<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 16, 1999
-----------------
SATCON TECHNOLOGY CORPORATION
----------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 001-11512 04-2857552
----------------------------------------------------------------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
161 First Street, Cambridge, Massachusetts 02142
----------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 661-0540
--------------
Not Applicable
--------------
(Former Name or Former Address, if Changed Since Last Report)
-1-
<PAGE>
Item 2 Acquisition or Disposition of Assets
On November 16, 1999, SatCon Technology Corporation (the "Registrant")
purchased certain intellectual property, equipment and other assets from
Northrop Grumman Corporation ("NGC"). These assets were used by NGC in
connection with its power electronics products business. The Registrant intends
to continue to use the acquired assets in its power electronics products
business. The Registrant also entered into (i) a sublease with NGC pursuant to
which it entered into a five-year sublease for approximately 14,863 square feet
of rentable space in the Baltimore, Maryland area and (ii) a three-year
Transition Services Agreement providing the Registrant access to certain test
facilities and personnel of NGC on a fee basis. In consideration for the
foregoing acquisition and agreements, NGC received 578,761 shares of the
Registrant's common stock, $0.01 par value per share (the "Common Stock"), and
warrants to purchase an additional 200,000 shares of the Registrant's Common
Stock. A warrant to purchase 100,000 shares of the Registrant's Common Stock was
issued by the Registrant on November 16, 1999. A second warrant to purchase
100,000 shares of the Registrant's Common Stock will be issued upon the
satisfaction by NGC of certain agreed upon conditions. The warrants each have a
term of six years and an exercise price per share of Common Stock of $9.725.
The Registrant has agreed to register for resale under the Securities Act
of 1933, as amended (the "Securities Act"), the Common Stock (i) issued in
connection with the transaction and (ii) issuable upon exercise of the warrants.
The foregoing summary description is qualified in its entirety by reference
to the definitive transaction documents, copies of which are attached as
exhibits to this Current Report on Form 8-K.
This report may contain forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended, which reflect the Registrant's current judgment on certain
issues. Because such statements apply to future events, they are subject to
risks and uncertainties that
-2-
<PAGE>
could cause the actual results to differ materially. Important factors which
could cause actual results to differ materially are described in the
Registrant's reports on Forms 10-K and 10-Q on file with the Securities and
Exchange Commission.
Item 7. Financial Statements and Exhibits
(a) Financial statements.
None
(b) Pro forma financial information.
None
(c) Exhibits.
The Exhibits to this report are listed in the Index to Exhibits
set forth on page 5 hereof.
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SATCON TECHNOLOGY CORPORATION
Date: November 22, 1999 By: /s/ David B. Eisenhaure
---------------------------------------
David B. Eisenhaure
President, Chief Executive Officer and
Chairman of the Board
-4-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- ------- -------
2.3 Asset Purchase Agreement, dated as of November 16, 1999, by and
between the Registrant and Northrop Grumman Corporation.
3.1(1) Certificate of Incorporation of the Registrant.
3.2(1) Bylaws of the Registrant.
3.3(2) Certificate of Amendment of Certificate of Incorporation of the
Registrant, as filed with the Secretary of State of the State of
Delaware on May 12, 1997.
3.4(2) Bylaws Amendment of the Registrant.
3.5(3) Certificate of Amendment of Certificate of Incorporation of the
Registrant, as filed with the Secretary of State of the State of
Delaware on March 17, 1999.
3.6(3) Certificate of Designation of Series and Statement of Variations of
Relative Rights, Preferences and Limitations of Preferred Stock, dated
as of August 25, 1999, relating to the Registrant's Series A
Preferred Stock.
10.33 Sublease, dated November 16, 1999, between the Registrant and Northrop
Grumman Corporation.
10.34 Transition Services Agreement, dated as of November 16, 1999, between
the Registrant and Northrop Grumman Corporation.
10.35 Memorandum of Understanding, entered into on November 16, 1999,
between the Registrant and Northrop Grumman Corporation.
10.36 Registration Rights Agreement, dated as of November 16, 1999, by and
between the Registrant and Northrop Grumman Corporation.
10.37 Form of Stock Purchase Warrant issued on November 16, 1999 by the
Registrant to Northrop Grumman Corporation.
10.38 Form of Stock Purchase Warrant to be issued to Northrop Grumman
Corporation upon the satisfaction of certain conditions.
_______________
(1) Incorporated by reference to Exhibits to the on Registrant's Registration
Statement on Form S-1 (File No. 33-49286).
(2) Incorporated by reference to Exhibits to the Registrant's Quarterly Report
on Form 10-Q for the period ended March 31, 1997.
(3) Incorporated by reference to Exhibits to the Registrant's Current Report on
Form 8-K dated August 25, 1999.
-5-
<PAGE>
EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
by and between
SATCON TECHNOLOGY CORPORATION
and
NORTHROP GRUMMAN CORPORATION
Dated as of
November 16, 1999
<PAGE>
THIS ASSET PURCHASE AGREEMENT ("Agreement"), dated as of November 16, 1999,
by and between SATCON TECHNOLOGY CORPORATION, a Delaware corporation
("Purchaser") and NORTHROP GRUMMAN CORPORATION, a Delaware corporation
("Seller").
RECITALS
Seller owns patented and other specified and unspecified intellectual
property rights, certain contracts and related equipment and owns or is the
licensee of certain software required to carry out the work to be performed
under such contracts and has performed to date under the contracts listed in
Exhibit A, all in connection with its Power Electronics Products Business,
previously known as Seller's Electric Vehicle Group, which produces power
electronics, controllers and motors for electric and hybrid vehicle powertrains,
microturbine power generation and energy storage products (the "Business").
Seller desires to sell to Purchaser, and Purchaser desires to purchase from
Seller, the contracts and bid and proposal offers set forth in Exhibit A
("Contracts"), the accounts receivable, prepaid expenses and advance payments,
if any, set forth in Exhibit AA ("Financial Assets"), the equipment, and other
assets located in the Workspace as defined in the Transition Services Agreement
annexed hereto and as set forth in Exhibit B ("Equipment"), the raw material,
work in process and finished goods listed in Exhibit C ( "Inventory"), the
intellectual property used in the business set forth in Exhibit D (
"Intellectual Property")the designs, specifications drawings, bills of
materials, production lines and processes, shop configurations, instructions,
warnings, repair and maintenance procedures and the like as described in Exhibit
DD ("Process Related Property"), ,") the owned software listed in Exhibit E,
("Owned Software"), the customer lists, prospects, books, records, and purchase
orders listed in Exhibit F ("Other Intangible Assets") and Seller and Purchaser
also desire to license or sublicense the software set forth in Exhibit G
("Licensed Software") (all of the foregoing ,collectively, the "Assets") on the
terms, conditions, restrictions, licenses and reservations hereinafter set
forth. To the extent that any intangible property rights, other than the
Intellectual Property, arise from or relate exclusively to the activities of the
Business as conducted heretofore and to the date hereof or to the Intellectual
Property exist and are owned or licensed to Seller, such intangible property are
included in the Assets transferred or sublicensed hereunder. Intangible
property rights including intellectual property rights and those rights
described in Section 1.1(j) that have been used in and are necessary to the
products and services of the Business as conducted heretofore but that also
relate to business, assets or products of Seller that are not transferred to
Purchaser by this Agreement shall be available to Purchaser pursuant to an
unrestricted, worldwide, perpetual, irrevocable, royalty-free, fully paid up,
non-exclusive license from Seller which shall also be assignable and under which
SatCon can freely grant sublicenses and Seller hereby grants such right and
license. However, in no event does the Purchaser obtain the right within this
Agreement to sublicense or assign intangible property rights including
intellectual property for any other use than as used in the Business as defined.
1
<PAGE>
AGREEMENT
Now, therefore, Purchaser and Seller hereby agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Purchased Assets. In reliance upon the representations,
warranties and agreements herein contained and upon the terms and subject
to the conditions set forth in this Agreement, Seller hereby agrees to sell
(except that it agrees to license or sublicense to the extent of Seller's
right to sublicense Licensed Software or that of a Licensee), assign,
transfer, convey and deliver to Purchaser, and Purchaser hereby agrees to
purchase and acquire from Seller, on the Closing Date, all of Seller's
right, title and interest in and to the Assets described in Exhibits A, AA,
B, C, D (as and to the extent provided herein), DD, E, F and G attached
hereto, which Assets include:
(a) The Contracts listed and described in Exhibit A, and all
books and records relating to the Contracts, including attendant
vendor files, invoices with supporting documentation, business and
technical records, and correspondence, including the executory portion
of any and all sales orders, bids and quotations as set forth in
Exhibit A;
(b) Equipment- All equipment described in the attached Exhibit B;
(c) The Inventory- All raw materials, work in process and
finished goods listed and described in attached Exhibit C;
(d) (i) Licenses and permits used in the Business, the
Intellectual Property (set forth on Exhibit D) and trade secrets and
intangible property used exclusively in the Business (provided however
that to the extent any such Intellectual Property, unspecified
intellectual property rights and all other specific items referred to
in this Section 1.1(d)(i) and the items described in Section 1.1(d)
(ii) are used or usable by Seller in any respect other than in
connection with the Business or any business of Seller involving
Governmental Customers as defined below), Purchaser agrees to grant,
and does hereby grant back to Seller and Seller hereby accepts from
Purchaser a nonexclusive irrevocable, perpetual, royalty-free,
worldwide right and license -to-use such Intellectual Property for
products and/or services provided by Seller solely to Governmental
Customers ("Governmental Customers" shall mean any office, department,
agency or instrumentability of (i) the government of the United
States, (ii) any foreign government (iii) any state, country or local
government or governmental subdivision, or (iv) any state or political
subdivision of any foreign country)) including: a) all applications
for patents; b) patent disclosures; c) proprietary trade secrets and
know-how; d) any rights which Seller has with respect to potentially
patentable technology and other items on which any persons employed in
the Business have worked during and arising out of their employment
with Business for which patent applications have not yet been filed
but
2
<PAGE>
disclosures have been made to Seller's cognizant patent committee; e)
design rights relating to the Business; f) domain name of the
Business, if any; g)trademarks and trade names issued and pending
relating exclusively to the Business; source code, if any, used
exclusively in the Business: h) brochures, videos and websites, if
any, exclusively of the Business, but in all cases only those items in
subsections (d)(i) (c) through (h) that arise solely from or are used
exclusively in the Business are considered Assets as such term is used
in this Agreement; any intangible property rights including those
described in clauses (a) through (h) above that have been used in and
are necessary to the products and services of the Business as
conducted heretofore but that also relate to business, assets or
products of Seller that are not transferred outright to Purchaser by
this Agreement are hereby available to Purchaser pursuant to a
royalty-free, non-exclusive license from Seller and Seller agrees to
grant and does hereby grant to Purchaser, and Purchaser hereby accepts
from Seller, an unrestricted non-exclusive, irrevocable, perpetual,
fully paid up royalty-free, worldwide right and license to such
intangible property (which rights shall be assignable and include the
right to freely sublicense) including, not by way of limitation,
rights relating to Patent Disclosure BD-96-189 entitled "A High Power,
Low Disturbance Electronic Circuit Assembly". However, in no event
does the Purchaser obtain the right within this Agreement to
sublicense or assign intangible property rights including intellectual
property for any other use than as used in the Business as defined.
(d) (ii) All the designs, specifications drawings, bills of
materials, production lines and processes, shop configurations,
instructions, warnings, repair and maintenance procedures,
manufacturing database and the like as listed and described in Exhibit
DD, provided, however, that with respect to any item appearing in
-----------------
Exhibit DD that has or can have application to any process involving
Excluded Assets or any business of Seller involving Governmental
Customers, Seller retains the right to use, employ, sell, license,
sublicense or otherwise transfer or utilize such item in connection
with products or services provided to Governmental Customers in
Seller's sole discretion, subject only to the restrictions of Section
4.4 of this Agreement;
(e) The Owned Software listed in Exhibit E;
(f) The Other Intangible Assets listed in Exhibit F
(g) Licensed Software listed in Exhibit G, but only as and to
the extent provided in Section 2.11 of this Agreement.
(h) The worldwide, perpetual, irrevocable, freely assignable,
fully paid up, unrestricted royalty-free, non-exclusive license (with
the right to freely sublicense and assign) to the intangible property
rights that have been used in and are necessary to the products and
services of the Business as they have been produced or provided to the
date of this Agreement. However, in no event does the Pur-
3
<PAGE>
chaser obtain the right within this Agreement to sublicense or assign
intangible property rights including intellectual property for any
other use than as used in the Business as defined.
(i) Reserved
(j) The so called "Blue Bird" assets are included in the Assets.
1.2 Excluded Assets.
(i) Except as set forth in this Agreement and any related
agreement, Purchaser shall not acquire by reason of this Agreement any
right, title or interest in or to any assets owned, leased or
otherwise used by Seller or on which any persons employed in the
Business have worked during their employment with Seller other than in
the Business. Business related licenses, software, and other such
intellectual property, related or integral to those Assets described
in this Agreement and its Exhibits, and which are reasonably necessary
for Purchaser to conduct the on-going business of the Business shall,
subject to National Security Regulations be made available to
Purchaser by Seller pursuant to license as provided in Section
1.1(d)(i) and (ii) above. If and to the extent Excluded Assets owned
by Seller have been used in the Business as heretofore conducted,
Seller shall make such assets available to the extent practicable to
Purchaser and Purchaser shall reimburse Seller for Seller's actual
costs of providing such items and/or services to Purchaser.
(ii) Silicon Carbide Technology. The assets, intellectual
property and technology related to the Silicon Carbide Technology are
not contemplated in this transaction and will not be transferred or
licensed to Purchaser. To the extent Seller offers silicon carbide
products for sale to the public, Purchaser shall be entitled to
purchase such silicon carbide products on the most favorable terms and
conditions, including price, as Seller provides from time to time for
identical products in identical quantities to others.
1.3(a) Liabilities Not Assumed by Purchaser.
(i) Except as otherwise provided in this Agreement, Purchaser is
not assuming any obligations or liabilities of Seller, or any
subsidiary thereof, notwithstanding that Seller makes certain
representations and warranties with respect to such obligations or
liabilities. All of such obligations and liabilities that are not
specifically assumed by Purchaser pursuant to this Agreement are
hereinafter referred to as "Retained Liabilities". "Retained
Liabilities" shall include, without limitation all liabilities
relating in any way to the Excluded Assets and all liabilities and
obligations arising prior to or with respect to the time period prior
to the Closing Date including without limitation under the Master
Lease which is an Exhibit to the Transition Services Agreement.
4
<PAGE>
(ii) Blue Bird Corporation Litigation. Purchaser and Seller
acknowledge the existence of a contractual dispute and litigation
between Seller and Blue Bird Corporation related to contract #FHB-5019
dated May 2, 1995 between Blue Bird Corporation and Northrop Grumman
Corporation. Purchaser does not assume any liability for such
litigation, but Purchaser shall reasonably cooperate with Seller and
assist Seller in the dispute and litigation with Blue Bird. Purchaser
will make reasonably available any of the Assets which are transferred
to the Purchaser by this agreement and will make its employees
reasonably available for depositions, settlement conferences, and
court appearances. Purchaser will be reimbursed for its actual costs
and expenses, including salary reimbursement, of making such employees
available for this purpose.
(b) Liabilities Assumed by Purchaser. As part consideration for this
transaction based on the representations of Seller in Section 2.6
hereof, Purchaser agrees to assume and discharge all obligations under
the Contracts in Exhibit A, which under such Contracts are to be
performed or discharged subsequent to the Closing Date.
1.4 Closing. The Closing of such sale and purchase (the "Closing")
shall take place on November 16, 1999 or such earlier or later date as the
parties hereto shall agree in writing (the "Closing Date") at the offices
of Seller, located at Linthicum, MD, or at such other place as the parties
hereto shall agree in writing. At the Closing, Seller shall deliver to
Purchaser a duly prepared Bill of Sale in accordance with Exhibit H hereto
with respect to the Assets. In consideration and exchange for the Assets,
Purchaser shall simultaneously pay to Seller the Purchase Price as provided
in Section 1.5.
1.5 Purchase Price; Manner of Payment. At Closing Purchaser will
deliver to Seller Shares of Common Stock of the Purchaser equal to
$4,905,000 divided by the average of the closing prices for Purchaser's
Common Stock as reported on the NASDAQ Composite Transactions reporting
system for the ten (10) business days immediately prior to the Closing
date. For example, if the average closing price of Purchaser's Common
Stock during the ten day period is $8.75, the Purchaser would deliver
577,058 shares to Seller at the Closing ($4,905,000 divided by $8.75).
The Shares will be restricted securities and will bear a legend reflecting
such restriction. Purchaser agrees to file a registration statement with
respect to the resale of such shares of Common Stock by Seller, at
Purchaser's cost and expense, as provided herein and in the Registration
Rights Agreement annexed hereto.
1.6 Warrants. At closing Purchaser will deliver to Seller warrant to
purchase 100,000 shares of Common Stock of Purchaser and if the conditions
in Schedule 1.6 incorporated herein by reference are fulfilled within 18
months of the date of this Agreement, purchaser shall deliver to Seller
promptly upon Seller certifying to Purchaser that the conditions set forth
in Schedule 1.6 have been satisfied and Purchaser has received the assets
therein specified, immediately upon such fulfillment, warrants to purchase
an addi-
5
<PAGE>
tional 100,000 shares of Common Stock of Purchaser. The exercise price per
share of all such warrants shall be equal to the average of the closing
prices for Purchaser's Common Stock as reported on the NASDAQ Composite
Transactions reporting system for the ten (10) business days immediately
prior to the Closing Date plus $1.25 and the warrants shall provide for an
exercise period through December 31, 2006. Such warrants shall be
represented by two (2) certificates each in the form of the Warrant
Certificate annexed hereto and the shares subject to such warrants shall
upon issuance be entitled to the benefits of the Registration Rights
Agreement annexed hereto.
1.7 Allocation of Purchase Price. Seller and Purchaser shall
mutually agree to the allocation of the Purchase Price specified in Section
1.5 among the Assets in accordance with Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code"), within seventy-five (75)
days following the Closing Date. Each of the Parties agrees to report this
transaction for tax purposes in accordance with such allocation of the
Purchase Price, including, without limitation, for all purposes on any
Federal or state income or franchise tax return filed by either Party after
the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
2.1 Corporate Organization and Authority. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority (corporate and
other) to own its properties and assets and to conduct its business as now
being conducted, including the power to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the performance of Seller's obligations hereunder have been
duly authorized and no other corporate proceedings on the part of Seller
are necessary to authorize such execution, delivery and performance. This
Agreement has been duly executed by Seller and is the valid and legally
binding obligation of Seller, enforceable against Seller in accordance with
its terms.
2.2 Qualification. Seller is qualified or otherwise authorized as a
foreign corporation to transact business and is in good standing as such in
each jurisdiction in which the conduct of its business so requires, except
where the failure to be so qualified will not have a material adverse
effect on Seller.
2.3 No Violation. Seller has the requisite corporate power to enter
into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by delegated
authority from the Seller's Board of Directors and no other corporate
proceedings on the part of Seller are necessary to authorize this Agreement
and the transactions contemplated hereby. This Agreement is a valid and
binding obligation of Seller enforceable in accordance with its terms. The
execution, delivery and performance
6
<PAGE>
by Seller of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) violate, conflict with or
result in the breach of any provision of the charter documents or by-laws
of Seller; (ii) violate, conflict with or result in a material breach of
any of the terms, or result in a material modification of, or otherwise
give any other contracting party the right to terminate, or constitute (or
with notice or lapse of time or both constitute) a default under, any
instrument, contract or other agreement to which Seller is a party, or by
or to which Seller's assets or properties may be bound or subject ; (iii)
violate any order, writ, judgment, injunction, award or decree of any
federal, state, local or foreign court, arbitrator or governmental or
regulatory body against, or binding upon Seller or upon the assets of
Seller; (iv) violate any statute, law or regulation of any governmental or
regulatory body, which violation would have a material adverse effect
thereto, other than to the extent any violation of such federal, state,
local or foreign laws, regulations, orders or other legal requirements
would have an immaterial effect, either singly or in the aggregate, on the
Business, Purchaser or Purchaser's ability to utilize the Assets in the
conduct of the Business following the Closing.; (v) result in the creation
or imposition of any lien, charge or encumbrance of any nature or
description upon any of the properties, assets or businesses of Seller; or
(vi) violate or result in the modification, revocation or suspension of any
transferable applicable licenses, if any, that are a portion of the Assets.
2.4 Compliance with Laws. The performance of the Contracts and the
Business to date have been conducted in accordance with all federal, state,
local or foreign laws, regulations, orders and other legal requirements
applicable thereto, other than to the extent any violation of such federal,
state, local or foreign laws, regulations, orders or other legal
requirements would have an immaterial effect, either singly or in the
aggregate, on the Business, Purchaser or Purchaser's ability to utilize the
assets in the conduct of the Business following the Closing.
2.5 Liens; Tax Matters. Seller represents and warrants to Purchaser
that except as disclosed in Schedule 2.5, Seller will transfer, and
Purchaser will receive title to the Assets free and clear of all liens,
security interests, claims, charges, encumbrances or title defects of
whatever nature or description. Purchaser and Seller shall each pay one-
half of any and all transfer or use taxes or other local taxes assessed and
payable as a consequence of the Closing of this transaction. To the extent
Seller or Purchaser is legally obligated to pay any of the transfer or use
taxes as a result of the Closing of this transaction ,the Party that in
fact pays such taxes shall be reimbursed by the other Party for one-half of
such payment within thirty (30) days of receipt of evidence of payment by
the Party that in fact made the required payment. All taxes applicable to
the Business and lawfully payable by the Seller with respect to all periods
prior to and through the Closing Date will be duly and properly computed,
reported, fully paid and discharged, and there are no unpaid taxes with
respect to any period prior to the Closing Date which are or could become a
lien on the Assets, except for current taxes not yet payable which taxes
shall be timely paid by Seller.
7
<PAGE>
2.6 Absence of Undisclosed Liabilities.
(a) At the Closing Date, there are no obligations or liabilities
arising from or relating to the Contracts except for performance
pursuant to the terms and conditions of such Contracts required after
the Closing Date and the obligations formed upon the acceptance by the
recipients of the outstanding bid and proposal offers included on
Exhibit A.
(b) Except as set forth on Schedule 2.6 attached hereto:
(i) each Contract is a valid and binding agreement of the
Seller, enforceable against the Seller in accordance with its
terms, and the Seller does not have any knowledge that any
Contract is not a valid and binding agreement of the other
parties thereto;
(ii) the Seller has fulfilled all material obligations
required pursuant to the Contracts to have been performed by the
Seller on its part prior to the date hereof, and the Seller has
no reason to believe that it would not be able to fulfill, when
due, all of its obligations under the Contracts which remain to
be performed after the date hereof;
(iii) the Seller is not in breach of or default under any
Contract, and no event has occurred which with the passage of
time or giving of notice or both would constitute such a default,
result in a loss of rights or result in the creation of any lien,
charge or encumbrance, thereunder or pursuant thereto;
(iv) to the best knowledge of the Seller, there is no
existing breach or default by any other party to any Contract,
and no event has occurred which with the passage of time or
giving of notice or both would constitute a default by such other
party, result in a loss of rights or result in the creation of
any lien, charge or encumbrance thereunder or pursuant thereto;
(v) the Seller is not restricted by any Contract relating
to the Business from carrying on its business anywhere in the
world;
(vi) the Seller has with respect to the Business no written
or oral Contracts to sell products or perform services which are
expected to be performed at, or to result in, a loss; and
(vii) the continuation, validity and effectiveness of each
Contract will not be affected by the transfer thereof to
Purchaser under this Agreement, and all such Contracts are
assignable to Purchaser without a consent
8
<PAGE>
or Purchaser will be entitled to the economic benefit thereof as
provided in Section 4.2(d) of this Agreement..
2.7 Tangible Personal Property. "Tangible Personal Property" means
the Equipment, the Inventory, and other tangible personal property located
in the Workspace as defined in the Transition Services Agreement used by
the Business to perform the Contracts and owned by Seller. All items of
Tangible Personal Property pertaining to the performance of the Contracts
are owned by Seller and are free and clear of all liens, security
interests, claims, charges, encumbrances or title defects of whatever
nature or description.
2.8 Licenses and Permits. The Seller has all requisite licenses,
permits and certificates, including environmental, health and safety
permits, from federal, state and local authorities necessary to conduct the
Business and own and operate the Assets (collectively, the "Permits").
Except as disclosed on Schedule 2.8, the Seller is not in violation of any
law, regulation or ordinance (including, without limitation, laws,
regulations or ordinances relating to building, zoning, environmental,
disposal of hazardous substances, land use or similar matters) relating to
its properties, the violation of which could have a material adverse effect
on the Business, the Assets or the Purchaser. The Business of the Seller
does not violate, in any material respect, any federal, state, local or
foreign laws, regulations or orders (including, but not limited to, any of
the foregoing relating to employment discrimination, occupational safety,
environmental protection, hazardous waste (as defined in the Resource
Conservation and Recovery Act, as amended, and the regulations adopted
pursuant thereto), conservation, or corrupt practices, the enforcement of
which would have a material and adverse effect on the results of
operations, condition (financial or otherwise), assets, properties,
business or prospects of the Business, the Assets or the Purchaser. Except
as set forth on Schedule 2.8 attached hereto, the Seller has not since
January 1, 1996 received any notice or communication from any federal,
state or local governmental or regulatory authority or otherwise of any
such violation or noncompliance with respect to the Business or the
Assets.
2.9 Title to, and Sufficiency of, the Assets. Except as otherwise
noted on Schedule 2.9 hereto, Seller holds and owns full, unconditional,
good and marketable title to all of the Assets free and clear of all liens,
security interests, claims, charges, encumbrances or title defects of
whatever nature or description. The Assets are sufficient to perform the
work-orders heretofore or currently placed with the Business, but no
representation or warranty is expressed and none is implied, with respect
to the ability of Purchaser to achieve profitable production of any item
produced by the Business heretofore without adding additional assets, it
being expressly understood by Purchaser that the Business has been
conducted primarily as a prototyping and pre-production design facility.
2.10 Customers and Suppliers. With respect to the Contracts, none of
the customers or suppliers of Seller to Seller's knowledge has threatened
to terminate or change significantly its relationship with the Business on
or after the Closing Date; Seller has not granted any unusual credit or
other sales terms to customers or others; and, all customer
9
<PAGE>
orders for Products of the Contracts are bona fide and have been entered
into at arm's length in the ordinary course of business.
2.11 Software. Exhibits E and G contain a complete and correct list
of all significant application software, information systems or computer
programs used directly in the performance of the Contracts or by the
Business (collectively the "Software"). Seller is the owner of all of the
Software set forth in Exhibit E and agrees to transfer it to Purchaser.
Seller is the licensee or is otherwise entitled to use the Software set
forth in Exhibit G, and to the extent, and only to the extent, if any, that
it is able so to do, shall transfer the license or shall sublicense such
Software to Purchaser without cost for the term of such license or
sublicense; if Seller is unable to transfer or sublicense any software,
Seller shall enter into a commercially reasonable relationship to provide
Purchaser with the economic benefit of a transfer or sublicense without
additional cost or other burden to or Purchaser. Seller will deliver to
Purchaser true and complete copies of all licenses, leases and purchase
agreements related to any such Software where such licenses, leases and/or
agreements are necessary to the Purchaser's use of such Software. Seller
has no knowledge of any violation of trade secret rights or copyrights with
respect to such Software. Such software is the Software used by the Group
to perform its work. To the extent Purchaser chooses to utilize such
Software subsequent to the Closing, Purchaser will be responsible for any
recurring license fees or maintenance agreements relating to the Software
that are due after Closing (and there will be no apportionment thereof).
2.12 Suits. There is no suit, action, claim, investigation or
inquiry by any person or entity or any administrative agency or
governmental body and no legal, administrative or arbitration proceeding
pending or, to Seller's knowledge, threatened against Seller or any
affiliate Seller, or which should be reasonably known or expected by
Seller, which has or will materially affect Seller's ability to consummate
the transactions contemplated herein.
2.13 Acquisition or Disposition of Assets. There have been no
material acquisitions or dispositions of the assets of the Business by
Seller prior to the Closing Date other than in the ordinary course of
business.
2.14 Product Warranties; Infringement. Except as set forth on
Schedule 2.14 attached hereto, the Seller has not received notice of any
litigation, warranty claim or products liability claims relating to the
Business or the Assets. No claims exist that any products produced or
designed by the business through the date of this Agreement infringe upon
the patents or protected trade secrets of third parties, and there is no
basis for any such claims of infringement. The Inventory, the Intellectual
Property and the other Assets are the Assets used in the Business to the
date hereof, and have been adequate to conduct the Business as conducted to
the date hereof. As indicated in Section 2.9, no assurance is or can be
given that Purchaser will not be required to acquire other assets in order
to achieve profitable production of products. To the extent that any
intangible property rights other than the Intellectual Property, arise from
or relate exclusively to the activities of the Business as conducted
heretofore and to the date hereof exist and are
10
<PAGE>
owned by or licensed to Seller, such intangible property rights are
included in the Assets transferred or sublicensed hereunder. Seller has
received no notice of, has no knowledge of any basis for and believes there
is no basis for, a claim against it that any of the operations, activities
and products of the Business infringe on any patent, trademark, trade name,
copyright or other property right of a third party, or that it is illegally
or otherwise using the trade secrets, formulae or any property rights of
others. Seller has no disputes with or claims against any third party for
infringement by such third party of any Intellectual property of the
Seller. The Seller has taken all steps reasonably necessary in its opinion
to protect its right, title and interest in and to any intangible property
transferred hereunder. Seller owns all legal rights in the patents and
patent applications listed in Exhibit D, but Seller has not recorded an
assignment with respect to the foreign patents and applications that were
acquired from Westinghouse Electric Corporation. Seller will cooperate with
Buyer, and take such reasonable steps as are necessary, at Buyer's cost, to
cause all such foreign patents and patent applications to be filed in the
proper filing offices to perfect registration thereof.
2.15 Inventory. Exhibit C attached hereto sets forth a true and
correct list of all inventories of raw materials, work in process, finished
goods, maintenance supplies spare parts and similar items of the Business
(collectively, "Inventory") as of the date hereof, and such Inventory is of
a quality and quantity as Seller has used and such inventory is useable and
saleable in the ordinary course of the conduct of the Business.
2.16 Environmental. The Seller is not and has not been in violation
of any law, regulation or ordinance (including, without limitation, laws,
regulations or ordinances relating to building, zoning, environmental,
disposal of hazardous substances, land use or similar matters) relating to
the Business or the real estate being subleased to the Purchaser on even
date herewith. The Business does not and has not violated, in any material
respect, any federal, state, local or foreign laws, regulations or orders
relating to environmental protection and hazardous waste (as defined in the
Resource Conservation and Recovery Act, as amended, and the regulations
adopted pursuant thereto), the enforcement of which would have a material
and adverse effect on the results of operations, condition (financial or
otherwise), assets, properties, business or prospects of the Business or
the Purchaser.
2.17 Acquired Assets Complete. The Assets (other than with respect
to inventory for products) are, when utilized by a labor force
substantially similar to that historically employed by the Seller in the
Business, adequate to conduct the business operations currently and
previously conducted by the Business to the extent provided in Section 2.9
of this Agreement.
2.18 Assets. Schedule 2.18 attached hereto sets forth a true,
correct and complete list of all claims, liabilities, liens, pledges,
charges, encumbrances and equities of any kind affecting the Assets
(collectively, the "Encumbrances"). The Seller is, and at the Closing will
be, the true and lawful owner of the Assets, and will have the right to
sell and transfer to the Purchaser good, clear, record and marketable title
to the Assets, free and
11
<PAGE>
clear of all Encumbrances of any kind, except as set forth on Schedule 2.18
attached hereto (the "Permitted Encumbrances") or as set forth on Schedule
2.18 attached hereto (the "Permitted Exceptions"). The delivery to the
Purchaser of the instruments of transfer of ownership contemplated by this
Agreement will vest good and marketable title to the Assets in the
Purchaser, free and clear of all liens, mortgages, pledges, security
interests, restrictions, prior assignments, encumbrances and claims of any
kind or nature whatsoever, except for the Permitted Encumbrances and the
Permitted Exceptions. At any time and from time to time after the Closing,
at the Purchaser's request and without further consideration, Seller
promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take such other action, as
Purchaser may reasonably request to more effectively transfer, convey and
assign to Purchaser, and to confirm Purchaser's title to, all of the
Assets, to put the Purchaser in actual possession and operating control
thereof, to assist the Purchaser in exercising all rights with respect
thereto and to carry out the purpose and intent of this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, warrants and agrees as follows:
3.1 Corporate Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite power and authority (corporate and
other) to own its properties and assets and to conduct its business as now
conducted.
3.2 Corporate Authority. Purchaser has the corporate power to enter
into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement, and the performance of
Purchaser's obligations hereunder, have been duly authorized and no other
corporate proceedings on the part of Purchaser are necessary to authorize
such execution, delivery and performance. This Agreement has been duly
executed by Purchaser and is the valid and legally binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
3.3 No Violation. The execution, delivery and performance by
Purchaser of this Agreement does not and will not violate any provision of
the charter documents or by-laws of Purchaser, of any agreement or
instrument to which Purchaser is a party or by which it is bound, or of any
order, judgment or decree of any court or other governmental or regulatory
authority to which Purchaser is subject.
3.4 Bulk Transfer Laws. Purchaser hereby waives compliance with the
provision of any so called bulk transfer laws of any jurisdiction in
connection with any of the transactions contemplated herein, to the extent
that failure to comply with any such law imposes an obligation or charge
upon any of the Assets, Purchaser reserves the right to claim full
indemnification and to be held harmless by Seller from such claim.
12
<PAGE>
3.5 Suits. There is no suit, action, claim, investigation or inquiry
by any person or entity or any administrative agency or governmental body
and no legal, administrative or arbitration proceeding pending or, to
Purchaser's knowledge threatened against Purchaser or any affiliate of
Purchaser which has or will materially affect Purchaser's ability to
consummate the transactions contemplated herein.
3.6 Inspection; Knowledge. Purchaser represents and warrants that it
is knowledgeable with respect to and is thoroughly familiar with the
operations and business to which the Assets relate, and that it has caused
its employees and/or agents to examine or review the Assets. Purchaser
represents and warrants that the terms, conditions, methods and procedures
specified in Schedule 3.6 hereto govern the conditions of acceptance of the
Assets and the Business to the same extent as if set out in full herein.
This Section 3.6 shall survive the Closing indefinitely
4. COVENANTS OF SELLER
4.1 Consents and Approvals. Seller (i) shall diligently assist and
cooperate with Purchaser to obtain all necessary consents, waivers,
authorizations and approvals of all governmental and regulatory
authorities, domestic and foreign, and of all other persons, firms or
corporations required in connection with the execution, delivery and
performance by Seller of this Agreement, and (ii) shall diligently assist
and cooperate with Purchaser in preparing and filing all documents required
to be submitted by Purchaser to any governmental or regulatory authority,
domestic or foreign, in connection with such transactions and in obtaining
any governmental consents, waivers, authorizations or approvals which may
be required to be obtained by Purchaser in connection with such
transactions.
4.2 Further Assurances.
(a) Upon the request of Purchaser at any time on or after the
Closing Date, Seller will forthwith execute and deliver such further
instruments of assignment, transfer, conveyance, endorsement,
direction or authorization, other documents and records as Purchaser
or its counsel may reasonably request in order to perfect title of
Purchaser in the Assets or otherwise to effectuate the purpose of this
Agreement or for Purchaser to perform its obligations under the
Contracts.
(b) Seller shall use its best efforts to obtain all consents,
approvals, exemptions, permits, waivers and other authorizations from
third parties (including, without limitation, governmental entities),
including without limitation all necessary consents to the assignment
of all Contracts and to effect all registrations, filings and notices
with or to third parties, if any, required to be made by Seller
(including, without limitation, governmental entities) as shall be
necessary, advisable or desirable in order for the transactions
contemplated herein to be effectuated and in order for the Purchaser
after the Closing to be able to conduct the business of the Business
as it has been historically conducted by Seller prior to the Closing.
13
<PAGE>
(c) Notwithstanding Section 4.2 (b) above, but subject to the
last sentence of this Section 4.2(c), this Agreement shall not
constitute an agreement to assign any Contract, permit or other asset,
or any benefit arising thereunder or resulting therefrom, if any
attempted assignment thereof, without the consent required or
necessary for such assignment, would constitute a breach or violation
thereof or would in any way adversely affect the rights of the
Purchaser or the Seller thereunder. If such consent is not obtained,
or if any attempted assignment would be ineffective or would adversely
affect the Seller's rights thereunder so that the Purchaser would not
in fact receive substantially all of such rights, the Seller shall
cooperate in any arrangement the Purchaser may reasonably request in
writing to provide the Purchaser with the benefit of any such
Contract, permit or other asset, including enforcement for the benefit
of the Purchaser of any and all rights of the Seller against any other
party arising out of the breach or wrongful cancellation thereof by
such party. Nothing contained in this Section 4.2 (c) shall affect the
liability, if any, of the Seller pursuant to this Agreement for
failing to disclose the need for, and failing to use best efforts to
obtain, any consent, approvals, authorizations, exemptions or waivers.
(d) Until all consents, approvals and authorizations are
obtained by the Seller, as applicable, to the assignment of all
Contracts and permits to the Purchaser, the Purchaser and the Seller
shall be bound by the following subcontracting arrangement with
respect to any and all contracts, leases, agreements and commitments
(unless, on a case-by-case basis, the following arrangement would not
be permitted thereunder): (i) the Purchaser shall perform all of the
Seller's obligations arising on or after the Closing Date under such
Contracts on a prompt and punctual basis as a subcontractor for the
Seller; and (ii) Seller shall promptly and punctually pay to the
Purchaser, in consideration of the obligations of the Purchaser set
forth in this Section 4.2 (d), all of the payments received by Seller
pursuant to or under such contracts, leases, agreements and
commitments relating to goods sold or services performed by Purchaser
on or after the Closing Date.
4.3 Confidentiality. Seller shall maintain the confidentiality of the
operations, customers, all proprietary or otherwise non-public information
relating to the Business and the Intellectual Property of the Business
following the Closing with the same degree of care as it utilizes in the
maintenance of its own trade secrets.
4.4 Non-Compete. Seller covenants and agrees with Purchaser that for
a period of five (5) years following the Closing Seller will not produce
any product identical to the products currently or heretofore produced by
the Business.. Seller reserves the right pursuant to the royalty-free
license and grant-back of Intellectual Property and the rights to use the
designs, drawings, specifications and other intangible property rights and
items described in Sections 1.1(d)(i) and (ii) to manufacture, produce,
provide and sell products and/or services to Governmental Customers and to
purchase acquire products from Purchaser or from third parties
substantially similar to those of the Business for use in con-
14
<PAGE>
nection with any contract Seller may have now or in the future with respect
to Governmental Customers, and to purchase or acquire an entity or business
that produces products in competition with the current or past products of
the Business provided such products in competition do not constitute fifty
percent (50%) or more of the revenue of such entity or business for each of
the past two (2) calendar years, and this Non-Compete Covenant shall not
apply to any assets or business activity that any entity acquiring more
than fifty percent (50%) of Seller's voting stock may transfer to Seller
subsequent to such acquisition.
4.5 Cooperation. Seller consents to Purchaser hiring the eight (8)
individuals listed in Schedule 4.5 and agrees that Purchaser may make
offers to and hire not more than fifteen additional employees of Seller;
provided however that nothing included herein shall be construed to limit
Seller's right to retain such employees. Seller covenants that it will not
make any effort out of the ordinary and usual course of business to
encourage such 8 listed individuals to reject employment with Purchaser,
and if so employed by Purchaser, Seller shall not solicit their
reemployment by Seller within the three (3) year period beginning with the
Closing Date but nothing in this Section 4.5 shall prevent Seller from
increasing salary, bonus and benefit levels for such individuals in
accordance with Sellers' standard practice. Nothing herein shall prevent a
rehire of any such listed individual by Seller if the contact and
application for reemployment is initiated solely by any such listed
individual.
5. COVENANTS OF PURCHASER; POST CLOSING PERFORMANCE
5.1 Purchaser covenants and agrees with Seller that Purchaser will
assume Seller's obligations under and perform the Contracts following the
Closing in accordance with their terms and applicable law, in a workmanlike
manner, with due regard for appropriate quality assurance procedures
5.2 Purchaser covenants and agrees that the representations and
warranties in Section 3.6 shall also constitute covenants and agreements
under this Section 5 with the same force and effect as if such Section 3.6
and Schedule 3.6 were set out herein in full and such covenants and
agreements shall survive the Closing indefinitely.
5.3 Purchaser covenants and agrees that within sixty (60) day of the
closing, the Purchaser shall file with the Securities and Exchange
Commission a Registration Statement on Form S-3 (the "Registration
Statement") covering the resale to the public by the Seller of the Shares.
The Purchaser shall use commercially reasonable efforts to cause the
Registration Statement to become effective as soon as practicable and to
keep it effective until the one year anniversary date of the closing;
provided however, the Purchaser may, by written notice to the Seller (i)
delay the filing or effectiveness of the Registration Statement or (ii)
suspend the Registration Statement after effectiveness and require that the
Seller immediately cease sales of shares pursuant thereto in the event that
(A) the Purchaser 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 and (B) the Purchaser
15
<PAGE>
engages in any activity or transaction or preparation or negotiations for
any activity or transaction that the Purchaser desires to keep confidential
for business reasons, if the Purchaser determines in good faith that the
public disclosure requirements imposed on the Purchaser under the
Securities Act in connection with the Registration Statement covering the
Shares would require disclosure of such activity, transaction, preparations
or negotiations.
6. CONDITIONS TO OBLIGATIONS OF PURCHASER
All obligations of Purchaser under this Agreement are subject to the
fulfillment, at or prior to the Closing Date, of the following conditions:
6.1 Representations and Warranties of Seller. All representations
and warranties made by Seller in this Agreement shall be true and correct
in all material respects on and as of the Closing Date. Such
representations and warranties shall survive the Closing for a period of
one year from the date of this Agreement.
6.2 No Violation of Orders. There shall not be in effect on the
Closing Date any statute, rule, regulation, decree, execution order,
preliminary or permanent injunction or other order issued, promulgated or
enacted by any federal, state, local or foreign government, governmental or
regulatory authority or court which declares this Agreement invalid in any
respect or prevents the consummation of the transactions contemplated
hereby, or which materially and adversely affects the assets, properties,
operations, prospects, net income or financial condition of Seller; and no
action or proceeding before any federal, state, local or foreign court or
governmental or regulatory authority shall have been instituted or
threatened by any federal, state, local or foreign government or
governmental or regulatory authority, or by any other person, entity or
organization which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the
validity or enforceability of this Agreement or any term or provision
hereof. If pre merger notification is required under the Hart-Scot-Rodino
Act, the waiting period under such Act shall have expired or been
terminated.
6.3 No Material Default or Adverse Change. During the period from the
date hereof to the Closing Date, there shall have been no material default
under or in the performance of any Contract and nothing shall have occurred
which is likely to materially and adversely affect the Business.
6.4 Legal Opinion. Purchaser shall have received the opinion of
Seller's counsel in form and substance reasonably satisfactory to
Purchaser.
6.5 Deliveries to Purchaser. Seller shall have delivered to
Purchaser all of the following documents and instruments:
16
<PAGE>
(a) Instruments of Transfer. All of the following documents
which shall be collectively referred to as the "Instruments of
Transfer":
(i) Bill of Sale. A Bill of Sale, in the form of Exhibit H
attached hereto, selling, assigning and transferring to Purchaser
all of the Assets, and
(ii) Transition Services Agreement ("TSA"). An executed TSA
in the form of Exhibit I attached hereto, which describes the
services and cost of such services to be performed by Seller on
behalf of Purchaser during the transition period.
(b) Seller's Legal Opinion.
(c) An executed Memorandum of Understanding in the form of
Exhibit J attached hereto between Purchaser and Seller.
7. CONDITIONS TO OBLIGATIONS OF SELLER
All obligations of Seller under this Agreement are subject to the
fulfillment, at or prior to the Closing Date, of the following conditions:
7.1 Representations and Warranties of Purchaser. All representations
and warranties made by Purchaser in this Agreement shall be true and
correct on and as of the Closing Date except as otherwise specified herein.
Such representations and warranties shall survive the Closing for a period
of twelve (12) months from the Closing except as otherwise provided herein.
7.2 Performance of Purchaser's Obligations. Purchaser shall have
performed in all respects all obligations required under this Agreement to
be performed by it on or prior to the Closing Date.
7.3 No Violation of Orders. There shall not be in effect on the
Closing Date any statute, rule, regulation, decree, executive order,
preliminary or permanent injunction or other order issued by any federal,
state, local or foreign, government, governmental or regulatory authority
or court which declares this Agreement invalid or unenforceable, in any
respect or which prevents the consummation of the transactions contemplated
hereby. If pre-merger notification is required under the Hart-Scot-Rodino
Act, the waiting period under such Act shall have expired or been
terminated.
7.4 Legal Opinion. Seller shall have received the opinion of
Purchaser's counsel, dated the Closing Date and addressed to Seller, in
form and substance reasonably acceptable to Seller.
17
<PAGE>
7.5 Deliveries to Seller. Purchaser shall have delivered to Seller
all of the following:
(a) Purchaser's executed Instruments of Transfer.
(b) Transition Services Agreement ("TSA"). An executed TSA
in the form of Exhibit I attached hereto, which describes the
services and cost of such services to be performed by Seller on
behalf of Purchaser during the transition period.
(c) The Certificate(s) of Common Stock.
(d) The Warrant No. W-1 to purchase Common Stock and
Purchaser shall have executed Warrant No. W-2 to be held pending
fulfillment of the conditions specified in Schedule 1.6 for its
delivery to Seller.
(e) Other Closing Documents. Purchaser shall have delivered
to Seller such other certificates, instruments and documents in
confirmation of the representations and warranties of Purchaser
or in furtherance of the transactions contemplated by this
Agreement as Seller or its counsel may reasonably request.
(f) Purchaser's Legal Opinion.
(g) An executed Memorandum of Understanding in the form of
Exhibit J attached hereto between Purchaser and Seller.
7.6 Legal Matters. All certificates, instruments, opinions and other
documents required to be executed or delivered by or on behalf of Purchaser
under the provisions of this Agreement, and all other actions and
proceedings required to be taken by or on behalf of Purchaser in
furtherance of the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to counsel for Seller.
8. INDEMNIFICATION
8.1 Indemnification
(a) If Seller breaches (or in the event any third party alleges facts
that, if true, would mean Seller has materially breached) any of its
representations, warranties, covenants contained in this Agreement, then
Seller agrees to defend, indemnify, and hold harmless Purchaser from and
against all loss, cost, liability and expense (including but not limited to
attorneys' fees, court costs, amounts paid or to be paid in settlement or
under judgment, and interest thereon), in excess of amounts received from
insurance proceeds, incurred by Purchaser as a result of, based upon or
related to such breach or alleged
18
<PAGE>
breach of any representation or warranty of Seller in this Agreement. In no
event shall Seller be required to defend, indemnify and hold harmless
Purchaser (or any other Person) for incidental, consequential or punitive
damages unless Purchaser is finally adjudicated to be liable to a third
party for such damages as a result of Seller's breach hereunder. The
indemnifications contained in this Paragraph 8.1(a) shall survive until the
expiration of twelve (12) months following the Closing Date.
(b) Seller agrees to defend and indemnify Purchaser from and against
any and all loss, cost, liability and expense Purchaser may suffer
resulting from, arising out of, relating to, in the nature of, or caused
by:
(i) any liability of Seller under the Contracts for work
performed or product in fact delivered on or prior to the Closing
Date; or
(ii) any work, labor or services performed for or delivered to
third parties by Seller or performed by the Business on or prior
to the Closing Date; or
(iii) Retained Liabilities;
(iv) any obligation resulting from the failure to comply with
the provisions of any applicable Bulk Transfers Law;
(v) a material breach of any covenant or agreement of Seller in
this Agreement (other than a breach of a representation or
warranty).
(c) (i) No claim for indemnification under Section 8.1(a) shall be
made by or on behalf of Purchaser if not raised by Purchaser within 12
months of the Closing Date
(ii) The obligation of Seller to defend, indemnify and hold
harmless Purchaser (including its respective directors, officers,
employees, affiliates) from loss, cost, liability and expense
relating to or arising from any liabilities set forth in Section
8.1(b) shall be absolute, unconditional and shall continue
indefinitely, except as may be otherwise provided in an
applicable covenant or agreement included within this Agreement
(including the schedules and exhibits incorporated herein).
(d) Purchaser agrees to defend, indemnify, and hold harmless Seller
(and its directors, officers, employees, affiliates and assigns) from any
and all loss, cost, liability and expense, (including but not limited to
attorney's fees, court costs, amounts paid or to be paid in settlement or
under judgment, and interest thereon) in excess of amounts received by
Seller from insurance proceeds, incurred by any of them as a result of, or
based upon a breach of Representation and Warranty by Purchaser provided
the claim for indemnification is brought by Seller within 12 months of the
Closing Date. In no event shall Purchaser be required to defend, indemnify
and hold harmless Seller (or any other such Person) for any incidental,
consequential or punitive damages.
19
<PAGE>
8.2 Notice of Asserted Liability. Promptly after receipt by any
party of notice of any demand, claim or circumstance that, immediately or
with the lapse of time, would give rise to a claim for or the commencement
(or threatened commencement) of any action, proceeding or investigation (an
"Asserted Liability") that may result in, a loss, cost, liability and
expense subject to the defense, indemnification and hold harmless
provisions hereunder, the Party receiving such notice ("Indemnitee") shall
give notice thereof to the Party having the indemnity obligation with
respect to that matter ("Indemnitor"). The notice shall describe the
Asserted Liability in reasonable detail, and shall indicate the amount
(estimated, if necessary) of the loss, cost, liability and expense that has
been or may be suffered by Indemnitee, provided that failure to give such
notice shall have no consequence unless and to the extent the Indemnitor is
prejudiced thereby.
8.3 Indemnification Claims.
(a) A party entitled, or seeking to assert rights, to indemnification
under this Section 8 (an "Indemnified Party") shall give written
notification to the party from whom indemnification is sought (an
"Indemnifying Party") of the commencement of any suit or proceeding
relating to a third party claim for which indemnification pursuant to this
Section 8 may be sought. Such notification shall be given within 20
business days after receipt by the Indemnified Party of notice of such suit
or proceeding, and shall describe in reasonable detail (to the extent known
by the Indemnified Party) the facts constituting the basis for such suit or
proceeding and the amount of the claimed losses; provided, however, that no
delay on the part of the Indemnified Party in notifying the Indemnifying
Party shall relieve the Indemnifying Party of any liability or obligation
hereunder except to the extent of any damage or liability caused by or
arising out of such failure. Within 20 days after delivery of such
notification, the Indemnifying Party may, upon written notice thereof to
the Indemnified Party, assume control of the defense of such suit or
proceeding with counsel reasonably satisfactory to the Indemnified Party;
provided that (i) the Indemnifying Party may only assume control of such
defense if (A) it acknowledges in writing to the Indemnified Party that any
losses, fines, costs or other liabilities that may be assessed against the
Indemnified Party in connection with such suit or proceeding constitute
Losses for which the Indemnified Party shall be indemnified pursuant to
this Section 8 and (B) the ad damnum is less than or equal to the amount of
Losses for which the Indemnifying Party is liable under this Section 8 and
(ii) the Indemnifying Party may not assume control of the defense of a suit
or proceeding involving criminal liability or in which equitable relief is
sought against the Indemnified Party. If the Indemnifying Party does not so
assume control of such defense, the Indemnified Party shall control such
defense. The party not controlling such defense (the "Non-controlling
Party") may participate therein at its own expense; provided that if the
Indemnifying Party assumes control of such defense and the Indemnified
Party reasonably concludes that the Indemnifying Party and the Indemnified
Party have conflicting interests or different defenses available with
respect to such suit or proceeding, the reasonable fees and expenses of
counsel to the Indemnified Party shall be considered "losses" for purposes
of this Agreement. The party controlling such defense (the "Controlling
Party") shall keep the Non-controlling Party advised of the status of such
20
<PAGE>
suit or proceeding and the defense thereof and shall consider in good faith
recommendations made by the Non-controlling Party with respect thereto. The
Non-controlling Party shall furnish the Controlling Party with such
information as it may have with respect to such suit or proceeding
(including copies of any summons, complaint or other pleading which may
have been served on such party and any written claim, demand, invoice,
billing or other document evidencing or asserting the same) and shall
otherwise cooperate with and assist the Controlling Party in the defense of
such suit or proceeding. The Indemnifying Party shall not agree to any
settlement of, or the entry of any judgment arising from, any such suit or
proceeding without the prior written consent of the Indemnified Party,
which shall not be unreasonably withheld or delayed. The Indemnified Party
shall not agree to any settlement of, or the entry of any judgment arising
from, any such suit or proceeding without the prior written consent of the
Indemnifying Party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Section 8, an
Indemnified Party shall give written notification (a "Claim Notice") to the
Indemnifying Party which contains (i) a description and the amount (the
"Claimed Amount") of any losses incurred or reasonably expected to be
incurred by the Indemnified Party, (ii) a statement that the Indemnified
Party is entitled to indemnification under this Section 8 for such Losses
and a reasonable explanation of the basis therefor, and (iii) a demand for
payment (in the manner provided in paragraph (c) below) in the amount of
such losses.
(c) Within 20 days after delivery of a Claim Notice, the Indemnifying
Party shall deliver to the Indemnified Party a written response (the
"Response") in which the Indemnifying Party shall: (i) agree that the
Indemnified Party is entitled to receive all of the Claimed Amount (in
which case the Response shall be accompanied by a payment by the
Indemnifying Party to the Indemnified Party of the Claimed Amount, by check
or by wire transfer, (ii) agree that the Indemnified Party is entitled to
receive part, but not all, of the Claimed Amount (the "Agreed Amount") (in
which case the Response shall be accompanied by a payment by the
Indemnifying Party to the Indemnified Party of the Agreed Amount, by check
or by wire transfer or (iii) dispute that the Indemnified Party is entitled
to receive any of the Claimed Amount.
(d) Reserved
(e) Notwithstanding the other provisions of this Section 8, if a
third party asserts (other than by means of a lawsuit) that an Indemnified
Party is liable to such third party for a monetary or other obligation
which may constitute or result in losses for which such Indemnified Party
may be entitled to indemnification pursuant to this Section 8, and such
Indemnified Party reasonably determines that it has a valid business reason
to fulfill such obligation, then (i) such Indemnified Party shall be
entitled to satisfy such obligation, without prior notice to or consent
from the Indemnifying Party, (ii) such Indemnified Party may subsequently
make a claim for indemnification in accordance with the provisions of this
Section 8, and (iii) such Indemnified Party shall be reimbursed, in
accordance with the provisions of this Section 8, for any such losses for
which it is entitled to indemnification
21
<PAGE>
pursuant to this Section 8 (subject to the right of the Indemnifying Party
to dispute the Indemnified Party's entitlement to indemnification, or the
amount for which it is entitled to indemnification, under the terms of this
Section 8).
8.4 Exclusive Remedy. After the Closing, except for the right to
seek injunctive relief, specific performance and other equitable remedies
the provisions for defense, indemnification and hold harmless set forth in
this Section 8 are the sole and exclusive remedies of the Parties hereto
with respect to all breaches of the terms of this Agreement.
9. MISCELLANEOUS PROVISIONS
9.1 Publicity and Non-disclosure. Except or otherwise required by
applicable law purchaser shall not make any press release or other
announcement concerning the transaction contemplated in this Agreement
without the prior review by and consent of Seller.
9.2 Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective
successors, representatives and assigns, as the case may be; provided,
however, that if and to the extent the Purchaser assigns this Agreement,
the Assignee must assume in a fully e4xecuted written instrument contained
herein.
9.3 Brokers and Finders. Seller and Purchaser each agrees to
indemnify, defend and hold harmless the other against any brokerage fee,
commission, finder's fee, or financial advisory fee due to any person, firm
or corporation acting or claiming to have acted on the indemnifying party's
or the indemnifying party's principals' or employees' behalf in connection
with the transactions contemplated by this Agreement.
9.4 Expenses. Except as otherwise provided in this Agreement, the
parties shall bear their respective expenses incurred in connection with
the preparation, execution and performance of this Agreement and the
transactions contemplated hereby, such expenses to include, without
limitation, all fees and expenses of agents, representatives, counsel and
accountants.
9.5 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been given
or made if in writing and delivered personally or sent by registered or
certified mail (postage prepaid, return receipt requested) to the parties
at the following addresses:
22
<PAGE>
(a) if to Purchaser, to:
SatCon Technology Corporation
161 First Street
Cambridge, MA 02142
ATTN: David B. Eisenhaure
with copy to:
Hale & Dorr
60 State Street
Boston, MA 02110
Attn. Jeffrey Carp
(b) if to Seller, to:
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, CA 90067
Attn: Office of the General Counsel
with copy to:
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, CA 90067
Attn: Corporate Vice President and Treasurer
or to such other persons or at such other addresses as shall be furnished
by any party by like notice to the other, and such notice or communication
shall be deemed to have been given or made as of the date so delivered.
9.6 Entire Agreement. This Agreement, together with the Schedules and
Exhibits attached hereto and incorporated herein by reference, including
the Memorandum of Understanding dated November 16, 1999 represent the
entire agreement and understanding of the parties hereto with reference to
the transactions set forth herein, and no representations, warranties or
covenants have been made in connection with this Agreement or the
transaction contemplated hereby other than those expressly set forth herein
and in the Schedules and Exhibits hereto, or in the certificates,
agreements and other documents delivered in accordance herewith. This
Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating
to the subject matter of this Agreement and all prior drafts of this
Agreement.
9.7 Waivers, Amendments and Remedies. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be
waived, only by
23
<PAGE>
a written instrument signed by Purchaser and Seller or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party
in exercising any right, power or privilege hereunder shall operate as a
waiver thereof; nor shall any waiver on the part of any party of any such
right, power or privilege, nor any single or partial exercise of any such
right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The rights and
remedies herein provided are cumulative, and are exclusive of any rights or
remedies that either party may otherwise have at law or in equity. The
rights and remedies of either party based upon, arising out of or otherwise
in respect of any inaccuracy in or breach of any representation, warranty,
covenant or agreement contained in this Agreement shall in no way be
limited by the fact that the act, omission, occurrence or other state of
facts upon which any claim of any such inaccuracy or breach is based may
also be the subject matter of any other representation, warranty, covenant
or agreement contained in this Agreement (or in any other agreement among
the parties) as to which there is no inaccuracy or breach.
9.8 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other
term or provision hereof, provided that the invalidity unenforceability of
such Term does not frustrate the purpose of a material term of the Parties
intent.
9.9 Section Headings. The Section headings contained in this
Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or of any term or provision
hereof.
9.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement. All references
herein to sections, clauses, and Exhibits shall be deemed references to
such parts of this Agreement, unless the context shall otherwise require.
9.11 Litigation Assistance. Seller and Purchaser agree from and after
the Closing Date to cooperate as provided herein, with each other with
respect to any action, suit, proceeding or investigation pending or
threatened against either of the parties hereto with respect to the
Contracts (other than so specified in the lease agreements included in the
Transition Services Agreement).
9.12 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect
to the conflicts of laws or choice of laws rules of such state.
9.13 Schedules and Exhibits. The Schedules and Exhibits attached
hereto are a part of this Agreement as if fully set forth herein.
24
<PAGE>
9.14 Post-Closing Access. So long as any Contract remains executory or
there is a claim thereunder by the other party thereto, Seller and its
affiliates, accountants and agents shall have access at reasonable times
and places and upon reasonable notice to all accounting and financial books
and records of Purchaser relating to such Contract and shall be permitted
to make copies thereof, to the extent necessary, to assure that Purchaser
is adequately protecting Seller.
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be signed
and attested all as of the date first written above.
Purchaser:
By: /s/ David B. Eisenhaure
-----------------------
[attest] Its: President
----------------------
/s/ Michael C. Turmelle
- --------------------------
Name Michael C. Turmelle
Title CFO
Seller: Northrop Grumman Corporation
By: /s/ Albert Myers
---------------------------
[attest] Its: Corporate Vice President and
Treasurer
/s/ Dawn Katje
- -------------------------------
Name Dawn Katje
Title Administrative Assistant
25
<PAGE>
Omitted Schedules
-----------------
Pursuant to Item 601(b)(2) of Regulation S-K promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as amended, SatCon
Technology Corporation has, with respect to the Asset Purchase Agreement by and
among Northrop Grumman Corporation and SatCon Technology Corporation, dated as
of November 16, 1999, omitted to file the related schedules (listed below).
These schedules will be supplementally furnished to the Commission upon request.
Schedules
- ---------
A Contracts
AA Financial Assets
B Equipment
C Inventory
D Intellectual Property
DD Process Related Property
E Owned Software
F Other Intangible Assets
G Licensed Software
2.5 Liens; Tax Matters
2.6 Absence of Undisclosed Liabilities
2.8 Licenses and Permits
2.9 Title to, and Sufficiency of, the Assets
2.14 Product Warranties
2.18 Assets
3.6 Inspection; Knowledge
<PAGE>
EXHIBIT 10.33
SUBLEASE
between
SATCON TECHNOLOGY CORPORATION
and
NORTHROP GRUMMAN CORPORATION
Dated
November 16, 1999
<PAGE>
SUBLEASE
THIS SUBLEASE, made this 16 day of November 1999 between NORTHROP GRUMMAN
CORPORATION, A Delaware corporation, having its principal office at 1840 Century
Park East, Los Angeles, CA 90067 (hereinafter called "Sublessor"), and SatCon
Technology Corporation, a Delaware Corporation, having its principal office at
161 First Street, Cambridge, MA 02142(hereinafter called "Sublessee").
WITNESSETH:
WHEREAS, Friendship Realty Company, Inc. (hereinafter called "Lessor") and
Westinghouse Electric Corporation entered into a lease agreement dated June
9, 1980 for a building located at 1745 W. Nursery Rd., Linthicum, MD., and
for a lease term expiring on May 31, 2000, as amended by agreements dated
October 12, 1992, March 8, 1993, and November 8, 1999 (the "Master Lease").
WHEREAS, the Master Lease was subsequently assigned to Sublessor.
WHEREAS, Sublessor desires to sublease a portion of the above property to
Sublessee.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Premises
1. (a) That for and in consideration of the payment by Sublessee of
the rent hereinafter reserved and the performance by Sublessee of the
covenants and agreements hereinafter agreed to be performed by it, and
in accordance with all of the provisions hereinafter set forth,
Sublessor does hereby sublet and demise unto the Sublessee and
Sublessee does hereby take and hire from the Sublessor approximately
14,863 rentable square feet of space as illustrated on Exhibit A, in
the premises at 1745 W. Nursery Rd., Linthicum, MD, which is leased to
the Sublessor by the Lessor (the "Subleased Premises"), under the
aforementioned lease (the "Master Lease") dated June 9, 1980 and
amended most recently on October 12, 1992 and March 8, 1993.
(b) Sublessor and Sublessee further agree that at Sublessee's option,
for a period of six (6) months from the date of this Sublease, and
upon prior written notice to the Sublessor by Sublessee, Sublessee
shall have the right to expand the Subleased Premises into the area
designated "Optional Space" as illustrated on Exhibit "A". All costs
and expense of construction shall be the sole responsibility of the
Sublessee. This option is subject to the Lessor approval rights as
described in the Master Lease. Any expansion into the Optional Space
will be allowed only after plans submitted by Sublessee to the
Sublessor are approved by Sublessor and Lessor, which approval shall
not be unreasonably withheld. A mutually acceptable amendment to this
Sublease will be executed by Sublessor and Sublessee which changes the
rentable square feet and rent, based upon the final footprint of the
improvements of the Optional Space.
1
<PAGE>
(c) Construction of any improvements will be coordinated through the
Sublessor and any construction management fees to the Lessor's
Property Management firm will be the sole responsibility of the
Sublessee.
Term
2. (a) This Sublease is for the term beginning on the date the last
signature is obtained on this Sublease and ending on March 31, 2002
subject to the provisions of Section 13.
(b) Sublessee will be granted a sublease renewal option for the
period April 1, 2002 through September 30, 2005, provided Sublessee is
not in default of the Master Lease or Sublease provisions and
Sublessee notifies Sublessor, in writing, Six (6) months in advance of
any expiration.
(c) Provided the Sublessor extends the term of the Master Lease
beyond September 30, 2005 and the above described Master Lease
extension occurs, Sublessee shall have the option to further extend
the term of the Sublease for two (2) additional two (2) year periods,
provided Sublessee is not in default of the Master Lease or Sublease
provisions and Sublessee notifies Sublessor, in writing, six (6)
months in advance of any expiration. Not withstanding the above,
Sublessor shall be under no obligation to extend the Master Lease
(d) Notwithstanding the foregoing, at anytime after the third
anniversary of the commencement date, either party shall have the
right to terminate this sublease at any time, upon six (6) months
prior written notice to the other party hereto.
Use 3. Sublessee shall use the Subleased Premises only for the same use
as is allowed Sublessor pursuant to Section 1 of the Master Lease, a
true and correct copy of which is attached hereto, as Exhibit "B" and
made a part hereof. Sublessee will comply with any and all laws,
ordinances, orders and regulations of any governmental authority which
are applicable to its use of the Subleased Premises and shall comply
with all provisions of the Master Lease.
Rents and Additional Rent
4. (a) Sublessee shall pay Sublessor One Hundred Fifty Six Thousand
Sixty Two dollars ($156,062.00), per year ("Annual Rent") ($10.50 per
rentable square foot) payable in equal monthly installments of
Thirteen Thousand Five and 17/100 dollars ($13,005.17) in advance on
the first day of each month during the term of this sublease without
deduction, set off or demand. Rent for any portion of a month shall be
prorated on a thirty (30) day basis. Rent payments will be delivered
to Sublessor's agent located at Northrop Grumman Corporation, P.O. Box
17319, Baltimore, MD 21203, Attn: Real Estate MS A465, or such other
place as Sublessor may designate.
(b) The Annual Rent set forth in paragraph 4.(a) above is comprised
of $71,342.00 annually ("Base Rent") ($4.80 per rentable square foot)
and $84,720.00 annually
2
<PAGE>
("Additional Rent") ($5.70 per rentable square foot) for services to
include janitorial, exterior maintenance and repairs, snow and ice
removal, water and sewer, real estate taxes and electric. The
allocated cost for electrical consumption is $44,589.00 annually
($3.00 per rental square foot).
(c) Sublessor and Sublessee each at its sole cost shall have the
right to install an electrical submeter for the purpose of measuring
the Sublessee's electrical consumption. Sublessee agrees to pay
Sublessor the cost of electricity consumed by Sublessee based upon the
same rates charged by the electrical provider to the Sublessor,
including any prorata amount for surcharges or taxes. The Sublessor
will deduct from the additional rent stated above in paragraph 4.(b)
$44,589.00 annually ($3.00 per rentable square foot) if submetering is
used to determine the cost of electric service provided to the
Sublessee.
(d) The Annual Rent obligation (Base Rent and Additional Rent) for
any Sublessee option period shall increase by four (4) percent for
each option period exercised by Sublessee.
3
<PAGE>
By way of example:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Annual Annual
Period Base Rent Additional Rent Total Annual Rent
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sublease Start - 3/31/2002 $71,342.00 $84,720.00 $156,062.00
- ---------------------------------------------------------------------------------------------
First Option Period
4/1/2002 - 9/30/2005 $74,195.68 $88,108.80 $162,304.48
- ---------------------------------------------------------------------------------------------
Second Option Period
10/1/2005 - 9/30/2007 $77,163.51 $91,633.14 $168,796.65
- ---------------------------------------------------------------------------------------------
Third Option Period
10/1/2007 - 9/30/2009 $80,250.05 $95,298.46 $175,548.51
- ---------------------------------------------------------------------------------------------
</TABLE>
Assignments and Subletting
5. Sublessee does not have the right to assign, or sublease to a
third party any or all of the Subleased Premises. Sublessee may only
assign this Sublease or further sublet the Subleased Premises or any
part thereof with prior written consent of Sublessor and Lessor which
consent may be withheld or conditioned by Sublessor or Lessor in their
sole discretion. Sublessee shall give Sublessor 30 days prior written
notice of any proposed subletting. Notwithstanding the above, no
consent shall be required from Sublessor in connection with a sub-
sublease or assignment to any entity with which Sublessee may merge,
or to any entity acquiring substantially all of Sublessee's stock or
assets and providing that no such transfer, assignment or sub-
subletting shall relieve Sublessee from its duty to perform fully all
of the agreements, covenants, and conditions set forth in this
Sublease or the Master Lease. In addition Sublessee shall not
transfer, assign or sub-sublet to any entity which would create a
violation of Sublessors security requirements under its Government
contracts.
Alterations, Additions or Improvements
6. (a) Sublessee shall not make any alterations, additions or
improvements, to the Subleased Premises without Sublessor's prior
written consent, which consent shall not be unreasonably withheld or
delayed and the written consent of the Landlord under the lease. All
work done pursuant to this Section 6 shall be done in a good and
workmanlike manner in full compliance with all applicable laws, and
the structural integrity of the building shall not be impaired, and no
liens shall attach to the Subleased Premises by reason thereof. Upon
termination of this Sublease, such alterations, additions, or
improvements shall, at the option of the Sublessor, (1) become the
property of Sublessor, or (2) by notice given to Sublessee at the time
Sublessor and Lessor approve such alterations, additions, or
improvements be removed by the Sublessee at it's expense, provided
that any part of the Subleased Premises affected by such removal shall
be restored to its original condition, reasonable wear and tear
excepted.
(b) At the written request of the Sublessee, the Sublessor will
coordinate and contract for any alteration, additions or improvements
including the construction of the
4
<PAGE>
Optional Space as referenced in Section 1.(b) that the Sublessee may
require from time to time. Sublessee agrees to reimburse Sublessor for
all third party costs incurred by Sublessor in connection with any
alteration, additions or improvements.
Preparation for Occupancy
7. At the commencement of the term, Sublessee shall accept the
Premises in its then "as is" condition. Sublessor shall not be
required to perform work of any kind or nature.
Incorporation of Prime Lease
8. This sublease is subordinate to and is subject to all of the
terms of the Master Lease. All of the terms with which Sublessor is
bound to comply under the Master Lease shall, to the extent that they
apply to the Subleased Premises and except as otherwise provided
herein, be binding upon Sublessee, and all of the obligations of
Lessor set forth in the Master Lease shall, to the extent that they
apply to the Subleased Premises, inure to Sublessee's benefit. It is
the intention of the Sublessor and Sublessee that, except as otherwise
provided in this sublease, the relationship between Sublessor and
Sublessee shall be governed by the language of the various articles of
the Master Lease as if they were typed out in this Sublease in full,
and the words "Lessor" "Lessee" and "Lease" as used in the Master
Lease, shall read, respectively, "Sublessor", "Sublessee" and
"Sublease".
Quiet Enjoyment
9. Sublessor covenants and agrees with Sublessee that upon Sublessee
paying the Annual Rent reserved in this Sublease and observing and
performing all of the other obligations, terms, covenants and
conditions of this Sublease on Sublessee's part to be observed and
performed, Sublessee may peaceably and quietly enjoy the Subleased
Premises during the term; provided, however, that this Sublease shall
automatically terminate upon termination or expiration of the Master
Lease and Sublessee shall have no claim against Sublessor unless such
termination was caused by the default of Sublessor in the performance
of its obligations under the Master Lease which have been assumed by
Sublessor under this Sublease and have not been assumed by Sublessee
hereunder.
Notices 10. All notices, demands and requests which may be or are required to
be given by either party to the other shall be in writing and shall be
effective only upon receipt. All such notices, demands and requests
shall be sent via registered U.S. mail postage prepaid, return receipt
requested, addressed:
5
<PAGE>
to the Sublessor: Northrop Grumman Corporation
1745 West Nursery Road
Linthicum, MD 21090
Attention: Real Estate Manager MS-A465
Telephone: (410) 765-9120
with a copy to: Northrop Grumman Corporation
Real Estate Department
Legal Notices
1840 Century Park East
Los Angeles, California 90067
Telephone (310) 201-3227
to the Sublessee: SatCon Technology Corporation
161 First Street
Cambridge, MA 02142
Attention: General Counsel
Either party may designate in writing any changes in address or
addresses of substitute or additional persons to receive such notices.
The effective date of service of any notice shall be the date such
notice was received. Inability to deliver a notice, due to a change in
address without notice by the addressee, shall be considered for all
purposes under this Sublease, a delivered notice effective as of the
mailing date.
6
<PAGE>
Environmental
11. The following environmental provisions apply to this Sublease:
(a) "Hazardous Materials" shall mean any material or substance (a)
which is defined as a "hazardous substance", "hazardous waste",
"extremely hazardous substance", "hazardous chemical," "toxic
substance", "pollutant", "contaminant" or the like under any federal,
state, or local environmental, or occupational health and safety,
statute, law, regulation, rule or ordinance ("Environmental Laws", as
more specifically defined below), (b) which contains polychlorinated
biphenyls (PCBs), (c) which contains asbestos, (d) which is
radioactive, or (e) the presence of which requires investigation or
remediation under any Environmental Law, as well as any toxic or
otherwise hazardous substance, material or waste which is or becomes
regulated as such by any Environmental Law.
(b) Without the prior written consent of Sublessor, Sublessee shall
not cause, allow or permit the escape, disposal or release of
Hazardous Materials in, around or from the Subleased Premises, except
in accordance with all applicable Environmental Laws. Sublessee shall
not store, use or allow the storage or use of Hazardous Materials in
the interior of the Subleased Premises in any manner not sanctioned by
law or the standards prevailing in the industry for handling and
storage of such Hazardous Materials. Sublessee is specifically
prohibited from storing Hazardous Materials in or around the exterior
of the Subleased Premises. In the event that any such Hazardous
Materials are required to be used by Sublessee in the ordinary course
of its business, Sublessee shall keep in the Subleased Premises and
supply a copy of same to Sublessor upon oral request, the uses of such
substances, including a copy of the applicable Material Safety Data
Sheet ("MSDS") if any, or other identification of such substances or
materials. Sublessee shall remain strictly responsible and liable for
any and all consequences, direct or indirect, resulting from the use
of such Hazardous Materials in or around the Subleased Premises,
including liability for all cost and expenses necessary to investigate
and remediate such Hazardous Materials unless such Hazardous Materials
were actually introduced to the subleased premises prior to the
commencement date of this Sublease. With respect to Hazardous
Materials introduced to the Subleased Premises after the commencement
date of this Sublease, Sublessee shall, at its sole cost and expense,
take any and all actions required to restore the Subleased Premises to
their conditions prior to the commencement date of this Sublease, and
in accordance with the requirements of any federal, state or local
governmental agency.
(c) Sublessee shall conduct all of its operations at the Subleased
Premises in compliance with all federal, state and local statutes
(including, but not limited to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et
seq., as amended, (CERCLA); the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq., as amended (RCRA); the Clean Air
Act, 42 U.S.C. 7401 et seq., as amended, the Clean Water Act, 33
U.S.C. Section 1251 et seq., as amended, the Occupational Health and
Safety Act 29 U.S.C. Section 651 et
7
<PAGE>
seq., as amended, and all applicable federal, state and local statues
related to health and safety and the environment now or hereafter
enacted and any additions and amendments thereto and regulations
enacted thereunder, ordinances, orders and requirements of common law,
regarding, but not limited to, (i) discharges to the air, soil,
surfaces or ground water; and (ii) handling, utilizing, storage,
treatment or disposal of any Hazardous Materials as defined therein
("Environmental Laws"). Sublessee shall obtain all permits, licenses
or approvals and shall make all notifications and registrations
required by Environmental Laws and shall submit to Sublessor, upon
request, for inspecting and copying all documents, permits, licenses,
approvals, manifest and records required to be submitted and/or
maintained by the provisions of the Environmental Laws. Sublessee
shall provide promptly to Sublessor copies of any permits, licenses,
approvals, notices of violations, summons, orders, complaints or other
documents received by Sublessee pertaining to compliance with the
Environmental Laws in the Subleased Premises.
(d) Sublessee shall not store any hazardous material or equipment
exterior to the building.
(e) If, Sublessor has evidence that there has been a release of
Hazardous Materials, Sublessor may require testing by an environmental
testing entity mutually agreed to by both parties hereto to ascertain
whether there has been a release of Hazardous Materials by Sublessee,
its agents, servants, employees or business invitees, in or around the
Subleased Premises. The reasonable costs of such testing shall be
reimbursed by Sublessee to Sublessor. If Lessor or any applicable
governmental agency requires environmental testing, then such testing
shall be performed and paid for in the manner described above.
Sublessee shall execute affidavits or representations, at Sublessor's
request, stating that to the best of Sublessee's knowledge and belief
after due inquiry, since the time that Sublessee took possession of
the Subleased Premises, there have been no unauthorized releases of
Hazardous Materials in, on or around the Subleased Premises.
(f) Sublessee hereby agrees to indemnify Sublessor and Lessor and to
hold Sublessor and Lessor harmless of, from and against any and all
expense, loss, cost, damages, fines, penalties, loss of value to the
leasehold estate or liability suffered by Sublessor by reason of
Sublessee's breach of any of the provisions of this Section 11.
(g) The provisions of this Section 11 shall survive the termination
of Sublessee's tenancy of this Sublease.
Sublessor and Sublessee Responsibilities
12. (a) Sublessee shall maintain and keep in good order and condition
the building utility systems serving the Subleased Premises including,
electrical, heating, air conditioning and plumbing systems. Except for
Sublessee's negligence or intentional acts, Sublessor shall be
responsible for the maintenance of the roof and building structure.
Sublessor shall provide janitorial and trash removal services.
Sublessor shall
8
<PAGE>
be responsible for payment of Real Estate Taxes. Sublessor shall allow
Sublessee access to the Sublessor's toilet facilities. Sublessee shall
not be obligated to make any repairs to the Subleased Premises that
are a capital expenditure as determined by generally accepted
accounting practices.
(b) Sublessee shall comply with all rules, regulations and security
requirements of the United States Government and its agencies as may
be required by Sublessor.
(c) Sublessee shall maintain and keep in good order and condition the
interior of Subleased Premises.
(d) Sublessee shall pay at its sole cost, for all maintenance and all
improvements, ordinary and extraordinary, required due to its specific
use of the Subleased Premises.
Termination
13. This Sublease shall terminate upon the occurrence of any of the
following:
(a) Full destruction of the Subleased Premises.
(b) Any exercise of the power of eminent domain by any governmental
authority, Federal, State, County, or municipal, or by any other party
vested by law with such power which shall at any time prevent the full
use and enjoyment of the Subleased Premises by Sublessee for the
purposes set forth in Section 3.
(c) Termination or Expiration of Sublessor's tenancy under the Master
Lease.
Security 14. Sublessee shall comply with the overall physical security and fire
protection requirements of the entire facility as well as the space
occupied by the Sublessee as reasonably directed by the Sublessor.
Sublessor shall maintain the existing building security monitoring,
however Sublessor shall not be liable for and Sublessee will hold
Sublessor harmless from any loss, damage, personal injury or death
resulting from any occurrence on the Subleased Premises, unless caused
by Sublessor's gross negligence or willful misconduct. Sublessor shall
have complete access to the Subleased Premises provided Sublessor
gives 24 hour notice to Sublessee except in the case of emergencies,
in which case Sublessor shall be allowed access without prior notice
to Sublessee.
Parking 15. Sublessee shall be allowed to park up to 40 automobiles on the
adjacent remote Parking Lots in unreserved spaces. Sublessee will be
allowed to park in front of the Subleased Premises in those areas
illustrated on Exhibit "A".
Insurance 16. (a) The Sublessee covenants that it will not do nor permit to be
done, nor keep nor permit to be kept upon the said premises, anything
which will contravene the policy or policies of insurance against loss
by fire or other causes, or which will increase the rate of fire or
other insurance on the building on the premises beyond the
9
<PAGE>
rate in effect on the commencement date of this lease. Should any act
of the Sublessee so increase said rate, then in addition to the
rentals hereinabove provided for, the Sublessee shall be liable for
such additional premium which shall be payable when billed, as
additional rent, collectible in the same manner as the rents
hereinabove provided for. Sublessee covenants that under no
circumstances will it keep or permit to be kept, do or permit to be
done in or about said Subleased Premises, anything of a character so
hazardous as to render it difficult, impracticable or impossible to
secure such insurance in companies acceptable to the Sublessor, and
further, immediately upon notice, to remove from the Subleased
Premises and/or desist from any practice deemed by the insurance
companies or the Association of Fire Underwriters as so affecting the
insurance risk.
(b) Sublessee shall and will save and keep harmless and indemnify the
Sublessor from and against any and all claims for damages whatsoever,
and the cost of defending against the same, of any kind or nature,
including personal injuries, arising in any manner or under any
circumstances relating to Sublessee's use of the Subleased Premises
during the term hereof, whether such damage, including personal
injury, be sustained by the Sublessee or its officers, agents,
employees or invitees or by other persons or corporations which seek
to hold the Sublessor liable unless caused by Sublessor's gross
negligence or willful misconduct. Sublessee further agrees to maintain
comprehensive public liability and property damage insurance with an
insurance company reasonably acceptable to Sublessor to protect the
Sublessor in the minimum amount of $1,000,000 for each occurrence for
bodily injury (or death) and/or property damage with a $2,000,000
aggregate. Such policy shall cover the entire Subleased Premises
including any such sidewalk, streets and parking area adjoining
Subleased Premises; shall be issued in form reasonably satisfactory to
Sublessor; shall provide for at least twenty (20) days' notice to
Sublessor before cancellation; and such policies or certificates
thereof shall be delivered to Sublessor.
(c) Sublessee and Sublessor each hereby waives any and all rights of
recovery against the other or against the officers, employees, agents
and representatives of the other, for loss or damage to such waiving
party or its property or the property of others under its control,
where such loss or damage is insured against under any insurance
policy in force at the time of such loss or damage. Sublessee and
Sublessor shall, upon obtaining the policies of insurance required
hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Sublease.
Sublessor Obligations to Lessor
17. Pursuant to the Master Lease, Sublessor shall be and remain
liable to Lessor for payment of rent and all other amounts provided
for in the Lease and to keep and be bound by all the terms, conditions
and covenants of the Lease.
Applicable Law
18. This Sublease shall be construed in accordance with, and its
performance shall be governed by, the laws of the state of Maryland.
10
<PAGE>
IT IS FURTHER CONVENANTED AND AGREED by and between the parties
hereto that the convenants and agreements herein contained shall bind
and inure to the benefit of the Sublessor and the Sublessee and their
respective successors and assigns.
IN WITNESS WHEREOF, the Sublessor and the Sublessee have caused this
agreement to be executed by their duly authorized officers as of the day and
year first above written.
WITNESS: NORTHROP GRUMMAN CORPORATION
/s/ Dawn Katje By: /s/ Albert Myers
- ------------------------------- -------------------------------------------
Dawn Katje Its: Corporate Vice President and Treasurer
Administrative Assistant
WITNESS: SATCON
/s/ Michael C. Turmelle By: /s/ David B. Eisenhaure
- ------------------------------- ------------------------------------------
Michael C. Turmelle Its: President
CFO -------------------------------------
11
<PAGE>
EXHIBIT 10.34
TRANSITION SERVICES AGREEMENT
between
SATCON TECHNOLOGY CORPORATION
and
NORTHROP GRUMMAN CORPORATION
Dated as of
November 16, 1999
<PAGE>
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT ("Agreement") dated as of November
16, 1999, is entered into by Northrop Grumman Corporation, a Delaware
corporation ("NGC") and SATCON, a Delaware corporation is the Transition
Services Agreement contemplated in the Asset Purchase Agreement November 16,
1999 by and between NGC and SATCON.
RECITALS
WHEREAS, SATCON requires workspace [and administrative services] while
it transitions to autonomous operations; and
WHEREAS, it is in NGC's best interest for SATCON to succeed in its
transition;
NOW, THEREFORE, in consideration of the mutual promises of the parties
contained herein and in the Asset Purchase Agreement, the parties agree as
follows:
ARTICLE I
SERVICES
Section 1.1. Scope of Services and Billings. NGC agrees to provide the
------------------------------
Services as set forth below. SATCON agrees to pay as compensation for the
Workspace (as defined below) and services an amount equal to the amounts set
forth and in accordance with the terms set forth below.
(a) The Workspace is approximately 14,863 rentable square feet of space in
the premises at 1745 W. Nursery Rd., Linthicum, MD as set forth in the attached
sublease (Exhibit A).Telephone and computer system usage, as well as equipment
and access, will be billed monthly at the conclusion of each NGC accounting
month and will be based on actual usage and cost of the telephone instruments
utilized by SATCON personnel. Such charges will be payable by SATCON within
thirty days of the date of an invoice from NGC.
(b) Existing personal computers and other equipment rentals as required by
SATCON will be billed to SATCON at the actual cost of such rentals and be
payable to NGC within thirty days of an invoice to SATCON.
(c) If during the Term of this Agreement NGC produces high power Silicon
Carbide semiconductors for sale on a commercial or merchant basis, NGC agrees
that SatCon will have the right and opportunity to purchase such Silicon Carbide
semiconductors on terms and conditions, including price as NGC offers to others
for identical products in identical quantities.
(d) To the extent NGC is legally able to do so, and to the extent its
insurance carriers, administrative agents and others providing services to NGC
agree to do so, upon SATCON's written request, NGC will continue those Health
and Welfare benefits which are requested to be
1
<PAGE>
extended by SATCON for a period of up to ninety (90) days following the Closing.
The cost of such benefits will be billed to SATCON at the actual cost of such
benefits plus the reasonable expenses of any extraordinary administration
incurred by NGC which is directly related to extending the benefits. The invoice
will be payable to NGC within thirty days of an invoice to SATCON.
(e) Engineering services and access to testing facilities and utilization
of personnel (to the extent under NGC's control) which have been historically
utilized by the Business acquired by SATCON will be provided as reasonably
required and requested by SATCON as follows:
1. product qualification lab2. reliability lab
3. calibration lab
4. magnetics lab
5. power hybrid facility
6. field engineering services group (FEMS)
7. semi conductor manufacturing group
8. continued access to the unigraphics drafting system for updating
drawings (and the related "electronic vault")
9. model shop services
10. contract and financial help on ongoing and legacy programs
11. reasonable access on a time and material basis to qualified
technical and administrative personnel that have historically been
utilized by the business
Section 1.2 Charges for Services. The charges for such services will
--------------------
be the actual costs incurred by NGC as recorded on NGC's books of account,
including all appropriate overheads and other direct costs such as travel, but
not including any fee or profit.
This Agreement shall constitute a Cost Plus No Fee Purchase Order from
SATCON for the administrative services above. Tasks will be assigned by an
authorized SATCON representative. A summary of charges will be provided and
billed monthly and will be payable by SATCON within thirty days of an invoice
for such services from NGC.
Section 1.3 Indemnity. All services provided by NGC personnel under
---------
this Agreement shall be under the direction of authorized SATCON personnel.
SATCON shall indemnify and hold NGC harmless from and against any and all costs,
liabilities, damages or other consequences whatsoever associated with or arising
from SATCON's negligent acts or omissions or willful misconduct in connection
with the administrative services contemplated under this Agreement.
2
<PAGE>
ARTICLE II
TERM OF AGREEMENT
-----------------
Section 2.1 Effective Date and Term. The initial term of this
-----------------------
Agreement shall commence on the Closing Date, and except as otherwise provided
below, continue for a period of up to three (3) years after the date hereof.
ARTICLE III
MISCELLANEOUS
Section 3.1 Independent Contractor Status. During the transition
-----------------------------
period while SATCON personnel are at the NGC site each party shall be
responsible for any injury or death to its own employees, including all workers'
compensation claims or liabilities resulting therefrom, and each such party
shall remain responsible for reporting its income and paying its own taxes.
Further, SATCON will obtain and maintain insurance in form and amount
satisfactory to NGC.
Section 3.2 Confidentiality. The parties each agree that they will
---------------
not divulge to any third party, or to any person within each respective
corporation who does not have a need to know, any confidential matters relating
to each other's business and the businesses of the other party's customers,
vendors or competitors which may become known by reason of use of the NGC
facility or performance of the administrative services.
Section 3.3 Force Majeure. NGC shall be excused for failure to
-------------
perform any part of this Agreement due to events beyond its control, including
but not limited to, fire, storm, flood, earthquake, explosion, accident, riots
and other civil disturbances, sabotage, strikes or other labor disturbances,
injunctions, transportation embargoes or delays, failure of performance of third
parties necessary to each of the parties' performance under this Agreement, or
the laws or regulations of the federal, state or local government or branch or
agency thereof.
Section 3.4 Standard of Performance; Remedies. In performing its
---------------------------------
obligations under this Agreement, each Party represents that it will use the
same standard of care and good faith as it uses in performing services for its
own account. Each Party agrees to exercise reasonable diligence to correct any
deficiency, defective or negligence in the Services provided by it hereunder.
Neither Party shall be liable to the other for compensatory, incidental or
consequential damages arising from performance of this Agreement, provided
however, this exculpation clause shall not apply if the performing Party or its
agents cause damages to the other Party as a result of willful misfeasance or
gross negligence.
Section 3.5 Notice. Any notice, request, designation, direction,
------
demand, election, acceptance or other communication shall be in writing and
shall be effective and deemed to have been given when it is (i) mailed postage
prepaid, by certified first class mail, return receipt requested, addressed to a
party and received by such party; (ii) hand or courier delivered; or (iii) sent
by telecopy with receipt confirmed, as follows:
3
<PAGE>
(a) if to Buyer, to:
SatCon Technology Corporation
161 First Street Cambridge, MA 02142
Attn: David B. EISENHAURE
(b) if to Seller, to:
Northrop Grumman Corporation
----------------------------
1840 Century Park East
Los Angeles, CA 90067
Attn: Office of the General Counsel
Any party may from time to time designate another address to which notice or
other communication shall be addressed or delivered to such party and such new
designation shall be effective on the latter of (ii) the date specified in the
notice and (ii) receipt of such notice by the intended recipient.
Section 3.6 Assignability. Neither party hereto shall assign this
-------------
Agreement in whole or in part without the prior written consent of the other
party hereto.
Section 3.7 No Third Party Beneficiaries. Each of the provisions of
----------------------------
this Agreement is for the sole and exclusive benefit of the Parties hereto
respectively, as their interests may appear, and shall not be deemed for the
benefit of any other person or entity or group of persons or entities.
Section 3.8 Severability. If any term or condition of this Agreement
------------
shall be held invalid in any respect, such invalidity shall not affect the
validity of any other term or condition hereof.
Section 3.9 Applicable Law. This Agreement shall be construed under
--------------
the laws of the State of and the rights and obligations of the Parties shall be
determined under the substantive law of Maryland, without giving effect to
Maryland's conflict of law rules or principles.
Section 3.10 Amendment or Modification. This Agreement may be amended,
-------------------------
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
Parties, or in the case of a waiver, by the party waiving compliance.
Section 3.11 Construction. Descriptive headings to sections and
------------
paragraphs are for convenience only and shall not control or affect the meaning
or construction of any provisions in this Agreement.
Section 3.12 Counterparts. This Agreement may be executed
------------
simultaneously in counterparts, each of which will be deemed an original, but
all of which together will constitute one and the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties as of the date first
written above.
NORTHROP GRUMMAN CORPORATION
By: /s/ Albert Myers
_______________________________________
Its: Corporate Vice President and Treasurer
SATCON
By: /s/David B. Eisenhaure
_______________________________________
Its: President
______________________________________
5
<PAGE>
EXHIBIT 10.35
MEMORANDUM OF UNDERSTANDING
between
SATCON TECHNOLOGY CORPORATION
and
NORTHROP GRUMMAN CORPORATION
Entered into on
November 16, 1999
<PAGE>
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING (MOU) is entered into between Northrop
Grumman Corporation, a Delaware corporation by and through its Electronic
Sensors and Systems Sector (ES3) with offices at Baltimore, Maryland
(hereinafter referred to as "Northrop Grumman") and SatCon Technology
Corporation, with offices at Cambridge, Massachusetts, a company organized and
existing under the laws of Delaware (hereinafter referred to as the "SatCon").
WHEREAS, Northrop Grumman has entered into an Asset Purchase Agreement with
SatCon for the sale of its Power Electronics Group (hereinafter the "Group").
WHEREAS, the parties desire to maintain a business relationship with one
another, where feasible, in pursuit of new business and/ or in support of
existing business where the parties can take advantage of the technology and
experience of personnel associated with the Asset Purchase Agreement.
WHEREAS, Northrop Grumman competes for and has access to programs which could
utilize the technologies and other assets sold to SatCon.
WHEREAS, the parties desire to explore the potential business opportunities
available to determine if and how to best utilize these technologies and other
assets.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein set
forth and other good and valuable consideration, the parties hereto agree as
follows:
Article I
GENERAL SCOPE
-------------
Within a reasonable time following execution of this MOU the parties will
meet to review the current ES3 list of candidate opportunities identified in
Exhibit A of this MOU, and, for the purpose of discussing the potential for
other ES3 candidate opportunities commensurate with the technology and expertise
of the Group. This list is to be updated between the parties as additional
opportunities arise. The parties intend to undertake activities to identify the
possibility of collaborative efforts, particularly with respect to the
technologies and expertise of the Group, including but not limited to:
Power Electronics e.g. motors, motor controls, power conversion, power
control electronics
Upon concurrence of the parties to a potential business opportunity
currently known or subsequently identified under this MOU, Northrop Grumman
agrees to consider the Group a preferred supplier, and provide the Group the
opportunity to receive and respond to Northrop Grumman "Request for Proposal" to
participate on any of the identified programs or projects. Any resulting
subcontract contemplated by this agreement is subject to the Group being
competitive in price, delivery, quality and performance, and, is subject to
mutual agreement to terms and conditions.
In addition to candidate opportunities, the parties recognize that, prior
to the sale of the Group to SatCon, certain employees of the Group supported
ongoing Northrop Grumman programs/ projects. The parties also recognize that the
expertise or engineering services provided by these employees may continue to be
required to complete Northrop Grumman's outstanding obligations or requirements.
Therefore, the parties agree that SatCon will make the expertise and engineering
services of those employees
<PAGE>
available to Northrop Grumman, subject to entering into a mutually acceptable
engineering services agreement entered into between the parties setting forth
the terms and conditions of any arrangement between Northrop Grumman and SatCon,
including the pricing thereof.
Article II
COSTS
-----
Any and all costs, expense or liability to either party, caused by or
arising from this MOU, its implementation, amendment or expansion shall be borne
by each party separately and individually and neither party shall be liable or
obligated to the other for any such costs, expense, or liabilityother than as
set forth in any agreement hereafter entered into by the parties.
Article III
PROPRIETARY INFORMATION
-----------------------
During the course of this MOU, the parties hereto may exchange such
proprietary information as may reasonably be necessary for each to perform its
obligations hereunder. Such exchange shall be in accordance with a Proprietary
Information Exchange Agreement simultaneously entered into by the parties..
Nothing contained within the terms of this MOU shall be deemed to modify the
obligations or terms of Attachment A.
All available means shall be used by both parties to avoid unauthorized
disclosure or use of such information by employing no less than the same degree
of care for said information that they use with respect to their own proprietary
information.
Article IV
RELATIONSHIP OF THE PARTIES
---------------------------
A. Each party shall act as independent contractor and neither party shall
be deemed to act as agent for, partner of or joint venture with, the other party
for any purpose whatsoever. It is understood and agreed that this MOU will in no
way interfere with or prohibit either party engaging in their normal business
activities which do not incorporate trade secrets or proprietary information of
the other party to both government and commercial users. The parties agree and
acknowledge that this MOU is not intended to establish an exclusive relationship
in derogation of the applicable antitrust laws. Nothing in this MOU shall grant
either party the right to make commitments of any kind for or on behalf of the
other party without the prior written consent of the other party.
B. If SatCon elects not to bid on one or more of the candidate
opportunities identified in Exhibit A of this Memorandum of Understanding, or if
SatCon's bid is unacceptable to Northrop Grumman for any reason, then Northrop
Grumman shall have the unrestricted right to perform or have performed the
statement of work offered to SatCon in connection with such business opportunity
and to utilize the Intellectual Property, drawings, determination,
specifications and other data transferred to SatCon under the Asset Purchase
Agreement, within the scope of the license back-granted by SatCon to Northrop
Grumman.
Article V
<PAGE>
ASSIGNMENT
----------
Neither this MOU nor any interest herein may be assigned, in whole or in
part, by either party hereto without the prior written consent of the other
party, except that without securing such prior consent, Northrop Grumman shall
have the right upon prior written notice to assign this MOU to any subsidiary or
affiliate of Northrop Grumman, provided that such subsidiary or affiliate shall
expressly assume all its obligations and liabilities under this MOU, and
provided further, that Northrop Grumman shall remain liable and responsible to
the other party for the performance and observance of all such obligations
undertaken by such subsidiary or affiliate.
Article VI
PUBLICITY AND NEWS RELEASE
--------------------------
Except as otherwise required by applicable law any news release, public
announcement, or advertisement to be released in connection with this MOU and
the subject matter hereunder shall have the written concurrence of both parties
prior to release.
Article VII
INDEMNITY
---------
The employees of Northrop Grumman and SatCon shall obey all pertinent rules
and regulations of the other party while on the premises of such party including
those relating to the safeguarding of classified information. Each party shall
indemnify and save harmless the other party from and against all claims for
bodily injuries, including death, or damage to property caused by the fault or
negligent act or omission of that party, their employees or agents, in
connection with this MOU. Neither party shall be liable for consequential,
indirect, incidental, or special damages by reason of its performance hereunder.
Article VIII
TERM OF AGREEMENT
-----------------
Except as otherwise expressly provided in Article III (proprietary
information) and unless extended or terminated by mutual written agreement of
the parties, this MOU shall automatically expire upon the elapsing of five (5)
years from the date of execution.
Article IX
APPLICABLE LAW AND DISPUTES
---------------------------
This agreement shall be governed and interpreted in accordance with the
laws of Maryland except its rules in regard to choice of laws.
Article X
ENTIRE AGREEMENT
----------------
This agreement constitutes the entire agreement between the parties and
supersedes any prior oral or written agreement, commitments, understandings or
communications with respect to the subject matter hereof. No change or
amendment to this MOU shall be valid or effective unless executed in writing by
both parties.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this MOU to be executed by
their duly authorized representatives.
NORTHROP GRUMMAN CORPORATION SATCON TECHNOLOGY CORPORATION
By: /s/ Albert Myers By: /s/ David B Eisenhaure
---------------------------- ------------------------------
Its: Corporate Vice President Its: President
and Treasurer -----------------------------
<PAGE>
EXHIBIT A
List of Candidate Business Opportunities
ES3 Oceanic Division
- --------------------
Program or Project Names: RIGEL
ASDS
LMRS
Other (Classified)
S2087 Northrop Grumman has an outstanding
offer on the S2087 Program. In the event of a successful
win, it is anticipated that for the type of system
proposed SatCon will be invited to bid on a Statement of
Work for requirements related to the S2087 Energy Storage
System, but if SatCon is unwilling to bid at the
specified price level, its bid is unacceptable to
Northrop Grumman or, if SatCon chooses to not bid, then
Northrop Grumman shall proceed as provided in Section
IV.B of the Memorandum of Understanding to which this
Exhibit A is attached.
ES3 Systems Development & Technology Division
Program or Project Names: CHPs
<PAGE>
Attachment A
PROPRIETARY INFORMATION
The Parties anticipate the exchange of Proprietary Information in
order to meet the intent and scope of the Memorandum of Understanding, the
exchange of such Proprietary Information shall be in accordance with the
following:
1. Only that information disclosed in written form and identified by a
marking thereon as proprietary, or oral information which is identified
as proprietary at the time of disclosure and confirmed in writing within
ten (10) days of its disclosure date, shall be considered proprietary
and subject to the terms hereof. The party furnishing the proprietary
information will be referred to as the "Disclosing Party" and the party
receiving the proprietary information will be referred to as the
"Receiving Party."
2. The exclusive points of contact with respect to the delivery and control
of proprietary information disclosed hereunder are designated by the
parties as follows:
SatCon SatCon Technology Corporation
161 First Street
Cambridge, MA 02142
ATTN: David B. Eisenhaure
Northrop Grumman: Susan M. Engler, MS A225
Northrop Grumman Corporation
Electronic Sensors and Systems Sector
P.O. Box 17319
Baltimore, Maryland 21203
Either party may change its point of contact by written notice to the
other.
3. The Receiving Party agrees to hold information identified and disclosed
as provided herein, in confidence, for a period of five (5) years from
the date of its receipt, except that Northrop Grumman is authorized to
disclose such information in a report to the United States Government
subject to the restrictions imposed by and bearing the appropriate
notice set forth in DoD Federal Acquisition Regulation Supplement
(DFARS) Section 252.227-7013 or in a proposal to the United States
Government subject to the restriction imposed by and bearing the legend
set forth in Federal Acquisition Regulation (FAR) Section 52.215-1.
4. Neither party shall be liable for disclosure pursuant to judicial action
or government regulation or requirement, provided that the originating
party is given prompt notice of such government or judicial action and
is afforded an opportunity to respond prior to disclosure by the
Receiving Party.
5. Neither party shall disclose or use for manufacturing or any purpose,
other than fulfilling the purpose of the Teaming Agreement and the
contemplated prime contract and subcontract, any proprietary information
disclosed to it by the other party in connection herewith. The foregoing
shall not apply to any portion of such data which has been or is:
(a) developed by the Receiving Party independently and without the
benefit of information disclosed hereunder by the Disclosing
Party;
<PAGE>
(b) lawfully obtained by the Receiving Party from a third party
without restriction;
(c) publicly available without breach of the terms hereof;
(d) disclosed without restriction by the Disclosing Party to a third
party, including the United States Government; or
(e) known to the Receiving Party prior to its receipt from the
Disclosing Party.
6. Each party shall use not less than the degree of care used to prevent
disclosure of its own proprietary information to prevent disclosure of
such information received hereunder. In no event, however, shall less
than a reasonable standard of care be used.
7. Except as may be required for the purpose of the Teaming Agreement, no
copies are to be made of said information without written concurrence
of the Disclosing Party. Such copies, when authorized, shall be
controlled in accordance with the terms hereof and shall be subject to
the recall provisions stated herein.
8. All information received and identified as stated herein shall remain
the property of the Disclosing Party and shall be returned upon
request. Nothing contained herein shall be construed as a right or
license, express or implied, under any patent or copyright, or
application therefor, of either party by or to the other party.
9. Any U.S. Government classified information disclosed by one party to
the other shall be handled in accordance with the Department of Defense
Industrial Security Manual for Safeguarding Classified Information (DoD
5220.22-M) or the National Industrial Security Program Operating Manual
(NISPOM), their supplements, and other applicable U. S. Government
security regulations.
10. The Receiving Party represents and warrants that no technical data
furnished to it by the Disclosing Party shall be exported from the
United States without first complying with all requirements of the
International Traffic in Arms Regulations and the Export Administration
Act, including the requirement for obtaining any export license, if
applicable. The Receiving Party shall first obtain the written consent
of the Disclosing Party prior to submitting any request for authority
to export any such technical data.
11. The obligations of each party with respect to proprietary information
received hereunder shall remain in effect in accordance with the terms
hereof notwithstanding the termination of the Memorandum of Agreement.
<PAGE>
EXHIBIT 10.36
REGISTRATION RIGHTS AGREEMENT
by and between
SATCON TECHNOLOGY CORPORATION
and
NORTHRUP GRUMMAN CORPORATION
Dated as of
November 16, 1999
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
effective as of November 16, 1999, by and between Satcon Technology Corporation,
a Delaware corporation (the "Company") and Northrop Grumman Corporation, a
Delaware corporation ("Northrop").
RECITALS
A. Upon the terms and subject to the conditions of an Asset Purchase
Agreement dated as of November 16, 1999 (the "APA"), by and among the Company,
and Northrop, the Company will acquire assets of Northrop's Power Electronics
Business Unit and the Company will issue 578,761 shares of the common stock, $_
par value ("Common Stock") of the Company to Northrop and one or more Warrants
to purchase Common Stock of the Company.
B. A material inducement for Northrop to consummate the transactions
contemplated by the APA was that the Company enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties contained herein, the parties agree as
follows:
1. Definitions. As used herein, the terms below shall have the following
meanings. Any such term, unless the context otherwise requires, may be used in
the singular or plural, depending upon the reference.
"Affiliate" shall have the meaning provided in the Exchange Act and the
---------
rules and regulations of the Commission promulgated thereunder.
"Agreement" shall mean this Registration Rights Agreement.
---------
"Commission" shall mean the United States Securities and Exchange
----------
Commission.
"Common Stock" shall have the meaning provided in Recital A.
------------
"Company" shall mean Satcon Technology Corporation.
-------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
------------
or any successor law, and the rules and regulations issued pursuant to that
Act or any successor law.
1
<PAGE>
"Holder" shall mean any Person to which or whom Northrop transfers all or
------
part of its Registered Shares or Warrant but only pursuant to an exemption
from registration under the Securities Act, or any permitted assignee
thereof in accordance with Section 19.
"APA" shall have the meaning provided in Recital A.
---
"Person" shall mean an individual, partnership, limited liability company,
------
joint venture, corporation, trust or unincorporated organization or any
other similar entity.
"Register," "registered" and "registration" shall refer to a registration
-----------------------------------------
effected by preparing and filing a registration statement or similar
document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document by the
Commission.
"Registrable Shares" shall mean (a) the Shares acquired by Northrop
------------------
pursuant to the APA or upon exercise of the Warrant and (b) any Common
Stock of the Company issued to Northrop as a dividend or other distribution
with respect to, or in exchange for or in replacement of, any of the
Shares; provided, however, that shares of Common Stock shall only be
treated as Registrable Shares if and so long as (1) they have not been sold
by Northrop or any Holder thereof to or through a broker or dealer or
underwriter in a public distribution or otherwise pursuant to an effective
Registration Statement under the Securities Act, (ii) they have not been
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale, or (iii) are not freely
tradable pursuant to Rule 144(k) under the Securities Act without any
volume limitation.
"Registration" shall mean a registration made pursuant to Section 2.
------------
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
--------------
successor law, and the rules and regulations issued pursuant to that Act or
any successor law.
"Shares" shall mean the shares of Common Stock issued and sold by the
------
Company to Northrop pursuant to the APA and shares of Common Stock issued
and sold by the Company to Northrop or a Holder upon exercise of the
Warrant.
"Violation" shall have the meaning provided in Section 6(a).
---------
"Warrants" shall mean the warrants represented by two (2) certificates
--------
(delivery to Northrop of one of which is subject to fulfillment of a post-
Closing condition as stated in the APA) each entitling Northrop to purchase
100,000 Shares of the
2
<PAGE>
Company for the price per share as stated in the form of Warrant
Certificate annexed to the APA.
2. Registration.
------------
(a) Commercially Reasonable Efforts. Upon the request of Northrop,
-------------------------------
which Northrop shall have the right to do only once with respect to the
Registrable Shares issued at the Closing under the APA and only once with
respect to the Registrable Shares acquired upon exercise of one or both of
the Warrants, the Company shall use its best efforts (without regard to
expenses) to file as soon as practicable hereafter, a registration
statement (the "Registrate Statement") under the Securities Act for resale
of the Registrable Shares which the Company has been notified along with
the request should be included therein by Northrop and shall use its
commercially reasonable efforts to cause such registration statement to
become effective as soon as practicable after each such notice thereafter
and to stay effective for a period of one year after the effectiveness of
each such registration. Northrop has simultaneously herewith delivered the
request for registration of the Registrable Shares issued at Closing of the
APA. Alternatively, the Company may (i) include such Registrable Shares in
an existing effective registration statement of the Company by post
effective amendment with respect to such resale so long as the Northrop and
the Holders are otherwise provided with all of the rights afforded each of
them hereunder or (ii) exchange the Registrable Shares on a one for one
basis for fully registered shares which are freely tradable to the same
extent as if the shares had been the subject of a registration for resale
of such shares as otherwise provided herein ("Registered Shares") provided
such exchange registration is permitted under the Securities Act. If the
Company elects alternative (ii), the Company agrees to exchange Registrable
Shares for Registered Shares. Notwithstanding anything in this Section 2,
the Purchaser may, by written notice to the Seller (i) delay the filing or
effectiveness of the Registration Statement or (ii) suspend the
Registration Statement after effectiveness and require that the Seller
immediately cease sales of shares pursuant thereto in the event that (A)
the Purchaser 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 Purchaser engages in any activity or
transaction that the Purchaser desires to keep confidential for business
reasons, if the Purchaser determines in good faith that the public
disclosure requirements imposed on the Purchaser under the Securities Act
in connection with the Registration Statement covering the Shares would
require disclosure of such activity, transaction, preparations or
negotiations or (C) the Company is in the "registration process" with
respect to an underwritten public offering; provided that each day of delay
or suspension shall not count toward the applicable one year period
referred to above.
3
<PAGE>
(b) Expenses of Registration. All expenses (other than underwriting
------------------------
discounts and commissions, stock transfer taxes and the fees and
disbursements of separate counsel, if any, retained by Northrop or the
Holders) incurred in connection with each Registration, including (without
limitation) all registration, filing and qualification fees, printers'
fees, accounting fees, and fees and disbursements of counsel for the
Company, shall be borne by the Company.
3. Obligations of the Company. Whenever required under this Agreement to
--------------------------
effect the registration of any Registrable Shares, the Company shall, as
expeditiously as reasonably possible, use reasonable commercial efforts (without
regard to expense) to do the following:
(a) Amendments. Prepare and file with the Commission such amendments
----------
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement, and furnish such
copies thereof to Northrop and the Holders.
(b) Prospectus. Furnish to Northrop and the Holders such numbers of
----------
copies of a prospectus, including a preliminary prospectus, and any post-
effective amendments in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Shares owned by them, and cause
all related filings to be made with the Commission as required by Rule 424.
(c) Blue Sky Qualification. Register and qualify the Registrable
----------------------
Shares covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by
Northrop and the Holders; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions.
(d) Prospectus Delivery. Promptly notify Northrop and each Holder of
-------------------
Registrable Shares covered by the registration statement at any time when
the Company becomes aware of the happening of any event as a result of
which the registration statement or the prospectus included in such
registration statement or any supplement to the prospectus (as then in
effect) contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein (in the case of
the prospectus, in light of the circumstances under which they were made)
not misleading or, if for any other reason it shall be necessary during
such time period to amend or supplement the registration statement or the
prospectus in order to comply with the Securities Act, whereupon, in either
case, each Holder shall immediately cease to use such registration
statement or prospectus for any purpose and, as promptly as practicable
thereafter, the
4
<PAGE>
Company shall promptly prepare and file with the Commission, and furnish
without charge to Northrop and the Holders, a supplement or amendment to
such registration statement or prospectus which will correct such statement
or omission or effect such compliance and such copies thereof as Northrop
and the Holders may reasonably request.
(e) Suspensions. The Company shall use its reasonable best efforts to
-----------
obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction.
(f) Certificates. The Company shall cooperate with the selling by
------------
Northrop and Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any restrictive
legends.
(g) Earnings Statements. The Company shall comply with all applicable
-------------------
rules and regulations of the SEC and make generally available to its
security holders earnings statements satisfying the provisions of Section
11 (a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act).
4. Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Shares of Northrop that Northrop (i) shall furnish to
the Company such information regarding itself, the Registrable Shares held by it
and the intended method of disposition of such securities as shall be required
to effect the registration of Northrop and such Holder's Registrable Shares and
(ii) shall agree in writing to observe all obligations applicable to a "Holder"
under this Agreement.
5. Delay of Registration. Neither Northrop nor any Holder shall have any
---------------------
right to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Agreement.
6. Indemnification. In the event any Registrable Shares are included in
---------------
a registration statement under this Agreement:
(a) Indemnification by the Company. To the fullest extent permitted
------------------------------
by law, the Company will indemnify and hold harmless Northrop, each Holder,
any underwriter (as defined in the Securities Act) for Northrop and such
Holder and each person, if any, who controls Northrop or such Holder or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities, joint or several) to
which they may become subject under the Securities Act, the Exchange Act,
or other federal or state law, insofar as such
5
<PAGE>
losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions
or violations (collectively a "Violation"): (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act or any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act
or any state securities law, and the Company will pay to Northrop and each
such Holder, director, underwriter or controlling person, as incurred, any
legal or other expenses reasonably incurred by one law firm retained by
them, plus appropriate local counsel in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 6(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of
the Company (which consent shall not be unreasonably withheld), nor shall
the Company be liable in any such case for any such loss, claim, damage,
liability, or action to which Northrop or any Holder, underwriter or
controlling person may become subject to the extent that it arises out of
or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
connection with such registration by Northrop or such Holder, underwriter
or controlling person or in connection with the sale by Northrop or others
during any period when a registration statement has not been declared
effective, sales are suspended or Northrop or others fail to deliver a
prospectus or utilize a prospectus that Northrop has been advised is
inaccurate. This right to indemnification shall remain in full force and
effect notwithstanding any investigation made by or on behalf of Northrop
and such Holder or underwriter and shall survive the transfer of such
securities by Northrop and such Holder.
(b) Indemnification by Northrop and Holder. To the fullest extent
--------------------------------------
permitted by law, Northrop for itself and each Holder, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act,
any underwriter, each other Holder and any controlling person of any such
underwriter or other Holder against any losses, claims, damages, or
liabilities, joint or several) to which any of the foregoing persons may
become subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information
furnished by Northrop or such Holder expressly for use in connection with
such registration or
6
<PAGE>
in connection with any sale by Northrop or others during any period when a
Registration Statement has not been declared effective, sales are suspended
or Northrop or others fail to deliver a prospectus or utilize a prospectus
that Northrop has been advised is inaccurate; provided, however, that the
indemnity agreement contained in this Section 6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of Northrop and
the Holder, which consent shall not be unreasonably withheld; provided,
further, that in no event shall any indemnity under this Section 6(b)
exceed the net proceeds from the offering received by Northrop or such
Holder.
(c) Procedures. Promptly after receipt by an indemnified party under
----------
this Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that
an indemnified party (together with all other indemnified parties which may
be represented without conflict by one counsel reasonably acceptable to the
Company) shall have the right to retain one separate counsel (plus
appropriate local counsel), with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action, if prejudicial in any material
respect to its ability to defend such action, shall to the extent
prejudicial relieve such indemnifying party of any liability to the
indemnified party under this Section 6, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under
this Section 6.
(d) Contribution. If the indemnification provided for in this Section
------------
6 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and
the indemnified party or parties on the other in connection with the
actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to,
7
<PAGE>
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or related to information
supplied by, such indemnifying party or indemnified parties, and the party
or parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action; provided, however, that in
no event shall the liability of Northrop hereunder be greater in amount
than the difference between the dollar amount of the proceeds received by
Northrop and all Holders upon the sale of the Registrable Shares giving
rise to such contribution obligation and all amounts previously contributed
by Northrop with respect to such losses, claims, damages, liabilities and
expenses. The amount paid or payable to a party as a result of the losses,
claims damages, liabilities and expenses referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
--------
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(e) Survival. The obligations of the Company and Northrop and any
Holders under this Section 6 shall survive the completion of any offering
of Registrable Shares in a registration statement under this Agreement, and
otherwise.
7. Reports Under Exchange Act. With a view to making available to
--------------------------
Northrop and the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the Commission that may at
any time permit Northrop or a Holder to sell securities of the Company to the
public without registration generally, the Company agrees to use reasonable
commercial efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(c) furnish to Northrop and any Holder, so long as Northrop or the
Holder owns any Registrable Shares, promptly upon request (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a
copy of the most recent
8
<PAGE>
annual and/or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing Northrop of any rule or regulation of
the Commission which permits the selling of any Registrable Shares without
registration or pursuant to such form.
8. Amendment of Registration Rights. Any provision of this Agreement may
--------------------------------
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and Northrop. Any amendment or waiver effected
in accordance with this Section 8 shall be binding upon Northrop and each Holder
of any Registrable Shares then outstanding, each future holder of all such
Registrable Shares and the Company.
9. [Reserved]
10. Restrictions on Public Sale by Holders. Notwithstanding anything
--------------------------------------
contained herein, each Holder of Registrable Securities agrees not to effect any
public sale or distribution of any Registrable Securities being registered
except during the period beginning three (3) business days after the release of
each of the Company's quarterly earnings announcements and continuing for thirty
(30) days thereafter.
11. Termination. The rights provided in this Agreement shall terminate on
the first anniversary of the effective date of this Agreement as to the
Registrable Shares issued at the Closing of the APA, and one year following the
date of first exercise of a Warrant as to all Registrable Shares subject to the
Warrant(s).
12. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE
-------------
RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF).
13. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. Titles and Subtitles. The titles and subtitles used in this Agreement
--------------------
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
15. Negotiation of Agreement. Each of the parties acknowledges that it
------------------------
has been represented by legal counsel of its choice throughout all negotiations
that have preceded the execution of this Agreement and that it has executed the
same with consent and upon the advice of said legal counsel. Each party and its
counsel cooperated in the drafting and preparation of this Agreement and the
documents referred to herein, and any and all drafts relating thereto shall be
deemed the work product of the parties and may not
9
<PAGE>
be construed against any party by reason of its preparation. Accordingly, any
rule of law or any legal decision that would require interpretation of any
ambiguities in this Agreement against the party that drafted it is of no
application and is hereby expressly waived. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intentions of the
parties and this Agreement.
16. Notices. Any notice, request, instruction or other document to be
-------
given hereunder by any party hereto to another party hereto shall be in writing,
shall be deemed to have been duly given or delivered when delivered personally
or telecopied (receipt confirmed, with a copy sent by reputable overnight
courier), or one business day after delivery to a reputable overnight courier,
postage prepaid, to the address of the party set forth below such person's
signature on this Agreement or to such address as the party to whom notice is to
be given may provide in a written notice to the other party to this Agreement, a
copy of which written notice shall be on file with the Secretary of the Company.
17. Severability. If one or more provisions of this Agreement are held to
------------
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its terms
to the fullest extent permitted by law.
18. Further Assurances. Each of the parties shall, without further
------------------
consideration, use reasonable efforts to execute and deliver such additional
documents and take such other action as the other party, may reasonably request
to carry out the intent of this Agreement and the transactions contemplated
hereby.
19. Transfer or Assignment of Registration Rights. The rights to cause
---------------------------------------------
the Company to register Registrable Securities may not be transferred or
assigned by Northrop.
20. Successors and Assigns. This Agreement shall be binding upon, and all
----------------------
rights hereto shall inure to the benefit of, the parties hereto, and their
respective successors and permitted assigns.
21. Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding of the parties hereto in respect of the actions and transactions
contemplated by this Agreement. There are no restrictions, promises,
inducements, representations, warranties, covenants or undertakings with regard
to the registration of the Company's capital stock pursuant to the Securities
Act, other than those expressly set forth or referred to in this Agreement.
22. Recapitalizations, etc. The provisions of this Agreement (including
----------------------
any calculation of share ownership) shall apply, to the full extent set forth
herein with respect to the Registrable Shares, to any and all shares of capital
stock of the Company or any
10
<PAGE>
capital stock, partnership units or, any other security evidencing ownership
interests in any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) that may be issued in respect of, in
exchange for, or in substitution of the Common Stock by reason of any stock
dividend, split, combination, recapitalization, liquidation, reclassification,
merger, consolidation or otherwise.
23. Third Party Beneficiary. There are no third party beneficiaries of
-----------------------
this Agreement.
24. Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
In Witness Whereof, the parties have executed this Agreement on the
date and year above written.
Satcon Technologies Corporation
By: /s/ David B. Eisenhaure
---------------------------
Its: President
--------------------------
Northrop Grumman Corporation
By: /s/ Albert Myers
---------------------------
Its: Corporate Vice President
and Treasurer
11
<PAGE>
EXHIBIT 10.37
FORM OF STOCK PURCHASE WARRANT
by
SATCON TECHNOLOGY CORPORATION
to
NORTHROP GRUMMAN CORPORATION
Issued on
November 16, 1999
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FOR INVESTMENT ONLY
AND NOT FOR RESALE. THEY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAW. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS FIRST REGISTERED UNDER SUCH
LAWS, OR UNLESS SATCON TECHNOLOGY CORPORATION (THE "COMPANY"), AS THE ISSUER,
HAS RECEIVED AN OPINION OF COUNSEL (WHICH COUNSEL MAY BE AN EMPLOYEE OF THE
HOLDER OF THIS CERTIFICATE OR SUCH HOLDER'S AFFILIATE) TO THE EFFECT THAT SUCH
TRANSACTION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS, INCLUDING THE TERMS AND CONDITIONS RELATING TO REGISTRATION RIGHTS,
SET FORTH IN A CERTAIN AGREEMENT DATED AS OF November 16, 1999, BY AND AMONG THE
COMPANY AND NORTHROP GRUMMAN CORPORATION, AS FROM TIME TO TIME AMENDED, MODIFIED
OR SUPPLEMENTED, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
No. W-1 Number of Shares: 100,000
Date: November 16, 1999
WARRANT CERTIFICATE
SATCON TECHNOLOLGY CORPORATION
This Warrant Certificate certifies that Northrop Grumman Corporation
(together with any subsequent holder of this Warrant, the "Holder") is the
holder of a Warrant (the "Warrant") to purchase 100,000 shares (the "Shares") of
the common stock, par value $1.00 per share ("Common Stock"), of Satcon
Technology Corporation (the "Company"), at a purchase price of $9.725 per Share
("Purchase Price"). The Warrant may be exercised as provided in Section 1
below. The number of shares that may be purchased upon exercise of the Warrant
set forth above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of the date hereof and are subject to adjustment as
set forth below.
The Warrant is subject to the following terms, conditions and provisions:
Section 1. Exercise of Warrant; Purchase Price; Term.
-----------------------------------------
(a) Exercise of Warrant. The Holder may exercise the Warrant in whole or
-------------------
in part (but, if in part, only as to a whole number of Shares) at any time and
from time to time during the period (the "Exercise Period") ending on December
31, 2006, upon surrender of this Warrant Certificate, with the Form of Election
attached thereto duly
1
<PAGE>
executed, to the Company at its office, together with payment of the Purchase
Price for all or a portion of the Shares. The Purchase Price shall be payable in
cash or by certified or official bank check or other immediately available funds
payable to the order of the Company.
(b) Issuance of Common Stock. Following the receipt of this Warrant
------------------------
Certificate, with the Form of Election to purchase duly executed, accompanied by
payment of the Purchase Price for the Shares to be purchased and an amount equal
to any applicable transfer tax in cash, or by certified or official bank check
or other immediately available funds payable to the order of the Company, the
Company shall thereupon promptly cause certificates for the number of whole
shares of Common Stock to be purchased to be delivered to the Holder.
(c) Unexercised Warrants. In case the Holder shall exercise the Warrant
--------------------
for an amount less than all Shares evidenced thereby, a new Warrant Certificate
evidencing a Warrant to purchase the remaining unexercised Shares shall be
issued by the Company to the Holder.
Section 2. Transfer of Warrant Certificates; Loss, Theft, Destruction or
-------------------------------------------------------------
Mutilation of Warrant Certificates.
----------------------------------
(a) Transfer of Warrant. The Warrant and the Shares issued upon exercise
-------------------
hereof may not be transferred or assigned without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, if reasonably requested by the Company).
Subject to the provisions of this subsection, title to the Warrant may be
transferred in the same manner as a negotiable instrument transferable by
endorsement and delivery; provided, however, that the Warrant may only be
transferred in whole and may not be transferred in part.
(b) Loss, Theft, Destruction or Mutilation of Warrant Certificates. In
--------------------------------------------------------------
the event of the loss, theft or destruction of a Warrant Certificate, then, upon
receipt by the Company of (i) evidence reasonably satisfactory to the Company of
such loss, theft, or destruction, (ii) an undertaking of indemnity or security
in a form and by a party reasonably satisfactory to the Company, and (iii)
reimbursement to the Company of all reasonable expenses incidental thereto, the
Company will make and deliver a new Warrant Certificate of like tenor to the
registered owner in lieu of the Warrant Certificate so lost, stolen, or
destroyed; provided, if the registered owner of such Warrant Certificate is the
Holder, or any insurance company, bank, pension fund or other institutional
investor, the Holder's or such institutional investor's own agreement of
indemnity shall be deemed to be satisfactory for purposes of the preceding
clause (ii). Upon surrender and cancellation of a Warrant Certificate if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor to the registered owner in lieu of the Warrant Certificate so mutilated.
2
<PAGE>
Section 3. Legends.
-------
Each Warrant Certificate issued evidencing all or any portion of the
Warrant shall, and any Shares issued pursuant to exercise of the Warrant shall,
unless the respective Warrant or Shares shall be covered by an effective
registration statement as provided in the Securities Act, bear an endorsement
reading substantially as follows:
"The securities represented by this certificate were acquired for
investment only and not for resale. They have not been registered
under the Securities Act of 1933, as amended, or any state securities
law. These securities may not be sold, transferred, pledged or
hypothecated unless first registered under such laws, or unless Satcon
Technology Corporation (the "Company"), as the issuer, has received an
opinion of counsel (which counsel may be an employee of the holder of
this certificate or such holder's affiliate) to the effect that such
transaction is exempt from the registration requirements of such laws.
"The securities represented by this certificate are subject to the
terms and conditions, including the terms and conditions relating to
registration rights, set forth in a Registration Rights Agreement
dated as of November 16, 1999 by and among the Company and Northrop
Grumman Corporation, as from time to time amended, modified or
supplemented, a copy of which may be obtained from the Company."
Section 4. Adjustment of Exercise Price and Number of Warrant Shares.
---------------------------------------------------------
The number of shares of Common Stock purchasable upon the exercise of the
Warrant and the payment of the Purchase Price shall be subject to adjustment of
as follows:
(a) Dividends, Subdivision, Combinations and Reclassifications. In case
----------------------------------------------------------
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue by reclassification of its shares of Common Stock other
securities of the Company (including, without limitation, any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), upon exercise of the Warrant at any time
subsequent to any such event the Holder shall be entitled to receive the kind
and number of shares of Common Stock or other securities of the Company that it
would have owned or have been entitled to receive after the happening of any of
the events described above, had the Warrant been exercised immediately prior to
the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this subsection shall become effective on the
effective date of such event.
3
<PAGE>
(b) Reorganization or Merger, etc. If after the issuance of the Warrant,
-----------------------------
any capital reorganization of the Company, or any reclassification of its Common
Stock, or any consolidation of the Company with or merger of the Company with or
into any other person or any sale, lease or other transfer of all or
substantially all of the assets of the Company to any other person, shall be
effected in such a way that a holder of Common Stock shall be entitled to
receive stock, other securities or assets (whether such stock, other securities
or assets are issued or distributed by the Company or another person) with
respect to or in exchange for Common Stock of the Company, then, upon exercise
of the Warrant the Holder shall have the right to receive the kind and amount of
stock, other securities or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer by a
holder of the number of shares of Common Stock that such Holder would have been
entitled to receive upon exercise of the Warrant had the Warrant been exercised
immediately before such reorganization, reclassification, consolidation, merger
or sale, lease or other transfer.
(c) De Minimis Adjustments. No adjustment in the number of shares of
----------------------
Common Stock purchasable under the Warrant shall be required unless such
adjustment would require an increase or decrease of at least two percent (2%) in
the number of such shares purchasable upon the exercise of the Warrant;
provided, that any adjustments that by reason of this subsection are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment; and provided further, upon exercise of the Warrant, the
Company shall make all necessary adjustments not theretofore made up to and
including the date upon which the Warrant is exercised.
Section 5. No Entitlement to Vote or Receive Dividends.
-------------------------------------------
Without limitation of any of the rights of the Holder under the
Shareholders Agreement described in Section 6 below, the Holder shall not be
entitled to vote or receive dividends or be deemed for any purpose the holder of
common Stock or of any other securities of the Company that may at any time be
issued upon the exercise of the Warrant but have not yet been so issued, nor
shall anything contained herein be construed to confer upon the Holder, as such,
any of the rights of a stockholder of the Company or any right to vote upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issue of
stock, reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights, or otherwise, until the Warrant shall have
been exercised as provided herein.
Section 6. Registration Rights Agreement.
-----------------------------
The Warrant is entitled to the benefits of and subject to all of the terms,
conditions and provisions of that certain Registration Rights Agreement dated as
of November 16,1999 by and among the Company and Northrop Grumman Corporation,
as from time to time amended, modified or supplemented, and the Holder hereof
agrees to perform and
4
<PAGE>
observe and be subject to all of such terms, conditions and provisions with
respect to the Warrant and any Shares issued pursuant hereto.
WITNESS the signature of the proper officer of the Company, dated the date
first above written.
By:/s/ David B. Eisenhaure
-----------------------
Name: David B. Eisenhaure
---------------------
Title: President
--------------------
5
<PAGE>
EXHIBIT 10.38
FORM OF STOCK PURCHASE WARRANT
to be issued to
NORTHROP GRUMMAN CORPORATION
Upon the satisfaction of
certain conditions
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FOR INVESTMENT ONLY
AND NOT FOR RESALE. THEY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAW. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS FIRST REGISTERED UNDER SUCH
LAWS, OR UNLESS SATCON TECHNOLOGY CORPORATION (THE "COMPANY"), AS THE ISSUER,
HAS RECEIVED AN OPINION OF COUNSEL (WHICH COUNSEL MAY BE AN EMPLOYEE OF THE
HOLDER OF THIS CERTIFICATE OR SUCH HOLDER'S AFFILIATE) TO THE EFFECT THAT SUCH
TRANSACTION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS, INCLUDING THE TERMS AND CONDITIONS RELATING TO REGISTRATION RIGHTS,
SET FORTH IN A CERTAIN AGREEMENT DATED AS OF November 16, 1999, BY AND AMONG THE
COMPANY AND NORTHROP GRUMMAN CORPORATION, AS FROM TIME TO TIME AMENDED, MODIFIED
OR SUPPLEMENTED, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
No. W-2 Number of Shares: 100,000
Date: November 16, 1999
WARRANT CERTIFICATE
SATCON TECHNOLOGY CORPORATION
This Warrant Certificate certifies that Northrop Grumman Corporation
(together with any subsequent holder of this Warrant, the "Holder") is the
holder of a Warrant (the "Warrant") to purchase 100,000 shares (the "Shares") of
the common stock, par value $1.00 per share ("Common Stock"), of Satcon
Technology Corporation (the "Company"), at a purchase price of $9.725 per Share
("Purchase Price"). The Warrant may be exercised as provided in Section 1
below. The number of shares that may be purchased upon exercise of the Warrant
set forth above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of the date hereof and are subject to adjustment as
set forth below.
The Warrant is subject to the following terms, conditions and provisions:
Section 1. Exercise of Warrant; Purchase Price; Term.
-----------------------------------------
(a) Exercise of Warrant. The Holder may exercise the Warrant in whole or
-------------------
in part (but, if in part, only as to a whole number of Shares) at any time and
from time to time during the period (the "Exercise Period") ending on December
31, 2006, upon surrender of this Warrant Certificate, with the Form of Election
attached thereto duly
1
<PAGE>
executed, to the Company at its office, together with payment of the Purchase
Price for all or a portion of the Shares. The Purchase Price shall be payable in
cash or by certified or official bank check or other immediately available funds
payable to the order of the Company.
(b) Issuance of Common Stock. Following the receipt of this Warrant
------------------------
Certificate, with the Form of Election to purchase duly executed, accompanied by
payment of the Purchase Price for the Shares to be purchased and an amount equal
to any applicable transfer tax in cash, or by certified or official bank check
or other immediately available funds payable to the order of the Company, the
Company shall thereupon promptly cause certificates for the number of whole
shares of Common Stock to be purchased to be delivered to the Holder.
(c) Unexercised Warrants. In case the Holder shall exercise the Warrant
--------------------
for an amount less than all Shares evidenced thereby, a new Warrant Certificate
evidencing a Warrant to purchase the remaining unexercised Shares shall be
issued by the Company to the Holder.
Section 2. Transfer of Warrant Certificates; Loss, Theft, Destruction or
-------------------------------------------------------------
Mutilation of Warrant Certificates.
----------------------------------
(a) Transfer of Warrant. The Warrant and the Shares issued upon exercise
-------------------
hereof may not be transferred or assigned without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, if reasonably requested by the Company).
Subject to the provisions of this subsection, title to the Warrant may be
transferred in the same manner as a negotiable instrument transferable by
endorsement and delivery; provided, however, that the Warrant may only be
transferred in whole and may not be transferred in part.
(b) Loss, Theft, Destruction or Mutilation of Warrant Certificates. In
---------------------------------------------------------------
the event of the loss, theft or destruction of a Warrant Certificate, then, upon
receipt by the Company of (i) evidence reasonably satisfactory to the Company of
such loss, theft, or destruction, (ii) an undertaking of indemnity or security
in a form and by a party reasonably satisfactory to the Company, and (iii)
reimbursement to the Company of all reasonable expenses incidental thereto, the
Company will make and deliver a new Warrant Certificate of like tenor to the
registered owner in lieu of the Warrant Certificate so lost, stolen, or
destroyed; provided, if the registered owner of such Warrant Certificate is the
Holder, or any insurance company, bank, pension fund or other institutional
investor, the Holder's or such institutional investor's own agreement of
indemnity shall be deemed to be satisfactory for purposes of the preceding
clause (ii). Upon surrender and cancellation of a Warrant Certificate if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor to the registered owner in lieu of the Warrant Certificate so mutilated.
2
<PAGE>
Section 3. Legends.
-------
Each Warrant Certificate issued evidencing all or any portion of the
Warrant shall, and any Shares issued pursuant to exercise of the Warrant shall,
unless the respective Warrant or Shares shall be covered by an effective
registration statement as provided in the Securities Act, bear an endorsement
reading substantially as follows:
"The securities represented by this certificate were acquired for
investment only and not for resale. They have not been registered
under the Securities Act of 1933, as amended, or any state securities
law. These securities may not be sold, transferred, pledged or
hypothecated unless first registered under such laws, or unless Satcon
Technology Corporation (the "Company"), as the issuer, has received an
opinion of counsel (which counsel may be an employee of the holder of
this certificate or such holder's affiliate) to the effect that such
transaction is exempt from the registration requirements of such laws.
"The securities represented by this certificate are subject to the
terms and conditions, including the terms and conditions relating to
registration rights, set forth in a Registration Rights Agreement
dated as of November 16, 1999 by and among the Company and Northrop
Grumman Corporation, as from time to time amended, modified or
supplemented, a copy of which may be obtained from the Company."
Section 4. Adjustment of Exercise Price and Number of Warrant Shares.
---------------------------------------------------------
The number of shares of Common Stock purchasable upon the exercise of the
Warrant and the payment of the Purchase Price shall be subject to adjustment of
as follows:
(a) Dividends, Subdivision, Combinations and Reclassifications. In case
----------------------------------------------------------
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue by reclassification of its shares of Common Stock other
securities of the Company (including, without limitation, any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), upon exercise of the Warrant at any time
subsequent to any such event the Holder shall be entitled to receive the kind
and number of shares of Common Stock or other securities of the Company that it
would have owned or have been entitled to receive after the happening of any of
the events described above, had the Warrant been exercised immediately prior to
the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this subsection shall become effective on the
effective date of such event.
3
<PAGE>
(b) Reorganization or Merger, etc. If after the issuance of the Warrant,
-----------------------------
any capital reorganization of the Company, or any reclassification of its Common
Stock, or any consolidation of the Company with or merger of the Company with or
into any other person or any sale, lease or other transfer of all or
substantially all of the assets of the Company to any other person, shall be
effected in such a way that a holder of Common Stock shall be entitled to
receive stock, other securities or assets (whether such stock, other securities
or assets are issued or distributed by the Company or another person) with
respect to or in exchange for Common Stock of the Company, then, upon exercise
of the Warrant the Holder shall have the right to receive the kind and amount of
stock, other securities or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer by a
holder of the number of shares of Common Stock that such Holder would have been
entitled to receive upon exercise of the Warrant had the Warrant been exercised
immediately before such reorganization, reclassification, consolidation, merger
or sale, lease or other transfer.
(c) De Minimis Adjustments. No adjustment in the number of shares of
----------------------
Common Stock purchasable under the Warrant shall be required unless such
adjustment would require an increase or decrease of at least two percent (2%) in
the number of such shares purchasable upon the exercise of the Warrant;
provided, that any adjustments that by reason of this subsection are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment; and provided further, upon exercise of the Warrant, the
Company shall make all necessary adjustments not theretofore made up to and
including the date upon which the Warrant is exercised.
Section 5. No Entitlement to Vote or Receive Dividends.
-------------------------------------------
Without limitation of any of the rights of the Holder under the
Shareholders Agreement described in Section 6 below, the Holder shall not be
entitled to vote or receive dividends or be deemed for any purpose the holder of
common Stock or of any other securities of the Company that may at any time be
issued upon the exercise of the Warrant but have not yet been so issued, nor
shall anything contained herein be construed to confer upon the Holder, as such,
any of the rights of a stockholder of the Company or any right to vote upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issue of
stock, reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights, or otherwise, until the Warrant shall have
been exercised as provided herein.
Section 6. Registration Rights Agreement.
-----------------------------
The Warrant is entitled to the benefits of and subject to all of the terms,
conditions and provisions of that certain Registration Rights Agreement dated as
of November 16,1999 by and among the Company and Northrop Grumman Corporation,
as from time to time amended, modified or supplemented, and the Holder hereof
agrees to perform and
4
<PAGE>
observe and be subject to all of such terms, conditions and provisions with
respect to the Warrant and any Shares issued pursuant hereto.
WITNESS the signature of the proper officer of the Company, dated the date
first above written.
By:_______________________
Name: ____________________
Title: ___________________
5
