BEACON POWER CORPORATION FORM OF WARRANT TO PURCHASE COMMON STOCK
Exhibit
1.3
BEACON
POWER CORPORATION
FORM
OF
Warrant
No.:
Number
of
Shares of Common Stock:_____________
Date
of
Issuance: October [___], 2007 ("Issuance
Date")
Beacon
Power Corporation, a Delaware corporation (the "Company"),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, _____________________________,
the
registered holder hereof or its permitted assigns (the "Holder"),
is
entitled, subject to the terms set forth below, to purchase from the Company,
at
the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the "Warrant"),
at
any time or times on or after six months and one day after the date hereof
(the
“Exercisability
Date”),
but not
after 11:59 p.m., New York time, on the Expiration Date (as defined below),
______________ (_____________)1
fully
paid nonassessable shares of Common Stock (as defined below) (the
"Warrant
Shares").
Except as otherwise defined herein, capitalized terms in this Warrant shall
have
the meanings set forth in Section 15. This Warrant is the Warrant to purchase
Common Stock (this "Warrant")
issued
pursuant to Section 6 of that certain Subscription Agreement, dated as of
October __, 2007 (the "Subscription
Date"),
by
and among the Company and the Holder (the "Subscription
Agreement")
pursuant to the Company’s Registration Statement on Form S-3, (File number
333-145165) (the “Registration
Statement”)
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise.
Subject
to the terms and conditions hereof (including, without limitation, the
limitations set forth in Section 1 (h)), this Warrant may be exercised by the
Holder on any day on or after the Exercisability Date, in whole or in part,
by
(i) delivery of a written notice, in the form attached hereto as
Exhibit
A
(the
"Exercise
Notice"),
of
the Holder's election to exercise this Warrant and (ii) (A) payment to the
Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being exercised (the
"Aggregate
Exercise Price")
in
cash or by wire transfer of immediately available funds or (B) provided the
conditions for cashless exercise set forth in Section 1(d) are satisfied, by
notifying the Company that this Warrant is being exercised pursuant to a
Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required
to deliver the original Warrant in order to effect an exercise hereunder.
Execution and delivery of the Exercise Notice with respect to less than all
of
the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. On or before the first (1st)
Business Day following the date on which the Company has received each of the
Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless
Exercise) (the "Exercise
Delivery Documents"),
the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company's transfer
agent (the "Transfer
Agent").
On or
before the third (3rd)
Business Day following the date on which the Company has received all of the
Exercise Delivery Documents (the "Share
Delivery Date"),
the
Company shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company ("DTC")
Fast
Automated Securities Transfer Program, upon the request of the Holder, credit
such aggregate number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the Holder's or its designee's balance account with DTC
through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer
Program, issue and dispatch by overnight courier to the address as specified
in
the Exercise Notice, a certificate, registered in the Company's share register
in the name of the Holder or its designee, for the number of shares of Common
Stock to which the Holder is entitled pursuant to such exercise. Upon delivery
of the Exercise Delivery Documents, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date such Warrant
Shares are credited to the Holder's DTC account or the date of delivery of
the
certificates evidencing such Warrant Shares, as the case may be. If this Warrant
is submitted in connection with any exercise pursuant to this Section 1(a)
and
the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three
Business Days after any exercise and at its own expense, issue a new Warrant
(in
accordance with Section 7(d)) representing the right to purchase the number
of
Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant
is
exercised. No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock to
be
issued shall be rounded up to the nearest whole number. The Company shall pay
any and all taxes which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant.
1 Insert
a
number of shares equal to the number of Common Shares purchased under the
Subscription Agreement.
(b) Exercise
Price.
For
purposes of this Warrant, "Exercise
Price"
means
$[_______]2 ,
subject
to adjustment as provided herein.
(c) Company's
Failure to Timely Deliver Securities.
If the
Company shall fail for any reason or for no reason to issue to the Holder within
three (3) Business Days of receipt of the Exercise Delivery Documents in
compliance with the terms of this Section 1, a certificate for the number of
shares of Common Stock to which the Holder is entitled and register such shares
of Common Stock on the Company's share register or to credit the Holder's
balance account with DTC for such number of shares of Common Stock to which
the
Holder is entitled upon the Holder's exercise of this Warrant, and if on or
after such Trading Day the Holder purchases (in an open market transaction
or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of shares of Common Stock issuable upon such exercise that the Holder
anticipated receiving from the Company (a "Buy-In"),
then
the Company shall, within three (3) Business Days after the Holder's request
and
in the Holder's discretion, either (i) pay cash to the Holder in an amount
equal
to the Holder's total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased (the "Buy-In
Price"),
at
which point the Company's obligation to deliver such certificate (and to issue
such Warrant Shares) shall terminate, or (ii) promptly honor its obligation
to
deliver to the Holder a certificate or certificates representing such Warrant
Shares and pay cash to the Holder in an amount equal to the excess (if any)
of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the date of exercise.
2
Insert
an amount equal to the closing bid price for the Common Stock immediately
prior
to the Subscription Date.
-2-
(d) Cashless
Exercise.
Notwithstanding
anything contained herein to the contrary, but subject to Section 1(h), if
a
registration statement covering the Warrant Shares that are the subject of
the
Exercise Notice (the "Unavailable
Warrant Shares"),
or an
exemption from registration,
is not
available for the resale of such Unavailable Warrant Shares, the Holder may,
in
its sole discretion, exercise this Warrant in whole or in part and, in lieu
of
making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "Cashless
Exercise"):
Net
Number = (A
x
B) - (A x C)
B
For
purposes of the foregoing formula:
| A= |
the
total number of shares with respect to which this Warrant is then
being
exercised.
|
| B= |
the
arithmetic average of the Closing Sale Prices of the shares of Common
Stock for the five (5) consecutive Trading Days ending on the date
immediately preceding the date of the Exercise
Notice.
|
| C= |
the
Exercise Price then in effect for the applicable Warrant Shares at
the
time of such exercise.
|
(e) Company-Elected
Conversion. (i)
The
Company shall provide to the Holder prompt written notice of any time that
the
Company is unable to
issue
the Warrant Shares via DTC transfer (or otherwise without restrictive legend),
because (A) the Securities and Exchange Commission (the “Commission”)
has
issued a stop order with respect to the Registration Statement, (B) the
Commission otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, (C) the Company
has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or (D) otherwise (each a “Restrictive
Legend Event”).
To the
extent that a Restrictive Legend Event occurs after the Holder has exercised
this Warrant in accordance with Section 1(a) but prior to the delivery of the
Warrant Shares, the Company shall (i) if the fair market value (as calculated
above) of the Warrant Shares is greater than the Exercise Price, provide written
notice to the Holder that the Company will deliver that number of Warrant Shares
to the Holder as should be delivered in a Cashless Exercise in accordance with
this Section 1(a), and return to the Holder all consideration paid to the
Company in connection with the Holder’s attempted exercise of this Warrant
pursuant to Section 1(a) (a “Company-Elected
Conversion”),
or
(ii) at the election of the Holder to be given within five (5) days of receipt
of notice of a Company-Elected Conversion, the Holder shall be entitled to
rescind the previously submitted Notice of Exercise and the Company shall return
all consideration paid by ▇▇▇▇▇▇ for such shares upon such
rescission.
-3-
(ii)
If a
Restrictive Legend Event has occurred and no exemption from the registration
requirements is available (including, without limitation, under Section 3(a)(9)
of the Securities Act by virtue of a Cashless Exercise), this Warrant shall
not
be exercisable. Notwithstanding anything herein to the contrary, the Company
shall not be required to make any cash payments to the Holder in lieu of
issuance of the Warrant Shares. The
Company shall give prompt written notice to the Holder of any cessation of
a
Restrictive Legend Event (the “Re-Effectiveness
Notice”).
Notwithstanding anything to the contrary contained herein, the Expiration Date
of this Warrant shall be extended for a period of five (5) days following
receipt by the Holder of the Re-Effectiveness Notice.
(f) Rule
144.
For
purposes of Rule 144(d) promulgated under the Securities Act, as in effect
on
the date hereof, it is intended that the Warrant Shares issued in a Cashless
Exercise shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have commenced, on the date
this Warrant was originally issued pursuant to the Subscription
Agreement.
(g) Disputes.
In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed.
(h) Limitations
on Exercises.
Any
exercise of this Warrant must be in compliance with this Section 1(h) and any
Exercise Notice must be accompanied by a certificate of the holder certifying
the number of shares of Common Stock owned by the holder and a detailed
computation of the number of shares of Common Stock the holder is entitled
to
acquire by exercise or conversion of any security or instrument without regard
to any time, cap or other limitation on such exercise or conversion. The Company
shall have no obligation to issue shares of Common Stock upon exercise hereof
to
the extent that it believes in good faith that such issuance would not be in
compliance with this Section 1(h).
(1) No
exercise that exceeds [19.99%] [9.99%] Beneficial Ownership. The Company shall
not effect the exercise of this Warrant, and the Holder shall not have the
right
to exercise this Warrant, to the extent that after giving effect to such
exercise, such Person (together with such Person's affiliates) would
beneficially own in excess of [19.99%] [9.99%] of the shares of Common Stock
outstanding immediately after giving effect to such exercise. For purposes
of
the foregoing sentence, the aggregate number of shares of Common Stock
beneficially owned by such Person and its affiliates shall include the number
of
shares of Common Stock issuable upon exercise of this Warrant with respect
to
which the determination of such sentence is being made, but shall exclude shares
of Common Stock which would be issuable upon (i) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by such Person and its
affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned by such Person
and its affiliates (including, without limitation, any convertible notes or
convertible preferred stock or warrants) subject to a limitation on conversion
or exercise analogous to the limitation contained herein. Except as set forth
in
the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended. For purposes of this Warrant, in determining the number
of outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company's most recent
Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with
the
Securities and Exchange Commission, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock outstanding.
For any reason at any time, upon the written or oral request of the Holder,
the
Company shall within one Business Day confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding. In any case,
the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder and its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported.
-4-
(2) No
Exercise That Triggers Pill. This
warrant may not be exercised to acquire securities to the extent that when
added
to those already beneficially owned by such holder for purposes of the Rights
Agreement between the Company and Computershare Trust Company N.A., dated as
of
September 22, 2002 and as amended from time to time (as so amended, the “Rights
Agreement”) such securities would cause such holder to become an Acquiring
Person as that term is used in the Rights Agreement with respect to that
holder.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
The
Exercise Price and the number of Warrant Shares shall be adjusted from time
to
time as follows:
(a)
RESERVED
(b) Adjustment
upon Subdivision or Combination of Common Stock.
If the
Company at any time on or after the Subscription Date subdivides (by any stock
split, stock dividend, recapitalization, reorganization, scheme, arrangement
or
otherwise) one or more classes of its outstanding shares of Common Stock into
a
greater number of shares, the Exercise Price in effect immediately prior to
such
subdivision will be proportionately reduced and the number of Warrant Shares
will be proportionately increased. If the Company at any time on or after the
Subscription Date combines (by any stock split, stock dividend,
recapitalization, reorganization, scheme, arrangement or otherwise) one or
more
classes of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination
will
be proportionately increased and the number of Warrant Shares will be
proportionately decreased. Any adjustment under this Section 2(b) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
-5-
(c) Other
Events.
If any
event occurs of the type contemplated by the provisions of this Section 2 but
not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of Warrant Shares
so
as to protect the rights of the Holder; provided that no such adjustment
pursuant to this Section 2(c) will increase the Exercise Price or decrease
the
number of Warrant Shares as otherwise determined pursuant to this Section
2.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS.
If the
Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of shares of Common Stock, by
way
of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or options by way
of a
dividend, spin off, reclassification, corporate rearrangement, scheme of
arrangement or other similar transaction) (a "Distribution"),
at
any time after the issuance of this Warrant, then, in each such
case:
(a) any
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the
close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing
Bid
Price of the shares of Common Stock on the Trading Day immediately preceding
such record date minus the value of the Distribution (as determined in good
faith by the Company's Board of Directors) applicable to one share of Common
Stock, and (ii) the denominator shall be the Closing Bid Price of the shares
of
Common Stock on the Trading Day immediately preceding such record date;
and
(b) the
number of Warrant Shares shall be increased to a number of shares equal to
the
number of shares of Common Stock obtainable immediately prior to the close
of
business on the record date fixed for the determination of holders of shares
of
Common Stock entitled to receive the Distribution multiplied by the reciprocal
of the fraction set forth in the immediately preceding paragraph (a); provided
that in the event that the Distribution is of shares of Common Stock (or common
stock) ("Other
Shares of Common Stock")
of a
company whose common shares are traded on a national securities exchange or
a
national automated quotation system, then the Holder may elect to receive a
warrant to purchase Other Shares of Common Stock in lieu of an increase in
the
number of Warrant Shares, the terms of which shall be identical to those of
this
Warrant, except that such warrant shall be exercisable into the number of shares
of Other Shares of Common Stock that would have been payable to the Holder
pursuant to the Distribution had the Holder exercised this Warrant immediately
prior to such record date and with an aggregate exercise price equal to the
product of the amount by which the exercise price of this Warrant was decreased
with respect to the Distribution pursuant to the terms of the immediately
preceding paragraph (a) and the number of Warrant Shares calculated in
accordance with the first part of this paragraph (b).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights.
In
addition to any adjustments pursuant to Section 2 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights
to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the "Purchase
Rights"),
then
the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on
the
exercise of this Warrant) immediately before the date on which a record is
taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock
are
to be determined for the grant, issue or sale of such Purchase
Rights.
-6-
(b) Fundamental
Transactions; Parent Entities.
The
Company shall not enter into or be party to a Fundamental Transaction unless
(i)
if the Successor Entity is a publicly traded corporation whose common stock
is
quoted on or listed for trading on an Eligible Market, the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant
pursuant to written agreements in form and substance reasonably satisfactory
to
the Holder, including agreements to deliver to each holder of Warrants in
exchange for such Warrants a written instrument issued by the Successor Entity
substantially similar in form and substance to this Warrant, including, without
limitation, an adjusted exercise price equal to the value for the shares of
Common Stock reflected by the terms of such Fundamental Transaction, and
exercisable for a corresponding number of shares of capital stock equivalent
to
the shares of Common Stock acquirable and receivable upon exercise of this
Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, and satisfactory to the Holder and (ii)
if the Successor Entity is not a publicly traded corporation whose common stock
is quoted on or listed for trading on an Eligible Market, the Successor assumes
in writing all of the obligations of the Company under this Warrant pursuant
to
written agreements in form and substance reasonably satisfactory to the Holder,
including agreements to deliver to each holder of Warrants in exchange for
such
Warrants a written instrument issued by the Successor Entity substantially
similar in form and substance to this Warrant exercisable for the consideration
that would have been issuable in the Fundamental Transaction in respect of
the
Warrant Shares had this Warrant been exercised immediately prior to the
consummation of the Fundamental Transaction. The provisions of this Section
shall apply similarly and equally to successive Fundamental Transactions and
shall be applied without regard to any limitations on the exercise of this
Warrant.
Notwithstanding
the foregoing, in the event of a Change of Control other than one in which
a
Successor Entity that is a publicly traded corporation whose stock is quoted
or
listed for trading on an Eligible Market assumes this Warrant such that the
Warrant shall be exercisable for the publicly traded Common Stock of such
Successor Entity, then at the request of the Holder delivered before the 90th
day after such Fundamental Transaction, the
Company (or the Successor Entity) shall purchase this Warrant from the Holder
by
paying to the Holder, within five Business Days after such request (or, if
later, on the effective date of the Fundamental Transaction),
cash in
an amount equal to the Black Scholes Value of the remaining unexercised portion
of this Warrant on the date of such Fundamental Transaction.
In
the
event that any person becomes a Parent Entity of the Company, such person shall
assume all of the obligations of the Company under this Warrant with the same
effect as if such person had been named as the Company herein.
-7-
5. NONCIRCUMVENTION.
The
Company hereby covenants and agrees that the Company will not, by amendment
of
its Certificate of Incorporation, Bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue
or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and will at
all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the Holder. Without limiting
the generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, (ii) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant, and (iii) shall, so long as this Warrant is
outstanding, take all action necessary to reserve and keep available out of
its
authorized and unissued shares of Common Stock, solely for the purpose of
effecting the exercise of this Warrant, 100% of the number of shares of Common
Stock issuable upon exercise of this Warrant then outstanding (without regard
to
any limitations on exercise).
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER.
Except
as otherwise specifically provided herein, the Holder, solely in such Person's
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person's capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give
or
withhold consent to any corporate action (whether any reorganization, issue
of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed
as
imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant.
If this
Warrant is to be transferred, the Holder shall surrender this Warrant to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Warrant (in accordance with Section 7(d)), registered as
the
Holder may request, representing the right to purchase the number of Warrant
Shares being transferred by the Holder and, if less then the total number of
Warrant Shares then underlying this Warrant is being transferred, a new Warrant
(in accordance with Section 7(d)) to the Holder representing the right to
purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant.
Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the
loss, theft, destruction or mutilation of this Warrant, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder
to
the Company in customary form and, in the case of mutilation, upon surrender
and
cancellation of this Warrant, the Company shall execute and deliver to the
Holder a new Warrant (in accordance with Section 7(d)) representing the right
to
purchase the Warrant Shares then underlying this Warrant.
-8-
(c) Exchangeable
for Multiple Warrants.
This
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance
with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant
will represent the right to purchase such portion of such Warrant Shares as
is
designated by the Holder at the time of such surrender; provided, however,
that
no Warrants for fractional shares of Common Stock shall be given.
(d) Issuance
of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to the terms
of
this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
(ii) shall represent, as indicated on the face of such new Warrant, the right
to
purchase the Warrant Shares then underlying this Warrant (or in the case of
a
new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant
Shares designated by the Holder which, when added to the number of shares of
Common Stock underlying the other new Warrants issued in connection with such
issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such
new Warrant which is the same as the Issuance Date, and (iv) shall have the
same
rights and conditions as this Warrant.
8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise
provided herein, such notice shall be given in accordance with Section 7 of
Annex I to the Subscription Agreement. The Company shall provide the Holder
with
prompt written notice of all actions taken pursuant to this Warrant, including
in reasonable detail a description of such action and the reason therefore.
9. AMENDMENT
AND WAIVER.
Except
as otherwise provided herein, the provisions of this Warrant may be amended
and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the Holder.
10. GOVERNING
LAW.
This
Warrant shall be governed by and construed and enforced in accordance with,
and
all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the
State
of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than
the
State of New York.
11. CONSTRUCTION;
HEADINGS.
This
Warrant shall be deemed to be jointly drafted by the Company and the Holder
and
shall not be construed against any person as the drafter hereof. The headings
of
this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.
12. RESERVED
-9-
13. REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant, at law or in equity (including
a
decree of specific performance and/or other injunctive relief), and nothing
herein shall limit the right of the Holder to pursue actual damages for any
failure by the Company to comply with the terms of this Warrant.
14. TRANSFER. This
Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company.
15. CERTAIN
DEFINITIONS.
For
purposes of this Warrant, the following terms shall have the following
meanings:
(a) "Black
Scholes Value"
means
the value of this Warrant based on the Black and Scholes Option Pricing Model
obtained from the "OV" function on Bloomberg determined as of the day
immediately following the public announcement of the applicable Fundamental
Transaction and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the remaining term of this Warrant
as
of such date of request and (ii) an expected volatility equal to the greater
of
80% and the 100 day volatility obtained from the HVT function on
Bloomberg.
(b) "Bloomberg"
means
Bloomberg Financial Markets.
(c) "Business
Day"
means
any day other than Saturday, Sunday or other day on which commercial banks
in
The City of New York are authorized or required by law to remain
closed.
(d) "Change
of Control"
means
any Fundamental Transaction other than (A) any reorganization, recapitalization
or reclassification of the Common Stock, in which holders of the Company's
voting power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly or indirectly,
the voting power of the surviving entity or entities necessary to elect a
majority of the members of the board of directors (or their equivalent if other
than a corporation) of such entity or entities, or (B) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company.
(e) "Closing
Bid Price"
and
"Closing
Sale Price"
means,
for any security as of any date, the last closing bid price and last closing
trade price, respectively, for such security on the Principal Market, as
reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or the last trade
price, respectively, of such security prior to 4:00:00 p.m., New York time,
as
reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing bid
price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded
as
reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security
as
reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the
bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the "pink sheets" by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price
cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Sale Price, as the case may be,
of
such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.
-10-
(f) "Common
Stock"
means
(i) the Company's shares of Common Stock, par value $0.01 per share, and
(ii) any share capital into which such Common Stock shall have been changed
or any share capital resulting from a reclassification of such Common
Stock.
(g) RESERVED
(h) RESERVED
(i) "Eligible
Market"
means
the Principal Market, The New York Stock Exchange, Inc., The American Stock
Exchange, The NASDAQ Global Select Market or The NASDAQ Capital
Market.
(j) "Expiration
Date"
means
the date sixty (60) months after the Exercisability Date or, if such date falls
on a day other than a Business Day or on which trading does not take place
on
the Principal Market (a "Holiday"),
the
next date that is not a Holiday, as the same may be extended pursuant to Section
1(e) hereof.
(k) "Fundamental
Transaction"
means
that the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Person, or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of the Company to another Person, or (iii) allow another Person to make
a
purchase, tender or exchange offer that is accepted by the holders of more
than
the 50% of the outstanding shares of Common Stock (not including any shares
of
Common Stock held by the Person or Persons making or party to, or associated
or
affiliated with the Persons making or party to, such purchase, tender or
exchange offer), or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making
or
party to, such stock purchase agreement or other business combination), (v)
reorganize, recapitalize or reclassify its Common Stock, or (vi) any "person"
or
"group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the
Exchange Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Common
Stock.
-11-
(l) "Options"
means
any rights, warrants or options to subscribe for or purchase shares of Common
Stock or Convertible Securities.
(m) "Parent
Entity"
of a
Person means an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is quoted or listed
on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.
(n) "Person"
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization, any other entity and
a
government or any department or agency thereof.
(o) "Principal
Market"
means
The NASDAQ Global Market.
(p) RESERVED
(q) RESERVED
(r) "Successor
Entity"
means
the Person (or, if so elected by the Holder, the Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or the Person (or,
if so
elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(s) "Trading
Day"
means
any day on which the Common Stock are traded on the Principal Market, or, if
the
Principal Market is not the principal trading market for the Common Stock,
then
on the principal securities exchange or securities market on which the Common
Stock are then traded; provided that "Trading Day" shall not include any day
on
which the Common Stock are scheduled to trade on such exchange or market for
less than 4.5 hours or any day that the Common Stock are suspended from trading
during the final hour of trading on such exchange or market (or if such exchange
or market does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00:00 p.m., New York
time).
(t) RESERVED
[Signature
Page Follows]
-12-
IN
WITNESS WHEREOF,
the
Company has caused this Warrant to Purchase Common Stock to be duly executed
as
of the Issuance Date set out above.
| BEACON POWER CORPORATION | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
BEACON
POWER CORPORATION
The
undersigned holder hereby exercises the right to purchase _________________
of
the shares of Common Stock ("Warrant
Shares")
of
Beacon Power Corporation, a Delaware corporation (the "Company"),
evidenced by the attached Warrant to Purchase Common Stock (the "Warrant").
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.
1.
Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall
be made as:
____________ a
"Cash
Exercise"
with
respect to _________________ Warrant Shares; and/or
____________ a
"Cashless
Exercise"
with
respect to _______________ Warrant Shares.
2.
Payment of Exercise Price. In the event that the holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the
Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to the holder __________
Warrant Shares in accordance with the terms of the Warrant.
4. The
undersigned holder
hereby
certifies that the number of shares of Common Stock owned by the holder and
a
detailed computation of the number of shares of Common Stock the holder is
entitled to acquire by exercise or conversion of any security or instrument
without regard to any time, cap or other limitation on such exercise or
conversion, are set forth below.
Date:
_______________ __, ______
_________________________________
Name of Registered Holder
| By: | |||
|
Name:
|
|||
|
Title:
|
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs [INSERT
NAME
OF TRANSFER AGENT] to issue the above indicated number of shares of Common
Stock
in accordance with the Transfer Agent Instructions dated ______, 2007 from
the
Company and acknowledged and agreed to by [INSERT NAME OF TRANSFER
AGENT].
| BEACON POWER CORPORATION | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||