Exhibit 10.3

NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES, SUBJECT TO THE TERMS OF
THIS LEGEND AND THE SECURITIES ACT.

SATCON TECHNOLOGY CORPORATION

WARRANT A

Warrant A No. [ ]

 

Dated: July 19, 2006

 

SatCon Technology Corporation, a Delaware corporation (the “Company”), hereby
certifies that, for value received, [Name of Holder] or its registered assigns
(the “Holder”), is entitled to purchase from the Company up to a total of
[          ] shares of common stock, $0.01 par value per share (the “Common
Stock”), of the Company (each such share, a “Warrant Share” and all such shares,
the “Warrant Shares”) at an exercise price equal to $1.815 per share (as
adjusted from time to time as provided in Section 9, the “Exercise Price”), at
any time and from time to time from and after the six month anniversary of the
Closing Date and through and including the date that is seven years from the
date of issuance hereof (the “Expiration Date”), and subject to the following
terms and conditions.  This Warrant (this “Warrant”) is one of a series of
similar warrants issued pursuant to that certain Securities Purchase Agreement,
dated as of July 19, 2006, by and among the Company and the Purchasers
identified therein (the “Purchase Agreement”).  All such warrants are referred
to herein, collectively, as the “Warrants.”

1.             DEFINITIONS.  IN ADDITION TO THE TERMS DEFINED ELSEWHERE IN THIS
WARRANT, CAPITALIZED TERMS THAT ARE NOT OTHERWISE DEFINED HEREIN HAVE THE
MEANINGS GIVEN TO SUCH TERMS IN THE PURCHASE AGREEMENT.

2.             REGISTRATION OF WARRANT.  THE COMPANY SHALL REGISTER THIS
WARRANT, UPON RECORDS TO BE MAINTAINED BY THE COMPANY FOR THAT PURPOSE (THE
“WARRANT REGISTER”), IN THE NAME OF THE RECORD HOLDER HEREOF FROM TIME TO TIME. 
THE COMPANY MAY DEEM AND TREAT THE REGISTERED HOLDER

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OF THIS WARRANT AS THE ABSOLUTE OWNER HEREOF FOR THE PURPOSE OF ANY EXERCISE
HEREOF OR ANY DISTRIBUTION TO THE HOLDER, AND FOR ALL OTHER PURPOSES, ABSENT
ACTUAL NOTICE TO THE CONTRARY.

3.             REGISTRATION OF TRANSFERS.  THE COMPANY SHALL REGISTER THE
ASSIGNMENT AND TRANSFER OF ANY PORTION OF THIS WARRANT IN THE WARRANT REGISTER,
UPON SURRENDER OF THIS WARRANT, WITH THE FORM OF ASSIGNMENT ATTACHED HERETO ON
ANNEX B DULY COMPLETED AND SIGNED, TO THE COMPANY AT ITS ADDRESS SPECIFIED
HEREIN.  UPON ANY SUCH REGISTRATION OR TRANSFER, A NEW WARRANT TO PURCHASE
COMMON STOCK, IN SUBSTANTIALLY THE FORM OF THIS WARRANT (ANY SUCH NEW WARRANT, A
“NEW WARRANT”), EVIDENCING THE PORTION OF THIS WARRANT SO TRANSFERRED SHALL BE
ISSUED TO THE TRANSFEREE AND A NEW WARRANT EVIDENCING THE REMAINING PORTION OF
THIS WARRANT NOT SO TRANSFERRED, IF ANY, SHALL BE ISSUED TO THE TRANSFERRING
HOLDER.  THE ACCEPTANCE OF THE NEW WARRANT BY THE TRANSFEREE THEREOF SHALL BE
DEEMED THE ACCEPTANCE BY SUCH TRANSFEREE OF ALL OF THE RIGHTS AND OBLIGATIONS OF
A HOLDER OF A WARRANT.

4.             EXERCISE AND DURATION OF WARRANTS.

(A)           THIS WARRANT SHALL BE EXERCISABLE BY THE REGISTERED HOLDER AT ANY
TIME AND FROM TIME TO TIME ON OR AFTER THE SIX MONTH ANNIVERSARY OF THE CLOSING
DATE TO AND INCLUDING THE EXPIRATION DATE.  AT 6:30 P.M., NEW YORK CITY TIME ON
THE EXPIRATION DATE, THE PORTION OF THIS WARRANT NOT EXERCISED PRIOR THERETO
SHALL BE AND BECOME VOID AND OF NO VALUE; PROVIDED THAT, IF THE AVERAGE OF THE
CLOSING PRICES FOR THE FIVE TRADING DAYS IMMEDIATELY PRIOR TO (BUT NOT
INCLUDING) THE EXPIRATION DATE EXCEEDS THE EXERCISE PRICE ON THE EXPIRATION
DATE, THEN THIS WARRANT SHALL BE DEEMED TO HAVE BEEN EXERCISED IN FULL (TO THE
EXTENT NOT PREVIOUSLY EXERCISED) ON A “CASHLESS EXERCISE” BASIS AT 6:30 P.M. NEW
YORK CITY TIME ON THE EXPIRATION DATE IF A “CASHLESS EXERCISE” MAY OCCUR AT SUCH
TIME PURSUANT TO SECTION 10 BELOW.

(B)           A HOLDER MAY EXERCISE THIS WARRANT BY DELIVERING TO THE COMPANY
(I) AN EXERCISE NOTICE, IN THE FORM ATTACHED HERETO ON ANNEX A (THE “EXERCISE
NOTICE”), APPROPRIATELY COMPLETED AND DULY SIGNED, AND (II) PAYMENT OF THE
EXERCISE PRICE FOR THE NUMBER OF WARRANT SHARES AS TO WHICH THIS WARRANT IS
BEING EXERCISED (WHICH MAY TAKE THE FORM OF A “CASHLESS EXERCISE” IF SO
INDICATED IN THE EXERCISE NOTICE AND IF A “CASHLESS EXERCISE” MAY OCCUR AT SUCH
TIME PURSUANT TO THIS SECTION 10 BELOW), AND THE DATE SUCH ITEMS ARE DELIVERED
TO THE COMPANY (AS DETERMINED IN ACCORDANCE WITH THE NOTICE PROVISIONS HEREOF)
IS AN “EXERCISE DATE.”  THE HOLDER SHALL NOT BE REQUIRED TO DELIVER THE ORIGINAL
WARRANT IN ORDER TO EFFECT AN EXERCISE HEREUNDER.  EXECUTION AND DELIVERY OF THE
EXERCISE NOTICE SHALL HAVE THE SAME EFFECT AS CANCELLATION OF THE ORIGINAL
WARRANT AND ISSUANCE OF A NEW WARRANT EVIDENCING THE RIGHT TO PURCHASE THE
REMAINING NUMBER OF WARRANT SHARES.

5.             DELIVERY OF WARRANT SHARES.

(A)           UPON EXERCISE OF THIS WARRANT, THE COMPANY SHALL PROMPTLY (BUT IN
NO EVENT LATER THAN THREE TRADING DAYS AFTER THE EXERCISE DATE) ISSUE OR CAUSE
TO BE ISSUED AND CAUSE TO BE DELIVERED TO OR UPON THE WRITTEN ORDER OF THE
HOLDER AND IN SUCH NAME OR NAMES AS THE HOLDER MAY DESIGNATE, A CERTIFICATE FOR
THE WARRANT SHARES ISSUABLE UPON SUCH EXERCISE, FREE OF RESTRICTIVE LEGENDS
UNLESS A REGISTRATION STATEMENT COVERING THE RESALE OF THE WARRANT SHARES AND
NAMING THE HOLDER AS A SELLING STOCKHOLDER THEREUNDER IS NOT THEN EFFECTIVE AND
THE WARRANT SHARES ARE NOT FREELY TRANSFERABLE WITHOUT VOLUME RESTRICTIONS
PURSUANT TO RULE 144 UNDER THE

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SECURITIES ACT.  THE HOLDER, OR ANY PERSON SO DESIGNATED BY THE HOLDER TO
RECEIVE WARRANT SHARES, SHALL BE DEEMED TO HAVE BECOME HOLDER OF RECORD OF SUCH
WARRANT SHARES AS OF THE EXERCISE DATE.  THE COMPANY SHALL, UPON REQUEST OF THE
HOLDER, USE ITS BEST EFFORTS TO DELIVER WARRANT SHARES HEREUNDER ELECTRONICALLY
THROUGH THE DEPOSITORY TRUST CORPORATION OR ANOTHER ESTABLISHED CLEARING
CORPORATION PERFORMING SIMILAR FUNCTIONS.

(B)           THIS WARRANT IS EXERCISABLE, EITHER IN ITS ENTIRETY OR, FROM TIME
TO TIME, FOR A PORTION OF THE NUMBER OF WARRANT SHARES.  UPON SURRENDER OF THIS
WARRANT FOLLOWING ONE OR MORE PARTIAL EXERCISES, THE COMPANY SHALL ISSUE OR
CAUSE TO BE ISSUED, AT ITS EXPENSE, A NEW WARRANT EVIDENCING THE RIGHT TO
PURCHASE THE REMAINING NUMBER OF WARRANT SHARES.

(C)           IN ADDITION TO ANY OTHER RIGHTS AVAILABLE TO A HOLDER, IF THE
COMPANY FAILS TO DELIVER TO THE HOLDER A CERTIFICATE REPRESENTING WARRANT SHARES
BY THE THIRD TRADING DAY AFTER EXERCISE OF THIS WARRANT IN FULL COMPLIANCE WITH
SECTION 4(B), AND IF AFTER SUCH THIRD TRADING DAY THE HOLDER PURCHASES (IN AN
OPEN MARKET TRANSACTION OR OTHERWISE) SHARES OF COMMON STOCK TO DELIVER IN
SATISFACTION OF A SALE BY THE HOLDER OF THE WARRANT SHARES THAT THE HOLDER
ANTICIPATED RECEIVING FROM THE COMPANY (A “BUY-IN”), THEN THE COMPANY SHALL,
WITHIN THREE TRADING DAYS AFTER THE HOLDER’S REQUEST AND IN THE HOLDER’S
DISCRETION, EITHER (I) PAY CASH TO THE HOLDER IN AN AMOUNT EQUAL TO THE HOLDER’S
TOTAL PURCHASE PRICE (INCLUDING BROKERAGE COMMISSIONS, IF ANY) FOR THE SHARES OF
COMMON STOCK SO PURCHASED (THE “BUY-IN PRICE”), AT WHICH POINT THE COMPANY’S
OBLIGATION TO DELIVER SUCH CERTIFICATE (AND TO ISSUE SUCH COMMON STOCK) SHALL
TERMINATE, OR (II) PROMPTLY HONOR ITS OBLIGATION TO DELIVER TO THE HOLDER A
CERTIFICATE OR CERTIFICATES REPRESENTING SUCH COMMON STOCK AND PAY CASH TO THE
HOLDER IN AN AMOUNT EQUAL TO THE EXCESS (IF ANY) OF THE BUY-IN PRICE OVER THE
PRODUCT OF (A) SUCH NUMBER OF SHARES OF COMMON STOCK, TIMES (B) THE CLOSING
PRICE ON THE DATE OF THE EVENT GIVING RISE TO THE COMPANY’S OBLIGATION TO
DELIVER SUCH CERTIFICATE.

(D)           THE COMPANY’S OBLIGATIONS TO ISSUE AND DELIVER WARRANT SHARES IN
ACCORDANCE WITH THE TERMS HEREOF ARE ABSOLUTE AND UNCONDITIONAL, IRRESPECTIVE OF
ANY ACTION OR INACTION BY THE HOLDER TO ENFORCE THE SAME, ANY WAIVER OR CONSENT
WITH RESPECT TO ANY PROVISION HEREOF, THE RECOVERY OF ANY JUDGMENT AGAINST ANY
PERSON OR ANY ACTION TO ENFORCE THE SAME, OR ANY SETOFF, COUNTERCLAIM,
RECOUPMENT, LIMITATION OR TERMINATION, OR ANY BREACH OR ALLEGED BREACH BY THE
HOLDER OR ANY OTHER PERSON OF ANY OBLIGATION TO THE COMPANY OR ANY VIOLATION OR
ALLEGED VIOLATION OF LAW BY THE HOLDER OR ANY OTHER PERSON, AND IRRESPECTIVE OF
ANY OTHER CIRCUMSTANCE WHICH MIGHT OTHERWISE LIMIT SUCH OBLIGATION OF THE
COMPANY TO THE HOLDER IN CONNECTION WITH THE ISSUANCE OF WARRANT SHARES. 
NOTHING HEREIN SHALL LIMIT A HOLDER’S RIGHT TO PURSUE ANY OTHER REMEDIES
AVAILABLE TO IT HEREUNDER, AT LAW OR IN EQUITY INCLUDING, WITHOUT LIMITATION, A
DECREE OF SPECIFIC PERFORMANCE AND/OR INJUNCTIVE RELIEF WITH RESPECT TO THE
COMPANY’S FAILURE TO TIMELY DELIVER CERTIFICATES REPRESENTING SHARES OF COMMON
STOCK UPON EXERCISE OF THE WARRANT  AS REQUIRED PURSUANT TO THE TERMS HEREOF.

6.             CHARGES, TAXES AND EXPENSES.   ISSUANCE AND DELIVERY OF
CERTIFICATES FOR SHARES OF COMMON STOCK UPON EXERCISE OF THIS WARRANT SHALL BE
MADE WITHOUT CHARGE TO THE HOLDER FOR ANY ISSUE OR TRANSFER TAX, WITHHOLDING
TAX, TRANSFER AGENT FEE OR OTHER INCIDENTAL TAX OR EXPENSE IN RESPECT OF THE
ISSUANCE OF SUCH CERTIFICATES, ALL OF WHICH TAXES AND EXPENSES SHALL BE PAID BY
THE COMPANY; PROVIDED, HOWEVER, THAT THE COMPANY SHALL NOT BE REQUIRED TO PAY
ANY TAX WHICH MAY BE PAYABLE IN RESPECT OF ANY TRANSFER INVOLVED IN THE
REGISTRATION OF ANY CERTIFICATES FOR WARRANT

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SHARES OR WARRANTS IN A NAME OTHER THAN THAT OF THE HOLDER OR AN AFFILIATE
THEREOF.  THE HOLDER SHALL BE RESPONSIBLE FOR ALL OTHER TAX LIABILITY THAT MAY
ARISE AS A RESULT OF HOLDING OR TRANSFERRING THIS WARRANT OR RECEIVING WARRANT
SHARES UPON EXERCISE HEREOF.

7.             REPLACEMENT OF WARRANT.  IF THIS WARRANT IS MUTILATED, LOST,
STOLEN OR DESTROYED, THE COMPANY SHALL ISSUE OR CAUSE TO BE ISSUED IN EXCHANGE
AND SUBSTITUTION FOR AND UPON CANCELLATION HEREOF, OR IN LIEU OF AND
SUBSTITUTION FOR THIS WARRANT, A NEW WARRANT, BUT ONLY UPON RECEIPT OF EVIDENCE
REASONABLY SATISFACTORY TO THE COMPANY OF SUCH LOSS, THEFT OR DESTRUCTION AND
CUSTOMARY AND REASONABLE INDEMNITY, IF REQUESTED.

8.             RESERVATION OF WARRANT SHARES.  THE COMPANY COVENANTS THAT IT
WILL AT ALL TIMES RESERVE AND KEEP AVAILABLE OUT OF THE AGGREGATE OF ITS
AUTHORIZED BUT UNISSUED AND OTHERWISE UNRESERVED COMMON STOCK, SOLELY FOR THE
PURPOSE OF ENABLING IT TO ISSUE WARRANT SHARES UPON EXERCISE OF THIS WARRANT AS
HEREIN PROVIDED, THE NUMBER OF WARRANT SHARES WHICH ARE THEN ISSUABLE AND
DELIVERABLE UPON THE EXERCISE OF THIS ENTIRE WARRANT, FREE FROM PREEMPTIVE
RIGHTS OR ANY OTHER CONTINGENT PURCHASE RIGHTS OF PERSONS OTHER THAN THE HOLDER
(TAKING INTO ACCOUNT THE ADJUSTMENTS AND RESTRICTIONS OF SECTION 9). THE COMPANY
COVENANTS THAT ALL WARRANT SHARES SO ISSUABLE AND DELIVERABLE SHALL, UPON
ISSUANCE AND THE PAYMENT OF THE APPLICABLE EXERCISE PRICE IN ACCORDANCE WITH THE
TERMS HEREOF, BE DULY AND VALIDLY AUTHORIZED, ISSUED AND FULLY PAID AND
NONASSESSABLE.  THE COMPANY WILL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO
ASSURE THAT SUCH SHARES OF COMMON STOCK MAY BE ISSUED AS PROVIDED HEREIN WITHOUT
VIOLATION OF ANY APPLICABLE LAW OR REGULATION, OR OF ANY REQUIREMENTS OF ANY
SECURITIES EXCHANGE OR AUTOMATED QUOTATION SYSTEM UPON WHICH THE COMMON STOCK
MAY BE LISTED.

9.             CERTAIN ADJUSTMENTS.  THE EXERCISE PRICE AND NUMBER OF WARRANT
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO ADJUSTMENT FROM
TIME TO TIME AS SET FORTH IN THIS SECTION 9.

(A)           STOCK DIVIDENDS AND SPLITS.  IF THE COMPANY, AT ANY TIME WHILE
THIS WARRANT IS OUTSTANDING, (I) PAYS A STOCK DIVIDEND ON ITS COMMON STOCK OR
OTHERWISE MAKES A DISTRIBUTION ON ANY CLASS OF CAPITAL STOCK THAT IS PAYABLE IN
SHARES OF COMMON STOCK, (II) SUBDIVIDES OUTSTANDING SHARES OF COMMON STOCK INTO
A LARGER NUMBER OF SHARES, OR (III) COMBINES OUTSTANDING SHARES OF COMMON STOCK
INTO A SMALLER NUMBER OF SHARES, THEN IN EACH SUCH CASE THE EXERCISE PRICE SHALL
BE MULTIPLIED BY A FRACTION OF WHICH THE NUMERATOR SHALL BE THE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING IMMEDIATELY BEFORE SUCH EVENT AND OF WHICH THE
DENOMINATOR SHALL BE THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING
IMMEDIATELY AFTER SUCH EVENT.  ANY ADJUSTMENT MADE PURSUANT TO CLAUSE (I) OF
THIS PARAGRAPH SHALL BECOME EFFECTIVE IMMEDIATELY AFTER THE RECORD DATE FOR THE
DETERMINATION OF STOCKHOLDERS ENTITLED TO RECEIVE SUCH DIVIDEND OR DISTRIBUTION,
AND ANY ADJUSTMENT PURSUANT TO CLAUSE (II) OR (III) OF THIS PARAGRAPH SHALL
BECOME EFFECTIVE IMMEDIATELY AFTER THE EFFECTIVE DATE OF SUCH SUBDIVISION OR
COMBINATION.

(B)           PRO RATA DISTRIBUTIONS.  IF THE COMPANY, AT ANY TIME WHILE THIS
WARRANT IS OUTSTANDING, DISTRIBUTES TO HOLDERS OF COMMON STOCK (I) EVIDENCES OF
ITS INDEBTEDNESS, (II) ANY SECURITY (OTHER THAN A DISTRIBUTION OF COMMON STOCK
COVERED BY THE PRECEDING PARAGRAPH), (III) RIGHTS OR WARRANTS TO SUBSCRIBE FOR
OR PURCHASE ANY SECURITY, OR (IV) ANY OTHER ASSET (IN EACH CASE, “DISTRIBUTED
PROPERTY”), THEN IN EACH SUCH CASE THE EXERCISE PRICE IN EFFECT IMMEDIATELY
PRIOR TO THE RECORD DATE FIXED FOR DETERMINATION OF STOCKHOLDERS ENTITLED TO
RECEIVE SUCH

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DISTRIBUTION SHALL BE ADJUSTED (EFFECTIVE ON SUCH RECORD DATE) TO EQUAL THE
PRODUCT OF SUCH EXERCISE PRICE TIMES A FRACTION OF WHICH THE DENOMINATOR SHALL
BE THE AVERAGE OF THE CLOSING PRICES FOR THE FIVE TRADING DAYS IMMEDIATELY PRIOR
TO (BUT NOT INCLUDING) SUCH RECORD DATE AND OF WHICH THE NUMERATOR SHALL BE SUCH
AVERAGE LESS THE THEN FAIR MARKET VALUE OF THE DISTRIBUTED PROPERTY DISTRIBUTED
IN RESPECT OF  ONE OUTSTANDING SHARE OF COMMON STOCK, AS DETERMINED BY THE
COMPANY’S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS THAT REGULARLY EXAMINE THE
FINANCIAL STATEMENTS OF THE COMPANY, (AN “APPRAISER”).  IN SUCH EVENT, THE
HOLDER, AFTER RECEIPT OF THE DETERMINATION BY THE APPRAISER, SHALL HAVE THE
RIGHT TO SELECT AN ADDITIONAL APPRAISER (WHICH SHALL BE A NATIONALLY RECOGNIZED
ACCOUNTING FIRM), IN WHICH CASE SUCH FAIR MARKET VALUE SHALL BE DEEMED TO EQUAL
THE AVERAGE OF THE VALUES DETERMINED BY EACH OF THE APPRAISER AND SUCH
APPRAISER.  AS AN ALTERNATIVE TO THE FOREGOING ADJUSTMENT TO THE EXERCISE PRICE,
AT THE REQUEST OF THE HOLDER DELIVERED TO THE COMPANY IN WRITING BEFORE THE 45TH
DAY AFTER SUCH RECORD DATE, THE COMPANY WILL DELIVER TO SUCH HOLDER, WITHIN FIVE
TRADING DAYS AFTER SUCH REQUEST (OR, IF LATER, ON THE EFFECTIVE DATE OF SUCH
DISTRIBUTION), THE DISTRIBUTED PROPERTY THAT SUCH HOLDER WOULD HAVE BEEN
ENTITLED TO RECEIVE IN RESPECT OF THE WARRANT SHARES FOR WHICH THIS WARRANT
COULD HAVE BEEN EXERCISED IMMEDIATELY PRIOR TO SUCH RECORD DATE.  IF SUCH
DISTRIBUTED PROPERTY IS NOT DELIVERED TO A HOLDER PURSUANT TO THE PRECEDING
SENTENCE, THEN UPON EXPIRATION OF OR ANY EXERCISE OF THE WARRANT THAT OCCURS
AFTER SUCH RECORD DATE, SUCH HOLDER SHALL REMAIN ENTITLED TO RECEIVE, IN
ADDITION TO THE WARRANT SHARES OTHERWISE ISSUABLE UPON SUCH EXERCISE (IF
APPLICABLE), SUCH DISTRIBUTED PROPERTY.

(C)           FUNDAMENTAL TRANSACTIONS.  IF, AT ANY TIME WHILE THIS WARRANT IS
OUTSTANDING, (I) THE COMPANY EFFECTS ANY MERGER OR CONSOLIDATION OF THE COMPANY
WITH OR INTO ANOTHER PERSON, (II) THE COMPANY EFFECTS ANY SALE OF ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS IN ONE OR A SERIES OF RELATED TRANSACTIONS,
(III) ANY TENDER OFFER OR EXCHANGE OFFER (WHETHER BY THE COMPANY OR ANOTHER
PERSON) IS COMPLETED PURSUANT TO WHICH HOLDERS OF COMMON STOCK ARE PERMITTED TO
TENDER OR EXCHANGE THEIR SHARES FOR OTHER SECURITIES, CASH OR PROPERTY, OR (IV)
THE COMPANY EFFECTS ANY RECLASSIFICATION OF THE COMMON STOCK OR ANY COMPULSORY
SHARE EXCHANGE PURSUANT TO WHICH THE COMMON STOCK IS EFFECTIVELY CONVERTED INTO
OR EXCHANGED FOR OTHER SECURITIES, CASH OR PROPERTY (OTHER THAN AS A RESULT OF A
SUBDIVISION OR COMBINATION OF SHARES OF COMMON STOCK COVERED BY SECTION 9(A)
ABOVE) (IN ANY SUCH CASE, A “FUNDAMENTAL TRANSACTION”), THEN THE HOLDER SHALL
HAVE THE RIGHT THEREAFTER TO RECEIVE, UPON EXERCISE OF THIS WARRANT, THE SAME
AMOUNT AND KIND OF SECURITIES, CASH OR PROPERTY AS IT WOULD HAVE BEEN ENTITLED
TO RECEIVE UPON THE OCCURRENCE OF SUCH FUNDAMENTAL TRANSACTION IF IT HAD BEEN,
IMMEDIATELY PRIOR TO SUCH FUNDAMENTAL TRANSACTION, THE HOLDER OF THE NUMBER OF
WARRANT SHARES THEN ISSUABLE UPON EXERCISE IN FULL OF THIS WARRANT (THE
“ALTERNATE CONSIDERATION”).  THE AGGREGATE EXERCISE PRICE FOR THIS WARRANT WILL
NOT BE AFFECTED BY ANY SUCH FUNDAMENTAL TRANSACTION, BUT THE COMPANY SHALL
APPORTION SUCH AGGREGATE EXERCISE PRICE AMONG THE ALTERNATE CONSIDERATION IN A
REASONABLE MANNER REFLECTING THE RELATIVE VALUE OF ANY DIFFERENT COMPONENTS OF
THE ALTERNATE CONSIDERATION.  IF HOLDERS OF COMMON STOCK ARE GIVEN ANY CHOICE AS
TO THE SECURITIES, CASH OR PROPERTY TO BE RECEIVED IN A FUNDAMENTAL TRANSACTION,
THEN THE HOLDER SHALL BE GIVEN THE SAME CHOICE AS TO THE ALTERNATE CONSIDERATION
IT RECEIVES UPON ANY EXERCISE OF THIS WARRANT FOLLOWING SUCH FUNDAMENTAL
TRANSACTION.  IN THE EVENT OF A FUNDAMENTAL TRANSACTION, THE COMPANY OR THE
SUCCESSOR OR PURCHASING PERSON, AS THE CASE MAY BE, SHALL EXECUTE WITH THE
HOLDER A WRITTEN AGREEMENT PROVIDING THAT:

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(x)   this Warrant shall thereafter entitle the Holder to purchase the Alternate
Consideration in accordance with this section 9(c),

(y)  in the case of any such successor or purchasing Person, upon such
consolidation, merger, statutory exchange, combination, sale or conveyance such
successor or purchasing Person shall be jointly and severally liable with the
Company for the performance of all of the Company’s obligations under this
Warrant and the Purchase Agreement, and

(z)   if registration or qualification is required under the Exchange Act or
applicable state law for the public  resale by the Holder of shares of stock and
other securities so issuable upon exercise of this Warrant, such registration or
qualification shall be completed prior to such reclassification, change,
consolidation, merger, statutory exchange, combination or sale.

IF, IN THE CASE OF ANY FUNDAMENTAL TRANSACTION, THE ALTERNATE CONSIDERATION
INCLUDES SHARES OF STOCK, OTHER SECURITIES, OTHER PROPERTY OR ASSETS OF A PERSON
OTHER THAN THE COMPANY OR ANY SUCH SUCCESSOR OR PURCHASING PERSON, AS THE CASE
MAY BE, IN SUCH FUNDAMENTAL TRANSACTION, THEN SUCH WRITTEN AGREEMENT SHALL ALSO
BE EXECUTED BY SUCH OTHER PERSON AND SHALL CONTAIN SUCH ADDITIONAL PROVISIONS TO
PROTECT THE INTERESTS OF THE HOLDER AS THE BOARD OF DIRECTORS OF THE COMPANY
SHALL REASONABLY CONSIDER NECESSARY BY REASON OF THE FOREGOING.  AT THE HOLDER’S
REQUEST, ANY SUCCESSOR TO THE COMPANY OR SURVIVING ENTITY IN SUCH FUNDAMENTAL
TRANSACTION SHALL ISSUE TO THE HOLDER A NEW WARRANT CONSISTENT WITH THE
FOREGOING PROVISIONS AND EVIDENCING THE HOLDER’S RIGHT TO PURCHASE THE ALTERNATE
CONSIDERATION FOR THE AGGREGATE EXERCISE PRICE UPON EXERCISE THEREOF.  THE TERMS
OF ANY AGREEMENT PURSUANT TO WHICH A FUNDAMENTAL TRANSACTION IS EFFECTED SHALL
INCLUDE TERMS REQUIRING ANY SUCH SUCCESSOR OR SURVIVING ENTITY TO COMPLY WITH
THE PROVISIONS OF THIS PARAGRAPH (C) AND INSURING THAT THE WARRANT (OR ANY SUCH
REPLACEMENT SECURITY) WILL BE SIMILARLY ADJUSTED UPON ANY SUBSEQUENT TRANSACTION
ANALOGOUS TO A FUNDAMENTAL TRANSACTION. IF ANY FUNDAMENTAL TRANSACTION
CONSTITUTES OR RESULTS IN A CHANGE OF CONTROL, THEN AT THE REQUEST OF THE HOLDER
DELIVERED TO THE COMPANY IN WRITING BEFORE THE 45TH DAY AFTER SUCH FUNDAMENTAL
TRANSACTION, THE COMPANY (OR ANY SUCH SUCCESSOR OR SURVIVING ENTITY) WILL
PURCHASE THIS WARRANT FROM THE HOLDER FOR A PURCHASE PRICE, PAYABLE IN CASH
WITHIN FIVE TRADING DAYS AFTER SUCH REQUEST (OR, IF LATER, ON THE EFFECTIVE DATE
OF THE FUNDAMENTAL TRANSACTION), EQUAL TO THE BLACK-SCHOLES VALUE OF THE
REMAINING UNEXERCISED PORTION OF THIS WARRANT ON THE DATE OF SUCH REQUEST.

(D)           SUBSEQUENT EQUITY SALES.

(I)            FOR SO LONG AS THIS WARRANT IS OUTSTANDING, THE COMPANY OR ANY
SUBSIDIARY SHALL NOT ISSUE ADDITIONAL SHARES OF COMMON STOCK OR RIGHTS,
WARRANTS, OPTIONS OR OTHER SECURITIES OR DEBT CONVERTIBLE, EXERCISABLE OR
EXCHANGEABLE FOR SHARES OF COMMON STOCK OR OTHERWISE ENTITLING ANY PERSON TO
ACQUIRE SHARES OF COMMON STOCK (COLLECTIVELY, “COMMON STOCK EQUIVALENTS”) AT AN
EFFECTIVE PRICE PER SHARE OF COMMON STOCK (PRIOR TO DEDUCTING FEES, COMMISSIONS
AND OTHER EXPENSES RELATED TO SUCH ISSUANCE) (THE “EFFECTIVE PRICE”) LESS THAN
THE CONVERSION PRICE (AS DEFINED IN THE NOTES) (AS ADJUSTED TO SUCH DATE) (A
“PROHIBITED ISSUANCE”).  FOR PURPOSES OF THIS PARAGRAPH, IN CONNECTION WITH ANY
ISSUANCE OF ANY COMMON STOCK EQUIVALENTS, (A) THE MAXIMUM NUMBER OF SHARES OF
COMMON STOCK POTENTIALLY ISSUABLE AT ANY TIME UPON CONVERSION, EXERCISE OR
EXCHANGE OF

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SUCH COMMON STOCK EQUIVALENTS (THE “DEEMED NUMBER”) SHALL BE DEEMED TO BE
OUTSTANDING UPON ISSUANCE OF SUCH COMMON STOCK EQUIVALENTS, (B) THE EFFECTIVE
PRICE APPLICABLE TO SUCH COMMON STOCK SHALL EQUAL THE MINIMUM DOLLAR VALUE OF
CONSIDERATION PAYABLE TO THE COMPANY TO PURCHASE SUCH COMMON STOCK EQUIVALENTS
AND TO CONVERT, EXERCISE OR EXCHANGE THEM INTO COMMON STOCK (PRIOR TO DEDUCTING
ANY FEES, COMMISSIONS AND OTHER EXPENSES RELATED THERETO), DIVIDED BY THE DEEMED
NUMBER, AND (C) THE ACTUAL ISSUANCE OF COMMON STOCK UPON CONVERSION, EXERCISE OR
EXCHANGE OF SUCH COMMON STOCK EQUIVALENTS SHALL NOT BE SUBJECT AGAIN TO THIS
SECTION 9(D)(I).

(II)           IF, AT ANY TIME WHILE THIS WARRANT IS OUTSTANDING, THE COMPANY OR
ANY SUBSIDIARY ISSUES COMMON STOCK EQUIVALENTS WITH AN EFFECTIVE PRICE OR A
NUMBER OF UNDERLYING SHARES THAT FLOATS OR RESETS OR OTHERWISE VARIES OR IS
SUBJECT TO ADJUSTMENT BASED (DIRECTLY OR INDIRECTLY) ON MARKET PRICES OF THE
COMMON STOCK (A “FLOATING PRICE SECURITY”), THEN FOR PURPOSES OF APPLYING THE
PRECEDING PARAGRAPH, WHETHER SECTION 9(D)(I) HAS BEEN VIOLATED WILL BE
DETERMINED SEPARATELY EACH TIME SUCH ADJUSTMENT OCCURS.

(III)          IN THE EVENT THE COMPANY BREACHES SECTION 9(D)(I), THEN AT THE
REQUEST OF THE HOLDER DELIVERED TO THE COMPANY IN WRITING BEFORE THE 45TH DAY
AFTER SUCH PROHIBITED ISSUANCE, THE COMPANY (OR ANY SUCH SUCCESSOR OR SURVIVING
ENTITY) WILL PURCHASE THIS WARRANT FROM THE HOLDER FOR A PURCHASE PRICE, PAYABLE
IN CASH WITHIN FIVE TRADING DAYS AFTER SUCH REQUEST, EQUAL TO THE BLACK-SCHOLES
VALUE OF THE REMAINING UNEXERCISED PORTION OF THIS WARRANT ON THE DATE OF SUCH
REQUEST.

(IV)          NOTWITHSTANDING THE FOREGOING, THE COMPANY SHALL BE PERMITTED TO
ISSUE EXCLUDED STOCK.

(E)           NUMBER OF WARRANT SHARES.  SIMULTANEOUSLY WITH ANY ADJUSTMENT TO
THE EXERCISE PRICE PURSUANT TO PARAGRAPHS (A) OR (B) OF THIS SECTION, THE NUMBER
OF WARRANT SHARES THAT MAY BE PURCHASED UPON EXERCISE OF THIS WARRANT SHALL BE
INCREASED OR DECREASED PROPORTIONATELY, SO THAT AFTER SUCH ADJUSTMENT THE
AGGREGATE EXERCISE PRICE PAYABLE HEREUNDER FOR THE INCREASED OR DECREASED NUMBER
OF WARRANT SHARES SHALL BE THE SAME AS THE AGGREGATE EXERCISE PRICE IN EFFECT
IMMEDIATELY PRIOR TO SUCH ADJUSTMENT.

(F)            CALCULATIONS.  ALL CALCULATIONS UNDER THIS SECTION 9 SHALL BE
MADE TO THE NEAREST CENT OR THE NEAREST 1/100TH OF A SHARE, AS APPLICABLE.  THE
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AT ANY GIVEN TIME SHALL NOT INCLUDE
SHARES OWNED OR HELD BY OR FOR THE ACCOUNT OF THE COMPANY, AND THE DISPOSITION
OF ANY SUCH SHARES SHALL BE CONSIDERED AN ISSUE OR SALE OF COMMON STOCK.

(G)           NOTICE OF ADJUSTMENTS.  UPON THE OCCURRENCE OF EACH ADJUSTMENT
PURSUANT TO THIS SECTION 9, THE COMPANY AT ITS EXPENSE WILL PROMPTLY COMPUTE
SUCH ADJUSTMENT IN ACCORDANCE WITH THE TERMS OF THIS WARRANT AND PREPARE A
CERTIFICATE SETTING FORTH SUCH ADJUSTMENT, INCLUDING A STATEMENT OF THE ADJUSTED
EXERCISE PRICE AND ADJUSTED NUMBER OR TYPE OF WARRANT SHARES OR OTHER SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT (AS APPLICABLE), DESCRIBING THE
TRANSACTIONS GIVING RISE TO SUCH ADJUSTMENTS AND SHOWING IN DETAIL THE FACTS
UPON WHICH SUCH ADJUSTMENT IS BASED.  THE COMPANY WILL PROMPTLY DELIVER A COPY
OF EACH SUCH CERTIFICATE TO THE HOLDER WITHIN 10 TRADING DAYS OF THE OCCURRENCE
OF SUCH ADJUSTMENT.

7

 

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(H)           NOTICE OF CORPORATE EVENTS.  IF THE COMPANY  (I) DECLARES A
DIVIDEND OR ANY OTHER DISTRIBUTION OF CASH, SECURITIES OR OTHER PROPERTY IN
RESPECT OF ITS COMMON STOCK, INCLUDING WITHOUT LIMITATION ANY GRANTING OF RIGHTS
OR WARRANTS TO SUBSCRIBE FOR OR PURCHASE ANY CAPITAL STOCK OF THE COMPANY OR ANY
SUBSIDIARY, (II) AUTHORIZES OR APPROVES, ENTERS INTO ANY AGREEMENT CONTEMPLATING
OR SOLICITS STOCKHOLDER APPROVAL FOR ANY FUNDAMENTAL TRANSACTION OR (III)
AUTHORIZES THE VOLUNTARY DISSOLUTION, LIQUIDATION OR WINDING UP OF THE AFFAIRS
OF THE COMPANY, THEN THE COMPANY SHALL DELIVER TO THE HOLDER A NOTICE DESCRIBING
THE MATERIAL TERMS AND CONDITIONS OF SUCH TRANSACTION, AT LEAST 20 CALENDAR DAYS
PRIOR TO THE APPLICABLE RECORD OR EFFECTIVE DATE ON WHICH A PERSON WOULD NEED TO
HOLD COMMON STOCK IN ORDER TO PARTICIPATE IN OR VOTE WITH RESPECT TO SUCH
TRANSACTION, AND THE COMPANY WILL TAKE ALL STEPS REASONABLY NECESSARY IN ORDER
TO INSURE THAT THE HOLDER IS GIVEN THE PRACTICAL OPPORTUNITY TO EXERCISE THIS
WARRANT PRIOR TO SUCH TIME SO AS TO PARTICIPATE IN OR VOTE WITH RESPECT TO SUCH
TRANSACTION; PROVIDED, HOWEVER, THAT THE FAILURE TO DELIVER SUCH NOTICE OR ANY
DEFECT THEREIN SHALL NOT AFFECT THE VALIDITY OF THE CORPORATE ACTION REQUIRED TO
BE DESCRIBED IN SUCH NOTICE.

10.           PAYMENT OF EXERCISE PRICE.  THE HOLDER SHALL PAY THE EXERCISE
PRICE IN CASH IN IMMEDIATELY AVAILABLE FUNDS; PROVIDED, HOWEVER, THAT IF A
REGISTRATION STATEMENT COVERING THE RESALE OF THE WARRANT SHARES IS NOT
EFFECTIVE AT THE TIME OF EXERCISE, THE HOLDER MAY SATISFY ITS OBLIGATION TO PAY
THE EXERCISE PRICE THROUGH A “CASHLESS EXERCISE,” IN WHICH EVENT THE COMPANY
SHALL ISSUE TO THE HOLDER THE NUMBER OF WARRANT SHARES DETERMINED AS FOLLOWS:

 

X = Y [(A-B)/A]

where:

 

 

 

 

X = the number of Warrant Shares to be issued to the Holder.

 

 

 

 

 

Y = the number of Warrant Shares with respect to which this Warrant is being
exercised.

 

 

 

 

 

A = the arithmetic average of the VWAP for the five Trading Days immediately
prior to (but not including) the Exercise Date.

 

 

 

 

 

B = the Exercise Price.

 

FOR PURPOSES OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT, IT IS INTENDED,
UNDERSTOOD AND ACKNOWLEDGED THAT THE WARRANT SHARES ISSUED IN A CASHLESS
EXERCISE TRANSACTION SHALL BE DEEMED TO HAVE BEEN ACQUIRED BY THE HOLDER, AND
THE HOLDING PERIOD FOR THE WARRANT SHARES SHALL BE DEEMED TO HAVE COMMENCED, ON
THE DATE THIS WARRANT WAS ORIGINALLY ISSUED PURSUANT TO THE PURCHASE AGREEMENT.

11.           LIMITATION ON EXERCISE.

(A)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE
NUMBER OF SHARES OF COMMON STOCK THAT MAY BE ACQUIRED BY THE HOLDER UPON ANY
EXERCISE OF THIS WARRANT (OR OTHERWISE IN RESPECT HEREOF) SHALL BE LIMITED TO
THE EXTENT NECESSARY TO INSURE THAT, FOLLOWING SUCH EXERCISE (OR OTHER
ISSUANCE), THE TOTAL NUMBER OF SHARES OF COMMON STOCK THEN BENEFICIALLY OWNED BY
SUCH HOLDER AND ITS AFFILIATES AND ANY OTHER PERSONS WHOSE BENEFICIAL OWNERSHIP
OF

8

 

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COMMON STOCK WOULD BE AGGREGATED WITH THE HOLDER’S FOR PURPOSES OF SECTION 13(D)
OF THE EXCHANGE ACT, DOES NOT EXCEED 4.999%  (THE “THRESHOLD PERCENTAGE”) OR
9.999% (THE “MAXIMUM PERCENTAGE”) OF THE TOTAL NUMBER OF ISSUED AND OUTSTANDING
SHARES OF COMMON STOCK (INCLUDING FOR SUCH PURPOSE THE SHARES OF COMMON STOCK
ISSUABLE UPON SUCH EXERCISE).  FOR SUCH PURPOSES, BENEFICIAL OWNERSHIP SHALL BE
DETERMINED IN ACCORDANCE WITH SECTION 13(D) OF THE EXCHANGE ACT AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER.  EACH DELIVERY OF AN EXERCISE NOTICE
HEREUNDER WILL CONSTITUTE A REPRESENTATION BY THE HOLDER THAT IT HAS EVALUATED
THE LIMITATIONS SET FORTH IN THIS PARAGRAPH AND DETERMINED THAT ISSUANCE OF THE
FULL NUMBER OF WARRANT SHARES REQUESTED IN SUCH EXERCISE NOTICE IS PERMITTED
UNDER THIS PARAGRAPH.  THE COMPANY’S OBLIGATION TO ISSUE SHARES OF COMMON STOCK
IN EXCESS OF THE LIMITATION REFERRED TO IN THIS SECTION SHALL BE SUSPENDED (AND
SHALL NOT TERMINATE OR EXPIRE NOTWITHSTANDING ANY CONTRARY PROVISIONS HEREOF)
UNTIL SUCH TIME, IF ANY, AS SUCH SHARES OF COMMON STOCK MAY BE ISSUED IN
COMPLIANCE WITH SUCH LIMITATION.  BY WRITTEN NOTICE TO THE COMPANY, THE HOLDER
SHALL HAVE THE RIGHT (X) AT ANY TIME AND FROM TIME TO TIME TO REDUCE ITS MAXIMUM
PERCENTAGE IMMEDIATELY UPON NOTICE TO THE COMPANY IN THE EVENT AND ONLY TO THE
EXTENT THAT SECTION 16 OF THE EXCHANGE ACT OR THE RULES PROMULGATED THEREUNDER
(OR ANY SUCCESSOR STATUTE OR RULES) IS CHANGED TO REDUCE THE BENEFICIAL
OWNERSHIP PERCENTAGE THRESHOLD THEREUNDER TO A PERCENTAGE LESS THAN 9.999% AND
(Y) AT ANY TIME AND FROM TIME TO TIME, TO WAIVE THE PROVISIONS OF THIS SECTION
INSOFAR AS THEY RELATE TO THE THRESHOLD PERCENTAGE OR TO INCREASE OR DECREASE
ITS THRESHOLD PERCENTAGE (BUT NOT IN EXCESS OF THE MAXIMUM PERCENTAGE) UNLESS
THE HOLDER SHALL HAVE, BY WRITTEN INSTRUMENT DELIVERED TO THE COMPANY,
IRREVOCABLY WAIVED ITS RIGHTS TO SO INCREASE OR DECREASE ITS THRESHOLD
PERCENTAGE, BUT (I) ANY SUCH WAIVER, INCREASE OR DECREASE WILL NOT BE EFFECTIVE
UNTIL THE 61ST DAY AFTER SUCH NOTICE IS DELIVERED TO THE COMPANY, AND (II) ANY
SUCH WAIVER OR INCREASE OR DECREASE WILL APPLY ONLY TO THE HOLDER AND NOT TO ANY
OTHER HOLDER OF WARRANTS.

(B)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE
NUMBER OF SHARES OF COMMON STOCK THAT MAY BE ACQUIRED BY THE HOLDER UPON ANY
EXERCISE OF THIS WARRANT (OR OTHERWISE IN RESPECT HEREOF) SHALL BE LIMITED TO
THE EXTENT NECESSARY TO INSURE THAT, FOLLOWING SUCH EXERCISE (OR OTHER
ISSUANCE), THE TOTAL NUMBER OF SHARES OF COMMON STOCK THEN BENEFICIALLY OWNED BY
SUCH HOLDER AND ITS AFFILIATES AND ANY OTHER PERSONS WHOSE BENEFICIAL OWNERSHIP
OF COMMON STOCK WOULD BE AGGREGATED WITH THE HOLDER’S FOR PURPOSES OF SECTION
13(D) OF THE EXCHANGE ACT, DOES NOT EXCEED 19.999% OF THE TOTAL NUMBER OF ISSUED
AND OUTSTANDING SHARES OF COMMON STOCK (INCLUDING FOR SUCH PURPOSE THE SHARES OF
COMMON STOCK ISSUABLE UPON SUCH EXERCISE).  FOR SUCH PURPOSES, BENEFICIAL
OWNERSHIP SHALL BE DETERMINED IN ACCORDANCE WITH SECTION 13(D) OF THE EXCHANGE
ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

12.           FRACTIONAL SHARES.  THE COMPANY SHALL NOT BE REQUIRED TO ISSUE OR
CAUSE TO BE ISSUED FRACTIONAL WARRANT SHARES ON THE EXERCISE OF THIS WARRANT. 
IF ANY FRACTION OF A WARRANT SHARE WOULD, EXCEPT FOR THE PROVISIONS OF THIS
SECTION, BE ISSUABLE UPON EXERCISE OF THIS WARRANT, THE NUMBER OF WARRANT SHARES
TO BE ISSUED WILL BE ROUNDED UP TO THE NEAREST WHOLE SHARE OR RIGHT TO PURCHASE
THE NEAREST WHOLE SHARE, AS THE CASE MAY BE.

13.           NOTICES.  ANY AND ALL NOTICES OR OTHER COMMUNICATIONS OR
DELIVERIES HEREUNDER (INCLUDING WITHOUT LIMITATION ANY EXERCISE NOTICE) SHALL BE
IN WRITING AND SHALL BE DEEMED GIVEN AND EFFECTIVE ON THE EARLIEST OF (I) THE
DATE OF TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE
AT THE FACSIMILE NUMBER SPECIFIED IN THIS SECTION PRIOR TO 6:30 P.M. (NEW YORK
CITY TIME) ON A TRADING DAY, (II) THE NEXT TRADING DAY AFTER THE DATE OF
TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE AT THE
FACSIMILE NUMBER SPECIFIED IN THIS SECTION ON A DAY THAT IS NOT A TRADING DAY OR
LATER THAN 6:30 P.M. (NEW

9

 

--------------------------------------------------------------------------------

YORK CITY TIME) ON ANY TRADING DAY, (III) THE TRADING DAY FOLLOWING THE DATE OF
MAILING, IF SENT BY A NATIONALLY RECOGNIZED OVERNIGHT COURIER SERVICE, OR (IV)
UPON ACTUAL RECEIPT BY THE PARTY TO WHOM SUCH NOTICE IS REQUIRED TO BE GIVEN. 
THE ADDRESS FOR SUCH NOTICES OR COMMUNICATIONS SHALL BE AS SET FORTH IN THE
PURCHASE AGREEMENT.

14.           CALL RIGHT.

(A)           IF FOLLOWING THE LATER OF THE (I) EFFECTIVE DATE AND (II) THE SIX
MONTH ANNIVERSARY OF THE DATE HEREOF, THE CLOSING PRICES FOR ANY 20 CONSECUTIVE
TRADING DAYS EXCEEDS 200% OF THE EXERCISE PRICE (THE “THRESHOLD I PRICE”, AND
SUCH 20 DAY PERIOD, THE “THRESHOLD I PERIOD”), THEN THE COMPANY WILL HAVE THE
RIGHT, BUT NOT OBLIGATION (THE “CALL I RIGHT”), ON PRIOR WRITTEN NOTICE IN
ACCORDANCE WITH SECTION 14(C) BELOW TO REQUIRE THE HOLDER TO EXERCISE UP TO 50%
OF ANY UNEXERCISED PORTION OF THIS WARRANT FOR WHICH AN EXERCISE NOTICE HAS NOT
YET BEEN DELIVERED (THE “CALL I AMOUNT”); PROVIDED THAT THE CALL I RIGHT MUST BE
EXERCISED WITHIN 20 TRADING DAYS OF THE LAST DAY OF THE THRESHOLD I PERIOD.

(B)           IF FOLLOWING THE 24 MONTH ANNIVERSARY OF THE DATE HEREOF, THE
CLOSING PRICES FOR ANY 20 CONSECUTIVE TRADING DAYS EXCEEDS 300% OF THE EXERCISE
PRICE (THE “THRESHOLD II PRICE”, AND TOGETHER WITH THE THRESHOLD I PRICE, EACH A
“THRESHOLD PRICE” AND SUCH 20 DAY PERIOD, THE “THRESHOLD II PERIOD”), THEN THE
COMPANY WILL HAVE THE RIGHT, BUT NOT OBLIGATION (THE “CALL II RIGHT”, AND
TOGETHER WITH THE CALL I RIGHT, EACH A “CALL RIGHT”), ON PRIOR WRITTEN NOTICE IN
ACCORDANCE WITH SECTION 14(C) BELOW TO REQUIRE THE HOLDER TO EXERCISE ANY
UNEXERCISED PORTION OF THIS WARRANT FOR WHICH AN EXERCISE NOTICE HAS NOT YET
BEEN DELIVERED (THE “CALL II AMOUNT”, AND TOGETHER WITH THE CALL I AMOUNT, EACH
A “CALL AMOUNT”); PROVIDED THAT THE CALL II RIGHT MUST BE EXERCISED WITHIN 20
TRADING DAYS OF THE LAST DAY OF THE THRESHOLD II PERIOD.

(C)           TO EXERCISE A CALL RIGHT, THE COMPANY SHALL DELIVER TO THE HOLDER
AN IRREVOCABLE WRITTEN NOTICE (A “CALL NOTICE”), INDICATING THE APPLICABLE CALL
AMOUNT.  THE DATE THAT THE COMPANY DELIVERS THE CALL NOTICE TO THE HOLDERS WILL
BE REFERRED TO AS THE “CALL DATE.” WITHIN 15 TRADING DAYS OF RECEIPT OF THE CALL
NOTICE, THE HOLDER SHALL EXERCISE THIS WARRANT FOR UP TO THE APPLICABLE CALL
AMOUNT IN ACCORDANCE WITH SECTION 4(B) ABOVE.  ANY PORTION OF THE CALL AMOUNT
THAT IS NOT EXERCISED BY 6:30 P.M. (NEW YORK CITY TIME) ON THE 15TH TRADING DAY
FOLLOWING THE DATE OF RECEIPT OF THE CALL NOTICE (THE “FORCED EXERCISE DATE”)
SHALL BE CANCELLED.  ANY UNEXERCISED PORTION OF THIS WARRANT TO WHICH THE CALL
NOTICE DOES NOT PERTAIN (THE “REMAINING PORTION”) WILL BE UNAFFECTED BY SUCH
CALL NOTICE.  THE COMPANY COVENANTS AND AGREES THAT IT WILL HONOR ANY EXERCISE
NOTICE WITH RESPECT TO THE CALL AMOUNT THAT ARE TENDERED FROM THE CALL DATE
THROUGH AND INCLUDING 6:30 P.M. (NEW YORK CITY TIME) ON THE FORCED EXERCISE
DATE.

(D)           NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
WARRANT, THE COMPANY MAY NOT REQUIRE THE CANCELLATION OF ANY UNEXERCISED CALL
AMOUNT (AND ANY CALL NOTICE WILL BE VOID), UNLESS FROM THE BEGINNING OF THE 20
CONSECUTIVE TRADING DAYS USED TO DETERMINE WHETHER THE COMMON STOCK HAS ACHIEVED
THE APPLICABLE THRESHOLD PRICE THROUGH THE FORCED

10

 

--------------------------------------------------------------------------------

EXERCISE DATE (THE “CALL PERIOD”) (I) THE CLOSING PRICES FOR EACH TRADING DAY
DURING SUCH CALL PERIOD EXCEEDS SUCH THRESHOLD PRICE, (II) THE COMPANY SHALL
HAVE HONORED IN ACCORDANCE WITH THE TERMS OF THIS WARRANT ANY EXERCISE NOTICE
DELIVERED BY 6:30 P.M. (NEW YORK CITY TIME) ON THE FORCED EXERCISE DATE, (III)
THE EQUITY CONDITIONS (AS DEFINED IN THE NOTES) ARE SATISFIED (OR WAIVED IN
WRITING BY THE APPLICABLE HOLDER) ON EACH TRADING DAY WITH RESPECT TO ALL
UNDERLYING SHARES ISSUABLE UPON EXERCISE OF THE CALL AMOUNT, AND (IV) THE
AVERAGE DAILY TRADING VOLUME AS REPORTED ON BLOOMBERG, L.P. DURING SUCH CALL
PERIOD (DETERMINED BY CALCULATING THE ARITHMETIC AVERAGE OF THE DAILY TRADING
VOLUME FOR EACH TRADING DAY IN SUCH CALL PERIOD) IS GREATER THAN 100,000 SHARES.

(E)           NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, (I) IN CONNECTION
WITH THE COMPANY’S EXERCISE OF A CALL RIGHT, THE THRESHOLD PERCENTAGE LIMITATION
ON EXERCISE SET FORTH IN SECTION 11 SHALL NOT APPLY AND (II) IF AFTER THE CALL
RIGHT IS EXERCISED, THE STATED EXPIRATION DATE OF THIS WARRANT WOULD OCCUR PRIOR
TO THE FORCED EXERCISE DATE, THE “EXPIRATION DATE” HEREOF SHALL BE EXTENDED TO
END OF THE FORCED EXERCISE DATE SOLELY TO THE EXTENT NECESSARY TO ENABLE THIS
WARRANT TO BE EXERCISED FOR THE CALL AMOUNT ON THE FORCED EXERCISE DATE.

15.           WARRANT AGENT.  THE COMPANY SHALL SERVE AS WARRANT AGENT UNDER
THIS WARRANT.  UPON 30 DAYS’ NOTICE TO THE HOLDER, THE COMPANY MAY APPOINT A NEW
WARRANT AGENT.  ANY CORPORATION INTO WHICH THE COMPANY OR ANY NEW WARRANT AGENT
MAY BE MERGED OR ANY CORPORATION RESULTING FROM ANY CONSOLIDATION TO WHICH THE
COMPANY OR ANY NEW WARRANT AGENT SHALL BE A PARTY OR ANY CORPORATION TO WHICH
THE COMPANY OR ANY NEW WARRANT AGENT TRANSFERS SUBSTANTIALLY ALL OF ITS
CORPORATE TRUST OR STOCKHOLDERS SERVICES BUSINESS SHALL BE A SUCCESSOR WARRANT
AGENT UNDER THIS WARRANT WITHOUT ANY FURTHER ACT.  ANY SUCH SUCCESSOR WARRANT
AGENT SHALL PROMPTLY CAUSE NOTICE OF ITS SUCCESSION AS WARRANT AGENT TO BE
MAILED (BY FIRST CLASS MAIL, POSTAGE PREPAID) TO THE HOLDER AT THE HOLDER’S LAST
ADDRESS AS SHOWN ON THE WARRANT REGISTER.

16.           MISCELLANEOUS.

(A)           SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH ON THE FIRST
PAGE HEREOF, THIS WARRANT MAY BE ASSIGNED BY THE HOLDER.  THIS WARRANT MAY NOT
BE ASSIGNED BY THE COMPANY EXCEPT TO A SUCCESSOR IN THE EVENT OF A FUNDAMENTAL
TRANSACTION.  THIS WARRANT SHALL BE BINDING ON AND INURE TO THE BENEFIT OF THE
PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.  SUBJECT TO THE
PRECEDING SENTENCE, NOTHING IN THIS WARRANT SHALL BE CONSTRUED TO GIVE TO ANY
PERSON OTHER THAN THE COMPANY AND THE HOLDER ANY LEGAL OR EQUITABLE RIGHT,
REMEDY OR CAUSE OF ACTION UNDER THIS WARRANT.  THIS WARRANT MAY BE AMENDED ONLY
IN WRITING SIGNED BY THE COMPANY AND THE HOLDER AND THEIR SUCCESSORS AND
ASSIGNS.

(B)           THE COMPANY WILL NOT, BY AMENDMENT OF ITS GOVERNING DOCUMENTS OR
THROUGH ANY REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION, MERGER,
DISSOLUTION, ISSUE OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION, AVOID OR
SEEK TO AVOID THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS OF THIS WARRANT,
BUT WILL AT ALL TIMES IN GOOD FAITH ASSIST IN THE CARRYING OUT OF ALL SUCH TERMS
AND IN THE TAKING OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER
TO PROTECT THE RIGHTS OF THE HOLDER AGAINST IMPAIRMENT.  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, THE COMPANY (I) WILL NOT INCREASE THE PAR VALUE OF
ANY WARRANT SHARES ABOVE THE AMOUNT PAYABLE THEREFOR ON SUCH EXERCISE, (II) WILL
TAKE ALL SUCH ACTION AS MAY BE REASONABLY NECESSARY OR APPROPRIATE IN ORDER THAT
THE COMPANY MAY VALIDLY AND LEGALLY ISSUE FULLY PAID AND

11

 

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NONASSESSABLE WARRANT SHARES ON THE EXERCISE OF THIS WARRANT, AND (III) WILL NOT
CLOSE ITS STOCKHOLDER BOOKS OR RECORDS IN ANY MANNER WHICH INTERFERES WITH THE
TIMELY EXERCISE OF THIS WARRANT.

(C)           GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.  ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
(WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW.  THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

(D)           THE HEADINGS HEREIN ARE FOR CONVENIENCE ONLY, DO NOT CONSTITUTE A
PART OF THIS WARRANT AND SHALL NOT BE DEEMED TO LIMIT OR AFFECT ANY OF THE
PROVISIONS HEREOF.

(E)           IN CASE ANY ONE OR MORE OF THE PROVISIONS OF THIS WARRANT SHALL BE
INVALID OR UNENFORCEABLE IN ANY RESPECT, THE VALIDITY AND ENFORCEABILITY OF THE
REMAINING TERMS AND PROVISIONS OF THIS WARRANT SHALL NOT IN ANY WAY BE AFFECTED
OR IMPAIRED THEREBY AND THE PARTIES WILL ATTEMPT IN GOOD FAITH TO AGREE UPON A
VALID AND ENFORCEABLE PROVISION WHICH SHALL BE A COMMERCIALLY REASONABLE
SUBSTITUTE THEREFOR, AND UPON SO AGREEING, SHALL INCORPORATE SUCH SUBSTITUTE
PROVISION IN THIS WARRANT.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has caused this Warrant A to be duly executed by
its authorized officer as of the date first indicated above.

 

 

 

SATCON TECHNOLOGY CORPORATION

 

 

 

 

 

By:
                                                                                        

 

Name:  David B. Eisenhaure

 

Title:  Chief Executive Officer

 

 

 

By                                                                                          

 

Name:  David E. O’Neil

 

Title:  Vice President of Finance and Treasurer

 

 

13

 

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Annex A

FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To:  SATCON TECHNOLOGY CORPORATION

The undersigned is the Holder of Warrant A No. _______ (the “Warrant”) issued by
SatCon Technology Corporation, a Delaware corporation (the “Company”). 
Capitalized terms used herein and not otherwise defined have the respective
meanings set forth in the Warrant.

1.                               THE WARRANT IS CURRENTLY EXERCISABLE TO
PURCHASE A TOTAL OF ______________ WARRANT SHARES.

2.                               THE UNDERSIGNED HOLDER HEREBY EXERCISES ITS
RIGHT TO PURCHASE _________________ WARRANT SHARES PURSUANT TO THE WARRANT.

3.                               THE HOLDER INTENDS THAT PAYMENT OF THE EXERCISE
PRICE SHALL BE MADE AS (CHECK ONE):

____       “Cash Exercise” under Section 10

____       “Cashless Exercise” under Section 10 (if permitted)

4.                               IF THE HOLDER HAS ELECTED A CASH EXERCISE, THE
HOLDER SHALL PAY THE SUM OF $____________ TO THE COMPANY IN ACCORDANCE WITH THE
TERMS OF THE WARRANT.

5.                               PURSUANT TO THIS EXERCISE, THE COMPANY SHALL
DELIVER TO THE HOLDER _______________ WARRANT SHARES IN ACCORDANCE WITH THE
TERMS OF THE WARRANT.

6.                               FOLLOWING THIS EXERCISE, THE WARRANT SHALL BE
EXERCISABLE TO PURCHASE A TOTAL OF ______________ WARRANT SHARES.

 

 

 

 

 

Dated: ________________, ___

 

Name of Holder:

 

 

 

 

 

(Print)   _____________________________

 

 

 

 

 

By:   ________________________________

 

 

Name:   ______________________________

 

 

Title:   _______________________________

 

 

 

 

 

(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)

 

--------------------------------------------------------------------------------

Annex B

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant to
purchase  ____________ shares of Common Stock of SatCon Technology Corporation
to which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of SatCon Technology Corporation with full
power of substitution in the premises.

Dated:  _________________, _____

 

 

 

 

 

 

 

 

 

 

(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)

 

 

 

 

 

 

 

 

Address of Transferee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the presence of:

 

 

 

 

 

 

 

 

 

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