SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement") dated as of July 21,
2005, by and between NxtPhase T&D Corp., a Canadian corporation (the "Company"),
and Beacon Power Corporation, a Delaware corporation (referred to herein as
"Purchaser"). Certain capitalized terms used in this Agreement are defined in
Exhibit A attached hereto.
Recitals
WHEREAS, the Company is a party to a certain Securities Purchase
Agreement, dated November 12, 2004, pursuant to which Perseus 2000, L.L.C.
("Perseus") agreed to purchase Class A Preferred Shares from the Company along
with other parties specified therein (the "Initial Securities Purchase
Agreement"), and at such time also entered into an Investor Rights Agreement
(the "Investor Rights Agreement"); and
WHEREAS, the Company and Purchaser are parties to an arrangement
agreement, dated as of April 22, 2005 pursuant to which the Company will be
acquired by Purchaser (the "Arrangement"); and
WHEREAS, pursuant to a binding term sheet dated as of April 22, 2005,
between Perseus and the Company (the "Term Sheet"), Perseus agreed on behalf of
Perseus 2000 Expansion, L.L.C. ("Perseus 2000 Expansion"), an affiliate of
Perseus, to purchase additional Class A Preferred Shares from the Company, as
more fully set forth therein; and
WHEREAS, pursuant to the Term Sheet, the Company and Perseus have
agreed that the Purchaser may purchase such Shares (as defined below) from the
Company in lieu of Perseus doing so, and the Company has obtained appropriate
waivers from its other stockholders allowing the Purchaser to do so in lieu of
Perseus; and
WHEREAS on June 13, 2005 the Purchaser purchased the first tranche of
111,111 Class A Preferred Shares as contemplated in the Term Sheet and the
parties wish to enter into this Agreement to provide for the purchase by the
Purchaser of the second tranche of 111,111 Class A Preferred Shares.
Agreement
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. Authorization and Sale of the Preferred Shares.
1.1 Authorization. The Company has authorized the issuance and sale
pursuant to the terms and conditions hereof of shares of its Class A Preferred
Shares, having the rights, restrictions, privileges and preferences set forth in
the Share Conditions attached hereto as Exhibit B (the "Share Conditions").
1.2 Issuance and Sale.
(a) Issuance and Sale at the Closing. In reliance upon the representations,
warranties and covenants of the parties set forth herein, and subject to
satisfaction of the conditions set forth herein, at the Closing, the Company
shall issue, sell and deliver to Purchaser, and Purchaser shall purchase from
the Company, at a purchase price per Class A Preferred Share equal to U.S. $4.50
(the "Per Share Price"), that number of Class A Preferred Shares specified
adjacent to such Purchaser's name on Schedule A hereto (the "Shares"); and
Purchaser shall pay to the Company, subject to the provisions of Section 1.2(b)
hereof, an aggregate amount for the Shares equal to the amount specified
adjacent to such Purchaser's name on Schedule A hereto. The Purchaser shall not
be obligated to proceed with its purchase of the Shares hereunder unless,
without limitation to any other rights of Purchaser hereunder, all conditions
set forth in Section 2.3(a) have been satisfied. The purchase and sale of the
Shares will occur in one or more closings, as described below.
(b) Credit Toward Perseus' Purchase Obligation. The Company agrees that the
purchase of Class A Preferred Shares by Purchaser pursuant hereto shall satisfy
that portion of Perseus' obligation of to purchase additional Class A Preferred
Shares pursuant to the Term Sheet in an amount proportional to the cash purchase
price paid by Purchaser pursuant hereto, and that Perseus shall be a third party
beneficiary of this subsection therefore.
2. Closing.
2.1 Closing. Subject to satisfaction or waiver of the conditions specified
in Sections 2.3(a) and 2.3(b) hereof, the closing of the purchase and sale to
the Purchaser of the Shares (the "Closing") shall take place on the date hereof
immediately after the execution and delivery of this Agreement. Such Closing
shall be held at 1:00 p.m. at the offices of Xxxxxx & Xxxxxx LLP, 0000 Xxxxxx
Xxxxxxxxx, Xxxxx 000, XxXxxx, Xxxxxxxx 00000, or at such other time and place as
shall be mutually agreed to by the Parties. The date of the Closing is
hereinafter referred to as the "Closing Date."
2.2 Deliveries. At the Closings, the Company will deliver to the Purchaser
certificates registered in the Purchaser's name representing the aggregate
number of Shares issued and sold by the Company to Purchaser at such Closing, as
determined pursuant to Section 1.2 above. Purchaser shall pay its respective
purchase price for the Shares to be purchased by it at such Closing, net of any
credit thereto as set forth in Section 1.2(b), by wire transfer of immediately
available funds to the account designated by the Company on Schedule B hereto.
At the Closing, the parties shall also deliver all documents required to be
delivered at such Closing pursuant to Section 2.3 hereof.
2.3 Conditions to Closing.
(a) Conditions to Obligations of the Purchaser. The obligation of Purchaser
to purchase the Shares at the Closing is subject to the satisfaction on or prior
to the Closing Date of the following conditions, any of which may be waived by
Purchaser:
(i) Representations and Warranties Correct; Performance of Obligations. The
representations and warranties made by the Company in Section 3 hereof shall
have been true and correct in all material respects when made, and shall be true
and correct in all material respects on and as of the Closing Date with the same
force and effect as if they had been made on and as of such date, except to the
extent any such representations and warranties are made as of a specific date;
and the Company shall have performed all obligations, covenants and agreements
herein required to be performed by it on or prior to the Closing.
(ii) Consents and Waivers. The Company shall have obtained any and all
consents (including all governmental or regulatory consents, approvals or
authorizations required in connection with the valid execution, delivery and
performance of this Agreement), permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement.
(iii) Compliance Certificate. The Company shall have delivered to Purchaser
a certificate, executed by the Chief Executive Officer of the Company dated as
of the Closing Date, certifying the fulfillment of the conditions specified in
subsections (a)(i) and (a)(ii) of this Section 2.3.
(iv) Secretary's Certificate. The Company shall have delivered to Purchaser
a certificate, executed by the Secretary of the Company, dated as of the Closing
Date, certifying the authenticity of attached copies of the Company's Articles
of Incorporation, Share Conditions, Bylaws and resolutions of the Board of
Directors of the Company (the "Board of Directors") approving the transactions
contemplated hereby.
(v) Legal Opinion. Xxxxxx Xxxxxxx, legal counsel to the Company, will issue
an opinion to the Purchaser in the form substantially as set forth on Exhibit C.
(vi) Other Documents. The Purchaser shall have received such other
certificates and documents as it shall have reasonably requested.
(b) Conditions to Obligations of the Company. The Company's obligation to
issue and sell the Shares at the Closing is subject to the fulfillment on or
prior to the Closing Date of the following conditions, any of which may be
waived by the Company:
(i) Representations and Warranties. The representations and warranties made
by Purchaser in Section 4 hereof shall have been true and correct in all
material respects when made, and shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if they
had been made on and as of such date.
(ii) Payment of Purchase Price. Purchaser shall have delivered the purchase
price at the Closing as specified in Section 1.2 hereof.
3. Representations and Warranties Relating to the Company. Except as
otherwise set forth in the Disclosure Schedule attached hereto as Exhibit D (the
"Company Disclosure Schedule"), the Company represents and warrants to the
Purchaser as set forth below:
3.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Canada. The
Company has the requisite corporate power and authority to carry on its business
as now conducted and as it is proposed to be conducted, and is duly qualified or
licensed to do business and in good standing in the provinces of British
Columbia and each other jurisdiction in which the failure to so qualify or be
licensed would have a Material Adverse Effect.
3.2 Capital Structure. The authorized capital stock of the Company consists
of the following shares, and immediately following the Closing all of the issued
and outstanding shares as hereinafter set forth have been duly authorized and
will be validly issued, and fully paid and nonassessable and will have been
offered, issued, sold and delivered by the Company in compliance with all
applicable U.S. federal and state and Canadian federal and provincial securities
laws:
(a) Preferred Stock. An unlimited number of Class A Preferred Shares, no
par value, of which 1,659,829 shares are issued and outstanding, prior to the
transactions contemplated by this Agreement.
(b) Common Stock. An unlimited number of shares of Common Stock, no par
value (the "Common Stock"), of which 1,000,000 shares are issued and
outstanding.
(c) Options, Warrants, Reserved Shares, Treasury Stock. There are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the Company of any
shares of the Company's capital stock or any securities convertible into or
ultimately exchangeable or exercisable for any shares of the Company's capital
stock, nor is the Company obligated in any manner to issue any shares of its
capital stock or other securities. None of the Company's outstanding capital
stock, or stock issuable upon exercise or exchange of any outstanding options,
warrants or rights is subject to any preemptive rights, rights of first refusal
or other rights to purchase such stock (whether in favor of the Company or any
other person), pursuant to any agreement or commitment of the Company. The
Company holds no shares of its capital stock in its treasury.
(d) Security Holders. Section 3.2(d) of the Company Disclosure Schedule
contains a complete and accurate list of the names of all current stockholders
of the Company and all current holders of outstanding warrants, options, or
other rights ultimately exchangeable, exercisable or convertible for or into
capital stock, organized by the type of security held by each such holder and
setting forth the amount of such security held by such holder and, in the case
of securities exchangeable, exercisable or convertible into Common Stock, the
amount of Common Stock into which such securities are exchangeable, exercisable
or convertible.
3.3 Power, Authorization and Validity. The Company has the corporate power,
legal capacity and corporate authority to enter into and perform its obligations
under this Agreement and the Investor Rights Agreement. The execution, delivery
and performance by the Company of this Agreement and the Investor Rights
Agreement have been duly and validly approved and authorized by all necessary
corporate action on its part. No authorization, consent, or approval,
governmental or otherwise, is necessary to enable the Company to enter into this
Agreement and to perform its obligations hereunder except for filings pursuant
to applicable state laws and Regulation D of the United States Securities Act of
1933, as amended (the "Securities Act") and filings required under the
securities laws of the Provinces of Canada. This Agreement and the Investor
Rights Agreement, when executed and delivered by the Company, will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, equitable
remedies, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally.
3.4 No Violation. Neither the execution and delivery of this Agreement nor
the consummation of the transactions or performance of the Company's obligations
contemplated hereby will conflict with, result in a material breach or violation
of, or cause a default under, any provision of the Company's Articles of
Incorporation, Share Conditions or Bylaws, each as is currently in effect, any
instrument, contract or agreement that is material to the business of the
Company or any judgment, writ, decree, order, law, statute, ordinance, rule or
regulation applicable to the Company.
3.5 Representations Regarding Class A Preferred Shares and the Conversion
Shares. All corporate action has been taken on the part of the Company, its
officers, directors and stockholders necessary for the authorization and
creation, issuance and delivery of the Class A Preferred Shares and the
Conversion Shares. The Class A Preferred Shares and the Conversion Shares when
issued in compliance with the provisions of this Agreement and the Share
Conditions will be validly issued, fully paid and nonassessable and, assuming
the accuracy of Purchaser's representations in Section 4 of this Agreement,
issued in compliance with all applicable U.S. federal and state and Canadian
federal and provincial securities laws. Except for those rights set forth in the
Investor Rights Agreement, a copy of which has been provided to Purchaser by the
Company, none of the Class A Preferred Shares issued pursuant to this Agreement,
and none of the Conversion Shares, are subject to any preemptive rights, rights
of first refusal, or other rights to purchase such stock (whether in favor of
the Company or any other person), pursuant to any agreement or commitment of the
Company. The Company has obtained appropriate waivers required by the XXX in
order to issue Class A Preferred Shares to Purchaser.
3.6 No Subsidiaries. Except for NxtPhase T&D, Inc., the Company does not
own of record or beneficially any capital stock or equity interest or investment
in any corporation, association, partnership, limited partnership, limited
liability company, trust or other entity.
3.7 Title to Property and Assets. The Company owns and possesses its
properties and assets that are material to its business free and clear of all
mortgages, deeds of trust, liens, encumbrances, security interests and claims
except for (i) statutory liens for the payment of current taxes that are not yet
delinquent, and (ii) liens, encumbrances and security interests that arise in
the ordinary course of its business and do not affect material properties and
assets of the Company. With respect to the properties and assets it leases that
are material to its business, the Company is in compliance with such leases in
all material respects. The Company holds valid leasehold interests to its
material leased properties and assets free of any liens, encumbrances or
security interests of any party other than the lessors of such property and
assets. The Company's properties and assets are in all material respects in good
operating condition and repair.
3.8 Proprietary Assets.
(a) The Company owns or possesses sufficient legal rights to all
Proprietary Assets used in or necessary for its business as now conducted or as
proposed to be conducted as of the date hereof ("Company Proprietary Assets"),
without any known infringement of the rights of any other Person. Section 3.8(a)
of the Company Disclosure Schedule identifies the license agreements under which
Proprietary Assets are being licensed to the Company (the "License Agreements").
Except as specified in Section 3.8(a) of the Company Disclosure Schedule and
except for licenses or agreements relating to the Company's use rights regarding
mass market "off the shelf" products obtained pursuant to "shrink wrap" or other
standard form agreements, the Company is neither a party to nor bound by any
options, licenses or agreements of any kind relating to any Proprietary Assets.
The Company has good and marketable title to all Company Proprietary Assets,
free and clear of all material liens and other encumbrances, except for third
party rights licensed to it, as to which the Company has a valid right to use
such Proprietary Assets. The Company has not licensed any Company Proprietary
Assets to any Person on an exclusive basis and has not entered into any covenant
not to compete or contract limiting its ability to exploit fully any Company
Proprietary Assets or to transact business in any market or geographical area or
with any Person.
(b) The Company has taken all measures required under the License
Agreements and all other reasonable and customary measures and precautions
necessary to protect and maintain the confidentiality and secrecy of all Company
Proprietary Assets (except trademarks, issued patents and other Company
Proprietary Assets similarly known to the public and Company Proprietary Assets
whose value would be materially unimpaired by public disclosure) and otherwise
to maintain and protect the value of all Company Proprietary Assets.
(c) Except where such infringement, misappropriation or unlawful use would
not and could not reasonably be expected to be material in impact or amount,
either individually or in the aggregate, to the knowledge of the Company, the
Company is not infringing, misappropriating or making any unlawful use of, and
the Company has not at any time infringed, misappropriated or made any unlawful
use of, any Proprietary Asset owned or used by any other Person. No claims or
notices (in writing or otherwise) with respect to Company Proprietary Assets
have been communicated to the Company: (i) to the effect that the manufacture,
sale, license or use of any Proprietary Asset or product, practice of any
process or provision of any service as now made, sold, practiced, used practiced
or provided or currently offered or proposed by the Company infringes or
potentially infringes, or constitutes a misappropriation or unlawful use of any
copyright, patent, trade secret or other intellectual property right of a third
party, or (ii) challenging the ownership or validity of any of the rights to or
interest in such Proprietary Assets of the Company. Except as disclosed on
Section 3.8(c) of the Company Disclosure Schedule, the Company has not received
any notice to the effect that any patents or registered trademarks, service
marks or registered copyrights held by the Company are invalid or not
subsisting. To the knowledge of the Company, no other Person is infringing,
misappropriating or making any unlawful use of, and no Proprietary Asset owned
or used by any other Person infringes or conflicts with, any Proprietary Asset
used in or pertaining to the business of the Company.
(d) All current and former employees of the Company have executed and
delivered to the Company an agreement (containing no exceptions to or exclusions
from the scope of its coverage relevant to the Company's business) (the
"Employee Agreement"), providing for the assignment of all rights to
intellectual property and trade secrets created or discovered while an employee
of the Company to the Company, and all current and former consultants and
independent contractors to the Company providing technical services relating to
the Company's Proprietary Assets have executed and delivered to the Company an
agreement (containing no exceptions to or exclusions from the scope of its
coverage relevant to the Company's business), the material provisions of which
are in substance as protective to the Company as the terms of the Employee
Agreement.
3.9 Contracts.
(a) Section 3.9(a) of the Company Disclosure Schedule identifies each
material license agreement, development agreement, manufacturing agreement,
distribution agreement, OEM agreement or other agreement to which the Company is
a party.
(b)
(i) The Company has no agreements, contracts or commitments that call for
prospective fixed and/or contingent payments or expenditures by or to the
Company of more than $25,000 other than those entered into in the ordinary
course of its business concerning the sale of Company Products;
(ii) The Company has no purchase agreement, contract or commitment that
calls for fixed and/or contingent payments by the Company that are in excess of
the normal, ordinary and usual requirements of the Company's business;
(iii) There is no outstanding sales contract, commitment or proposal
(including, without limitation, development projects) of the Company that is
reasonably likely to result, either individually or in the aggregate, in any
Material Adverse Change to the Company upon completion or performance thereof;
(iv) The Company has no outstanding agreements, contracts or commitments
with officers, employees, agents, consultants, advisors, salesmen, sales
representatives, distributors or dealers that are not cancelable by it on notice
of not longer than thirty days and without liability, penalty or premium
exceeding $25,000 in any single instance or $50,000 in the aggregate;
(v) The Company has not entered into any employment, independent contractor
or similar agreement, contract or commitment that is not terminable on not more
than thirty days' notice without penalty or liability of any type, including
without limitation severance or termination pay;
(vi) The Company has no collective bargaining or union agreements,
contracts or commitments;
(vii) The Company is not restricted by agreement from competing with any
person, from carrying on its business anywhere in the world or otherwise
operating its business in any manner it deems appropriate;
(viii) The Company has not guaranteed any obligations of other Persons or
made any agreements to acquire or guarantee any obligations of other Persons;
and
(ix) Except as provided in Section 3.9(b) of the Company Disclosure
Schedule, the Company has no outstanding loan or advance to any Person nor is it
party to any line of credit, standby financing, revolving credit or other
similar financing arrangement of any sort that would permit the borrowing by the
Company of any sum.
(c) Sections 3.9(a) and (b) of the Company Disclosure Schedule contain a
complete list of all the material contracts to which the Company is a party. The
Company has not entered into any material oral contracts. Each contract
identified in Sections 3.9(a) and (b) of the Company Disclosure Schedule (a
"Company Material Contract") is valid and in full force and effect, is
enforceable by the Company in accordance with its terms, subject to (i) laws of
general application relating to insolvency and the relief of debtors and (ii)
rules of law governing specific performance, injunctive relief and other
equitable remedies, and will continue to be so immediately following each
Closing Date. No such contract, agreement or instrument contains any liquidated
damages, penalty or similar provision. To the knowledge of the Company, no party
to any such contract, agreement or instrument intends to cancel, withdraw,
modify or amend such contract, agreement or instrument.
(d)
(i) The Company has not violated or breached, or committed any default
under, any Company Material Contract in any material respect, and, to the
knowledge of the Company, no other Person has violated or breached, or committed
any default under, any Company Material Contract in any material respect; and
(ii) To the knowledge of the Company, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, (A) result in a material violation or
breach of any of the provisions of any Company Material Contract, (B) give any
Person the right to declare a default or exercise any remedy under any Company
Material Contract, (C) give any Person the right to accelerate the maturity or
performance of any Company Material Contract or (D) give any Person the right to
cancel, terminate or modify any Company Material Contract.
(e) None of the Company Material Contracts contains any provision which
would require the consent of third parties hereunder or under the Investor
Rights Agreement to the sale and issuance of the Class A Preferred Shares or any
of the other transactions as contemplated hereunder or which would be altered as
a result of such transaction.
3.10 Registration Rights. Except as provided in the XXX, the Company has
not granted or agreed to grant to any person or entity any rights (including
piggyback registration rights) to have any securities of the Company registered
with any U.S., Canadian or other governmental authority.
3.11 Taxes.
(a) The Company has fully and timely, properly and accurately filed all tax
returns and reports required to be filed by it, including all federal, foreign,
provincial and local tax returns and estimates for all years and periods (and
portions thereof) for which any such returns, reports or estimates were due. All
such returns, reports and estimates were prepared in the manner required by
applicable law in all material respects. All income, sales, use, occupation,
property or other taxes or assessments due from the Company prior to the Closing
Date have been paid or will be paid on or before the Closing Date. There are no
pending assessments, asserted deficiencies or claims for additional taxes that
have not been paid. The reserves for taxes, if any, reflected on the Financial
Statements are adequate, and there are no tax liens on any property or assets of
the Company (other than liens for taxes not yet due and payable). There have
been no audits or examinations of any tax returns or reports of the Company by
any Governmental Body. No state of facts exists or has existed which would
constitute grounds for the assessment of any penalty or any further tax
liability in a material amount, either individually or in the aggregate, beyond
that shown on the respective tax reports, returns or estimates. There are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any federal, foreign, state or local tax return or report for any
period.
(b) All taxes that the Company has been required to collect or withhold
have been duly withheld or collected and, to the extent required, have been paid
to the proper taxing authority.
(c) The Company is not a party to any tax-sharing agreement or similar
arrangement with any other Person.
(d) At no time has the Company been included in the federal consolidated
income tax return of any affiliated group of corporations.
(e) The Company is not currently under any contractual obligation to pay to
any Governmental Body any tax obligations of, or with respect to any transaction
relating to, any other Person or to indemnify any other Person with respect to
any tax, other than pursuant to this Agreement.
3.12 Employees. The Company is not a party to any collective bargaining
agreements and, to the best knowledge of the Company, there are no attempts to
organize the employees of the Company. Section 3.12 of the Company Disclosure
Schedule lists all employee benefit plans and programs of the Company and
employment contracts, arrangements and understandings with its employees, other
than those terminable, without penalty, at will or within thirty days. Copies of
any of the foregoing plans, programs, contracts, arrangements or understandings
have been made available to the Purchaser or its counsel. To the knowledge of
the Company, no employee of the Company is subject to any judgment, decree or
order of any court or administrative agency, or any other restriction that would
materially interfere with the use of his or her best efforts to carry out his or
her duties for the Company or that would conflict with the Company's business as
currently conducted. The Company has not received any written notice from any
former employer that an employee of the Company has prior obligations to a
former employer that would interfere or conflict with such employee's ability to
perform his or her intended services for the Company. To the knowledge of the
Company, no employee or advisor of the Company is or is now expected to be in
violation of any term of any employment contract, disclosure agreement,
proprietary information and inventions agreement or any other contract or
agreement or any restrictive covenant or any other common law obligation to a
former employer relating to the right of any such employee to be employed by the
Company because of the nature of the business conducted or to be conducted by
the Company or to the use of trade secrets or proprietary information of others,
and the employment of the Company's employees does not subject the Company or
the Company's shareholders to any liability. There is neither pending nor, to
the knowledge of the Company, threatened any actions, suits, proceedings or
claims, or any basis therefor or threat thereof with respect to any contract,
agreement, covenant or obligation referred to in the preceding sentence.
3.13 Insurance. At the Closing, the Company will have, and at all times
thereafter, shall have in force with good and responsible insurance companies
fire, public liability, property damage and other insurance in such amounts and
with such coverage or risks as are customary for similar businesses and adequate
to the needs of the Company.
3.14 Compliance With Corporate Instruments and Laws. The Company is not in
violation of any provision of its Articles of Incorporation, the Share
Conditions or Bylaws as currently in effect. The Company is in compliance in all
material respects with all applicable laws, statutes, rules, and regulations of
all governmental and regulatory authorities which are applicable and the
compliance with which is material to the Company or its assets or business. The
Company has complied in all material respects at all times with any and all
applicable federal, provincial and foreign laws, rules, regulations,
proclamations and orders relating to the importation or exportation of its
products. All licenses, franchises, permits and other governmental
authorizations held by the Company and which are material to its business are
valid and sufficient in all respects for the business presently carried on by
the Company.
3.15 Litigation. There is no suit, action, proceeding, claim or
investigation pending or, to the knowledge of the Company, threatened against
the Company before any court or administrative agency which could have a
Material Adverse Effect or which questions or challenges the validity of this
Agreement or the Investor Rights Agreement. There is no judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or arbitrator outstanding against the Company.
3.16 Corporate Documents. The Company has furnished to the Purchaser or its
counsel for their examination true and complete copies of the following
documents: (i) copies of its Articles of Incorporation, the Share Conditions and
Bylaws, each as currently in effect, (ii) minute books containing required
records setting forth proceedings, consents, actions, and meetings of its
shareholders, Board of Directors and any committees thereof, and (iii) all
material permits, orders, and consents issued by any regulatory agency with
respect to the Company, or any securities of the Company, and all applications
for such permits, orders, and consents. The corporate minute books, stock
certificate books, stock registers and other corporate records of the Company
are complete and accurate in all material respects, and the signatures appearing
on all documents contained therein are the true signatures of the persons
purporting to have signed the same. All actions reflected in such books and
records were duly and validly taken in compliance in all material respects with
the laws of the applicable jurisdiction.
3.17 Related Party Transactions.
(a) Except as disclosed in Section 3.17(a) of the Company Disclosure
Schedule, none of the Company's Affiliates, officers, directors, shareholders or
employees, or any Affiliate of any of such Person, has any material interest in
any property, real or personal, tangible or intangible, including Proprietary
Assets used in or pertaining to the business of the Company, except for the
normal rights of a stockholder, or, to the knowledge of the Company, any
supplier, distributor or customer of the Company.
(b) Except for the Agreement and the Investor Rights Agreement, and as
otherwise disclosed on Sections 3.12 and 3.17(b) of the Company Disclosure
Schedule, there are no agreements, understandings or proposed transactions
between the Company and any of its officers, directors, employees, Affiliates,
or, to the knowledge of the Company, any Affiliate thereof.
(c) To the knowledge of the Company, no employee, officer or director of
the Company has any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation that competes with the
Company, except that employees, officers or directors of the Company may own
stock in publicly traded companies that may compete with the Company. To the
knowledge of the Company, no member of the immediate family of any officer or
director of the Company is directly or indirectly interested in any material
contract with the Company.
3.18 Disclosure. The statements by the Company contained in this Agreement,
the exhibits hereto, and the certificates and documents required to be delivered
by the Company to the Purchaser under this Agreement, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained herein and therein not
misleading in light of the circumstances under which such statements were made.
3.19 Securities Laws. Subject to the truth and accuracy of the Purchaser's
representations in Section 4 hereof, the offer, sale and issuance of the Class A
Preferred Shares in conformity with the terms of this Agreement and the issuance
of Conversion Shares upon conversion of the Class A Preferred Shares will:
(a) constitute transactions exempt from the registration requirements of
Section 5 of the Securities Act, and the qualification or registration
requirements of any applicable state securities laws as such laws exist on the
date hereof; and
(b) constitute transactions exempt from prospectus and registration
requirements of the Securities Act (British Columbia) and the securities
legislation of each other province of Canada in which Purchaser resides.
4. Representations and Warranties of Purchaser and Restrictions on Transfer
Imposed by the Securities Act and Applicable State Securities Laws.
4.1 Representations and Warranties by Purchaser. Purchaser represents and
warrants to the Company as follows:
(a) The Class A Preferred Shares and the Conversion Shares (collectively,
the "Securities") are being or will be acquired for Purchaser's own account, for
investment and not with a view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act, or applicable state securities laws.
(b) Purchaser understands that (i) the Securities have not been registered
under the U.S. Securities Act of 1933, as amended (the "Securities Act") by
reason of their issuance in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act pursuant to Section 4(2)
thereof and have not been qualified under any U.S. state securities laws on the
grounds that the offering and sale of securities contemplated by this Agreement
are exempt from registration thereunder, and (ii) the Company's reliance on such
exemptions is predicated on Purchaser's representations set forth herein.
Purchaser understands that the resale of the Securities may be restricted
indefinitely, unless a subsequent disposition thereof is registered under the
Securities Act and registered under any state securities law or is exempt from
such registration in the United States or a prospectus is filed and receipted
with applicable securities regulatory authorities of the provinces of Canada.
(c) Purchaser is an "accredited investor" within the meaning of Rule 501 of
Regulation D under the Securities Act, as presently in effect, and has been
advised that Class A Preferred Shares have not been registered and, therefore,
will be subject to restrictions on transfer pursuant to applicable securities
laws. Purchaser is a resident in the jurisdiction set forth below their
respective name in the signature page hereto. Purchaser has not been formed
solely for the purpose of making this investment and is purchasing the Class A
Preferred Shares to be acquired by Purchaser hereunder as principal for its own
account for investment, not as a nominee or agent, and not with a view to, or
for resale in connection with, the distribution thereof. Purchaser has such
knowledge and experience in financial and business matters that Purchaser is
capable of evaluating the merits and risks of such investment, is able to incur
a complete loss of such investment and is able to bear the economic risk of such
investment for an indefinite period of time.
(d) Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the existence of a public market for the shares of the Company's
capital stock, the availability of certain current public information about the
Company, the resale occurring not less than one year after a party has purchased
and paid for the security to be sold, the sale being effected through a
"broker's transaction" or in a transaction directly with a "market maker," and
the number of shares being sold during any three-month period not exceeding
specified limitations. Purchaser further understands that there is no assurance
that Rule 144 or any exemption from the Securities Act will be available, or if
available, that such exemption will allow Purchaser to dispose of or otherwise
transfer any or all of the Shares or the Conversion Stock under the
circumstances, in the amounts or at the times Purchaser might propose.
(e) During the negotiation of the transactions contemplated herein, the
Purchaser and its representatives and legal counsel have been afforded access to
corporate books, financial statements, records, contracts, documents, and other
information concerning the Company and to its offices and facilities, have been
afforded an opportunity to ask such questions of the Company's officers,
employees, agents, accountants and representatives concerning the Company's
business, operations, financial condition, assets, liabilities and other
relevant matters as they have deemed necessary or desirable, and have been given
all such information as has been requested, to evaluate the merits and risks of
the prospective investments contemplated herein.
(f) Purchaser has the full right, power and authority to enter into and
perform Purchaser's obligations under this Agreement and the Investor Rights
Agreement, and this Agreement and the Investor Rights Agreement constitutes
valid and binding obligations of Purchaser enforceable in accordance with their
terms.
(g) No consent, approval or authorization of or designation, declaration or
filing with any Governmental Body on the part of Purchaser is required in
connection with the valid execution and delivery of this Agreement or the
Investor Rights Agreement.
4.2 Legend. Each certificate representing the Securities may be endorsed
with the following legends:
(a) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE "RESTRICTED
SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY
NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (I) IN
CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
ACT OR (II) IN COMPLIANCE WITH RULE 144 OR (III) OTHERWISE PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT BASED ON AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER;
(b) UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A
DAY AFTER THE LATER OF (i) JUNE __, 2005 AND (ii) THE DATE THE ISSUER BECAME A
REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA; and
(c) Any other legends required by applicable securities laws or the
Investor Rights Agreement.
The Company may instruct its transfer agent not to register the transfer of
the Securities, unless the conditions specified in the foregoing legends are
satisfied. 4.3 Removal of Legend and Transfer Restrictions. (a) Any legend
endorsed on a certificate pursuant to Section 4.2(a) and the stop transfer
instructions with respect to such Securities shall be removed and the Company
shall issue a certificate without such legend to the holder thereof (1) if such
Securities are registered under the Securities Act and a prospectus meeting the
requirements of Section 10 of the Securities Act is available, (2) if such
legend may be properly removed under the terms of Rule 144 promulgated under the
Securities Act, or (3) if such holder provides the Company with an opinion of
counsel for such holder, reasonably satisfactory to legal counsel for the
Company to the effect that a sale, transfer or assignment of such Securities may
be made without registration.
(b) Any legend endorsed on a certificate pursuant to Section 4.2(b) and the
stop transfer instructions with respect to such Securities as it applies to
Section 4.2(b) shall be removed and the Company shall issue a certificate
without such legend to the holder thereof if (i) a receipt is obtained for a
prospectus in all applicable provinces qualifying the Securities; or (ii) the
Company becomes a reporting issuer in all applicable Canadian provinces and the
hold period applicable to the Securities under applicable provincial securities
laws has expired.
5. Indemnity.
5.1 Survival. The representations and warranties of the parties contained
in this Agreement shall survive the Closing indefinitely.
5.2 Indemnity.
(a) The Company hereby agrees to indemnify and defend and hold harmless the
Purchaser, its Affiliates, successors and assigns and each of their respective
officers, directors, employees and agents (the "Indemnified Parties") from and
against, and agrees to pay or cause to be paid to the Indemnified Parties all
amounts equal to the sum of, any and all claims, demands, costs, expenses,
losses and other liabilities of any kind that the Indemnified Parties may incur
or suffer (including without limitation all reasonable legal fees and expenses)
which arise or result from any breach of or failure by the Company to perform
any of its representations, warranties, covenants or agreements in this
Agreement or the Investor Rights Agreement; provided, however, such
indemnification shall not include payment of consequential damages of the
Indemnified Parties. The rights of Purchaser hereunder shall be in addition to,
and not in lieu of, any other rights and remedies which may be available to them
by law.
5.3 Procedures.
(a) If a third party shall notify an Indemnified Party with respect to any
matter that may give rise to a claim for indemnification under the indemnity set
forth above in Section 5.2, the procedure set forth below shall be followed.
(i) Notice. The Indemnified Party shall give to the party providing
indemnification (the "Indemnifying Party") written notice of any claim, suit,
judgment or matter for which indemnity may be sought under Section 5.2 promptly
but in any event within thirty days after the Indemnified Party receives notice
thereof; provided, however, that failure by the Indemnified Party to give such
notice shall not relieve the Indemnifying Party from any liability it shall
otherwise have pursuant to this Agreement except to the extent that the
Indemnifying Party is actually prejudiced by such failure. Such notice shall set
forth in reasonable detail (i) the basis for such potential claim and (ii) the
dollar amount of such claim. The Indemnifying Party shall have a period of
fifteen days within which to respond to the Indemnified Party thereto regarding
acceptance or rejection of the Indemnified Party's claim (the "Response"). If
the Indemnifying Party does not issue a Response within such fifteen-day period,
the Indemnifying Party shall be deemed to have accepted responsibility for such
indemnity.
(ii) Defense of Claim. With respect to a claim by a third party against an
Indemnified Party for which indemnification may be sought under this Agreement,
the Indemnifying Party shall have the right, at its option, to be represented by
counsel of its choice and to assume the defense or otherwise control the
handling of any claim, suit, judgment or matter for which indemnity is sought,
which is set forth in the notice sent by the Indemnified Party, by notifying the
Indemnified Party in its Response; provided, however, that the Indemnified Party
shall have the right to employ counsel to represent it if, in the Indemnified
Party's reasonable judgment based upon the advice of counsel, it is advisable in
light of the separate interests of the Indemnified Party, to be represented by
separate counsel, and in that event the reasonable fees and expenses of such
separate counsel shall be paid by the Indemnifying Party. If the Indemnifying
Party does not give timely notice in its Response in accordance with the
preceding sentence, the Indemnifying Party shall be deemed to have given notice
that it does not wish to control the handling of such claim, suit or judgment.
In the event the Indemnifying Party elects (by notice in writing within such
fifteen-day period) to assume the defense of or otherwise control the handling
of any such claim, suit, judgment or matter for which indemnity is sought, the
Indemnifying Party shall indemnify and hold harmless the Indemnified Party from
and against any and all reasonable professional fees (including attorneys' fees,
accountants, consultants and engineering fees) and investigation expenses
incurred by the Indemnifying Party prior to such election, notwithstanding the
fact that the Indemnifying Party may not have been so liable to the Indemnified
Party had the Indemnifying Party not elected to assume the defense of or to
otherwise control the handling of such claim, suit, judgment or other matter. In
the event that the Indemnifying Party does not assume the defense or otherwise
control the handling of such matter, the Indemnified Party may retain counsel,
as an indemnification expense, to defend such claim, suit, judgment or matter.
(iii) Final Authority. The parties shall cooperate in the defense of any
such claim or litigation and each shall make available all books and records
which are relevant in connection with such claim or litigation. In connection
with any claim, suit or other proceeding with respect to which the Indemnifying
Party has assumed the defense or control, the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with respect
to any matter which does not include a provision whereby the plaintiff or
claimant in the matter releases the Indemnified Party from all liability with
respect thereto, without the written consent of the Indemnified Party. In
connection with any claim, suit or other proceeding with respect to which the
Indemnifying Party has not assumed the defense or control, the Indemnified Party
may not compromise or settle such claim without the consent of the Indemnifying
Party, which shall not be unreasonably withheld and shall be deemed to have been
given if the Indemnified Party provides the Indemnifying Party with a written
notice setting forth the material terms of such compromise or settlement and the
Indemnifying Party does not object thereto in writing within ten days of its
receipt of such notice.
(b) Claims Between the Indemnifying Party and the Indemnified Party. Any
claim for indemnification under this Agreement which does not result from the
assertion of a claim by a third party shall be asserted by written notice given
by the Indemnified Party to the Indemnifying Party. The Indemnifying Party shall
have a period of thirty days within which to respond thereto.
6. Covenants.
6.1 Insurance. The Company shall maintain insurance, including but not
limited to Director's and Officer's Insurance, with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is customarily carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Company operates. The
Company shall pay all such insurance premiums payable by them.
6.2 Compliance with Laws. The Company shall comply with the requirements of
all applicable laws, rules, regulations and orders of any governmental
authority, non-compliance with which could have a Material Adverse Effect.
6.3 Expenses of Directors. The Company shall reimburse any directors
designated by the Purchaser to the Board of Directors for all reasonable
expenses incurred by any such director in connection with the carrying out of
such director's duties to the Company, including without limitation travel,
entertainment, meals, lodging and related expenses in connection with such
directors' attendance at meetings of the Company's Board of Directors or
committees thereof.
6.4 Tax Matters. The Company shall, and shall cause each of its
subsidiaries to: (i) prepare and timely file, or cause to be prepared and timely
filed, all tax returns and reports required to be filed by it, each in the
manner required by applicable law in all material respects and in a manner that
is accurate and complete in all material respects, and (ii) pay all income,
sales, use, occupation, property and other taxes and assessments that are due in
accordance with applicable law, on or before the due date therefor, whether or
not such taxes or assessments are shown on any such tax return.
6.5 Use of Proceeds. The Company hereby covenants and agrees that all of
the proceeds received by it from the issuance and sale of the Class A Preferred
Shares shall be used for product development, corporate infrastructure and
working capital.
6.6 Unwind. In the event that (a) the Arrangement is terminated for any
reason or (b) the Arrangement is not consummated within fifty weeks after the
date of this Agreement, then the Purchaser and Perseus 2000 Expansion shall take
the actions set forth in Section 2.1(f) of the Investment Agreement, dated as of
April 22, 2005, by and between Perseus 2000 Expansion and the Purchaser.
6.7 Investor Rights Agreement. The Company hereby covenants that the
Purchaser shall have the right to execute a joinder agreement to the Investor
Rights Agreement. The Company hereby further covenants and agrees that it shall
use its respective best efforts to have the other parties to the Investor Rights
Agreement acknowledge the Purchaser's rights thereunder. Notwithstanding the
foregoing, in the event that the actions set forth in Section 6.6 hereof result
in the Purchaser exchanging its Shares with Perseus 2000 Expansion, the
Purchaser shall take such further actions reasonably requested by the Company to
acknowledge and confirm the termination of its rights pursuant to the Investor
Rights Agreement.
7. Miscellaneous.
7.1 Waivers and Amendments. This Agreement may not be amended except
pursuant to an agreement in writing executed by the Company and Purchaser;
provided that Section 1.2(b) of this Agreement shall not be amended without the
prior written consent of Perseus.
7.2 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of New York without regard to the principles of conflicts of
laws thereof.
7.3 NO RIGHT TO JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, COUNTERCLAIM OR OTHERWISE,
IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY RELATED
AGREEMENTS ANY RIGHT TO A TRIAL BY JURY.
7.4 Successors and Assigns. Except as otherwise expressly provided herein
and subject to the Investor Rights Agreement and applicable law, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.
7.5 Entire Agreement. This Agreement, the Investor Rights Agreement, and
the other exhibits hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
7.6 Notices, etc. All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or by facsimile transmission or three days after
being mailed, registered or certified mail, return receipt requested, with
postage prepaid, to the address or facsimile number (as the case may be) listed
for each such party below such party's signature page hereto or, if any party
shall have designated a different address or facsimile number by notice to the
other parties given as provided above, then to the last address or facsimile
number so designated.
7.7 Severability. In case any provision of this Agreement shall be declared
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
7.8 Titles and Subtitles. The titles of the paragraphs and subparagraphs of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
7.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
7.10 Publicity. None of the parties to this Agreement, nor any of their
affiliates, shall issue any press release or otherwise make any public
announcement or disclosure with respect to this Agreement, the Investor Rights
Agreement or any of the transactions contemplated hereby or thereby without the
prior written consent of each of the Company and the Purchaser, unless such
disclosure is required by applicable law, provided, however, within sixty (60)
days of the date of this Agreement, the Company may issue a press release
disclosing that Purchaser has invested in the Company, provided that the final
form of the press release is approved in advance in writing by Purchaser. The
name of the Purchaser and the fact that Purchaser has invested in the Company
may be included in a reusable press release boilerplate statement by the
Company, so long as the Purchaser have given the Company their approval of such
boilerplate statement and the boilerplate statement is reproduced in the same
form in which it was approved
7.11 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
7.12 Finder's Fees.
(a) The Company (i) represents and warrants that it has retained no finder
or broker in connection with the transactions contemplated by this Agreement and
the Investor Rights Agreement and (ii) hereby agrees to indemnify and to hold
the Purchaser harmless of and from any liability for any commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which the Company, or any of its employees or representatives,
are responsible.
(b) Purchaser (i) represents and warrants that it has retained no finder or
broker in connection with the transactions contemplated by this Agreement and
the Investor Rights Agreement and (ii) hereby agrees to indemnify and to hold
the Company harmless of and from any liability for any commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which it, or any of its employees or representatives, are
responsible.
[Signatures follow on next page]
IN WITNESS WHEREOF, the Company has executed this Agreement as of the day
and year first above written.
NXTPHASE T&D CORPORATION
Signature:
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: President
Address for Notice:
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
IN WITNESS WHEREOF, the undersigned Purchaser has executed this Agreement
as of the day and year first above written.
BEACON POWER CORPORATION
Signature:
By:/s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
Address for Notice:
Beacon Power Corporation
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn.: F. Xxxxxxx Xxxx
President and CEO
Facsimile: (000) 000-0000
IN WITNESS WHEREOF, Perseus 2000 Expansion has executed this Agreement as
of the day and year first above written exclusively for purposes of Section 6.6
hereof.
PERSEUS 2000 EXPANSION, L.L.C.
Signature:
By: /s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
--------------------------------------
Title: Treasurer
--------------------------------------
Address for Notice:
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Senior Managing Director
Facsimile: (000) 000-0000
Schedule A
CLOSING
---------------------------- ----------------- ------------ ---------------------- --------------
Number of Aggregate Amount Previously Paid Amount Due at
Class A Purchase Paid Toward Purchase Closing
Purchaser: Preferred Shares Price (USD) Price (if any)
---------------------------- ----------------- ------------ ---------------------- --------------
Beacon Power Corporation. 111,111 $499,999.50 $0 $499,999.50
---------------------------- ----------------- ------------ ---------------------- --------------
Schedule B
Wire Transfer Instructions
Account Name: NxtPhase T&D Corporation
Bank: Royal Bank of Canada
Bank Address 0000 Xxxx Xxxxxxx Xx., Xxxxxxxxx XX X0X 0X0
Swift Address: XXXXXXX0
Transit No: 10
US$ Account No: 000 000 0
Contact: Xxxxx Xxxxx
Ph - 604.665.8337
Fax - 000.000.0000
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement to which this Exhibit A is attached, the
following terms have the following meanings:
"Company Products" means all versions and implementations of any
product which has been, is being or is intended to be marketed by the Company.
"Conversion Shares" means shares of Common Stock issuable upon
conversion of the Class A Preferred Shares.
"Governmental Body" means any: (a) nation, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government; or
(c) governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, organization, unit, body or entity and any court or other tribunal).
"Material Adverse Change" means a change which would have a Material
Adverse Effect.
"Material Adverse Effect." An event, violation or other matter will be
deemed to have a "Material Adverse Effect" on the Company if such event,
violation or other matter would be material in impact or amount to the Company's
business, intellectual property rights or condition, or, taken as a whole, its
assets, liabilities, operations, or financial performance.
"Person" means any individual, entity or Governmental Body.
"Proprietary Asset" means: (a) any patent, patent application,
trademark (whether registered or unregistered), trademark application, trade
name, fictitious business name, service xxxx (whether registered or
unregistered), service xxxx application, copyright (whether registered or
unregistered), copyright application, maskwork, maskwork application, trade
secret, know-how, customer list, franchise, system, computer software, computer
program, invention, design, blueprint, engineering drawing, proprietary product,
technology, proprietary right or other intellectual property right or intangible
asset; and (b) any right to use or exploit any of the foregoing.
EXHIBIT B
SHARE CONDITIONS
Share conditions are as set forth in the Articles of Incorporation of the
Company.
EXHIBIT C
LEGAL OPINION
[Farris, Vaughan, Xxxxx & Xxxxxx LLP Letterhead]
July ___, 2005
TO: Beacon Power Corporation
Dear Sirs:
Re: NxtPhase T & D Corporation
We have acted as counsel to NxtPhase T & D Corporation (the "Corporation") in
connection with the issuance and sale by the Corporation of 111,111 Class A
Preferred Shares (the "Class A Preferred Shares") for US $4.50 per share, in
accordance with the terms of a securities purchase agreement (the "Securities
Purchase Agreement"), dated July , 2005, between the Corporation and Beacon
Power Corporation (the "Investor").
This opinion is being provided pursuant to section 2.3(a)(v) of the Securities
Purchase Agreement and, unless the context requires otherwise, all capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Securities Purchase Agreement.
SCOPE OF INQUIRIES
We have examined the following documents:
(a) Securities Purchase Agreement; (b) the Certificate and Articles of
Incorporation and By-laws of the Corporation; and (c) Resolutions of the
Directors of the Corporation.
We have also examined such corporate records of the Corporation, certificates of
public officials, certificates of officers of the Corporation, and other
documents and have made such other searches and examinations and considered such
questions of law as we have considered necessary in order to give the opinions
expressed below.
ASSUMPTIONS
In rendering the opinions expressed below, we have assumed:
(a) the authenticity of documents purporting to be originals;
(b) the conformity to originals of documents purporting to be photostatic
or facsimile copies of originals;
(c) the genuineness of all signatures on all documents reviewed by us;
(d) that each party to any agreement or instrument referred to herein,
other than the Corporation, has all necessary power and authority to execute and
deliver such agreement or instrument and to do all acts and things as required
or contemplated to be done thereby, has duly authorized the execution and
delivery of such agreement or instrument and the observance and performance of
its obligations thereunder, has duly executed such agreement or instrument and
has duly delivered the same to each of the other parties thereto;
(e) that to the extent any of the matters as to which we opine are governed
by any laws other than those of the Province of British Columbia or the federal
laws of Canada applicable therein we have assumed with your permission, without
independent investigation or verification, that (i) such laws are identical in
all respects to the laws of the Province of British Columbia and the federal
laws of Canada applicable therein;
(f) that the Securities Purchase Agreement constitutes legal, valid and
binding obligations of all parties thereto, enforceable in accordance with its
terms under the laws of the jurisdiction expressly chosen by the parties to
govern the such document, being the laws of the State of New York;
(g) if any obligation under any of the Securities Purchase Agreement falls
to be performed in any jurisdiction outside of the Province of British Columbia,
the performance of such obligation will not be illegal or ineffective by virtue
of the laws of that jurisdiction;
(h) that the acknowledgements, representations and warranties of the
parties to the Securities Purchase Agreement, other than those of the
Corporation, are true, correct and accurate in all respects; and
(i) the accuracy and completeness of all information provided to us (in
written form or by facsimile transmission) by offices of public record.
RELIANCE
In expressing the opinion set forth in paragraph 1 below, we have relied solely
upon a Certificate of Compliance issued in respect of the Corporation by the
Deputy Director under the Canada Business Corporations Act, dated July , 2005.
In expressing the opinions set forth below, we have relied as to matters of fact
solely upon certificates of an officer of the Corporation, copies of which have
been delivered to you concurrently herewith, with respect to the accuracy of
factual matters contained therein.
OPINION
We express no opinion as to any laws, or matters governed by any laws other than
the laws of the Province of British Columbia and the federal laws of Canada
applicable therein.
The expressions "to our knowledge" or "of which we have knowledge", when used
herein, means to the actual knowledge of the partners and associates of our firm
who have had involvement with the matters contemplated in this opinion.
Based and relying on the foregoing, and subject to the qualifications set out
below, we are of the opinion that:
1. The Corporation is a corporation duly incorporated and validly existing
under the Canada Business Corporations Act and is in good standing with
respect to the filing of annual returns.
2. The Corporation has the corporate power and capacity to (a) own, lease and
operate its properties and conduct its business as, to our knowledge, it is
currently conducted and (b) to execute, deliver and perform its obligations
under the Securities Purchase Agreement.
3. The authorized share capital of the Corporation consists of an unlimited
number of Common Shares and an unlimited number of Class A Preferred
Shares, of which, on the date hereof prior to the issuance of the Class A
Preferred Shares contemplated in the Securities Purchase Agreement,
1,000,000 Common Shares and 1,659,829 Class A Preferred Shares are validly
issued and outstanding as fully paid and non-assessable shares in the
capital of the Corporation. The Class A Preferred Shares have the rights,
preferences, restrictions and privileges set forth in the Corporation's
Articles of Incorporation.
4. The execution and delivery by the Corporation of the Securities Purchase
Agreement and the consummation by the Corporation of the transactions
contemplated thereby, have been duly authorized by all necessary
corporation action on the part of the Corporation and the Securities
Purchase Agreement has been duly executed and delivered by the Corporation
and constitutes a legal, valid and binding obligation of the Corporation
enforceable against the Corporation in accordance with its terms.
5. The choice of the laws of the State of New York to govern the Securities
Purchase Agreement will be upheld as a valid choice of law by the courts of
the Province of British Columbia provided that the choice of law is bona
fide (in that it was not made with a view to avoiding the consequences of
the law of any other jurisdiction) and is not contrary to public policy, as
that term is understood under the laws of the Province of British Columbia;
in an action brought before a court of competent jurisdiction in the
Province of British Columbia in respect of the Securities Purchase
Agreement, the laws of the State of New York, to the extent specifically
pleaded and proved as a matter of a fact by expert evidence, would be
recognized and applied by such courts to all issues that, under the
conflict of laws rules of the Province of British Columbia, are to be
determined in accordance with the proper or governing law of the Securities
Purchase Agreement if the choice of law in such document is valid; although
the parties may have made a valid choice of law, the courts of the Province
of British Columbia will not apply those laws: (i) which it characterizes
as being of a revenue, penal or public law nature, (ii) which relate to
matters of a procedural nature, or (iii) the application of which would be
inconsistent with public policy, as that term is applied by the courts in
the Province of British Columbia; in addition, a court of competent
jurisdiction in British Columbia may reserve to itself an inherent power to
decline to hear any such action if it is contrary to public policy for it
to do so, or if it is not the proper forum to hear such an action, or if
concurrent proceedings in respect of such matter are being brought
elsewhere.
6. The execution, delivery and performance by the Corporation of the
Securities Purchase Agreement to which it is a party do not (i) violate the
laws of the Province of British Columbia or any federal laws of Canada
applicable therein, or any court order, judgment or decree which has been
entered against the Corporation or any Subsidiary of which we have
knowledge, (ii) constitute a default under or breach of, or result in the
creation of a lien or a right of acceleration under, any of the agreements
or instruments listed in Exhibit D or (iii) violate its Certificate and
Articles of Incorporation or Bylaws.
7. The Common Shares issuable upon conversion of the Class A Preferred Shares
have been duly authorized and reserved for issuance upon conversion of the
Class A Preferred Shares. The Class A Preferred Shares, when issued, sold
and delivered against payment therefor in accordance with the provisions of
the Securities Purchase Agreement, will be duly and validly issued, fully
paid and non-assessable. The Common Shares, when issued upon conversion of
the Class A Preferred Shares in accordance with their terms, will be duly
and validly issued, fully paid and non-assessable.
8. To our knowledge, there is no action, proceeding or litigation pending or
threatened against the Corporation before any court or any governmental or
administrative agency or body.
9. No notices, reports or other filings are required to be made by the
Corporation or any of its subsidiaries with, nor are any consents,
registrations, applications, approvals, permits, licenses or authorizations
required to be obtained by the Corporation from, securities regulatory
authorities in the Province of British Columbia for the issuance of the
Class A Preferred Shares or the issuance and delivery of the Common Shares
upon conversion of the Class A Preferred Shares so long as no commission or
other remuneration is paid or given to others in respect of the trade
except for administrative or professional services or for services
performed by a registered dealer, other than normal post-closing filings in
connection with qualifying for exemptions from the prospectus and
registration requirements of applicable securities laws.
10. The offer and sale of the Class A Preferred Shares pursuant to the
Securities Purchase Agreement are exempt from the prospectus and
registration requirements of the Securities Act (British Columbia), subject
to the Corporation filing a report with the British Columbia Securities
Commission of such trade on or before the 10th day after the trade, on Form
45-103F4, prepared and executed in accordance with the Securities Act
(British Columbia), the rules and regulations made and promulgated
thereunder and the instruments, policies, notices and interpretation notes
of the British Columbia Securities Commission together with the requisite
filing fee and a duly completed fee checklist.
QUALIFICATIONS
The opinions expressed herein are subject to the following qualifications and
limitations:
1. The enforceability of the obligations of the parties to the Securities
Purchase Agreement and the rights and remedies set out therein and any
judgment arising out of or in connection therewith are subject to and may
be limited by:
(a) applicable bankruptcy, reorganization, arrangement, winding-up,
insolvency, liquidation, moratorium, preference and other similar laws
and judicial decisions from time to time in effect affecting the
enforcement of rights and remedies of creditors;
(b) applicable laws regarding limitations of actions;
(c) the equitable and statutory powers of the courts to stay proceedings
before them, to stay the execution of judgments, to limit the right of
a creditor to receive immediate payment of amounts stated to be
payable on demand, to relieve from penalties or the consequences of
default, particularly if the default is minor or non-substantive, to
refrain from enforcing non-competition or other restrictive covenants
and to grant relief against forfeiture; and
(d) the general principles of equity, whether enforceability is considered
in a proceeding in equity or at law, and no opinion is expressed as to
the availability of any specific remedy that may be granted, imposed
or rendered or as to the availability of the remedy of specific
performance, injunctive relief or other equitable remedies in any
particular instance;
2. Provisions in the Securities Purchase Agreement providing for the recovery
of fees and expenses from any person may be restricted by a court to a
reasonable amount, and legal fees are subject to taxation;
3. No opinion is expressed on:
(a) provisions of the Securities Purchase Agreement which:
(i) purport to directly or indirectly exclude unwritten variations,
waivers or consents of, to or under the Securities Purchase
Agreement or restrict their effect;
(ii) purport to restrict the access to, or waive the benefit of, legal
or equitable remedies or defences;
(iii) purport to bind or affect, or confer a benefit upon, persons who
are not parties to the Securities Purchase Agreement;
(iv) purport to establish evidentiary standards, such as provisions
stating that certain determinations, calculations, requests or
certificates will be conclusive or binding;
(v) purport to waive or affect any rights to notices;
(vi) purport to allow severance of an invalid, illegal or
unenforceable provision, or restrict its effect;
(vii) relate to any taxes, levies, duties, imposts or charges which
may be imposed upon, or exigible in respect of, any of the
matters contemplated by the Securities Purchase Agreement, and in
particular, but without limitation, no opinion is expressed as to
any withholding tax that may be imposed upon, or exigible or
payable in respect of, any such transactions;
4. The effectiveness of provisions which purport to relieve a person from a
liability or duty otherwise owed may be limited by law, and provisions
requiring indemnification or reimbursement of a person may not be enforced
by a court, to the extent that they relate to or arise as a result of the
failure of such person to have performed a duty (contractual or otherwise)
or from the breach of contract, tort or other wrongful act of such person.
5. The opinions in paragraph 9 and 10 are subject to the qualification that no
effective order, ruling or decision is issued or granted by a court or
regulatory or administrative body that has the effect of precluding or
restricting the issue and delivery by the Corporation of any securities
referred to in such paragraphs or restricting any trades of such securities
and at the relevant time there is no such order affecting any person who
engages in such a trade.
6. Canadian courts will not give monetary judgment in any currency other than
that of Canada and such judgment may be based on a rate of exchange in
existence on a day other than the date of payment of such judgment.
7. The rate of post-judgment interest applicable to any obligation under the
Securities Purchase Agreement lies within the discretion of the court.
This opinion may not be relied upon by any person or entity other than the
addressees hereof, their successors and their assigns of whom we have notice at
the time of the assignment, and this opinion may not be circulated, quoted or
otherwise referred to for any purpose other than in connection with the
transactions contemplated by the Securities Purchase Agreement, in each case,
without our prior written consent. We do not undertake to advise you or anyone
else of any changes in the opinions expressed herein resulting from changes in
law, changes in facts or any other matters that hereafter might occur that did
not exist on the date hereof.
Yours truly,
Farris, Vaughan, Xxxxx & Xxxxxx LLP
EXHIBIT D
COMPANY DISCLOSURE SCHEDULE
Section 3.2(c) and (d) - Options, Warrants etc. and Security Holders
Current Shareholders
------------------------------------ -------------------- --------------------
Number of Class A Number of Common
Preferred Shares Shares
------------------------------------ -------------------- --------------------
Perseus 2000, L.L.C. 902,698 478,587
------------------------------------ -------------------- --------------------
El Dorado Investment Company* 463,832 68,336
------------------------------------ -------------------- --------------------
Working Opportunity Fund (EVCC) Ltd. 85,602 214,300
------------------------------------ -------------------- --------------------
GE Capital Equity Holdings, Inc. 9,641 46,333
------------------------------------ -------------------- --------------------
Hydro-Quebec Capitech Inc. 2,974 44,222
------------------------------------ -------------------- --------------------
Canadian Science and Technology
Growth Fund Inc. 16,379 96,800
------------------------------------ -------------------- --------------------
OPG Ventures Inc. 925 36,100
------------------------------------ -------------------- --------------------
Western Technology Seed Investment 14,222
------------------------------------ -------------------- --------------------
Xxxxx Xxxxxxxxx 1,100
------------------------------------ -------------------- --------------------
Beacon Power Corporation 111,111
------------------------------------ -------------------- --------------------
TOTAL: 1,659,829 1,000,000
------------------------------------ -------------------- --------------------
Options, Warrants etc.
El Dorado is obligated to purchase an additional 66,667 Class A Preferred Shares
of the Company for $300,000 pursuant to the terms of the Initial Securities
Purchase Agreement, and a waiver granted by the Company on April 21, 2005.
The Company is a party to a binding Term Sheet with Perseus 2000, L.L.C. dated
April 22, 2005 which provides for the issuance of up to $1.5 million of Class A
Preferred Shares.
Pursuant to their employment agreements, the senior management of the Company
have the right to participate in the Company's option plan. The Investor Rights
Agreement contemplates that an option pool of 462,000 Common Shares of the
Company would be allocated to the Company's employees, consultants and other
eligible individuals. No options have been granted at the date hereof, on the
basis that in lieu thereof the employees will receive restricted stock units and
stock options of the Purchaser on the basis contemplated in the Arrangement
Agreement and Schedule B thereto. If the Arrangement is not completed, it is
anticipated that such options would be granted to employees of the Company.
The Company has an option to enter into a Long-Term License Agreement with The
Texas A&M University System ("TAMUS"). Pursuant to section 3.04 of that
Long-Term License Agreement, TAMUS would be entitled to receive NxtPhase Common
Shares equal to 5% of its total issued and outstanding stock on a fully-diluted
basis, or, if at such time the Company is a subsidiary of the Purchaser, 5% of
the total number of shares of the Purchaser issued to NxtPhase Shareholders in
the Arrangement. See the terms of the Long-Term License Agreement, a true and
complete copy of which has been provided to the Purchaser.
The Investor Rights Agreement provides for certain rights of the holders of
Class A Preferred Shares to purchase shares of the Company and require
redemption of shares of the Company in certain circumstances. See the terms of
that agreement, a true and complete copy of which has been provided to the
Purchaser.
The Company is party to the Arrangement Agreement dated as of April 22, 2005
with the Purchaser.
Section 3.7 - Title to Property and Assets
Cash collateral held by Royal Bank of Canada in the amount of $40,000 Canadian
as security deposit for VISA corporate credit cards used by Company's employees.
The Company has made a security deposit equal to two months' rent on the lease
of its Vancouver premises.
A letter of credit for $200,000 has been provided to the landlord of the Phoenix
premises to be reduced over the term of the lease.
3.8 Company Proprietary Assets
The Company is party to a one year license for use of the patents held by TAMUS,
with the option to enter into a long-term license, copies of which have been
provided to the Purchaser.
Mr. Hrabliuk was removed as an "inventor" on NxtPhase Patent case #20051, as the
contributions he made were also removed from the patent.
On March 30, 2005, the Company and VA TECH Transmission & Distribution SA
jointly filed for a patent on Optical Sensor Arrangement for Electrical
Switchgear. Under the terms of Addendum N. 1 to GIS Joint Development Agreement,
both parties agree that it is their intention that such IP be exploited
together. If, after December 2006, certain sales targets are not met, the
parties grant one another a perpetual, royalty free license to use the IP.
3.8(d) Employment Agreements
Employment Agreements have been executed by Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxx Xxxxx,Xxx Xxxxxxxx, Xxx Xxxxx, and Xxxxxxxx Xxxxxxxxx.
Section 3.9 - Material Contracts
Section 3.9 - Material Contracts
---------------------------------- ------------------------------------------------ ----------------------------------
Name of Agreement Parties Date
---------------------------------- ------------------------------------------------ ----------------------------------
Technology/Asset
---------------------------------- ------------------------------------------------ ----------------------------------
Texas A&M License Agreement the Company and TAMUS Signed by the Company Jan. 13,
2005 and by TAMUS on Feb. 1, 2005
---------------------------------- ------------------------------------------------ ----------------------------------
Confirmation letter The parties have duly executed a letter April 6, 2005
amendment to the TAMUS License Agreement to
confirm that the Effective Date of the License
Agreement is August 17, 2004.
---------------------------------- ------------------------------------------------ ----------------------------------
Sales Agreements
---------------------------------- ------------------------------------------------ ----------------------------------
AIS Marketing Agreement The Company and VA TECH Xxxxxxxxx High Voltage Executed with NxtPhase
GmbH Corporation on April 29, 2004;
assigned to the Company on
August 18, 2004
---------------------------------- ------------------------------------------------ ----------------------------------
Addendum N. 1 to AIS Marketing The Company and VA TECH Xxxxxxxxx High Voltage February 17, 2005
Agreement GmbH
---------------------------------- ------------------------------------------------ ----------------------------------
Optical High Current Measurement The Company and DynAmp, LLC September 1, 2004
Systems Marketing Agreement
---------------------------------- ------------------------------------------------ ----------------------------------
Financing
---------------------------------- ------------------------------------------------ ----------------------------------
Noteholders' Agreement Perseus 2000, LLC, El Dorado Investment August 17, 2004
Company, GE Capital Equity Holdings, BV,
Western Technology Seed Investment Fund
Limited Partnership, Hydro-Quebec Capitech
Inc., Working Opportunity Fund, Canadian
Science and Technology Growth Fund Inc., OPG
Ventures, Inc.
---------------------------------- ------------------------------------------------ ----------------------------------
Purchase and Sale Agreement Perseus 2000, LLC, El Dorado Investment August 17, 2004
Company, GE Capital Equity Holdings, BV,
Western Technology Seed Investment Fund
Limited Partnership, Hydro-Quebec Capitech Inc.
---------------------------------- ------------------------------------------------ ----------------------------------
Financing Term Sheet Perseus 2000, LLC and the Company August 11, 2004
---------------------------------- ------------------------------------------------ ----------------------------------
Initial Securities Purchase The Company and Perseus 2000, LLC, El Dorado November 12, 2004
Agreement Investment Company, GE Capital Equity
Holdings, BV, Working Opportunity Fund (EVCC)
Ltd., Canadian Science and Technology Growth
Fund, Inc., OPG Ventures Inc., Hydro-Quebec
Capitech Inc.
---------------------------------- ------------------------------------------------ ----------------------------------
Investor Rights Agreement The Company and Perseus 2000, LLC, El Dorado November 12, 2004
Investment Company, GE Capital Equity
Holdings, BV, Working Opportunity Fund (EVCC)
Ltd., Canadian Science and Technology Growth
Fund, Inc., OPG Ventures Inc., Hydro-Quebec
Capitech Inc.
---------------------------------- ------------------------------------------------ ----------------------------------
Cash Collateral Agreement Royal The Company and Royal Bank of Canada August 30, 2004
Bank of Canada no fixed expiry
date unless cards cancelled
---------------------------------- ------------------------------------------------ ----------------------------------
Financing Term Sheet Perseus 2000, LLC and the Company April 22, 2005
---------------------------------- ------------------------------------------------ ----------------------------------
Termsheet for funding of Canadian Foundation for Sustainable April 14, 2005
Canadian expenditures to reduce Development Technology (SDTC) and the Company
greenhouse gas emissions
---------------------------------- ------------------------------------------------ ----------------------------------
Contribution Agreement The Company and PowerTech Labs, Inc. June 7, 2005
---------------------------------- ------------------------------------------------ ----------------------------------
Facilities
---------------------------------- ------------------------------------------------ ----------------------------------
Vancouver Building Premises Broadway-HEB Property Inc. and the Company November 1, 2004
---------------------------------- ------------------------------------------------ ----------------------------------
Phoenix Facility Lease (new The Company T&D Inc. and Oxnard Land Holdings Executed by the Company on April
premises) LLC 8. 2005 and by Oxnard on April
15, 2005
---------------------------------- ------------------------------------------------ ----------------------------------
Winnipeg Facility Lease 3101495 Manitoba Ltd. and the Company January 1, 2005
---------------------------------- ------------------------------------------------ ----------------------------------
Joint Development Agreements
---------------------------------- ------------------------------------------------ ----------------------------------
GIS Joint Development Agreement The Company and VA TECH Xxxxxxxxx High Voltage Executed with NxtPhase
GmbH Corporation on June 15, 2004;
assigned to the Company on
August 19, 2004
---------------------------------- ------------------------------------------------ ----------------------------------
Addendum N.1 to GIS Joint The Company and VA TECH Xxxxxxxxx High Voltage February 17, 2005
Development Agreement GmbH
---------------------------------- ------------------------------------------------ ----------------------------------
Addendum N.2 to GIS Joint The Company and VA TECH T&D GmbH June 10, 2005
Development Agreement
---------------------------------- ------------------------------------------------ ----------------------------------
Suppliers
---------------------------------- ------------------------------------------------ ----------------------------------
Relay and recorder contract NxtPhase Corporation and Arizona Precision December 11, 2003 - party is
manufacturing Sheet Metal/JIT, Inc. NxtPhase Corporation, but
working to replace APSM, so
assignment to the Company not
being negotiated
---------------------------------- ------------------------------------------------ ----------------------------------
Relay and recorder contract The Company and Xxxxxxxx Electric Co. Ltd. January 11, 2005
manufacturing
---------------------------------- ------------------------------------------------ ----------------------------------
Section 3.12 Employment Contracts
---------------------------------- ------------------------------------------------ ----------------------------------
Employment Agreements Xxxxxx Xxxxxxxx Xxxxxx Xxxxxxxx'x and Xxxx
Xxxxx'x agreements are dated
Xxx Xxxxxxxx August 17, 2004, Xxxxxx
Xxxxxxxx'x agreement is dated
Xxx Xxxxx March 10, 2005. The remaining
agreements are being reviewed by
Xxxxxxxx Xxxxxxxxx employees for execution. The
Company has also executed two
Xxxx Xxxxx letter agreements providing for
bonuses payable to Xxxxxx
Xxxxxx Sikorsky Xxxxxxxx on completion of the
Arrangement with the Purchaser
---------------------------------- ------------------------------------------------ ----------------------------------
IP Assignment Agreements Xxxxxx Xxxxxx Xxxxx 00, 0000
Xxxxxxxx Xxxxxxxxx - IP Assignment Agreement
March 24, 2005 relating to Optical Sensor
Arrangement for gas insulated switchgear
Xxx Xxxxx- IP Assignment Agreement relating to March 24, 2005
Optical Sensor Arrangement for gas insulated
switchgear
---------------------------------- ------------------------------------------------ ----------------------------------
The following benefit plans are in place for the Company employees:
Canadian Employees:
------------------------------------------------------- -----------------------------------------------------
Extended health, dental and long-term disability Maritime Life
------------------------------------------------------- -----------------------------------------------------
Accidental death and dismemberment Industrial Alliance Pacific
------------------------------------------------------- -----------------------------------------------------
US Employees:
------------------------------------------------------- -----------------------------------------------------
Basic medical, major medical, drugs, dental Humana
------------------------------------------------------- -----------------------------------------------------
Accidental death and dismemberment UNUM Provident
------------------------------------------------------- -----------------------------------------------------
Section 125, Flexible Spending (voluntary employee Paychex
funded)
------------------------------------------------------- -----------------------------------------------------
401 (k)(voluntary employee funded) Paychex
------------------------------------------------------- -----------------------------------------------------
Vision care Vision Services Plan
------------------------------------------------------- -----------------------------------------------------
Section 3.17 -Related Party Transactions
As the principal inventor of a number of the patents licensed from TAMUS, Dr.
Xxx Xxxxx will have an interest in the benefits from a license agreement between
the Company and TAMUS pursuant to an agreement to be executed between TAMUS and
Xx. Xxxxx.
