Exhibit 10.7


 


Execution Copy


 


REGISTRATION
RIGHTS AGREEMENT


 


This REGISTRATION RIGHTS
AGREEMENT, dated November 8, 2007 (this “Agreement”),
by and among SatCon Technology Corporation, a Delaware corporation (the “Company”) and the Persons listed on the Schedule
of Investors attached hereto as Exhibit A who are signatories to
this Agreement (each an “Investor,”
and together the “Investors”). Unless
otherwise provided in this Agreement, capitalized terms used herein have the
respective meanings given to them in Section 1.1 hereof.


 


WHEREAS, pursuant to the
Stock and Warrant Purchase Agreement, dated as of November 8, 2007 (the “Purchase Agreement”), by and among the
Company and the Investors, the Company has agreed to issue and sell to the
Investors shares of Series C Preferred Stock and the Warrants;


 


WHEREAS, upon the terms
and conditions set forth in the Purchase Agreement, in the event of an
Additional Warrant Triggering Event, the Company shall issue Additional
Warrants to the Investors.


 


WHEREAS, the obligations
of the Company and the Investors under the Purchase Agreement are conditioned
upon, among other things, the execution and delivery of this Agreement by the
Company and the Investors.


 


NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein and for
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:


 


ARTICLE I



DEFINITIONS


 


1.1           Definitions. As
used in this Agreement, and unless the context requires a different meaning,
the following terms have the meanings indicated:


 


“Additional Warrant(s)”
has the meaning set forth in the Purchase Agreement.


 


“Additional Warrant
Shares” has the meaning set forth in the Purchase Agreement.


 


“Additional Warrant
Triggering Event” has the meaning set forth in the Purchase Agreement.


 


“Affiliate” means any
Person who is an “affiliate” as defined in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act.


 


“Agreement” means this
Agreement as the same may be amended, supplemented or modified in accordance
with the terms hereof.


 

















 


“Alternative Transaction
Securities” has the meaning set forth in the Purchase Agreement.


 


“Board of Directors”
means the Board of Directors of the Company.


 


“Business Day” means any
day other than a Saturday, Sunday or other day on which commercial banks in the
State of New York are authorized or required by law or executive order to
close.


 


“Certificate of
Designation” has the meaning set forth in the Purchase Agreement.


 


“Charter Documents” means
the Certificate of Incorporation and the By-laws of the Company.


 


“Closing Date” has the
meaning set forth in the Purchase Agreement.


 


“Common Stock” means the
common stock, par value $0.01 per share, of the Company and any other capital
stock of the Company into which such stock is reclassified or reconstituted.


 


“Common Stock Equivalents”
means any security or obligation which is by its terms, directly or indirectly,
convertible into or exchangeable or exercisable into or for shares of Common
Stock, including, without limitation, the Series C Preferred Stock, the
Warrants and any option, warrant or other subscription or purchase right with
respect to Common Stock.


 


“Company” has the meaning
set forth in the preamble to this Agreement.


 


“Company Underwriter” has
the meaning set forth in Section 5.1.


 


“Designated Holder” means
the Investors and any permitted transferee of the Investors to whom Registrable
Securities have been transferred in accordance with Section 8.5 of this
Agreement, other than a transferee to whom Registrable Securities have been
transferred pursuant to a Registration Statement under the Securities Act or
Rule 144 or Regulation S under the Securities Act (or any successor
rule thereto), but in each case solely for so long as such Investor or
transferee continues to be a holder of Registrable Securities.


 


“Effectiveness Period”
has the meaning set forth in Section 3.2(a).


 


“Exchange Act” means the
securities Exchange Act of 1934, as amended, and the rules and regulations of
the SEC thereunder.


 


“Holders’ Counsel” has
the meaning set forth in Section 5.1(a).


 


“Incidental Registration”
has the meaning set forth in Section 4.1.


 


“Indemnified Party” has
the meaning set forth in Section 6.3.


 


“Indemnifying Party” has
the meaning set forth in Section 6.3.


 


“Inspector” has the
meaning set forth in Section 5.1(h).


 


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“Investors” has the
meaning set forth in the preamble to this Agreement and shall also include any
permitted transferee thereof.


 


“Knowledge” has the
meaning set forth in the Purchase Agreement.


 


“Liability” has the
meaning set forth in Section 6.1.


 


“Majority in Interest”
means the Designated Holders holding at least 50% of the then-outstanding
Registrable Securities.


 


“NASD” means the National
Association of Securities Dealers, Inc.


 


“New Securities” has the
meaning set forth in the Purchase Agreement.


 


“Person” means any
individual, firm, corporation, partnership, limited liability company, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by
merger or otherwise) of such entity.


 


“Purchase Agreement” has
the meaning set forth in the recitals to this Agreement.


 


“Records” has the meaning
set forth in Section 5.1(h).


 


“Registrable Securities”
means, subject to Section 2.2 below, (a) shares of Common Stock
issued or issuable upon conversion of the Series C Preferred Stock and
upon exercise of the Warrants and Additional Warrants; (b) shares of Common
Stock issued as Alternative Transaction Securities pursuant to the Purchase
Agreement (or if such Alternative Transaction Securities are not issued in the
form of Common Stock, the Common Stock issued or issuable upon conversion or
exercise of the Alternative Transaction Securities, as the case may be);
(c) shares of Common Stock issued as New Securities to the Investors (or
if such New Securities are not issued in the form of Common Stock, the Common
Stock issued or issuable upon conversion or exercise of the New Securities, as
the case may be); and (d) any Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of the securities referenced in clauses (a), (b) and (c)
above.


 


“Registration Expenses”
has the meaning set forth in Section 5.3.


 


“Registration Statement”
means a registration statement filed pursuant to the Securities Act.


 


“Required Effectiveness
Date” means (i) with respect to the initial Shelf Registration Statement
required to be filed hereunder, the earlier of (A) the date that is sixty (60)
days from the Required Filing Date or (B) five (5) Business Days following the
date the SEC or the Staff notifies the Company that it will not review the
Registration Statement or that the Company may request effectiveness of the Registration
Statement, and (ii) with respect to any additional Registration Statements that
may be required to be filed hereunder (including without limitation pursuant to
Section 3.2), the 60th day (or in the event of a review of such
additional Registration Statement by 


 


3

















 


the SEC, the 90th day) following the date on which the
Company first knows, or reasonably should have known, that such additional
Registration Statement is required and may be filed with the SEC.


 


“Required Filing Date”
has the meaning set forth in Section 3.1.


 


“SEC” means the United
States Securities and Exchange Commission or any similar agency then having
jurisdiction to enforce the Securities Act.


 


“SEC Approved Registrable
Securities” means Registrable Securities other than SEC Non-Registrable
Securities.


 


“SEC Non-Registrable
Securities” means the Registrable Securities excluded from the Registration
Statement either (i) pursuant to Section 3.2(b) because the SEC or the Staff
has indicated through comment letters or otherwise that such securities are not
eligible to be resold under Rule 415 of the Securities Act, (ii) pursuant to
Section 3.2(c) or (iii) pursuant to Section 3.2(d).


 


“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations of the
SEC promulgated thereunder.


 


“Series C Preferred
Stock” means the Series C Convertible Preferred Stock, par value $0.01 per
share, of the Company.


 


“Shelf Registration
Statement” has the meaning set forth in Section 3.1.


 


“Staff” has the meaning
set forth in Section 3.2(b).


 


“Stockholder Approval”
has the meaning set forth in the Purchase Agreement.


 


“Stockholders Meeting”
has the meaning set forth in the Purchase Agreement.


 


“Trading Day” means (a)
any day on which the Common Stock is listed or quoted and traded on any
national securities exchange, market or trading or quotation facility on which
the Common Stock is then listed or quoted (an “Eligible Market”), or (b) if the Common Stock is not then
listed or quoted and traded on any Eligible Market, then a day on which trading
occurs on the OTC Bulletin Board (or any successor thereto), or (c) if trading
ceases to occur on the OTC Bulletin Board (or any successor thereto), any
Business Day.


 


“Warrant(s)” has the meaning
set forth in the Purchase Agreement.


 


ARTICLE II



GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT


 


2.1           Grant of Rights.
The Company hereby grants registration rights to the Designated Holders upon
the terms and conditions set forth in this Agreement.


 


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2.2           Registrable
Securities. For the purposes of this Agreement, securities of the Company
listed in clauses (a), (b), (c) and (d) of the definition of “Registrable
Securities” in Section 1.1 hereof will cease to be Registrable Securities, when
(i) a Registration Statement covering such Registrable Securities has been
declared effective under the Securities Act by the SEC and such Registrable
Securities have been disposed of pursuant to such effective Registration
Statement, (ii) the entire amount of the Registrable Securities owned by a
Designated Holder may be sold in a single sale, in the opinion of counsel
satisfactory to the Company and such Designated Holder, each in their
reasonable judgment (it being agreed that Greenberg Traurig, LLP shall be
satisfactory counsel), without any limitation as to volume pursuant to
Rule 144(k) (or any successor provision then in effect) under the
Securities Act or (iii) such Registrable Securities have been sold pursuant
to Rule 144 under the Securities Act.


 


2.3           Holders of
Registrable Securities. A Person is deemed to be a holder of Registrable
Securities whenever such Person owns of record Registrable Securities, or holds
an option to purchase, or a security convertible into or exercisable or
exchangeable for, Registrable Securities whether or not such acquisition or
conversion has actually been effected. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company may act upon the basis of the
instructions, notice or election received from the registered owner of such
Registrable Securities.


 


ARTICLE III



SHELF REGISTRATION STATEMENT


 


3.1           Shelf Registration
Statement. To the greatest extent legally permissible, not later than
thirty (30) days after the earlier to occur of (i) the Second Tranche Closing
Date (as defined in the Purchase Agreement) or (ii) in the event that the
Company fails to obtain Stockholder Approval at the Stockholders Meeting, the
date of the Stockholders Meeting (such 30th day, the “Required  Filing Date”),
the Company shall file with the SEC a shelf registration statement pursuant to
Rule 415 of the Securities Act (the “Shelf
Registration Statement”) on Form S-3 (or any successor form
thereto), or if Form S-3 may not be used by the Company, on Form S-1
or SB-2 (or any successor forms thereto), as selected by the Company, with
respect to the resale, from time to time, covering all of the Registrable
Securities held by the Designated Holders. The Shelf Registration Statement
shall contain substantially the “Plan of Distribution” attached hereto as Exhibit
B. The disposition of Registrable Securities from the Shelf Registration
Statement may occur in one or more underwritten offerings, block transactions,
broker transactions, at-market transactions or in such other manner or manners
as may be specified by the Designated Holders.


 


3.2           Effective Shelf
Registration Statement.


 


(a)         The Company shall use its
reasonable best efforts to cause the Shelf Registration Statement to become
effective as soon as practicable after the earlier to occur of (i) the Second
Tranche Closing Date or (ii) in the event that the Company fails to obtain
Stockholder Approval at the Stockholders Meeting, the date of the Stockholders
Meeting (but not later than the Required Effectiveness Date), and shall use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective under the Securities Act, subject to the provisions of Sections 5.4



 


5

















 


and 5.5 hereof, until the earlier of (i) such
time as the Company delivers an opinion of counsel reasonably acceptable to the
Designated Holders holding a majority of the then-outstanding Registrable
Securities (it being agreed that Greenberg Traurig, LLP shall be satisfactory
counsel) that each Designated Holder may sell in the open market in a single
transaction all Registrable Securities then held by each such Designated Holder
pursuant to Rule 144(k) of the Securities Act (or any similar provision
then in force) without being subject to the volume limitations thereof or
otherwise under an applicable exemption from the registration requirements of
the Securities Act, as amended, and all other applicable securities and blue
sky laws, (ii) all Registrable Securities covered by such Shelf
Registration Statement have been sold pursuant to such Shelf Registration
Statement or (iii) all Registrable Securities have been sold pursuant to Rule
144 (such period being the “Effectiveness Period”).


 


(b)         Notwithstanding anything
to the contrary in this Agreement, in the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering
pursuant to a Registration Statement filed pursuant to this Agreement as
constituting an offering of securities by or on behalf of the Company such that
Rule 415 is not available to the Company to register the resale of such
Registrable Securities and as a result the Staff or the SEC does not permit
such Registration Statement to become effective and used for resales in a
manner that permits the continuous resale at the market by the Designated
Holders participating therein (or as otherwise may be acceptable to each
Designated Holder) without being named therein as an “underwriter,” then the
Company shall reduce the number of shares to be included in such Registration
Statement by all Designated Holders until such time as the Staff and the SEC
shall so permit such Registration Statement to become effective as aforesaid. In
making such reduction, the Company shall reduce the number of Registrable
Securities to be included by all Designated Holders on a pro rata basis (based
upon the number of Registrable Securities otherwise required to be included for
each Designated Holder) unless the inclusion of shares by a particular
Designated Holder or a particular set of Designated Holders results in the
Staff or the SEC’s taking the position that the inclusion of such Registrable
Securities by such Designated Holders would constitute a registration “by or on
behalf of the Company,” in which event the shares held by such Designated
Holder or set of Designated Holders shall be the only shares subject to
reduction (and if by a set of Designated Holders on a pro rata basis by such
Designated Holders or on such other basis as would result in the exclusion of
the least number of shares by all such Designated Holders). In addition, in the
event that the Staff or the SEC requires any Designated Holder seeking to sell securities
under a Registration Statement filed pursuant to this Agreement to be
specifically identified as an “underwriter” (an “Underwriter
Identification”) in order to permit such Registration Statement to
become effective, and such Designated Holder does not consent to being so named
as an underwriter in such Registration Statement, then, in each such case, the
Company shall reduce the total number of Registrable Securities to be
registered on behalf of such Designated Holder, until such time as the Staff or
the SEC does not require such Underwriter Identification or until such
Designated Holder accepts such Underwriter Identification and the manner
thereof. In the event of any reduction in Registrable Securities pursuant to
this Section 3.2(b), if requested by a Designated Holder holding Registrable
Securities that were so excluded from such registration, the Company shall use
its reasonable best efforts to cause such Registrable Securities to be
registered to the greatest extent and at the earliest opportunity practicable
and in any event not later 30 days after the earliest practicable date
permitted under applicable guidance of the SEC and the Staff (and shall use its
reasonable best 


 


6

















 


efforts to effect
additional registrations of Registrable Securities until all such securities
have been included in additional Registration Statements).


 


(c)         Notwithstanding anything
to the contrary in this Agreement, in the event the SEC or the Staff does not
permit inclusion of Additional Warrant Shares in a Registration Statement until
such time that the related Additional Warrants are outstanding, then such
Additional Warrant Shares may be excluded from the initial Shelf Registration
Statement. Thereafter, on a semi-annual basis (by June 30 and December 31 of
each year), the Company shall be obligated to file a Registration Statement
covering the resale of any Additional Warrant Shares underlying Additional
Warrants that are outstanding at such time; provided, however, that the Company
shall not be required to file such a Registration Statement if the total number
of Additional Warrant Shares to be included in such Registration Statement is
less than 100,000 (as adjusted for stock dividends, splits, combinations and the
like) or if the Additional Warrant Shares have been registered on a prior
Registration Statement.


 


(d)         Notwithstanding anything
to the contrary in this Agreement, a Designated Holder shall have the right to
require the Company to exclude all or any portion of such Designated Holder’s
Registrable Securities from any Registration Statement, by written notice to
the Company upon such Designated Holder’s reasonable belief that (i) inclusion
of such Registrable Securities in the Registration Statement could subject such
Designated Holder to underwriter liability, or (ii) the SEC or the Staff will
impose restrictions and terms on the disposition of such Registrable Securities
that are materially inconsistent with the Plan of Distribution attached hereto
as Exhibit B. In such event, the Company shall be required to file a new
registration statement for such excluded shares in accordance with Section
3.2(b).


 


(e)         Notwithstanding anything
to the contrary in this Agreement, in the event Rule 415 is not available to the
Company to register the resale of such Registrable Securities or if the Shelf
Registration Statement is not effective or is otherwise subject to suspension
for 20 or more consecutive Trading Days or more than 60 Trading Days, in the
aggregate, in any 365 day period, the Designated Holders may submit a written
request (a “Demand Notice”) to the Company
that the Company register all or part of the Registrable Securities under and
in accordance with the Securities Act with an anticipated aggregate offering price
of at least $3,000,000 (a “Demand Registration”).
Such Demand Notice shall specify the number and description of Registrable
Securities to be sold. Upon receipt of the Demand Notice, the Company shall (i)
within five Business Days after receipt of such Demand Notice, give written
notice of the proposed registration to all other Designated Holders; and (ii)
as soon as practicable, use reasonable best efforts to effect such registration
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Designated Holders joining in such request as are specified
in written requests received by the Company within 20 Business Days after the
date the Company mails the written notice referred to in clause (i) above. The
Company shall not be required to effect or take any action to effect a Demand
Registration after the Company has effected two Demand Registrations pursuant
to this Section 3.2(e). Section 3.3 shall not apply with respect to Demand
Registrations.


 


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3.3           Event Payments. Should
an Event (as defined below) occur, then upon each monthly anniversary of the
occurrence of such Event (an “Event Payment Date”)
until the applicable Event is cured, as relief for the damages suffered
therefrom by the Designated Holders (the parties hereto agreeing that the
liquidated damages provided for in this Section 3.3 constitute a reasonable
estimate of the damages that may be incurred by the Designated Holders by
reason of such Event and that such liquidated damages represent the exclusive
monetary remedy for the Designated Holders for damages suffered due to such
Event), the Company shall pay to each Designated Holder an amount in cash, as
liquidated damages and not as a penalty, equal to one-twentieth of a percent
(0.0005) of (i) the number of SEC Approved Registrable Securities then held by
such Designated Holder as of the date of such Event, multiplied by (ii) the
purchase price paid by such Designated Holder for such SEC Approved Registrable
Securities then held, for each day that such Event continues, excluding the day
on which such Event has been cured. The payments to which a Designated Holder
shall be entitled pursuant to this Section 3.3 are referred to herein as “Event Payments.” In the event the Company
fails to make Event Payments to a Designated Holder within two (2) Business
Days after an Event Payment Date, such Event Payments owed to such Designated
Holder shall bear interest at the rate of one percent (1.0%) per month
(prorated for partial months) until paid in full. All pro rated calculations
made pursuant to this paragraph shall be based upon the actual number of days
in such pro rated month. Notwithstanding the foregoing provisions, in no event
shall the Company be obligated to pay such liquidated damages (a) to more than
one Designated Holder in respect of the same Registrable Securities for the
same period of time or (b) in an aggregate amount that exceeds 9.9% of the
purchase price paid by such Designated Holder for its Registrable Securities
pursuant to the Purchase Agreement.


 


For such purposes, each of the following shall
constitute an “Event”:


 


(a)         the Registration
Statement is not filed on or prior to the Required Filing Date or is not
declared effective on or prior to the Required Effectiveness Date except (A) as
provided for in Section 5.5, (B) in the event that the SEC or the Staff
(whether by means of a comment letter provided by the SEC or the Staff relating
to the Registration Statement or otherwise) makes a determination that the
registration of the Registrable Securities under the Registration Statement may
not be appropriately characterized as secondary offerings that are eligible to
be made on a shelf basis under Rule 415 or that one or more of the Designated
Holders should be named as an underwriter therein, (C) if the Company is
involved in a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the
Exchange Act or (D) in the event of a merger or consolidation of the Company or
a sale, license or other disposition of more than fifty percent (50%) of the
assets of the Company or one of its material subsidiaries in one or a series of
related transactions; or


 


(b)         on and after the
effective date of a Registration Statement filed hereunder, a Designated Holder
is not permitted to sell SEC Approved Registrable Securities under the
Registration Statement (or a subsequent Registration Statement filed in
replacement thereof) for any reason (other than the fault of such Designated
Holder) for twenty (20) or more consecutive Trading Days or more than sixty
(60) Trading Days, in the aggregate, in any 365 day period, except as provided
in Section 5.5.


 


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ARTICLE IV



INCIDENTAL OR “PIGGY-BACK” REGISTRATION


 


4.1           Request for
Incidental Registration. At any time after the date hereof until the end of
the Effectiveness Period, if (i) the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the Company
for its own account (other than a Registration Statement on Form S-4 or S-8
or any successor thereto), or (ii) the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering for the account
of any stockholder of the Company other than any Designated Holder, then in
each case the Company shall give written notice of such proposed filing to each
of the Designated Holders at least twenty (20) days before the anticipated
filing date, and such notice shall describe the proposed registration and
distribution and offer such Designated Holders the opportunity to register the
number of Registrable Securities as each such Designated Holder may request (an
“Incidental Registration”);
provided, however, that the Designated Holders shall only have the right to
register shares pursuant to clause (ii) of this sentence if the Shelf
Registration Statement is not effective or is otherwise subject to suspension
(or if the Company reasonably foresees that such Registration Statement will be
subject to suspension within thirty (30) days following such determination)
under Sections 5.4 or 5.5 hereof. The Company shall use its reasonable best
efforts (within twenty (20) days of the notice by the Designated Holders
provided for below in this sentence) to cause the managing underwriter or
underwriters in the case of a proposed underwritten offering (the “Company Underwriter”) to permit each of the
Designated Holders who have requested in writing to the Company within ten (10)
Business Days of the giving of the notice by the Company to participate in the
Incidental Registration to include its, his or her Registrable Securities in such
offering on the same terms and conditions as the securities of the Company or
the account of such other stockholder, as the case may be, included therein. In
connection with any Incidental Registration under this Section 4.1
involving an underwritten offering, the Company shall not be required to
include any Registrable Securities in such underwritten offering unless the
Designated Holders thereof accept the terms of the underwritten offering as
agreed upon between the Company, such other stockholders, if any, and the
Company Underwriter. If the Company Underwriter determines that the
registration of all or part of the Registrable Securities which the Designated
Holders have requested to be included in an offering by the Company for its own
account (other than a Registration Statement on Form S-4 or S-8 or any
successor thereto) would materially adversely affect the success of such
offering, then the Company shall be required to include in such Incidental
Registration, to the extent of the amount that the Company Underwriter believes
may be sold without causing such adverse effect, first, all of the securities
to be offered for the account of the Company, second, the Registrable
Securities to be offered for the account of the Designated Holders pursuant to
this Article IV, as a group, which Registrable Securities shall be
allocated pro rata among such Designated Holders based on the number of
Registrable Securities requested to be included in such offering by each such
Designated Holder, and third, other securities requested to be included in such
offering; provided, however,
that no such reduction shall reduce the shares of Registrable Securities held
by the Designated Holders included in the registration to below 10% of the
total amount of securities included in such registration, unless such adverse
effect is related to any of the matters contemplated by Section 3.2(b) hereof,
in which case such 10% floor shall not apply and such Registrable Securities
may be excluded pursuant to the provisions of Section 3.2(b) hereof. If the
Company Underwriter determines that the registration of all or part of the
Registrable Securities which the Designated 


 


9

















 


Holders
have requested to be included in an offering for the account of any stockholder
of the Company other than any Designated Holders (“Other
Stockholders”) would materially adversely affect the success of such
offering, then the Company shall be required to include in such Incidental
Registration, to the extent of the amount that the Company Underwriter believes
may be sold without causing such adverse effect, first, all of the securities
to be offered for the account of such Other Stockholders, second, the
Registrable Securities to be offered for the account of the Designated Holders
pursuant to this Article IV, as a group, which Registrable Securities shall be
allocated pro rata among such Designated Holders based on the number of
Registrable Securities requested to be included in such offering by each such
Designated Holder, third, all of the securities to be offered for the account
of the Company, and fourth, other securities requested to be included in such
offering; provided, however,
that no such reduction shall reduce the shares of Registrable Securities held
by the Designated Holders included in the registration to below 30% of the
total amount of securities included in such registration unless such adverse
effect is related to any of the matters contemplated by Section 3.2(b) above,
in which case such 30% floor shall not apply and such Registrable Securities
may be excluded pursuant to the provisions of Section 3.2(b).


 


4.2           Right to Terminate
Registration. The Company shall have the right to terminate or withdraw any
registration initiated by it under Section 4.1 prior to the effectiveness
of such registration whether or not any Designated Holder has elected to
include Registrable Securities in such registration. A Designated Holder shall
have the right, by written notice to the Company, to exclude all or any portion
of such Designated Holder’s Registrable Securities from any Registration
Statement effected pursuant to this Article IV at any time prior to its
effectiveness.


 


4.3           Expenses. The
Company shall bear all Registration Expenses in connection with any Incidental
Registration pursuant to this Article IV, whether or not such Incidental
Registration becomes effective.


 


ARTICLE V



REGISTRATION PROCEDURES


 


5.1           Obligations of the
Company. Whenever registration of Registrable Securities has been requested
pursuant to Article III or Article IV of this Agreement, the Company
shall use its reasonable best efforts to effect the registration of such
Registrable Securities in accordance with the intended method of distribution
thereof, and in connection with any such request, the Company shall, as
expeditiously as possible:


 


(a)         before filing a
Registration Statement or prospectus or any amendments or supplements thereto
relating to Registrable Securities, the Company shall provide a single counsel
selected by the Designated Holders holding a majority of the Registrable
Securities being registered in such registration (“Holders’ Counsel”) with an adequate and appropriate
opportunity to review and comment on such Registration Statement and each
prospectus included therein (and each amendment or supplement thereto) to be
filed with the SEC, subject to such documents being under the Company’s
control, provided, that in no event shall such
review period be required to be more than five (5) days, and the Company shall
notify the Holders’ Counsel and each seller of Registrable Securities of any
stop order issued or threatened by the SEC relating to Registrable 


 


10

















 


Securities and use all
reasonable efforts to prevent the entry of such stop order or to remove it if
entered;


 


(b)         prepare and file with the
SEC such amendments and supplements to such Registration Statement and the
prospectus used in connection therewith as may be reasonably necessary to keep
such Registration Statement effective for the period specified in such Article
III, or with respect to Article IV and if not so specified therein, the lesser
of (A) 180 days and (B) such shorter period which will terminate
when all Registrable Securities covered by such Registration Statement have
been sold and shall comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;


 


(c)         furnish to each seller of
Registrable Securities, prior to filing a Registration Statement relating to
Registrable Securities, at least one copy of such Registration Statement as is
proposed to be filed, and thereafter such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such Registration Statement
(including each preliminary prospectus) and any prospectus filed under
Rule 424 under the Securities Act as each such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;


 


(d)         register or qualify such
Registrable Securities under such other securities or “blue sky” laws of such
jurisdictions as any seller of Registrable Securities may reasonably request,
and continue such registration or qualification in effect in such jurisdiction
for as long as permissible pursuant to the laws of such jurisdiction, or for as
long as any such seller reasonably requests or until all of such Registrable
Securities are sold, whichever is shortest, and do any and all other acts and
things which may be reasonably necessary or advisable to enable any such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided,
however, that the Company shall
not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 5.1(d), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any such
jurisdiction;


 


(e)         notify each seller of
Registrable Securities: (i) when a prospectus, any prospectus supplement,
a Registration Statement or a post-effective amendment to a Registration
Statement (but only if relating to Registrable Securities) has been filed with
the SEC, and, with respect to a Registration Statement or any post-effective
amendment (but only if relating to Registrable Securities), when the same has
become effective; (ii) of any request by the SEC or any other federal or
state governmental authority for amendments or supplements to a Registration
Statement or related prospectus or for additional information (but only if
relating to Registrable Securities); (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement relating to Registrable
Securities or the initiation or threatening of any proceedings for that
purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceedings for such purpose; (v) of the
existence of any fact or happening of 


 


11

















 


any event (including the
passage of time) of which the Company has Knowledge which makes any statement
of a material fact in such Registration Statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
or which would require the making of any changes in the Registration Statement
or prospectus in order that, in the case of the Registration Statement, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of such prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and
(vi) determination by counsel of the Company that a post-effective
amendment to a Registration Statement relating to Registrable Securities is
advisable;


 


(f)          upon the occurrence of
any event contemplated by clause (v) of Section 5.1(e), as promptly
as practicable, prepare a supplement or amendment to such Registration
Statement or related prospectus and furnish to each seller of Registrable
Securities a reasonable number of copies of such supplement to or an amendment
of such Registration Statement or prospectus as may be necessary so that, after
delivery to the purchasers of such Registrable Securities, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case
of such prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.


 


(g)         enter into and perform
customary agreements and take such other actions as reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities,
including causing its officers to participate in “road shows” and other
information meetings organized by the underwriter, if applicable;


 


(h)         make available at
reasonable times for inspection by any Designated Holder, any managing
underwriter participating in any disposition of such Registrable Securities
pursuant to a Registration Statement, Holders’ Counsel and any attorney,
accountant or other agent retained by any such Designated Holder or any
managing underwriter (each, an “Inspector”
and collectively, the “Inspectors”),
all financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries (collectively, the “Records”) as shall be reasonably necessary
to enable them to exercise their due diligence responsibility, and cause the
Company’s and its subsidiaries’ officers, directors and employees, and the
independent public accountants of the Company, to supply all information
reasonably requested by any such Inspector in connection with such Registration
Statement. Notwithstanding the foregoing, Records and other information that
the Company determines, in good faith, to be confidential and which it notifies
the Inspectors are confidential shall not be disclosed by the Inspectors or
used for any purpose other than as necessary or appropriate for the purpose of
such inspection (and the Inspectors shall confirm their agreement in writing in
advance to the Company if the Company shall so request) unless (A) the
disclosure of such Records is necessary, in the Company’s judgment, to avoid or
correct a misstatement or omission in the Registration Statement, (B) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction after exhaustion of all appeals therefrom or
(C) the information in such Records was known to the Inspectors on a non-


 


12

















 


confidential basis prior
to its disclosure by the Company or has been made generally available to the
public. Each Designated Holder agrees that it shall promptly, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at the Company’s expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential, and such Designated Holder shall reasonably cooperate with the
Company in connection therewith;


 


(i)          if such sale is pursuant
to an underwritten offering, (A) obtain “comfort” letters dated the effective
date of the Registration Statement and the date of the closing under the
underwriting agreement from the Company’s independent public accountants in
customary form and covering such matters of the type customarily covered by “comfort”
letters as Holders’ Counsel or the managing underwriter reasonably requests;
(B) enter into a customary underwriting agreement or purchase agreement with
the underwriter containing representations and warranties, covenants and legal
opinion addressed to the Designated Holders and the underwriters in form,
substance and scope as would be customarily made by the Company to underwriters
and Designated Holders in similar offerings of securities; or (C) deliver such
documents and certificates as may be reasonably requested and as are
customarily delivered in similar offerings to the Designated Holders and to the
underwriter(s);


 


(j)          furnish, at the request
of any seller of Registrable Securities on the date such securities are
delivered to the underwriters for sale pursuant to such registration or, if
such securities are not being sold through underwriters, on the date the
Registration Statement with respect to such securities becomes effective and
dated as of such date, an opinion of counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any, and to
the seller making such request, covering such legal matters with respect to the
registration in respect of which such opinion is being given as the
underwriters, if any, and such seller may reasonably request and are
customarily included in such opinions;


 


(k)         comply with all
applicable rules and regulations of the SEC, and make generally available to
its security holders, as soon as reasonably practicable but no later than
fifteen (15) months after the effective date of the Registration Statement, an
earnings statement covering a period of twelve (12) months beginning after the
effective date of the Registration Statement, in a manner which satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;


 


(l)          cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed; provided, that the applicable listing
requirements are satisfied;


 


(m)        keep Holders’ Counsel
reasonably advised in writing as to the initiation and progress of any
registration under Article III or Article IV hereunder; provided, that the Company shall provide
Holders’ Counsel with all correspondence with the SEC in connection with any
Registration Statement filed hereunder to the extent that such Registration
Statement has not been declared effective on or prior to the date required
hereunder;


 


13

















 


(n)         provide reasonable
cooperation to each seller of Registrable Securities and each underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD; provided, that the Company shall not be
required to incur material expenses or obligations in connection with its
obligations under this Section 5.1(n); and


 


(o)         take all other steps
reasonably necessary to effect the registration of the Registrable Securities
contemplated hereby.


 


5.2           Seller Information.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish, and such seller shall furnish, to
the Company such information regarding the distribution of such securities as
the Company may from time to time reasonably request in writing. The furnishing
of such information shall be a condition to the inclusion of the seller’s
shares in such registration.


 


5.3           Registration
Expenses. The Company shall pay all expenses arising from or incident to
its performance of, or compliance with, this Agreement, including, without
limitation, (i) SEC, stock exchange and NASD registration and filing fees,
(ii) all fees and expenses incurred in complying with securities or “blue
sky” laws (including reasonable fees, charges and disbursements of counsel to
any underwriter incurred in connection with “blue sky” qualifications of the
Registrable Securities as may be set forth in any underwriting agreement),
(iii) all printing, messenger and delivery expenses, (iv) the fees,
charges and expenses of the Holders’ Counsel (including without limitation the
fees charges and expenses incurred in connection with any amendments to a
Registration Statement), but in no event shall the Company be required to pay
more than $15,000 in the aggregate for such fees, charges and expenses, and
(v) the fees, charges and expenses of counsel to the Company and of its independent
public accountants and any other accounting fees, charges and expenses incurred
by the Company (including, without limitation, any expenses arising from any “cold
comfort” letters or any special audits incident to or required by any
registration or qualification), regardless of whether such Registration
Statement is declared effective. All of the expenses described in the preceding
sentence of this Section 5.3 are referred to herein as “Registration Expenses.”  The Designated Holders of Registrable
Securities sold pursuant to a Registration Statement shall bear the expense of
any broker’s commission or underwriter’s discount or commission relating to
registration and sale of such Designated Holders’ Registrable Securities.


 


5.4           Notice to Discontinue.
Each Designated Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in clause (v) of
Section 5.1(e) and Section 5.5 hereof, such Designated Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such
Designated Holder’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5.1(f) and, if so directed by the Company,
such Designated Holder shall deliver to the Company (at the Company’s expense)
all copies, other than permanent file copies then in such Designated Holder’s
possession, of the prospectus covering such Registrable Securities which is
current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 5.1(b)) by the
number of days during the period from and including the date of 


 


14

















 


the
giving of such notice pursuant to clause (v) of Section 5.1(e) to and
including the date when sellers of such Registrable Securities under such
Registration Statement shall have received the copies of the supplemented or
amended prospectus contemplated by, and meeting the requirements of,
Section 5.1(f).


 


5.5           Suspension of Sales.
Notwithstanding anything in this Agreement to the contrary, so long as the
Registration Statement is on Form S-1 or on any other form that does not allow
for forward incorporation by reference of reports and other materials filed by
the Company pursuant to Section 13(a) or 15(d) of the Exchange Act, the Company
may suspend sales under such Registration Statement as follows:  (i) for the period commencing at the time
that the Company disseminates a press release announcing its preliminary financial
results for any fiscal period and ending on the third Business Day after the
earlier of (A) the date that the related report on Form 10-K or 10-Q, as
applicable, under the Exchange Act is filed with the SEC and (B) the date on
which such report is required to be filed under the Exchange Act (giving effect
to Rule 12b-25 promulgated thereunder); (ii) for the period commencing at the
time that the Company disseminates a press release announcing a material
development that would make a statement of a material fact in such Registration
Statement untrue or misleading and ending on the third Business Day after the
earlier of (A) the date that the related report on Form 8-K is filed with the
SEC and (B) the date on which such report is required to be filed under the
Exchange Act (giving effect to Rule 12b-25 promulgated thereunder), and (iii)
to the extent necessary to allow any post-effective amendment to the
Registration Statement or supplement to the prospectus to be prepared and, if
necessary, filed with the SEC and, in the case of a post-effective amendment,
declared effective. In addition, the Company may suspend sales under any
Registration Statement for a period during which the Company, in the good faith
opinion of the Board of Directors, determines that the disclosure of material,
non-public information concerning the Company or any of its subsidiaries would
be materially detrimental to the Company; provided, that
the Company shall promptly notify the Designated Holders in writing (I) of the
existence of such material, non-public information (provided that in each
notice the Company will not disclose the content of such material, non-public
information to the Designated Holders) and the date on which such suspension
will begin and (II) of the date on which such suspension ends; provided  further, that
such right to suspend sales shall not exceed sixty (60) Trading Days in any 365
day period without such suspension being deemed an Event pursuant to which the
Company is required to make Event Payments pursuant to Section 3.3. The Company
will use its reasonable best efforts to minimize periods during which the
Registration Statement is not effective.


 


ARTICLE VI



INDEMNIFICATION; CONTRIBUTION


 


6.1           Indemnification by
the Company. The Company agrees to indemnify and hold harmless each
Designated Holder, its general or limited partners, members, directors,
officers, Affiliates and each Person who controls (within the meaning of
Section 15 of the Securities Act) any of the foregoing from and against
any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) (each, a “Liability”
and collectively, “Liabilities”),
(i) arising out of or based upon any untrue, or allegedly untrue,
statement of a material fact contained in any Registration Statement,
prospectus or preliminary, final or summary prospectus or notification or 


 


15

















 


offering
circular (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or (ii) arising out of or based upon
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which such statements were made, except insofar
as such Liability arises out of or is based upon any untrue statement or
omission contained in such Registration Statement, preliminary prospectus or
final prospectus in reliance and in conformity with information concerning such
Designated Holder furnished in writing to the Company by such Designated Holder
specifically for use therein or is due to the grossly negligent wrongful action
or wrongful inaction of such Designated Holder, to deliver or to cause to be
delivered the prospectus, including a corrected prospectus, furnished by the
Company to such Designated Holder (or made available by the Company if such
Designated Holder is notified of its availability in writing in a timely
manner); provided, however, that the foregoing indemnity with
respect to any preliminary prospectus shall not inure to the benefit of any
indemnified Person from whom the Person asserting such losses, claims, damages,
liabilities, expenses and judgments purchased securities if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary prospectus is eliminated or remedied in the prospectus and a copy
of the prospectus shall not have been furnished to such Person in a timely
manner due to the wrongful action or wrongful inaction of such indemnified
Person, whether as a result of negligence or otherwise. The Company shall also
provide customary indemnities to any underwriters of the Registrable
Securities, their officers, directors and employees and each Person who
controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.


 


6.2           Indemnification by
Designated Holders. In connection with any Registration Statement in which
a Designated Holder is participating pursuant to Article III or Article IV
hereof, each such Designated Holder shall promptly furnish to the Company in
writing such information with respect to such Designated Holder as the Company may
reasonably request or as may be required by law for use in connection with any
such Registration Statement or prospectus and all information required to be
disclosed in order to make the information previously furnished to the Company
by such Designated Holder not materially misleading or necessary to cause such
Registration Statement or prospectus not to omit a material fact with respect
to such Designated Holder necessary in order to make the statements therein not
misleading. Each Designated Holder agrees to indemnify and hold harmless the
Company, its directors, officers, Affiliates, any underwriter retained by the
Company and each Person who controls the Company or such underwriter (within
the meaning of Section 15 of the Securities Act) to the same extent as the
foregoing indemnity from the Company to the Designated Holders, but only if
such untrue statement or omission was made in reliance upon and in conformity
with information with respect to such Designated Holder furnished in writing to
the Company by such Designated Holder specifically for use in such Registration
Statement or preliminary, final or summary prospectus or amendment or
supplement, or a document incorporated by reference into any of the foregoing
or, due to the grossly negligent wrongful action or wrongful inaction of such
Designated Holder, to deliver or to cause to be delivered the prospectus,
including a corrected prospectus, furnished by the Company to such Designated
Holder (or made available by the Company if such Designated Holder is notified
of its availability in writing in a timely manner); provided, however,
that the total amount to be indemnified by such Designated Holder pursuant to
this Section 6.2 shall be limited to the net proceeds (after deducting the
underwriters’ discounts and 


 


16

















 


commissions)
received by such Designated Holder in the offering to which the Registration
Statement or prospectus relates.


 


6.3           Conduct of
Indemnification Proceedings. Any Person entitled to indemnification
hereunder (the “Indemnified Party”)
agrees to give prompt written notice to the indemnifying party (the “Indemnifying Party”) after the receipt by
the Indemnified Party of any written notice of the commencement of any action,
suit, proceeding or investigation or threat thereof made in writing for which
the Indemnified Party intends to claim indemnification or contribution pursuant
to this Agreement; provided, however, that the failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party of any Liability
that it may have to the Indemnified Party hereunder (except to the extent that
the Indemnifying Party is materially prejudiced or otherwise forfeits
substantive rights or defenses by reason of such failure). If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to
the extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel shall be paid by the Indemnified Party unless (i) the
Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party
fails to assume the defense of such action with counsel reasonably satisfactory
to the Indemnified Party or (iii) the named parties to any such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party and such parties have been advised by such counsel that
either (x) representation of such Indemnified Party and the Indemnifying
Party by the same counsel would be inappropriate under applicable standards of
professional conduct or (y) there may be one or more legal defenses
available to the Indemnified Party which are different from or additional to those
available to the Indemnifying Party, in any of such cases, the Indemnifying
Party shall not have the right to assume the defense of such action on behalf
of such Indemnified Party, it being understood, however, that the Indemnifying
Party shall not be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Indemnified
Parties. No Indemnifying Party shall be liable for any settlement entered into
without its written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the consent of such Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of which such
Indemnified Party is a party and indemnity has been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability for claims that are the subject
matter of such proceeding.


 


6.4           Contribution.


 


(a)         If the indemnification
provided for in this Article VI from the Indemnifying Party is unavailable
to an Indemnified Party hereunder in respect of any Liabilities referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions which resulted in such Liabilities, as well as any
other relevant equitable considerations. The relative faults of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in 


 


17

















 


question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
Liabilities referred to above shall be deemed to include, subject to the
limitations set forth in Sections 6.1 and 6.2, any legal or other fees,
charges or expenses reasonably incurred by such party in connection with any
investigation or proceeding; provided,
that the total amount to be contributed by such Designated Holder shall be
limited to the net proceeds (after deducting the underwriters’ discounts and
commissions) received by such Designated Holder in the offering. No Person
involved in the sale of Registrable Securities who is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
in connection with such sale shall be entitled to indemnification or
contribution from any Person involved in such sale of Registrable Securities
who is not guilty of fraudulent misrepresentation.


 


(b)         The parties hereto agree
that it would not be just and equitable if contribution pursuant to this
Section 6.4 were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in Section 6.4(a). No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.


 


ARTICLE VII



COVENANTS


 


7.1           Rule 144. The
Company covenants that from and after the date hereof it shall use its
reasonable best efforts to (a) file any reports required to be filed by it
under the Exchange Act and (b) take such further action as each Designated
Holder may reasonably request (including providing any information necessary to
comply with Rule 144 under the Securities Act), all to the extent required
from time to time to enable such Designated Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, or Regulation S under the
Securities Act or (ii) any similar rules or regulations hereafter adopted
by the SEC. The Company shall, upon the request of any Designated Holder,
deliver to such Designated Holder a written statement as to whether it has
complied with such requirements.


 


7.2           Limitations on
Registration Rights. No Person shall, without the prior written consent of
a Majority in Interest, be permitted to include securities of the Company in
any registration filed under Article III hereto.


 


ARTICLE VIII


 


MISCELLANEOUS


 


8.1           Recapitalizations,
Exchanges, etc. The provisions of this Agreement shall apply to the full
extent set forth herein with respect to (i) the shares of Common stock and
the Common Stock 


 


18

















 


Equivalents,
(ii) any and all shares of voting common stock of the Company into which
the shares of Common Stock or Common Stock Equivalents are converted, exchanged
or substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in conversion of, in
exchange for or in substitution of, the shares of Common Stock or Common Stock
Equivalents and shall be appropriately adjusted for any stock dividends, splits,
reverse splits, combinations, recapitalizations and the like occurring after
the date hereof. The Company shall use its reasonable best efforts to cause any
successor or assign (whether by merger, consolidation, sale of assets or
otherwise) to enter into a new registration rights agreement with the
Designated Holders on terms substantially the same as this Agreement as a
condition of any such transaction.


 


8.2           No Inconsistent
Agreements. The Company shall not enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Designated
Holders in this Agreement or grant any additional registration rights to any
Person or with respect to any securities which are not Registrable Securities
which are prior in right to or inconsistent with the rights granted in this
Agreement, except with the prior written consent of a Majority in Interest. No
holder of the securities of the Company has the right to register securities of
the Company on the initial or any subsequent Shelf Registration Statement.


 


8.3           Remedies. The
Designated Holders, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, shall be entitled to specific
performance of their rights under this Agreement. The Company agrees that
monetary damages (including those specified in Section 3.3) would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive in any action for
specific performance the defense that a remedy at law would be adequate.


 


8.4           Notices. All
notices, demands and other communications provided for or permitted hereunder
shall be made in the manner provided for under the Purchase Agreement.


 


8.5           Successors and
Assigns; Third Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto as hereinafter provided. The rights of the Designated Holders
contained in this Agreement shall be automatically transferred to the
transferee of any Registrable Security, provided,
that (i) such transferee agrees to become a party to this Agreement and be
fully bound by, and subject to, all of the terms and conditions of the
Agreement as though an original party hereto; (ii) the Company is, within a
reasonable time after such transfer, furnished with written notice of (a) the
name and address of such transferee, and (b) the securities with respect to
which such registration rights are being transferred; (iii) immediately
following such transfer the further disposition of such securities by the
transferee is restricted under the Securities Act or applicable state
securities laws if so required; and (iv) such transfer shall have been
conducted in accordance with all applicable federal and state securities laws. All
of the obligations of the Company hereunder shall survive any such transfer. Except
as provided in Article VI, no Person other than the parties hereto and
their successors and permitted assigns are intended to be a beneficiary of this
Agreement.


 


19

















 


8.6           Amendments and
Waivers. Except as otherwise provided herein, the provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given unless consented to
in writing by (i) the Company and (ii) the Designated Holders holding
at least 66.7% of the then-outstanding Registrable Securities; provided, that if any such amendment, modification,
supplement, waiver, consent or departure would adversely affect the rights,
preferences or privileges of any Investor disproportionately with respect to
the rights, preferences and privileges of the other Investors, such Investor’s
consent in writing shall be required; provided further,
any party hereto may give a waiver in writing as to itself. Notwithstanding the
foregoing, a Person who purchases Registrable Securities in the Second Tranche
Closing (as defined in the Purchase Agreement) may become a party to this
Agreement as an “Investor” and “Designated Holder” by executing a counterpart
of this Agreement without any amendment of this Agreement pursuant to this
Section or consent or approval of the Company (and Exhibit A shall be
updated accordingly).


 


8.7           Aggregation of Stock.
All shares of Registrable Securities held or acquired by Affiliated entities or
Persons or entities or Persons under common management or control shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.


 


8.8           Counterparts. This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. The parties hereto confirm that any facsimile copy of another
party’s executed counterpart of this Agreement (or its signature page thereof)
will be deemed to be an executed original thereof.


 


8.9           Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.


 


8.10         GOVERNING LAW; CONSENT
TO JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF. The parties hereto irrevocably submit
to the exclusive jurisdiction of any state or federal court sitting in the
County of New York, in the State of New York over any suit, action or
proceeding arising out of or relating to this Agreement or the affairs of the
Company. To the fullest extent they may effectively do so under applicable law,
the parties hereto irrevocably waive and agree not to assert, by way of motion,
as a defense or otherwise, any claim that they are not subject to the
jurisdiction of any such court, any objection that they may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.


 


8.11         Severability. If
any one or more of the provisions contained herein, or the application thereof
in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be in
any way impaired, unless the provisions held invalid, illegal or unenforceable
shall substantially impair the benefits of the remaining provisions hereof.


 


20

















 


8.12         Rules of Construction.
Unless the context otherwise requires, references to sections or subsections
refer to sections or subsections of this Agreement.


 


8.13         Entire Agreement. This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto with respect to the subject matter
contained herein. There are no restrictions, promises, representations,
warranties or undertakings with respect to the subject matter contained herein,
other than those set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings among the parties with respect to such
subject matter.


 


8.14         Further Assurances.
Each of the parties shall execute such documents and perform such further acts
(including, without limitation, obtaining any consents, exemptions,
authorizations or other actions by, or giving any notices to, or making any
filings with, any governmental authority or any other Person) as may be
reasonably required or desirable to carry out or to perform the provisions of this
Agreement.


 


8.15         Other Agreements. Nothing
contained in this Agreement shall be deemed to be a waiver of, or release from,
any obligations any party hereto may have under, or any restrictions on the
transfer of Registrable Securities or other securities of the Company imposed
by, any other agreement including, but not limited to, the Charter Documents
and the Purchase Agreement.


 


8.16         Termination. Except
for the liabilities or obligations under Section 5.3 or Article VI,
all of which shall remain in effect in accordance with their terms, this
Agreement and the obligations of the parties hereunder shall terminate upon the
end of the Effectiveness Period.


 


[Remainder of page
intentionally left blank]


 


21

















 


IN WITNESS WHEREOF, the
undersigned have executed, or have caused to be executed, this Registration
Rights Agreement on the date first written above.


 


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  SATCON
  TECHNOLOGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


[Signature Page to Registration
Rights Agreement]


 

















 


	
   

  	
  INVESTOR:

  
	
   

  	
   

  
	
   

  	
  ROCKPORT
  CAPITAL PARTNERS II, L.P.

  
	
   

  	
   

  
	
   

  	
  By:  RockPort Capital II, LLC

  
	
   

  	
  Its:
   General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


[Signature
Page to Registration Rights Agreement]


 

















 


	
   

  	
  INVESTOR:

  
	
   

  	
   

  
	
   

  	
  NGP
  ENERGY TECHNOLOGY PARTNERS,

  L.P.

  
	
   

  	
   

  
	
   

  	
  By:  NGP ETP, L.L.C.

  
	
   

  	
  Its:
   General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


[Signature
Page to Registration Rights Agreement]


 

















 


Exhibit
A


 


Schedule of
Investors


 


RockPort
Capital Partners II, L.P.


160
Federal Street, 18th floor


Boston,
MA 02110


Telephone:  (617) 912-1420


Facsimile:  (617) 912-1449


 


NGP
Energy Technology Partners, L.P.


1700 K
Street NW, Suite 750


Washington,
D.C. 20006


Telephone:  (202) 536-3920


Facsimile:  (202) 536-3921


 

















 


Exhibit B


 


Plan of
Distribution


 


The selling stockholders
may, from time to time, sell any or all of their shares of common stock on any
stock exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. The
selling stockholders may use any one or more of the following methods when
selling shares:


 


•      ordinary
brokerage transactions and transactions in which the broker-dealer solicits
purchasers;


 


•      block
trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;


 


•      purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;


 


•      an
exchange distribution in accordance with the rules of the applicable exchange;


 


•      privately
negotiated transactions;


 


•      short
sales;


 


•      through
the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;


 


•      broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per share;


 


•      one
or more underwritten offerings on a firm commitment or best efforts basis;


 


•      a
combination of any such methods of sale; and


 


•      any
other method permitted pursuant to applicable law.


 


The selling stockholders
may also sell shares under Rule 144 under the Securities Act, if available,
rather than under this prospectus.


 


Broker-dealers engaged by
the selling stockholders may arrange for other brokers-dealers to participate
in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated, which commissions or
discounts may be less than or in excess of those customary in the types of
transactions involved. Any profits on the resale of shares of common stock by a
broker-dealer acting as principal might be deemed to be underwriting discounts
or commissions under the Securities Act. Discounts, concessions, commissions
and similar selling expenses, if any, attributable to the sale of shares will
be borne by a selling stockholder. The selling 


 

















 


stockholders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the shares if liabilities are imposed on that person under
the Securities Act.


 


The selling stockholders
may from time to time pledge or grant a security interest in some or all of the
shares of common stock owned by them and, if they default in the performance of
their secured obligations, the pledgees or secured parties may offer and sell
the shares of common stock from time to time under this prospectus after we
have filed a supplement to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 supplementing or amending
the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.


 


The selling stockholders
also may transfer the shares of common stock in other circumstances, in which
case the transferees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus and may sell the shares
of common stock from time to time under this prospectus after we have filed a
supplement to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act of 1933 supplementing or amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.


 


The selling stockholders
and any broker-dealers or agents that are involved in selling the shares of
common stock may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares of common stock purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.


 


We are required to pay
all fees and expenses incident to the registration of the shares of common
stock. We have agreed to indemnify the selling stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.


 


The selling stockholders
have advised us that they have not entered into any agreements, understandings
or arrangements with any underwriters or broker-dealers regarding the sale of
their shares of common stock, nor is there an underwriter or coordinating
broker acting in connection with a proposed sale of shares of common stock by
any selling stockholder. If we are notified by any selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares of common stock, if required, we will file a supplement to this
prospectus.


 


The anti-manipulation
rules of Regulation M under the Securities Exchange Act of 1934 may apply to
sales of our common stock and activities of the selling stockholders.