SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 2)(1)
Energy Conversion Devices, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
292659109
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(CUSIP Number)
Mr. Nobukazu Fukazawa
General Manager of Accounting Planning Administration
Division
Canon Inc.
30-2, Shimomaruko 3-chome
Ohta-ku
Tokyo 146-8501, Japan
Telephone No.: 011-81-3-3758-2111
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 11, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(g), for other
parties to whom copies are to be sent.
(continued on following pages)
(page 1 of 27 pages)
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP No. 292659109 13D Page 2 of 27 Pages
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Canon Inc.
No I.R.S. identification no. (non-U.S. entity)
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [_]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Japan
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NUMBER OF 7. SOLE VOTING POWER
1,071, 905
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
0
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
1,071, 905
REPORTING
10. SHARED DISPOSITIVE POWER
PERSON WITH 0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,071, 905 shares
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [_]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4%
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14. TYPE OF REPORTING PERSON
CO
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<PAGE>
CUSIP No. 292659109 13D Page 3 of 27 Pages
Item 1. Security and Issuer
This statement relates to the Common Stock, $.01 par value (the "Common Stock"),
of Energy Conversion Devices, Inc. (the "Issuer"). The principal executive
offices of the Issuer are located at 1675 West Maple Road, Troy, Michigan 48084.
Item 2. Identity and Background
This statement is being filed by Canon Inc. ("Canon"), a corporation organized
under the laws of Japan. The principal executive offices of Canon are located at
30-2 Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501 Japan. Canon is a major
international integrated manufacturer and marketer of business machines, cameras
and optical and other products.
The name, business address and present principal occupation or employment of
each executive officer and director of Canon is set forth in Exhibit A hereto.
Each of such executive officers and directors is a citizen of Japan.
Neither Canon nor, to the best of Canon's knowledge, any of the individuals
listed in Exhibit A has been convicted during the last five years in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
Neither Canon nor, to the best of Canon's knowledge, any of the individuals
listed in Exhibit A has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which it or he was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration
Canon sold all of its 2,924,558-6/7 shares (the "USSC Shares") of the common
stock of United Solar Systems Corp. ("USSC") to the Issuer pursuant to a Stock
Purchase Agreement dated as of March 31, 2000 (the "Purchase Agreement") among
Canon, the Issuer and USSC. USSC was incorporated and capitalized by Canon and
the Issuer pursuant to a Joint Venture Agreement entered into by Canon and the
Issuer in 1990. The USSC Shares constituted all of Canon's equity interest in
USSC. The closing of the sale of the USSC Shares (the "Closing") took place on
April 11, 2000. At the Closing, in consideration for the USSC Shares, (i) the
Issuer issued 700,000 shares of Common Stock to Canon, (ii) paid $12,000,000 in
cash to Canon and (iii) issued to Canon a $12,000,000 promissory note payable on
or before January 1, 2004. Immediately prior to the Closing, Canon owned 371,905
shares of Common Stock, which it had purchased from the Issuer using working
capital pursuant to a stock purchase letter agreement dated May 13, 1987.
Item 4. Purpose of the Transaction
Canon acquired its shares of Common Stock pursuant to the Purchase Agreement for
investment purposes in connection with its divestiture of the USSC Shares. Canon
does not seek to exercise control over the Issuer through its ownership of
Common Stock. An employee of a U.S. subsidiary of Canon serves on the Board of
Directors of the Issuer, but there are no agreements or understandings with the
Issuer or any of the holders of its Common Stock obligating the Issuer or any
holder to continue Canon's representation on the Board. Canon has no present
intention of acquiring additional shares of Common Stock. Canon may determine to
dispose of all or a portion of its shares of Common Stock at any time (by
exercising its rights under the Registration Rights Agreement or otherwise)
based on future market conditions and other relevant factors.
<PAGE>
CUSIP No. 292659109 13D Page 4 of 27 Pages
Except as disclosed pursuant to Item 6 below, neither Canon nor, to the best of
Canon's knowledge, any of the individuals listed in Exhibit A has any plan or
proposal which relate to or would result in any of the events or transactions
described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of the date of this Statement, Canon beneficially owns 1,071,905
shares of Common Stock, constituting approximately 7.4% of the outstanding
shares of Common Stock, based on information provided by the Issuer on April 11,
2000. To the best of Canon's knowledge, none of the individuals listed in
Exhibit A beneficially own any shares of Common Stock.
(b) Canon has sole power to vote the 1,071,905 shares of Common Stock
beneficially owned by it.
(c) Canon acquired 700,000 shares of Common Stock on April 11, 2000 as
disclosed pursuant to Item 3 above. To the best of Canon's knowledge, none of
the individuals listed in Exhibit A have effected any transactions in Common
Stock during the 60 days preceding the date of this Statement.
(d) No person other than Canon has the right to receive or the power to
direct the receipt of dividends from, or the proceeds of the sale of, the shares
of Common Stock beneficially owned by Canon.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Pursuant to the Purchase Agreement, the Issuer entered into a Registration
Rights Agreement with Canon dated April 11, 2000 (the "Registration Rights
Agreement"), a copy of which is attached as Exhibit B hereto. Under the
Registration Rights Agreement, Canon has the right at any time to demand that
the Issuer prepare and file with the Securities and Exchange Commission (the
"Commission") a "shelf" registration statement for an offering to be made on a
continuous basis pursuant to Rule 415 (or any successor rule or similar
provision then in effect) under the Securities Act of 1933, as amended (the
"Securities Act"). In addition, Canon has "piggyback" registration rights in the
event the Issuer files a registration statement under the Securities Act with
respect to an offering by the Issuer for its own account or for the account of
any of the holders of the Issuer's equity securities of any class, other than
(i) a registration statement on Form S-4 or S-8 (or any substitute form that is
adopted by the Commission) or (ii) a registration statement filed in connection
with an exchange offer or the offering of securities solely to the Company's
existing security holders.
Item 7. Material to be Filed as Exhibits.
Exhibit A - Information concerning executive officers and directors of Canon
(name, business address and present principal occupation or employment of
each); and
Exhibit B - Registration Rights Agreement.
<PAGE>
CUSIP No. 292659109 13D Page 5 of 27 Pages
SIGNATURES
After reasonable inquiry and to the best of the knowledge and belief of
the undersigned, the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Date: April 21, 2000 CANON INC.
By: /s/ Toshizo Tanaka
-------------------------------
Toshizo Tanaka, Managing Director
and Senior General Manager of Finance
& Accounting Headquarters
<PAGE>
CUSIP No. 292659109 13D Page 6 of 27 Pages
Exhibit Index
Exhibit A. Information Concerning Canon's Executive Officers and Directors.
Exhibit B. Registration Rights Agreement
<PAGE>
CUSIP No. 292659109 13D Page 7 of 27 Pages
EXHIBIT A
INFORMATION CONCERNING CANON'S
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
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Business in Charge or
Position Main Occupation Name Business Address
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
President & C.E.O. Fujio Mitarai 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
146-8501 Japan
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Senior Managing 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Chief of OEM business Takashi Kitamura 146-8501 Japan
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Chief of Technology &
Product Development, Group
Executive of Technology
Management Headquarters,
Group Executive of Display
Development Headquarters,
Group Executive of Platform
Senior Managing Technology Development 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Headquarters Ichiro Endo 146-8501 Japan
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Chief of Human Resources
Management, General
Affairs & Marketing; Group
Executive of Human
Resources Management &
Senior Managing Organization 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Headquarters Yukio Yamashita 146-8501 Japan
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Chief of Printing
Technologies, Group
Executive of Internet
Managing Business Development 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Headquarters Takashi Saito 146-8501 Japan
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Senior General Manager
Managing of Finance & Accounting 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Headquarters Toshizo Tanaka 146-8501 Japan
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Group Executive of
Managing Production Management 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Headquarters Yusuke Emura 146-8501 Japan
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</TABLE>
<PAGE>
CUSIP No. 292659109 13D Page 8 of 27 Pages
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Business in Charge or
Position Main Occupation Name Business Address
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Managing President of Canon One Canon Plaza, Lake Success, NY 11042,
Director U.S.A., Inc. Kinya Uchida U.S.A.
- -----------------------------------------------------------------------------------------------------------------------------
Chief Executive of 20-2, Kiyohara-Kogyodanchi,
Managing Optical Products Akira Tajima Utsunomiya-shi, Tochigi 321-3292, Japan
Director Operations
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President of Canon Sales 11-28, Mita 3-chome, Minato-ku, Tokyo
Director Co., Inc. Haruo Murase 108-8011, Japan
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Executive V.P. & C.T.O. of One Canon Plaza, Lake Success, NY 11042,
Director Canon U.S.A., Inc. Toru Takahashi U.S.A.
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Group Executive of
Corporate Intellectual
Property and Legal 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Headquarters Nobuyoshi Tanaka 146-8501 Japan
- -----------------------------------------------------------------------------------------------------------------------------
Managing Director of Canon
Singapore Pte. Ltd.,
Chairman & Managing
Director of Canon Hongkong 9/F, The Hong Kong Club Building, 3A
Director Co., Ltd. Kohtaro Miyagi Chater Road, Central, Hong Kong
- -----------------------------------------------------------------------------------------------------------------------------
Chief Executive of Camera 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Operations Tsuneji Uchida 146-8501 Japan
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Chief Executive of
Peripheral Products 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Operations Junji Ichikawa 146-8501 Japan
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Group Executive of New 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Business Headquarters Muneo Adachi 146-8501 Japan
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President of Canon Bovenkerkerweg 59-61 1185 XB Amstelveen,
Director Europa N.V. Hajime Tsuruoka The Netherlands
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Chief Executive of
Chemical Products 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Operations Teruomi Takahashi 146-8501 Japan
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Group Executive of Core
Technology Development 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Headquarters Hironori Yamamoto 146-8501 Japan
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Group Executive of General 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Affairs Headquarters Akiyoshi Moroe 146-8501 Japan
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</TABLE>
<PAGE>
CUSIP No. 292659109 13D Page 9 of 27 Pages
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Business in Charge or
Position Main Occupation Name Business Address
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Group Executive of
Corporate Strategy & 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Development Headquarters Kunio Watanabe 146-8501 Japan
- -----------------------------------------------------------------------------------------------------------------------------
Chief Executive of Office 30-2 Shimomaruko, 3-chome, Ohta-ku, Tokyo
Director Imaging Products Operations Ikuo Soma 146-8501 Japan
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</TABLE>
<PAGE>
CUSIP No. 292659109 13D Page 10 of 27 Pages
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of April 11, 2000 (this
"Agreement") between CANON INC. ("Canon"), a corporation organized and existing
under the laws of Japan with its principal office at 30-2 Shimomaruko 3-chome,
Ohta-ku, Tokyo 146-8501 Japan, and ENERGY CONVERSION DEVICES, INC. ("ECD"), a
Delaware corporation with its principal office at 1675 West Maple Road, Troy,
Michigan 48084, U.S.A.
W I T N E S S E T H:
WHEREAS, the parties hereto are parties, together with United Solar
Systems Corp. ("United Solar"), to a Stock Purchase Agreement dated as of March
31, 2000 (as the same may be amended from time to time, the "Stock Purchase
Agreement"), pursuant to which, inter alia, Canon agreed to sell and ECD agreed
to purchase the capital stock of United Solar held by Canon;
WHEREAS, the purchase price for the aforesaid purchases of capital
stock of United Solar consists, in part, of 700,000 shares (the "Issued Shares")
of the Common Stock, par value $0.01 per share, of ECD ("Common Stock") being
issued to Canon as of the date hereof; and
WHEREAS, ECD desires to grant to Canon the rights set forth in this
Agreement, the execution and delivery of which by ECD is a condition to the
consummation of the transactions contemplated by the Stock Purchase Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the terms defined in the premises hereof
shall have the respective meanings specified therefor therein, and the following
terms shall have the respective meanings specified therefor:
"Advice" has the meaning set forth in Section 4 hereof.
"Affiliate" means, with respect to any specified Person, any
other Person who, directly or indirectly, controls, is controlled by,
or is under common control with such specified Person.
"Business Day" means any day other than a day on which banks
are authorized or required by law to be closed in the State of New
York.
<PAGE>
CUSIP No. 292659109 13D Page 11 of 27 Pages
"Commission" means the U.S. Securities and Exchange
Commission.
"Controlling Persons" has the meaning set forth in Section
6(a) hereof.
"Damages" has the meaning set forth in Section 6(a) hereof.
"ECD" has the meaning set forth in the preamble and shall
include ECD's successors by merger, acquisition, reorganization or
otherwise.
"ECD Securities" means the Issued Shares, all securities into
which any ECD Securities may be converted or exchanged upon any
recapitalization or reorganization of ECD, and all other shares of
Common Stock or other securities of ECD directly or indirectly issued
or issuable in respect of any ECD Securities by way of share dividend
or share split or in connection with a combination of shares,
recapitalization, merger, consolidation, or other reorganization.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute, and the rules and
regulations of the Commission promulgated thereunder.
"Holder" means (i) Canon and (ii) each Person (other than ECD
and its Affiliates) to whom a Holder transfers ECD Securities if such
Person acquires such ECD Securities as Registrable Securities.
"Holders' Counsel" means such U.S. counsel as is selected from
time to time by Holders of a majority in interest of the Registrable
Securities.
"Inspectors" has the meaning set forth in Section 4(l) hereof.
"NASD" has the meaning set forth in Section 4(p) hereof.
"Nasdaq" has the meaning set forth in Section 4(n) hereof.
"Objection Notice" has the meaning set forth in Section 4(a)
hereof.
"Objecting Party" has the meaning set forth in Section 4(a)
hereof.
"Person" shall mean any natural person or any corporation,
partnership, limited liability company or other entity.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective Registration Statement in reliance upon Rule
<PAGE>
CUSIP No. 292659109 13D Page 12 of 27 Pages
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 such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in
such prospectus.
"Records" has the meaning set forth in Section 4(l) hereof.
"Registrable Securities" means the ECD Securities; provided,
that any ECD Securities shall cease to be Registrable Securities when
(i) a Registration Statement covering such Registrable Securities has
been declared effective and such Registrable Securities have been
disposed of by the holder thereof pursuant to such effective
Registration Statement, (ii) such Registrable Securities are
transferred by the holder thereof to any Person other than a Holder
pursuant to Rule 144 (or any successor rule or similar provision then
in effect, but not Rule 144A) under the Securities Act, including a
sale pursuant to the provisions of Rule 144(k), or (iii) such ECD
Securities shall have ceased to be outstanding.
"Registration Expenses" has the meaning set forth in Section 5
hereof.
"Registration Statement" means any registration statement of
ECD that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, and all amendments and supplements
thereto, including post-effective amendments, in each case including
the Prospectus, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such
registration statement.
"Required Filing Date" has the meaning set forth in Section
2(a)(i) hereof.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor statute, and the rules and
regulations of the Commission promulgated thereunder.
"Shelf Registration Statement" has the meaning set forth in
Section 2(a)(i) hereof.
"Suspension Notice" has the meaning set forth in Section 4
hereof.
"Suspension Period" has the meaning set forth in Section 4
hereof.
"Target Effective Date" means the date 30 days after the
earlier of (i) the Required Filing Date or (ii) the date on which the
Shelf Registration Statement is actually filed with the Commission
pursuant to Section 2(a)(i) hereof.
"Target Effective Period" means the period of time between the
date on which a Shelf Registration Statement is actually declared
effective and the later to occur of (i) the date which is 24 months
following the date hereof, and (ii) the date which is three months
<PAGE>
CUSIP No. 292659109 13D Page 13 of 27 Pages
after the date on which each Holder has ceased to be an Affiliate of
ECD, provided that ECD first provides each Holder with an opinion of
counsel to such effect.
"Target Filing Date" has the meaning set forth in Section
3(a).
Section 2. Shelf Registrations.
(a) Filing; Effectiveness. As soon as practicable but not
later than the thirtieth (30th) day (the "Required Filing Date") after written
notice to such effect given by Canon to ECD, ECD shall prepare and file with the
Commission a "shelf" registration statement on the appropriate form for an
offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act (or any successor rule or similar provision then in effect) (the
"Shelf Registration Statement") covering all of the Registrable Securities then
issued and outstanding. ECD shall use its best efforts to have the Shelf
Registration Statement declared effective on or before the Target Effective Date
and to keep the Shelf Registration Statement continuously effective for the
Target Effective Period. Any Holder of Registrable Securities shall be permitted
to withdraw all or any part of the Registrable Securities held by it from the
Shelf Registration Statement at any time prior to the effective date of the
Shelf Registration Statement.
(b) Supplements; Amendments. ECD agrees, if necessary, to
supplement or amend the Shelf Registration Statement, as required by the rules,
regulations or instructions applicable to the registration form used by ECD for
the Shelf Registration Statement or by the Securities Act or as requested (which
request shall result in the filing of a supplement or amendment) by any Holder
of Registrable Securities to which the Shelf Registration Statement relates, and
ECD agrees to furnish to the Holders, Holders' Counsel and any managing
underwriter copies of any such supplement or amendment prior to its being used
and/or filed with the Commission.
(c) Effective Registration. A registration will not be deemed
to have been effected as the Shelf Registration Statement unless and until the
same has been declared effective by the Commission and ECD has complied in all
material respects with its obligations under this Agreement with respect
thereto; provided, that if after the Shelf Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to the Shelf
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the Commission or any other governmental agency or
court, the Shelf Registration Statement will be deemed not to have become
effective during the period of such interference until the offering of
Registrable Securities pursuant to the Shelf Registration Statement may legally
resume. If a registration requested pursuant to this Section 2 is deemed not to
have been effected, then ECD shall continue to be obligated to effect a
registration pursuant to this Section 2.
(d) Selection of Underwriter. If the Holders so elect, the
offering of Registrable Securities pursuant to the Shelf Registration Statement
shall be in the form of an underwritten offering. If they so elect, the Holders
participating in the Shelf Registration Statement shall select one or more
nationally recognized firms of investment bankers to act as the book-running
managing
<PAGE>
CUSIP No. 292659109 13D Page 14 of 27 Pages
underwriter or underwriters in connection with such offering and shall select
any additional investment bankers and managers to be used in connection with the
offering; provided, that such selection shall be subject to the consent of ECD,
which consent shall not be unreasonably withheld.
(e) Inclusion of ECD Securities other than Registrable
Securities. No shares of Common Stock or other ECD securities to be sold for the
account of any Person (including ECD) other than a Holder shall be included in
the Shelf Registration Statement unless (i) such offering is underwritten by one
or more nationally recognized firms of investment bankers and (ii) the managing
underwriter or underwriters shall advise ECD and Canon in writing that the
inclusion of such ECD securities will not materially and adversely affect the
price at which the Registrable Securities included in the Shelf Registration
Statement may be sold or the success of the offering.
(f) Deferral of Filing. ECD may defer the filing (but not the
preparation) of the Shelf Registration Statement until a date not later than
thirty (30) days after the Required Filing Date if at the time ECD receives the
notice from Canon pursuant to Section 2(a) hereof, ECD is engaged in
confidential negotiations or other confidential business activities, disclosure
of which would be required in the Shelf Registration Statement (but would not be
required if the Shelf Registration Statement were not filed), and the Board of
Directors of ECD determines in good faith that such disclosure would be
materially detrimental to ECD or would have a material adverse effect on any
such confidential negotiations or other confidential business activities. A
deferral of the filing of the Shelf Registration Statement pursuant to this
Section 2(f) shall be lifted, and the Shelf Registration Statement shall be
filed forthwith, if the negotiations or other activities are disclosed or
terminated. In order to defer the filing of the Shelf Registration Statement
pursuant to this Section 2(f), ECD shall promptly (but in any event within 10
days), upon determining to seek such deferral, deliver to each Holder a
certificate signed by an executive officer of ECD stating that ECD is deferring
such filing pursuant to this Section 2(f) and an approximation of the
anticipated delay. ECD may defer the filing of the Shelf Registration Statement
pursuant to this Section 2(f) only once.
Section 3. Piggy-Back Registration.
(a) Request for Registration. Each time the Company proposes
to file a registration statement under the Securities Act with respect to an
offering by the Company for its own account or for the account of any of its
securityholders of any class of equity security (other than (i) a registration
statement on Form S-4 or S-8 (or any substitute form that is adopted by the
Commission) or (ii) a registration statement filed in connection with an
exchange offer or the offering of securities solely to the Company's existing
securityholders), then the Company shall give written notice of such proposed
filing to each Holder of Registrable Securities as soon as practicable (but in
no event less than 30 days before the anticipated filing date), and such notice
shall offer such Holder the opportunity to register such number of shares of
Registrable Securities as each such Holder may request (which request must be
made in writing and shall specify the Registrable Securities intended to be
disposed of by such Holder and the intended method of distribution thereof) (a
"Piggy-Back Registration"). The Company shall permit, or, if the offering
relating to a Piggy-Back Registration is an underwritten offering, shall use its
best efforts to cause
<PAGE>
CUSIP No. 292659109 13D Page 15 of 27 Pages
the managing underwriter or underwriters of such proposed underwritten offering
to permit, the Registrable Securities requested to be included in such
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company or any other securityholder included therein
and shall permit, or use its best efforts to cause such managing underwriter or
underwriters to permit, the sale or other disposition of such Registrable
Securities in accordance with such Holder's intended method of distribution
thereof. Any Holder shall have the right to withdraw its request for inclusion
of its Registrable Securities in any registration statement pursuant to this
Section 3 by giving written notice to the Company of such withdrawal. The
Company may withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective, provided that the Company shall give immediate notice of such
withdrawal to the Holders who requested Registrable Securities to be included in
such Piggy-Back Registration and shall reimburse such Holders for all reasonable
out-of-pocket expenses (including counsel fees and expenses) incurred prior to
such withdrawal.
(b) Reduction of Offering. If the managing underwriter or
underwriters of any Piggy-Back Registration which is an underwritten offering
have informed, in writing, the Holders requesting inclusion of Registrable
Securities in such offering that it is their opinion that the total number of
shares which the Company, Holders of Registrable Securities and any other
Persons participating in such registration intend to include in such offering is
such as to materially and adversely affect the success of such offering, then
the number of shares to be offered for the account of all Persons (other than
the Holders) participating in such Piggy-Back Registration shall be reduced or
limited (to zero if necessary) pro rata in proportion to the respective number
of shares requested to be included in such offering by such Persons to the
extent necessary to reduce the total number of shares requested to be included
in such offering to the number of shares, if any, recommended by such managing
underwriter or underwriters.
Although the specific Securities disposed of pursuant to a
Piggy-Back Registration will cease to be Registrable Securities, the mere
registration of Registrable Securities under this Section 3 shall not relieve
the Company of its obligation to effect or maintain a Shelf Registration
Statement pursuant to Section 2 hereof. No failure by the Holders to elect a
Piggy-Back Registration under this Section 3 or to complete the sale of
Registrable Securities pursuant to the registration statement effected in
connection therewith, and no withdrawal of Registrable Securities from a
Piggy-Back Registration, shall relieve the Company of any other obligation under
this Agreement, including without limitation, the Company's obligations under
Sections 5 and 6 hereof.
Section 4. Registration Procedures.
In connection with the obligations of ECD to effect or cause
the registration of any Registrable Securities pursuant to the terms and
conditions of this Agreement, ECD shall use its best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection therewith:
(a) ECD shall prepare and file with the Commission a
Registration Statement on
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CUSIP No. 292659109 13D Page 16 of 27 Pages
the appropriate form under the Securities Act, which Registration
Statement shall comply as to form in all material respects with the
requirements of the applicable form and include all financial
statements required by the Commission to be filed therewith, and use
its best efforts to cause such Registration Statement to become
effective and remain effective in accordance with the provisions of
this Agreement; provided, that, at least ten (10) Business Days prior
to filing a Registration Statement or Prospectus or any amendments or
supplements thereto, including documents incorporated by reference
after the initial filing of the Registration Statement, ECD shall
furnish to the Holders of the Registrable Securities covered by such
Registration Statement, Holders' Counsel and the underwriters, if any,
draft copies of all such documents proposed to be filed, which
documents will be subject to the review of Holders' Counsel and the
underwriters, if any, and ECD will not, unless required by law or this
Agreement, file any Registration Statement or amendment thereto or any
Prospectus or any supplement thereto to which Holders holding a
majority in interest of the Registrable Securities covered by such
Registration Statement or the underwriters with respect to such
Securities, if any, shall object; provided, that any such objection to
the filing of any Registration Statement or amendment thereto or any
Prospectus or supplement thereto shall be made by written notice (the
"Objection Notice") delivered to ECD no later than ten Business Days
after the party or parties asserting such objection (the "Objecting
Party") receives draft copies of the documents that ECD proposes to
file. The Objection Notice shall set forth the objections and the
specific areas in the draft documents where such objections arise. ECD
shall have five (5) Business Days after receipt of the Objection Notice
to correct such deficiencies to the satisfaction of the Objecting
Party, and will notify each Holder of any stop order issued or
threatened by the Commission in connection therewith and shall use its
best efforts to prevent the entry of such stop order or, if entered, to
have such stop order withdrawn at the earliest possible moment.
(b) ECD shall promptly prepare and file with the Commission
such amendments and post-effective amendments to the Registration
Statement as may be necessary to keep such Registration Statement
effective for as long as ECD is required to keep such Registration
Statement effective pursuant to the terms hereof; shall cause the
Prospectus to be supplemented by any required Prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and shall comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all Registrable
Securities covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the
Holders set forth in such Registration Statement or amendment thereto
or such Prospectus or supplement thereto;
(c) ECD shall promptly furnish to any Holder and the
underwriters, if any, without charge, such number of conformed copies
of such Registration Statement and any post-effective amendment thereto
and such number of copies of the Prospectus (including each preliminary
Prospectus) and any amendments or supplements thereto, any documents
incorporated by reference therein and such other documents as any such
Holder or underwriter may request in order to facilitate the public
sale or other disposition of the Registrable Securities being sold by
such Holder.
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CUSIP No. 292659109 13D Page 17 of 27 Pages
(d) ECD shall, on or prior to the date on which a Registration
Statement is declared effective, (i) use its best efforts to register
or qualify the Registrable Securities covered by such Registration
Statement under the securities or "blue sky" laws of each of the 50
states of the United States and each other jurisdiction thereof (or
such jurisdictions as any Holder, Holders' counsel or underwriter may
request) or obtain appropriate exemptions therefrom; (ii) do any and
all other acts and things which may be necessary or advisable to enable
the Holders of Registrable Securities included in such Registration
Statement to consummate the disposition of such Registrable Securities
in accordance with their intended method of distribution thereof; (iii)
use its best efforts to keep each such state securities or "blue sky"
registration or qualification (or exemption therefrom) effective during
the period in which ECD is required to keep the Registration Statement
effective; and (iv) do any and all other acts or things which may be
necessary or advisable to enable the Holders of Registrable Securities
included in such Registration Statement to complete the disposition in
such jurisdictions of such Registrable Securities in accordance with
their intended method of distribution thereof; provided, that ECD shall
not be required (A) to qualify to do business in any jurisdiction where
it would not otherwise be required to so qualify but for this Section
4(d) or (B) to file any general consent to service of process.
(e) ECD shall promptly notify each Holder, Holders' Counsel
and any underwriter and (if requested by any such Person) confirm such
notice in writing, (i) when a Registration Statement or a Prospectus or
any post-effective amendment or any Prospectus supplement has been
filed and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of
any request by the Commission or any state securities authority for
amendments and supplements to a Registration Statement and Prospectus
or for additional information after the Registration Statement has
become effective, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv) of
the issuance by any state securities commission or other regulatory
authority of any order suspending the registration or qualification or
exemption from registration or qualification of any of the Registrable
Securities under state securities or "blue sky" laws or the initiation
of any proceedings for that purpose, (v) if, between the effective date
of a Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of ECD
contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to the offering of such
Registrable Securities cease to be true and correct in all material
respects, and (vi) of the happening of any event which makes any
statement of a material fact made in a Registration Statement or
related Prospectus untrue or which requires the making of any changes
in such Registration Statement or Prospectus so that such Registration
Statement or Prospectus 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; and, as
promptly as practicable thereafter, prepare and file an amendment to
such Registration Statement with the Commission and furnish to the
Holders and any
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CUSIP No. 292659109 13D Page 18 of 27 Pages
underwriter a supplement or amendment to such Prospectus so that, as
thereafter deliverable to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(f) ECD shall make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 30 days after the end of the 12-month
period beginning with the first day of ECD's first fiscal quarter
commencing after the effective date of a Registration Statement, which
earnings statement shall cover said 12-month period, and which
requirement will be deemed to be satisfied if ECD timely files complete
and accurate information on Forms 10-Q, 10-K and 8-K under the Exchange
Act and otherwise complies with Rule 158 under the Securities Act.
(g) ECD shall promptly use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement, and, if any such order suspending the effectiveness of a
Registration Statement is issued, shall promptly use its best efforts
to obtain the withdrawal of such order at the earliest possible moment.
(h) ECD shall, if requested by the managing underwriter or
underwriters, if any, Holders' Counsel, or any Holder promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as such managing underwriter or underwriters or Holder or
Holders' Counsel requests to be included therein, including, without
limitation, with respect to the Registrable Securities being sold by
such Holder to such underwriter or underwriters, the purchase price
being paid therefor by such underwriter or underwriters and any other
terms of an underwritten offering of the Registrable Securities to be
sold in such offering, and ECD shall promptly make all required filings
of such Prospectus supplement or post-effective amendment.
(i) ECD shall, as promptly as practicable after the filing
with the Commission of any document which is incorporated by reference
into a Registration Statement (in the form in which it was
incorporated), deliver a copy of each such document to each of the
Holders and to Holders' Counsel.
(j) ECD shall cooperate with the Holders and the managing
underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (which shall not bear any
restrictive legends unless required under applicable law) representing
Registrable Securities sold under a Registration Statement to the
purchasers thereof, and enable such Registrable Securities to be in
such denominations and registered in such names as the managing
underwriter or underwriters, if any, or such Holders may request and
keep available and make available to ECD's transfer agent prior to the
effectiveness of such Registration Statement a supply of such
certificates.
(k) ECD shall enter into such customary agreements (including,
if applicable, an underwriting agreement in customary form) and take
such other actions as the Holders or the
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CUSIP No. 292659109 13D Page 19 of 27 Pages
underwriters retained by the Holders participating in an underwritten
public offering, if any, may request in order to expedite or facilitate
the disposition of Registrable Securities (the Holders may, at their
option, require that any or all of the representations, warranties and
covenants of ECD to or for the benefit of any underwriters also be made
to and for the benefit of the Holders).
(l) ECD shall promptly make available to each Holder, any
underwriter participating in any disposition of Registrable Securities
pursuant to a Registration Statement, and any attorney, accountant or
other agent or representative retained by any such Holder or
underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of ECD
(collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause
ECD's officers, directors and employees to supply all information
requested by any such Inspector in connection with such Registration
Statement.
(m) ECD shall furnish to each Holder of Registrable Securities
included in such offering and to each underwriter, if any, a signed
counterpart, addressed to such Holder or underwriter, of (i) an opinion
or opinions of counsel to ECD, and (ii) a comfort letter or comfort
letters from ECD's independent public accountants, each in customary
form and covering matters of the type customarily covered by opinions
or comfort letters, as the case may be.
(n) ECD shall use its best efforts to cause the Registrable
Securities included in a Registration Statement (if ECD and the
Registrable Securities so qualify) (i) to be listed on each national
securities exchange, if any, on which similar securities issued by ECD
are then listed, or (ii) if similar securities of ECD are not then
listed, to be authorized for quotation or listing, as applicable, on
the New York Stock Exchange or The Nasdaq Stock Market, Inc.'s
("Nasdaq") National Market or Small-Cap Market.
(o) ECD shall provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later than the
effective date of such Registration Statement.
(p) ECD shall cooperate with each Holder and each underwriter
participating in the disposition of Registrable Securities and their
respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. ("NASD").
(q) ECD shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
(r) ECD shall appoint or maintain a transfer agent and
registrar for all Registrable Securities covered by a Registration
Statement not later than the effective date of such Registration
Statement.
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CUSIP No. 292659109 13D Page 20 of 27 Pages
(s) In connection with an underwritten offering, ECD shall
participate, to the extent reasonably requested by the managing
underwriter for the offering or the Holders, in customary efforts to
sell the securities being offered, including without limitation,
participating in "road shows."
(t) If the Registrable Securities are of a class of securities
that is listed on a national securities exchange, ECD shall file copies
of any Prospectus with such exchange in compliance with Rule 153 under
the Securities Act so that the Holders shall benefit from the
prospectus delivery procedures described therein.
In the case of the Shelf Registration Statement, each Holder,
upon receipt of any notice (a "Suspension Notice") from ECD of the happening of
any event of the kind described in Section 4(e)(vi) hereof, shall forthwith
discontinue disposition of the Registrable Securities pursuant to the Shelf
Registration Statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 4(e) or until such Holder is advised in writing (the "Advice") by ECD
that the use of the Prospectus may be resumed, and such Holder has received
copies of any additional or supplemental filings which are incorporated by
reference in the Prospectus, and, if so directed by ECD, such Holder will, or
will request the managing underwriter or underwriters, if any, to, deliver to
ECD (at ECD's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice; provided, that ECD shall not give
a Suspension Notice until after the Shelf Registration Statement has been
declared effective and shall not give more than one Suspension Notice during any
period of 12 consecutive months and in no event shall the period from the date
on which any Holder receives a Suspension Notice to the date on which any Holder
receives either the Advice or copies of the supplemented or amended Prospectus
contemplated by Section 4(f) (the "Suspension Period") exceed 30 days. In the
event that ECD shall give any Suspension Notice, (i) ECD shall use its best
efforts and take such actions as are reasonably necessary to render the Advice
and end the Suspension Period as promptly as practicable and (ii) the time
periods for which the Shelf Registration Statement is required to be kept
effective pursuant to Section 2 hereof shall be extended by the number of days
during the Suspension Period.
If any Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of ECD, then such Holder shall have
the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of ECD's securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any
future financial requirements of ECD, or (ii) in the event that such reference
to such Holder by name or otherwise is not required by the Securities Act or any
similar Federal or state securities or "blue sky" statute and the rules and
regulations thereunder then in force, the deletion of the reference to such
Holder.
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CUSIP No. 292659109 13D Page 21 of 27 Pages
Section 5. Registration Expenses. Any and all expenses
incident to ECD's performance of or compliance with this Agreement, including
without limitation, all Commission and securities exchange, Nasdaq or NASD
registration, listing and filing fees, all fees and expenses incurred in
connection with compliance with state securities or "blue sky" laws (including
reasonable fees and disbursements of counsel for any underwriters or Holder in
connection with the state securities or "blue sky" qualifications of the
Registrable Securities), printing expenses, messenger and delivery expenses,
internal expenses (including, without limitation, all salaries and expenses of
ECD's officers and employees performing legal or accounting duties), all
expenses for word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, the fees and
expenses incurred in connection with the listing of the Registrable Securities,
the fees and disbursements of counsel for ECD and of the independent certified
public accountants of ECD (including the expenses of any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letter requested pursuant to Section 4(m) hereof,
Securities Act liability insurance (if ECD elects to obtain such insurance), the
reasonable fees and expenses of any special experts or other Persons retained by
ECD in connection with any registration, the reasonable fees and disbursements
of Holders' Counsel and any reasonable out-of-pocket expenses of the Holders and
their agents, including any reasonable travel costs (but excluding underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities) (all such expenses being herein called
"Registration Expenses"), will be borne by ECD whether or not the Registration
Statement to which such expenses relate becomes effective.
Section 6. Indemnification and Contribution.
(a) Indemnification by ECD. ECD agrees to indemnify and hold
harmless, to the full extent permitted by law, each Holder, its partners,
officers, directors, trustees, shareholders, employees, agents and investment
advisers, and each Person who controls such Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, such Holder, together with the
partners, officers, directors, trustees, shareholders, employees, agents and
investment advisors of such controlling Person (collectively, the "Controlling
Persons"), from and against all losses, claims, damages, liabilities and
expenses (including, without limitation, any legal or other fees and expenses
incurred by any Holder or any such Controlling Person in connection with
defending or investigating any action or claim in respect thereof)
(collectively, the "Damages") to which such Holder, its partners, officers,
directors, trustees, shareholders, employees, agents and investment advisers,
and any such Controlling Person, may become subject under the Securities Act or
otherwise, insofar as such Damages (or proceedings in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of material fact
contained in any Registration Statement (or any amendment thereto) pursuant to
which Registrable Securities were registered under the Securities Act, including
all documents incorporated therein by reference, or are caused by any omission
or alleged omission to state therein a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or arise out of or are based upon any
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CUSIP No. 292659109 13D Page 22 of 27 Pages
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if ECD shall have furnished any
amendments or supplements thereto), or are caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, that ECD shall not be liable for Damages to any Holder
under this Section 6(a) to the extent that any such Damages (i) arise out of or
are based upon any such untrue statement or omission which is based upon
information relating to such Holder furnished in writing to ECD by such Holder
expressly for use in any such Registration Statement (or any amendment thereto)
or Prospectus (or amendment or supplement thereto); or (ii) were caused by the
fact that such Holder sold Securities to a Person as to whom it shall be
established that there was not sent or given, or deemed sent or given pursuant
to Rule 153 under the Securities Act, at the time of or prior to the written
confirmation of such sale, a copy of the Prospectus as then amended or
supplemented if, and only if, (a) ECD has previously furnished copies of such
amended or supplemented Prospectus to such Holder and (b) such Damages were
caused by any untrue statement or omission or alleged untrue statement or
omission contained in the Prospectus so delivered which was corrected in such
amended or supplemented Prospectus. In connection with an underwritten offering,
ECD will indemnify the underwriters thereof, their officers and directors and
each Person who controls such underwriters (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act) to the same extent
as provided above with respect to the indemnification of the Holders of
Registrable Securities except with respect to information provided by the
underwriter specifically for inclusion therein.
(b) Indemnification by the Holders. Each Holder agrees,
severally and not jointly, to indemnify and hold harmless ECD, its directors and
officers and each Person, if any, who controls ECD within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against all Damages to the same extent as the foregoing indemnity from ECD to
such Holder, but only to the extent such Damages arise out of or are based upon
any untrue statement of a material fact contained in any Registration Statement
(or any amendment thereto) or Prospectus (or any amendment or supplement
thereto) or are caused by any omission to state therein a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, which untrue statement or omission is
based upon information relating to such Holder furnished in writing to ECD by
such Holder expressly for use in any such Registration Statement (or any
amendment thereto) or any such Prospectus (or any amendment or supplement
thereto); provided, that such Holder shall not be obligated to provide such
indemnity to the extent that such Damages result from the failure of ECD to
promptly amend or take action to correct or supplement any such Registration
Statement or Prospectus on the basis of corrected or supplemental information
furnished in writing to ECD by such Holder expressly for such purpose. In no
event shall the liability of any Holder of Registrable Securities hereunder be
greater in amount than the amount of the proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation.
(c) Indemnification Procedures. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to either paragraph
(a) or (b) of this Section 6, such Person (the
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CUSIP No. 292659109 13D Page 23 of 27 Pages
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceedings
and shall pay the fees and disbursements of such counsel relating to such
proceeding. The failure of an indemnified party to notify the indemnifying party
with respect to a particular proceeding shall not relieve the indemnifying party
from any obligation or liability (i) which it may have pursuant to this
Agreement if the indemnifying party is not materially prejudiced by such failure
to so notify it or (ii) which it may otherwise have pursuant to this Agreement.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, or (ii) the
indemnifying party fails promptly to assume the defense of such proceeding or
fails to employ counsel reasonably satisfactory to such indemnified party, or
(iii) (A) the named parties to any such proceeding (including any impleaded
parties) include both such indemnified party or an Affiliate of such indemnified
party and any indemnifying party or an Affiliate of such indemnifying party, (B)
there may be one or more defenses available to such indemnified party or any
Affiliate of such indemnified party that are different from or additional to
those available to any indemnifying party or any Affiliate of any indemnifying
party and (C) such indemnified party shall have been advised by such counsel
that there may exist a conflict of interest between or among such indemnified
party or any Affiliate of such indemnified party and such indemnifying party or
any Affiliate of such indemnifying party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel of its choice 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, it being
understood, however, that unless there exists a conflict among indemnified
parties, the indemnifying parties shall not, in connection with any one such
proceeding or separate but substantially similar or related proceedings in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such indemnified
parties. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify each indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of each indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is a party, and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on all claims that are the subject
matter of such proceeding with no payment by such indemnified party of
consideration in connection with such settlement.
(d) Contribution. If the indemnification from the indemnifying
party provided for in this Section 6 is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an indemnified party
hereunder or insufficient in respect of any Damages incurred by such indemnified
party, then each indemnifying party, in lieu of indemnifying such indemnified
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CUSIP No. 292659109 13D Page 24 of 27 Pages
party, shall contribute to the Damages paid or payable by such indemnified party
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified parties in connection with the actions or
omissions that resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action or omission in question, including any untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact,
has been made by, or relates to information supplied by, such indemnifying party
or indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Damages referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section 6, any legal or other expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section
6(d) were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
6(d), no underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities underwritten
by it and distributed to the public were offered to the public (less any
underwriting discounts or commissions) exceeds the amount of any damages which
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no selling Holder
shall be required to contribute any amount in excess of the amount by which the
total net proceeds received by such selling Holder with respect to Registrable
Securities sold by such selling Holder exceeds the amount of any damages which
such selling Holder has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. Each
Holder's obligation to contribute pursuant to this Section 6(d) is several and
not joint and shall be determined by reference to the proportion that the
proceeds of the offering received by such Holder bears to the total proceeds of
the offering received by all the Holders. 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 remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any indemnified party at law or in equity.
Notwithstanding the foregoing, if indemnification is
available under paragraph (a) or (b) of this Section 6, the indemnifying parties
shall indemnify each indemnified party to the full extent provided in such
paragraphs without regard to the relative fault of said indemnifying party or
indemnified party or any other equitable consideration provided for in this
Section 6(d).
Section 7. Rule 144. ECD covenants that it will file any
reports required to be filed by it under the Securities Act and the Exchange
Act, and the rules and regulations adopted by the Commission thereunder (or, if
ECD is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit
sales of the
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CUSIP No. 292659109 13D Page 25 of 27 Pages
Registrable Securities under Rules 144 and 144A under the Securities Act), and
it will take such further action as any Holder may request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rules 144 and 144A under the Securities Act, as such
Rules may be amended from time to time, or (b) any successor rule or similar
provision or regulation hereafter adopted by the Commission. Upon the request of
any Holder, ECD will deliver to such Holder a written statement as to whether it
has complied with such requirements.
Section 8. Miscellaneous.
(a) No Inconsistent Agreements. ECD represents and warrants to
Canon that it has not entered into, and ECD agrees with Canon that on or after
the date of this Agreement it will not enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. ECD further
represents and warrants to Canon that the rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of ECD's other issued and outstanding securities
under any such agreements.
(b) 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 ECD has obtained the written consent of Holders of at
least a majority in interest of the outstanding Registrable Securities affected
by such amendment, modification, supplement, waiver or consent; provided, that,
no amendment, modification, supplement, waiver or consent to any departure from
the provisions of Sections 5 hereof or 6 (other than any immaterial amendment,
modification, supplement, waiver or consent) shall be effective as against any
Holder of Registrable Securities unless consented to in writing by such Holder.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties hereto, including, without limitation and without the need for an
express assignment, subsequent Holders. If any transferee of any Holder shall
acquire Registrable Securities in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities such
person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement and such person shall be
entitled to receive the benefits hereof.
(d) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(e) Further Assurances. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this
<PAGE>
CUSIP No. 292659109 13D Page 26 of 27 Pages
Agreement and the transactions contemplated hereby.
(f) Remedies. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law, including, and notwithstanding Section 6(g)(iii) of the Stock
Purchase Agreement, the right to bring claims for special, indirect,
consequential and punitive damages. The parties agree that the provisions of
this Agreement shall be specifically enforceable, it being agreed by the parties
that remedies at law for violations hereof, including monetary damages, are
inadequate and that the right to object in any action for specific performance
or injunctive relief hereunder on the basis that a remedy at law would be
adequate is waived.
(g) Entire Agreement. This Agreement sets forth the entire
understanding among the parties relating to the subject matter hereof.
(h) Severability. If any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired; provided, that in such case the parties shall use their best efforts
to achieve the purpose of the invalid provision.
(i) Governing Law. This Agreement and all actions contemplated
hereby shall be governed by and construed and enforced in accordance with the
laws of the State of New York, U.S.A., without regard to principles of conflicts
of laws.
(j) Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and delivered personally, by
facsimile or by certified or registered mail, return receipt requested, as
follows:
If to Canon: Canon Inc.
30-2, Shimomaruko 3-chome
Ohta-ku
Tokyo 146-8501, Japan
Attn: Corporate Strategy & Development
Headquarters
Facsimile No.: 81-3-5482-5141
with a copy to: Canon U.S.A., Inc.
One Canon Plaza
Lake Success, New York 11042
U.S.A.
Attn: Seymour Liebman, Esq.
Facsimile No.: (516) 328-5193
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CUSIP No. 292659109 13D Page 27 of 27 Pages
If to ECD: Energy Conversion Devices, Inc.
1675 West Maple Road
Troy, Michigan 48084
U.S.A.
Attn: President
Facsimile No.: (313) 280-1456
or to such other address as the party to receive such notice may designate by
written notice to the other parties.
(k) Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CANON INC.
By: /s/ Fujio Mitarai
------------------------------------
Fujio Mitarai, President & C.E.O.
ENERGY CONVERSION
DEVICES, INC.
By: /s/ Stanford R. Ovshinsky
------------------------------------
Stanford R. Ovshinsky, President & C.E.O.
