AmericanDG Energy Inc. 8% Senior Convertible Debentures Due 2011 Subscription Agreement
AmericanDG
Energy Inc.
8%
Senior Convertible Debentures Due 2011
Dear
Sir
or Madam:
1. Subscription.
The
undersigned, intending to be legally bound, irrevocably subscribes for and
agrees to purchase the aggregate U.S. dollar amount of the 8% Senior Convertible
Debentures Due 2011 (each a “Debenture” and collectively, the “Debentures”), of
American DG Energy Inc., a Delaware corporation (the “Company”), indicated on
the signature page hereof, on the terms and conditions described herein and
in
the Debenture.
The
undersigned herewith delivers to the Company the consideration (“Purchase
Price”) required to purchase the Debenture subscribed for hereunder by wire
transfer funds payable to: American DG Energy Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇. The minimum subscription is for $100,000 unless otherwise determined
in
the discretion of the Company. Capitalized terms not otherwise defined in this
Agreement have the meanings specified in the Debenture.
2. Investor
Representations, Warranties and Covenants.
The
undersigned hereby acknowledges, represents and warrants to, and agrees with
the
Company as follows:
(a) The
undersigned is acquiring the Debenture for the undersigned’s own account as
principal, for investment purposes only, and not with a view to, or for, resale
or distribution of all or any part of the Debenture or any shares of the
Company’s Common Stock, par value $.001 per share, issued upon conversion of the
Debenture (the “Underlying Shares”)(the “Debenture and the Underlying Shares are
collectively referred to herein as the “Securities”), and no other person has a
direct or indirect beneficial interest in the Securities;
(b) The
undersigned acknowledges its understanding that the offering and sale of the
Debentures is intended to be exempt from registration under the Securities
Act
of 1933, as amended (the “Securities Act”), by virtue of Sections 4(2) of the
Securities Act and Rule 505 of Regulation D (“Regulation D”) promulgated
thereunder and Section 4(6) of the Securities Act, and, in furtherance thereof,
the undersigned represents and warrants to and agrees with the Company that
the
undersigned has the financial ability to bear the economic risk of the
undersigned’s investment, has adequate means for providing for the undersigned’s
current needs and contingencies and has no need for liquidity with respect
to
the undersigned’s investment in the Debenture.
(c) The
undersigned is an “accredited investor” as defined in Rule 501(a) of Regulation
D under the Securities Act;
(d) The
undersigned:
(1) The
undersigned understands and has evaluated the risks of a purchase of the
Debenture;
(2) has
been
given the opportunity to ask questions of and receive answers from the Company
concerning the terms and conditions of the offering of the Debentures, and
has
been given the opportunity to obtain such information as the undersigned has
deemed necessary regarding the Company, the Debenture or the Underlying Shares
to the extent that the Company possesses such information or can acquire it
without unreasonable effort;
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(3) has
not
relied on any oral representation, warranty or information in connection with
the offering of the Debentures by the Company, or any officer, employee, agent
or affiliate of the Company;
(4) has
determined that the Debenture is a suitable investment for the undersigned
and
that at this time the undersigned can bear a complete loss of the undersigned’s
investment therein;
(5) has
such
knowledge and experience in financial and business matters that the undersigned
is capable of evaluating the merits and risks of the undersigned’s investment in
the Debenture;
(e)If
the
undersigned is a corporation, limited liability company, partnership, trust,
qualified plan or other entity, it is authorized and qualified to become a
holder of the Securities, and the person signing this Subscription Agreement
on
behalf of such entity has been duly authorized to do so;
(f) Any
information which the undersigned has heretofore furnished and herewith
furnishes to the Company with respect to the undersigned’s financial position
and business experience is correct and complete as of the date of this Agreement
and if there should be any material change in such information prior to issuance
to the undersigned of the Debenture, the undersigned will immediately furnish
such revised or corrected information to the Company;
(g) The
foregoing acknowledgments, representations, warranties and agreements shall
survive the closing at which the Debenture is issued;
(h) The
undersigned acknowledges that the undersigned has not purchased the Debenture
as
a result of any general solicitation or general advertising; and
(i) The
undersigned’s overall commitment to investments which are not readily marketable
is not disproportionate to the undersigned’s net worth, and the undersigned’s
investment in the Debenture and will not cause such overall commitment to become
excessive.
3. Investor
Awareness.
The
undersigned acknowledges that:
(a) No
federal or state agency has passed upon the Securities or made any finding
or
determination as to the fairness of this investment;
(b) There
is
no established market for the Securities of and no assurance has been given
that
any public market for them will develop;
(c) The
Securities may not be sold, pledged or otherwise transferred, except as may
be
permitted under the Securities Act and applicable state securities laws pursuant
to registration or exemption therefrom; and accordingly, the undersigned may
be
required to bear the financial risks of an investment in the Securities for
an
indefinite period of time;
(d) The
undersigned consents to (i) the placing of a legend substantially in the form
set forth below on the certificates representing the Underlying Shares stating
that the Underlying Shares have not been registered and setting forth the
restriction on transfer contemplated hereby, and (ii) the placing of a stop
transfer order on the books of the Company with respect to the
Securities.
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“The
shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended. These shares have been acquired for
investment and not with a view to distribution or resale and may not be sold,
mortgaged, pledged, hypothecated or otherwise transferred without an effective
registration statement for such sales under the Securities Act of 1933, or
an
opinion of counsel for the corporation that registration is not required under
such Act.
The
shares represented by this certificate are also subject to the provisions of
a
certain Investor Rights Agreement dated ________, 2006 and may not be
transferred except in accordance with the provisions of that
agreement.”
4. Miscellaneous.
(a) Indemnity.
The
undersigned agrees to indemnify and hold harmless the Company, its affiliates,
directors, officers, employees, agents and controlling persons (the Company
and
each such person being an “Indemnified Party”), from and against any and all
losses, claims, damages, liabilities and expenses whatsoever (including, but
not
limited to, any and all expenses whatsoever reasonably incurred investigating,
preparing or defending against any litigation commenced or threatened or any
claim whatsoever), joint or several, as incurred, to which such Indemnified
Party may become subject under any applicable United States federal or state
law
or the laws of any other domestic or foreign jurisdiction, or otherwise, and
related to or arising out of or based upon any false representation, warranty
or
acknowledgment, or breach or failure by the undersigned to comply with any
covenant or agreement made by the undersigned herein or in any other document
furnished by the undersigned to any of the foregoing in connection with this
transaction.
(b) Modification.
Except
as otherwise provided herein, neither this Agreement nor any provisions hereof
shall be modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination
is
sought.
(c) Binding
Effect.
Except
as otherwise provided herein, this Agreement shall be binding upon and inure
to
the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and assigns. If the undersigned is more than
one person, the obligation of the undersigned shall be joint and several and
the
agreements, covenants, representations, warranties and acknowledgments herein
contained shall be deemed to be made by and be binding upon each such person
and
his heirs, executors, administrators and successors.
(d) Entire
Agreement.
This
instrument contains the entire agreement of the parties and there are no
representations, warranties, acknowledgments, covenants or other agreements
except as stated or referred to herein.
(e) Assignability.
This
Agreement is not transferable or assignable by the undersigned.
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(f) Governing
Law and Forum.
Notwithstanding
the place where this Agreement may be executed by any of the parties hereto,
all
the terms and provisions hereof shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts, without giving effect
to its conflict of law principles. Any dispute which may arise out of or in
connection with this Agreement shall be adjudicated before a court located
in
Middlesex County, Massachusetts and the parties hereby submit to the exclusive
jurisdiction of the courts of the Commonwealth of Massachusetts located in
Boston, Massachusetts and of the federal courts in Boston, Massachusetts with
respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting
the
fact that such court is an inconvenient forum, relating to or arising out of
this Agreement or any acts or omissions relating to the sale of the Shares,
and
the undersigned consents to the service of process in any such action or legal
proceeding by means of registered or certified mail, return receipt requested,
in care of the address set forth below or such other address as the undersigned
shall furnish in writing to the Company. In the event any such action is
brought, whether at law or in equity, then the prevailing party shall be paid
its reasonable attorney's fees, expenses and disbursements arising out of such
action. The undersigned hereby waives trial by jury in any action or proceeding
involving, directly or indirectly, any matter (whether sounding in tort,
contract, fraud or otherwise) in any way arising out of or in connection with
this Agreement or the Holder’s purchase of the Shares.
[The
balance of this page has been intentionally left blank.]
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ALL
SUBSCRIBERS MUST COMPLETE THIS PAGE
The
undersigned acknowledges that this subscription shall not be effective unless
accepted by the Company as indicated below.
Date
of
Subscription: ______________, 2006
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Original
Principal Amount of Debentures subscribed for: U.S.
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$
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Exact
Name in Which Title is to be Held
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Name
of Subscriber (Print)
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Name
of Additional Subscriber
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Telephone
Number
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Telephone
Number
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Social
Security, Tax ID Number
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Social
Security, Tax ID Number
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Signature
of Subscriber
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Signature
of Additional Subscriber
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THIS
SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 1ST DAY OF APRIL,
2006.
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AmericanDG
Energy Inc.
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By:
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title:
Chief Financial Officer
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AmericanDG
Energy Inc.
8%
Senior Convertible Debenture Due 2011
Investor
Rights Agreement
To
the
purchaser of a Debenture (as such term is defined below) of AmericanDG Energy
Inc., a Delaware corporation (the "Company"), identified on the signature page
of this Agreement.
Dear
Sir
or Madam:
This
will
confirm that in consideration of your purchase of the Debenture, the Company
covenants and agrees with you as follows:
1. Certain
Definitions.
As used
in this Agreement, the following terms shall have the following respective
meanings:
“2006
Private Placement”
shall
mean the private placement of the Debentures conducted by the Company commencing
March 13, 2006.
"Commission"
shall
mean the Securities and Exchange Commission, or any other federal agency at
the
time administering the Securities Act.
"Common
Stock"
shall
mean the Common Stock, $.001 par value per share, of the Company, as constituted
as of the date of this Agreement.
“Conversion
Shares”
shall
mean shares of Common Stock issued upon conversion of the
Debentures.
“Debentures”
shall
mean the 8% Senior Convertible Debentures Due 2011 of the Company issued
pursuant to the Subscription Agreement.
"Exchange
Act"
shall
mean the Securities Exchange Act of 1934, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as
the
same shall be in effect at the time.
“Holder”
shall
mean each purchaser of a Debenture pursuant to the Subscription Agreement and
each transferee of such securities or any Registrable Securities to whom any
such securities or Registrable Securities are transferred in compliance with
Section 2 of this Agreement.
“Qualified
Offering”
shall
mean the Company’s first firm commitment underwritten public offering of its
Common Stock registered under the Securities Act.
“Qualified
Registration”
shall
mean the registration of the Company’s securities on Form 10 pursuant to Section
12(b) or 12(g) of the Exchange Act.
“Outstanding
Options”
shall
have the meaning set forth in Section 10.
"Registration
Expenses"
shall
mean the expenses so described in Section 6.
"Registrable
Securities"
shall
mean the Conversion Shares or any shares issued upon any stock split, stock
dividend, recapitalization or similar event with respect to such Conversion
Shares, excluding Conversion Shares which have been (a) registered under the
Securities Act pursuant to an effective registration statement filed thereunder
and disposed of in accordance with the registration statement covering them,
or
(b) publicly sold pursuant to Rule 144 under the Securities
Act.
-6-
"Securities
Act"
shall
mean the Securities Act of 1933, as amended, or any similar federal statute,
and
the rules and regulations of the Commission thereunder, all as the same shall
be
in effect at the time.
"Selling
Expenses"
shall
mean the expenses so described in Section 6.
“Subscription
Agreement”
shall
mean the Subscription Agreement dated as of ______, 2006 with respect to your
purchase of the Debentures
2. Restrictions
on Transfer.
(a) The
Holder agrees not to make any disposition of all or any portion of the
Registrable Securities unless and until:
(i) there
is
then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement; or
(ii) (A) the
transferee has agreed in writing to be bound by the terms of this Agreement,
(B) the Holder shall have notified the Company of the proposed disposition
and shall have furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and (C) if reasonably
requested by the Company, the Holder shall have furnished the Company with
an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the Securities
Act.
(b) Notwithstanding
the provisions of subsection (a) above, no such restriction shall apply to
a
transfer by a Holder that is (A) a partnership transferring to its partners
or former partners in accordance with partnership interests, (B) a
corporation transferring to a wholly-owned subsidiary or a parent corporation
that owns all of the capital stock of the Holder, (C) a limited liability
company transferring to its members or former members in accordance with their
interest in the limited liability company, (D) a Holder transferring to its
affiliated venture capital fund or (E) an individual transferring to the
Holder’s family member or trust for the benefit of an individual Holder;
provided
that in
each case the transferee will agree in writing to be subject to the terms of
this Agreement to the same extent as if he were an original Holder
hereunder.
(c) Each
certificate representing Registrable Securities shall be stamped or otherwise
imprinted with legends substantially similar to the following (in addition
to
any legend required under applicable state securities laws):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE SOLD,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SALES UNDER THE SECURITIES ACT OF 1933, OR
AN
OPINION OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE PROVISIONS OF
A
CERTAIN INVESTOR RIGHTS AGREEMENT DATED ________, 2006 AND MAY NOT BE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THAT
AGREEMENT.”
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(d) The
Company shall be obligated to reissue promptly unlegended certificates at the
request of the Holder if the Company has completed its Qualified Offering and
the Holder shall have obtained an opinion of counsel (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect
that
the securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification and legend.
(e) Any
legend endorsed on an instrument pursuant to applicable state securities laws
and the stop-transfer instructions with respect to such securities shall be
removed upon receipt by the Company of an order of the appropriate blue sky
authority authorizing such removal.
3. Required
Registration.
The
Company shall use its best efforts to file within one hundred twenty (120)
days
following the closing of a Qualified Offering or a Qualified Registration,
and
use its best efforts to cause to become effective under the Securities Act,
a
registration statement covering the sale of the Registrable Securities, and
shall take all action necessary to qualify the Registrable Securities under
state “blue sky” laws as hereinafter provided. The Company shall be entitled to
include in any registration statement referred to in this Section 3 shares
of
Common Stock to be sold by the Company for its own account.
4. Registration
Procedures.
Whenever the Company is required by the provisions of Section 3 to use its
best
efforts to effect the registration of any Registrable Securities under the
Securities Act, the Company will, as soon as reasonably possible:
(a) prepare
and file with the Commission a registration statement on Form S-1 or such other
form of general applicability satisfactory to Company with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
(b) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be
necessary to keep such registration statement effective until the earliest
to
occur of (i) the date that all of the securities registered thereunder have
been
sold pursuant thereto, (ii) the third anniversary of the date of the final
closing of the Offering, or (iii) until, by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect, the securities registered
thereunder are no longer required to be registered for the sale thereof by
the
Holder without restriction.
(c) furnish
to each seller of Registrable Securities and to each underwriter, if any, such
number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons reasonably
may
request in order to facilitate the public sale or other disposition of the
Registrable Securities covered by such registration statement;
(d) use
its
best efforts to register or qualify the Registrable Securities covered by such
registration statement under the securities or "blue sky" laws of such
jurisdictions as the sellers of the Shares and the Registrable Securities or,
in
the case of an underwritten public offering, the managing underwriter reasonably
shall request, provided,
however,
that
the Company shall not for any such purpose be required to qualify generally
to
transact business as a foreign corporation in any jurisdiction where it is
not
so qualified or to consent to general service of process in any such
jurisdiction;
(e) use
its
best efforts to list the Registrable Securities covered by such registration
statement with any securities exchange on which the Common Stock of the Company
is then listed; and
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(f) make
available for inspection by each seller of Registrable Securities, any
underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors
and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement.
(g) In
connection with each registration hereunder, each seller of Registrable
Securities will furnish to the Company in writing such information with respect
to such seller and the proposed distribution by such seller as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.
(h) In
connection with each registration pursuant to Section 3 covering an underwritten
public offering, the Company and the Holder agree to enter into a written
agreement with the managing underwriter selected by the Company containing
such
provisions as are customary in the securities business for such an arrangement
between such underwriter and companies of the Company's size and investment
stature.
5. Suspension
of Use of Registration Statement.
The
Holder agrees that, upon receipt of any notice from the Company of (A) the
happening of any event which makes any statements made in the registration
statement or related prospectus filed pursuant to this Investor Rights
Agreement, or any document incorporated or deemed to be incorporated therein
by
reference, untrue in any material respect or which requires the making of any
changes in such registration statement or prospectus so that, in the case of
such registration statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstance under
which they were made, not misleading or (B) that, in the judgment of the
Company’s Board of Directors, it is advisable to suspend use of the prospectus
for a discrete period of time due to pending corporate developments which are
or
may be material to the Company but have not been disclosed in the registration
statement or in relevant public filings with the SEC, or (C) the SEC has issued
a stop order suspending the effectiveness of the registration statement, such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such registration statement or prospectus until it is advised in
writing by the Company that use of the applicable prospectus may be resumed,
and
has received copies of any additional or supplemented filings that are
incorporated or deemed to be incorporated by reference in such prospectus.
The
Company shall use all reasonable best efforts to insure that the use of the
prospectus may be resumed as soon as practicable.
6. Expenses.
All
expenses incurred by the Company in complying with Section 3, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with complying
with state securities or "blue sky" laws, fees of the National Association
of
Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars, costs of insurance and fees and disbursements of one counsel for
the
sellers of Registrable Securities, but excluding any Selling Expenses, are
called "Registration Expenses". All underwriting discounts and selling
commissions applicable to the sale of Registrable Securities are called "Selling
Expenses".
The
Company will pay all Registration Expenses in connection with the registration
statement under Section 3. All Selling Expenses in connection with each
registration statement under Section 3 shall be borne by the participating
sellers in proportion to the number of shares sold by each, or by such
participating sellers other than the Company (except to the extent the Company
shall be a seller) as they may agree.
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7. Indemnification
and Contribution.
(a) In
the event of the registration of any Registrable Securities under the Securities
Act pursuant to Section 3, the Company will indemnify and hold harmless the
Holder and each other seller of such Shares and Registrable Securities
thereunder, each underwriter of such Registrable Securities thereunder and
each
other person, if any, who controls such seller or underwriter within the meaning
of the Securities Act, against any losses, claims, damages or liabilities,
joint
or several, to which such seller, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act pursuant to Section 3, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon 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, and will reimburse each such seller,
each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
so
made in conformity with information furnished by any such seller, any such
underwriter or any such controlling person in writing specifically for use
in
such registration statement or prospectus.
(b) In
the
event of a registration on behalf of the Holder of any of the Registrable
Securities under the Securities Act pursuant to Section 3, the Holder, severally
and not jointly, will indemnify and hold harmless the Company, each person,
if
any, who controls the Company within the meaning of the Securities Act, each
officer of the Company who signs the registration statement, each director
of
the Company, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims, damages
or
liabilities, joint or several, to which the Company or such officer, director,
underwriter or controlling person may become subject under the Securities Act
or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement
under which such Registrable Securities was registered under the Securities
Act
pursuant to Section 3, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon 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,
and will reimburse the Company and each such officer, director, underwriter
and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Holder will be liable hereunder
in any such case if and only to the extent that any such loss, claim, damage
or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to the Holder furnished in writing to
the
Company by the Holder specifically for use in such registration statement or
prospectus, and provided, further, however, that the liability of the Holder
hereunder shall be limited to the proportion of any such loss, claim, damage,
liability or expense which is equal to the proportion that the public offering,
price of the shares sold by the Holder under such registration statement bears
to the total public offering price of all securities sold thereunder, but not
in
any event to exceed the proceeds received by the Holder from the sale of
Registrable Securities covered by such registration statement.
(c) Promptly
after receipt by an indemnified party hereunder of notice of the. commencement
of any action, such indemnified party shall, if a claim in respect thereof
is to
be made against the indemnifying party hereunder, notify the indemnifying party
in writing thereof, but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to such indemnified party
other than under this Section 6 and shall only relieve it from any liability
which it may have to such indemnified party under this Section 6 if and to
the
extent the indemnifying party is prejudiced by such omission. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 6 for
any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected, provided,
however,
that,
if the defendants in any such action include both the indemnified party and
the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party shall have the right to select
a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
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(d) In
order
to provide for just and equitable contribution to joint liability under the
Securities Act in any case in which either (i) the Holder exercising rights
under this Agreement, or any controlling person of the Holder, makes a claim
for
indemnification pursuant to this Section 6 but it is judicially determined
(by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal to the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 6 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any the
Holder or any such controlling person in circumstances for which indemnification
is provided under this Section 6; then, and in each such case, the Company
and
the Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Holder is responsible for the portion represented
by
the percentage that the public offering price, if any, of its Registrable
Securities offered by the registration statement bears to the public offering
price, if any, of all securities offered by such registration statement, and
the
Company is responsible for the remaining portion; provided, however, that,
in
any such case, (A) the Holder will not be ruled to contribute any amount in
excess of the public offering price, if any, of all such Registrable Securities
offered by it pursuant to such registration statement; and (B) no person or
entity guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person
or
entity who was not guilty of such fraudulent misrepresentation.
8. Rule
144 Reporting . With
a
view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the Registrable Securities
to the public without registration, at all times after 90 days after the
Qualified Offering or the Qualified Registration shall have become effective,
the Company agrees to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144 under the Securities Act;
(b) use
reasonable efforts to 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 the Holder forthwith upon request a written statement by the Company as
to
its compliance with the reporting requirements of such Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as the Holder may reasonably request in availing the Holder
of
any rule or regulation of the Commission allowing the Holder to sell any
Registrable Securities without registration.
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9. “Lockup”
Agreement.
The
Holder hereby agrees that such Holder shall not sell, transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale, any shares of
Common Stock (or other securities) of the Company held by the Holder for a
period specified by the representative of the underwriters of Common Stock
(or
other securities) of the Company not to exceed one hundred eighty (180) days
following the effective date of the Company’s Qualified Offering or Qualified
Registration
10. Miscellaneous.
(a) All
covenants and agreements contained in this Agreement by or on behalf of any
of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including without limitation
permitted transferees of any Shares or Registrable Securities), whether so
expressed or not.
(b) All
notices, requests, consents and other communications hereunder shall be in
writing and shall be mailed by certified or registered mail, return receipt
requested, postage prepaid, or telexed, in the case of non-U.S. residents,
addressed as follows:
if
to the
Company or any other party hereto, at the address of such party set
forth
in
the
Subscription Agreement;
if
to the
Holder, at the address of the Holder set forth in the Subscription
Agreement;
or,
in
any case, at such other address or addresses as shall have been furnished in
writing to the Company (in the case of the Holder) or to the Holder (in the
case
of the Company) in accordance with the provisions of this
paragraph.
(c) Notwithstanding
the place where this Agreement may be executed by any of the parties hereto,
all
the terms and provisions hereof shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts, without giving effect
to its conflict of law principles. Any dispute which may arise out of or in
connection with this Agreement shall be adjudicated before a court located
in
Boston, Massachusetts and the parties hereby submit to the exclusive
jurisdiction of the courts of the Commonwealth of Massachusetts located in
Boston, Massachusetts and of the federal courts in Boston, Massachusetts with
respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting
the
fact that such court is an inconvenient forum, relating to or arising out of
this Agreement or any acts or omissions relating to the sale of the Shares,
and
each of the undersigned consents to the service of process in any such action
or
legal proceeding by means of registered or certified mail, return receipt
requested, in care of the address set forth below or such other address as
the
undersigned shall furnish in writing to the Company. In the event any such
action is brought, whether at law or in equity, then the prevailing party shall
be paid its reasonable attorney's fees, expenses and disbursements arising
out
of such action. Each of the undersigned hereby waives trial by jury in any
action or proceeding involving, directly or indirectly, any matter (whether
sounding in tort, contract, fraud or otherwise) in any way arising out of or
in
connection with this Agreement or the Holder’s purchase of a
Debenture.
(d) This
Agreement may not be amended or modified, and no provision hereof may be waived,
without the written consent of the Company and the Holders of at least a
majority of the outstanding Registrable Securities.
-12-
(e) 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.
(f) The
obligations of the Company to register the Registrable Securities under this
Agreement shall terminate on the tenth anniversary of the date of this
Agreement.
(g) If
any
provision of this Agreement shall be held to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach
only
to such provision and shall not in any manner affect or render illegal, invalid
or unenforceable any other provision of this Agreement, and this Agreement
shall
be carried out as if any such illegal, invalid or unenforceable provision were
not contained herein.
Please
indicate your acceptance of the foregoing by signing and returning the enclosed
counterpart of this letter, whereupon this Agreement shall be a binding
agreement between the Company and you.
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Very
truly yours,
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AmericanDG
Energy Inc.
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By:
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title:
Chief Financial Officer
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AGREED
TO
AND ACCEPTED as of
the
date
first above written.
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By:
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Name:
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Title:
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