sales of shares pursuant to the Purchaser Registration Statement other
than by means of such revised prospectus.
(c) The Company may not delay the filing or effectiveness of any
Purchaser Registration Statement or suspend the effectiveness of any Purchaser
Registration Statement (i) for more than 90 days after the effectiveness of the
Company's registration statement for the reasons specified in clause (A) of
Section 7.2(a), (ii) for more than 45 days for the reasons specified in clause
(B) of Section 7.2(a) or (iii) for more than 120 days in any 12 month period.
7.3 Piggyback Registration Rights. If the Company at any time (other
than pursuant to Section 7.1) proposes to register any of its securities under
the Securities Act for sale to the public, whether for its own account or for
the account of other security holders or both (other than a registration
statements on Form S-8 or Form S-4 or their successor forms), the Company shall
each such time give written notice to the Purchaser of its intention so to do.
Upon the written request of the Purchaser, received by the Company within 15
days after the giving of any such notice by the Company, to register any of its
shares of Common Stock, the Company will use its best efforts to cause the
shares of Common Stock as to which registration shall have been so requested to
be included in the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent required to permit the
sale or other disposition by the Purchaser. In the event that any registration
pursuant to this Section 7.3 shall be, in whole or in part, an underwritten
public offering of Common Stock, the number of shares of Common Stock proposed
to be offered by the Purchaser shall be reduced if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein,
provided, however, that such number of shares of Common Stock shall only be
reduced if any shares to be included in such underwriting for the account of any
person other than the Company or the Purchaser are reduced by a proportionate
number of shares. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 7.3 without
thereby incurring any liability to the Purchaser.
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7.4 Registration Procedures.
(a) In connection with the filing by the Company of any
Purchaser Registration Statement, the Company shall furnish to the Purchaser a
copy of the prospectus, including a preliminary prospectus, in conformity with
the requirements of the Securities Act.
(b) The Company shall use its best efforts to register or
qualify the shares of Common Stock covered by the Purchaser Registration
Statement under the securities laws of such states as the Purchaser shall
reasonably request; provided, however, that the Company shall not be required in
connection with this paragraph (b) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction.
(c) The Company shall prepare and file such amendments and
supplements to any Purchaser Registration Statement and any prospectus used in
connection therewith as may be necessary to keep such Purchaser Registration
Statement effective for the period referred to in Section 7.1 and comply with
the provisions of the Securities Act with respect to the disposition of the
shares of Common Stock offered by the Purchaser thereunder in accordance with
the Purchaser's intended method of distribution set forth in such Purchaser
Registration Statement for such period of distribution.
(d) If the Company has delivered preliminary or final
prospectuses to the Purchaser and after having done so the prospectus is amended
to comply with the requirements of the Securities Act, the Company shall
promptly notify the Purchaser and, if requested by the Company, the Purchaser
shall immediately cease making offers or sales of shares under the Stockholder
Registration Statement and return all prospectuses to the Company. The Company
shall promptly provide the Purchaser with revised prospectuses and, following
receipt of the revised prospectuses, the Purchaser shall be free to resume
making offers and sales under the Stockholder Registration Statement.
(e) The Company shall pay the expenses incurred by it in
complying with its obligations under this Section 7, including all registration
and filing fees, exchange listing fees, fees and expenses of counsel for the
Company, printing expenses, fees and expenses of counsel to the Purchaser in
connection with such registration (up to a maximum of $20,000 for each
registration), the fees and expenses associated with any review of the offering
required by the National Association of Securities Dealers, Inc. and fees and
expenses of accountants for the Company, but excluding any brokerage fees,
selling commissions or underwriting discounts incurred by the Purchaser in
connection with sales under the Purchaser Registration Statement.
7.5 Requirements of the Purchaser. The Purchaser agrees, with respect
to each Purchaser Registration Statement, that it shall:
(a) furnish to the Company in writing such information regarding
the Purchaser and the proposed sale of shares of Common Stock by the Purchaser
as the Company may reasonably request in writing in connection with such
Purchaser Registration Statement or as shall be required in connection therewith
by the SEC or any state securities law authorities;
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(b) indemnify the Company and each of its directors and officers
against, and hold the Company and each of its directors and officers harmless
from, any losses, claims, damages, expenses or liabilities (including reasonable
attorneys fees) to which the Company or such directors and officers may become
subject by reason of any statement or omission in such Purchaser Registration
Statement made in reliance upon, or in conformity with, a written statement by
the Purchaser furnished pursuant to this Section 7.5; and
(c) report to the Company sales made pursuant to such Purchaser
Registration Statement.
7.6 Indemnification. The Company agrees to indemnify and hold harmless
the Purchaser and any underwriter retained by the Purchaser to sell the shares
to be offered by the Purchaser or such underwriter against any losses, claims,
damages, expenses or liabilities to which the Purchaser or such underwriter may
become subject by reason of any untrue statement of a material fact contained in
any Purchaser Registration Statement or any omission to state therein a fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, expenses or
liabilities arise out of or are based upon information furnished to the Company
by or on behalf of the Purchaser or such underwriter for use in the Purchaser
Registration Statement. The Company shall have the right to assume the defense
and settlement of any claim or suit for which the Company may be responsible for
indemnification under this Section 7.6.
8. Standstill Agreement.
(a) Subject to the provisions of Section 8(b), the Purchaser
agrees that, for the period beginning on the Closing and ending on the tenth
anniversary of the Closing (the "Standstill Period"), unless it has obtained the
prior written consent of the Company, it will not
(i) acquire, directly or indirectly, by purchase or otherwise, of
record or beneficially, any voting securities of the Company, or rights or
options to acquire voting securities of the Company, if after such acquisition
(and giving effect to the exercise of any such rights or options) the Purchaser
would own of record or beneficially in the aggregate more than twelve percent
(12%) of the voting securities (assuming the exercise of all outstanding rights
or options to acquire such voting securities which are then exercisable) of the
Company (assuming the exercise of all outstanding rights or options held by the
Purchaser to acquire voting securities) (the "12 Percent Limit"); provided that
notwithstanding the provisions of this clause (i), if the number of shares of
outstanding voting securities of the Company is reduced or if the aggregate
ownership of the Purchaser is increased as a result of a recapitalization of the
Company, or as a result of any other action taken by the Company, the Purchaser
will not be required to dispose of (and may continue to vote) any of its
holdings of voting securities even though such action resulted in the
Purchaser's ownership exceeding the percentage of voting securities which the
Purchaser would then be permitted to own. Except as otherwise provided above, if
the Purchaser shall at any time during the Standstill Period own in the
aggregate in excess of the maximum percentage of the voting securities at the
time permitted by this clause (i), (a) the Purchaser shall sell as promptly as
practicable under the circumstances sufficient voting securities so that after
such sale the Purchaser shall not own in the aggregate more than the applicable
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maximum permitted percentage of voting securities, and (b) the Purchaser shall
refrain from voting on any matter as to which the holders of voting securities
shall have the right to vote with respect to any voting securities held by the
Purchaser in excess of the 12 Percent Limit (provided, however, that the
foregoing clause (b) shall not be deemed to limit the Company's remedies in the
event that the excess voting securities were acquired in violation of this
Section 8(a));
(ii) "solicit" proxies with respect to voting securities under
any circumstances or become a "participant" in any "election contest" relating
to the election of directors of the Company, as such terms are defined in
Regulation 14A under the Exchange Act; deposit any voting securities in a voting
trust or subject them to a voting agreement or other agreement of similar
effect;
(iii) initiate, propose or otherwise solicit stockholders for the
approval of one or more stockholder proposals at any time or induce or attempt
to induce any other person to initiate any stockholder proposal; or
(iv) take any action individually or jointly with any
partnership, limited partnership, syndicate, or other group or assist any other
person, corporation, entity or group in taking any action the Purchaser could
not take individually under the terms of this Agreement.
The provisions of this Section 8(a) shall not apply to any of the
activities restricted by subsections (i) through (iv) to the extent that, and
for as long as, either (a) the Board of Directors of the Company has publicly
announced it is seeking bids from third parties for the acquisition of the
Company, or (b) a third party not affiliated with the Purchaser announces an
offer to acquire a majority of the voting securities of the Company.
(b) For purposes of Section 8(a), the Purchaser shall not be
deemed to own indirectly or beneficially any voting securities of the Company,
or rights or options to acquire voting securities of the Company, that are owned
by any entity of which the Purchaser is a limited partner only or in which the
Purchaser otherwise owns a non-voting and minority equity interest.
9. Other Agreements of the Company and the Purchaser.
9.1 Board Representation.
(a) The Company hereby agrees that upon the Closing, the
number of members of the Board of Directors shall be increased by one, and an
individual designated by the Purchaser (the "Purchaser Designee") (who shall
initially be ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇) shall be elected to the Company's Board of
Directors. The Company also agrees that the Board of Directors shall use its
best efforts, subject to the exercise of its fiduciary duties, to nominate the
Purchaser Designee for election as a director of the Company at each meeting of
stockholders at which the directors of the Company are to be elected.
(b) The Board of Directors shall not remove any Purchaser
Designee, except for bad faith or willful misconduct. In the event that the
Purchaser Designee dies, is
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removed or resigns, a new designee of the Purchaser shall be elected by the
Board of Directors of the Company to fill the vacancy caused by the Purchaser
Designee's death, resignation or removal; provided that such new designee shall
be subject to the approval of the Company, which approval shall not unreasonably
be withheld.
(c) Any member of the Board of Directors of the Company
designated by the Purchaser shall excuse himself from any matter discussed or
acted upon at a Board of Directors meeting of the Company with respect to which
the Company and the Purchaser (or any affiliate of the Purchaser) have a
conflict of interests.
9.2 Future Equity Offerings of the Company. The Company and the
Purchaser agree that the Company shall have no obligation to offer, and the
Purchaser shall have no obligation to purchase, any shares of capital stock or
other securities of the Company issued and sold by the Company from time to time
after the date hereof.
9.3 Termination of Certain Covenants. Notwithstanding the
foregoing, the rights provided to the Purchaser under Section 1 and Section 9.1
shall terminate upon the date on which the Purchaser no longer owns at least 80%
of the total number of shares of Common Stock purchased hereunder (as
appropriately adjusted in the event of any stock split or similar event).
9.4 Non-Competition.
(a) Subject to the provisions of Section 9.4(c), the
Purchaser agrees that, for a period beginning on the date of this Agreement and
continuing until three years following the date on which the Purchaser first
ceases to own at least 80% of the total number of shares of Common Stock
purchased hereunder (as appropriately adjusted in the event of any stock split
or similar event) (the "Non-Competition Period"), it and its affiliates shall
not, directly or indirectly, in any capacity, engage in the business of
developing, producing, marketing or selling high temperature superconducting
materials or equipment of the kind or type developed or being developed,
produced, marketed or sold by the Company as of the Closing Date or during the
Non-Competition Period (engaging in any such activity, directly or indirectly,
in any capacity, "Competing With the Company").
(b) The Company and the Purchaser agree that if any
restriction set forth in Section 9.4(a) is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities, such restriction shall be
interpreted to extend over the maximum period of time and range of activities as
to which it may be enforceable.
(c) Notwithstanding the provisions of Section 9.4(a) but
subject to the Purchaser's compliance with its obligations under the
Confidential Disclosure Agreement dated November 13, 1996, nothing shall prevent
the Purchaser from (i) acquiring an interest in any other company or entity less
than 10% of whose revenue is derived from or whose expenses are allocable to
activities that Compete With the Company, (ii) using high temperature
superconducting materials or equipment made by an unaffiliated person that
Competes With the Company (x) within EDF or any of its affiliates or (y) to
provide services to any third party or (iii) conducting proprietary research,
development and testing (using its
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own employees and facilities or in collaboration with third parties) but not
commercializing any products resulting from such research and development;
provided that the Purchaser may sell or license any technology resulting from
such research and development, and provided further that if the Purchaser
intends to sell or license to third parties any technology so developed it must
first give written notice (the "Notice") to the Company stating that it intends
to sell or license such technology and setting forth the price or fee and any
other material terms (the "Offer Price") for such technology. Within 60 days
after receipt of the Notice, the Company may elect to purchase or license such
technology at the Offer Price. If the Company fails to elect to purchase or
license such technology at the Offer Price within the 60 day period specified
above, the Purchaser may sell or license such technology to third parties for a
price and on terms no more favorable to such third parties than the Offer Price.
10. Transfer of Shares; Legend.
10.1 The Shares shall not be sold or transferred to any person
other than a majority-owned subsidiary of EDF unless either (i) they first shall
have been registered under the Securities Act, or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Securities Act.
10.2 Each certificate representing the Shares shall bear a
legend substantially in the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such shares are registered under
such Act or an opinion of counsel satisfactory to the Company is
obtained to the effect that such registration is not required."
The foregoing legend shall be removed from the certificates
representing any of such Shares, at the request of the Purchaser, at such time
as such Shares become eligible for resale pursuant to Rule 144(k) under the
Securities Act.
11. Confidentiality. The Purchaser agrees that any confidential,
proprietary or secret information which it may obtain from the Company pursuant
to any financial statements, reports and other materials submitted by the
Company to the Purchaser or the Purchaser Designee, as the case may be, pursuant
to this Agreement, or otherwise, and its obligations with respect thereto, shall
be subject to the Confidential Disclosure Agreement dated November 13, 1996.
12. Survival of Representations and Warranties. All agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the closing of the transactions contemplated
hereby.
13. Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be (i) delivered by hand,
(ii) mailed by first class certified or registered mail, return receipt
requested, postage prepaid or (iii) transmitted by telecopy with a hard copy
mailed by first class certified or registered mail as aforesaid:
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If to the Company, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: President, or at such other
address or addresses as may have been furnished in writing by the Company to the
Purchaser, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopy number 617-526-5000; or
If to the Purchaser, to CHARTH S.A., ▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, Attn: President, or at such other address or addresses as may
have been furnished to the Company in writing by the Purchaser, with a copy to
Purchaser's designee on the Board at the following address: Electricite de
France, ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇.
Notices provided in accordance with this Section 13 shall be deemed
delivered upon personal delivery or (i) in the case of notices provided within
the continental United States, 48 hours after deposit in the mail, (ii) in the
case of notices provided outside the United States ten (10) days after deposit
in the mail or noon on the second business day next following deposit with an
overnight express courier service and (iii) in the case of notices provided by
telecopy, upon completion of transmission to the addressee's telecopier.
14. No Assignment. The Purchaser may assign any of its rights under
this Agreement to EDF or to another majority-owned subsidiary of EDF in
connection with the transfer of Shares to such entity. In addition, the
Purchaser may transfer its rights under Section 7 to any purchaser of at least
60% of the total number of shares of Common Stock purchased hereunder (as
appropriately adjusted in the event of any stock split or similar event). Except
as provided in the two preceding sentences, the rights granted to the Purchaser
under this Agreement may not be transferred or assigned by the Purchaser without
the prior written consent of the Company (which consent may be provided or
withheld in the Company's sole discretion). Subject to the foregoing, the
provisions of this Agreement shall be binding upon, and inure to the benefit of,
the respective successors, assigns, heirs, executors and administrators of the
parties hereto.
15. Entire Agreement. This Agreement, together with the Confidential
Disclosure Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter. The parties
acknowledge that they may in the future enter into one or more separate
agreements relating to the development, license and/or purchase and sale of
technology or products.
16. Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the 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.
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17. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Headings. The headings of the sections, subsections, and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.
19. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision.
20. Expenses. Each party hereto shall bear its own costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby (including any legal and other professional fees and expenses incurred by
such party and any taxes imposed upon such party as a result of the transactions
contemplated hereby).
21. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to conflict of laws provisions.
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first above written.
AMERICAN SUPERCONDUCTOR CORPORATION
/s/ ▇. ▇. ▇▇▇▇▇
________________________________
By:
Title: President
CHARTH (COMPAGNIE HOLDING D'APPLICATIONS
ET DE REALISATIONS THERMIQUES ET
HYDRAULIQUES) S.A.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
________________________________
By: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
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APPENDIX 1
TECHNICAL, INDUSTRIAL AND COMMERCIAL TOPICS FOR DISCUSSION
AT THE ADVISORY BOARD MEETING
(Note: Topics for discussion will not include details of manufacturing or
processing conditions for development, or production or export regulated uses of
superconducting materials, products and applications.)
1. The Company's activity on superconducting materials: progress,
achievements, difficulties.
1.1 Performance progress of the Company (general results, such as Jc, AC
losses, mechanical properties) on high temperature superconductor
wires, tapes and coated conductors, and prospects for improvements.
1.2 Funding sources and cooperations: present situation and future
possibilities.
1.3 Goals of existing and prospective alliance agreements including
manufacturing, development, marketing, sales, and distribution.
1.4 Discussion of the Company's technology assessments.
2. Performance requirements and marketing analyses for commercial use of
superconducting wires and tapes, and comparison with Item 1.1.
Applications considered include, but are not limited to: current limiters,
transformers, power cables, motors, SMES and other DC magnets.
3. The Company's activity on superconducting equipment and cryogenic power
electronics.
For each item of superconducting equipment in Item 2, the following Items
3.1 to 3.4 will be considered:
3.1 Involvement level of the Company in the developments of prototypes:
present situation and future possibilities.
3.2 Technical justifications of primary design of superconducting
demonstrators, industrial prototypes and future equipment.
3.3 General prospects and milestones for unit power increments and
evolution toward an industrial state of superconducting equipment.
3.4 Funding of demonstrators and industrial prototypes.
3.5 The Company's activity on cryogenic power electronics.
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3.6 Discussion and analysis of technical and economic improvements
required for cryogenic technology.
4. Plans for scaling up manufacturing operations.
4.1 Present level of industrial performance.
4.2 Growth of production capacity - general planning.
4.3 Prospects for technological evolution of production equipment.
4.4 Partnerships.
4.5 Investments needed and funding sources.
4.6 Progress against cost reduction plans for superconducting wires and
tapes.
5. Status of competitors and competitive technologies.
5.1 R&D and production capabilities and resources.
5.2 Patents and license agreements, trademarks, copyrights, royalty
agreements.
5.3 Funding resources.
5.4 Partnerships, development contracts.
5.5 Review and evaluation of alternative superconducting technologies.
5.6 Review and evaluation of progress made with conventional
technologies.
6. Commercialization agenda.
6.1 Review of the Company's business plan.
6.2 Discussion and judgment regarding strategy and production capacity
for the Company's targeted markets.
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