f8k042610ex4i_windtamer.htm


     

     

    Exhibit
4.1


    REGISTRATION
RIGHTS AGREEMENT

    


    This
Registration Rights Agreement (this “Agreement”) is entered into as
of April 26, 2010, by and among WindTamer Corporation, a corporation organized
under the laws of the State of New York, and Gerald Brock, Michael Hughes,
William Schmitz and Molly Hedges.  Capitalized terms used herein and
not otherwise defined shall have the meaning provided in Section 2
below.

    


    WHEREAS, the Company is
entering into that certain Loan Agreement dated of even date herewith (the
“Credit Facility”) with
First Niagara Bank, N.A. (“Lender”);

    


    WHEREAS, to further induce
Lender to provide credit to the Company under the Credit Facility, each Holder
other than Gerald Brock shall provide to Lender a limited guaranty (the “Guaranties”) of the Company’s
obligations under the Credit Facility;

    


    WHEREAS, in order to induce
the Holders to provide credit to the Guaranties to the Lender, Gerald Brock
shall pledge 20,000,000 shares of Common Stock (the “Pledged Shares”) owned by him
pursuant to that certain Stock Pledge Agreement dated of even date
herewith;

    


    WHEREAS, in consideration of
the pledge of the Pledged Shares by Gerald Brock and the provision of the
Guaranties by the Holders other than Gerald Brock, the Company is issuing the
Warrants to the Holders pursuant to the Warrant Purchase Agreement;
and

    


    WHEREAS, in further
consideration of the provision of the Guaranties by the Holders, the Company is
providing the Holders rights to register for resale by the Holders the shares of
the Common Stock issuable upon exercise of the Warrants under the Act on the
terms and conditions provided herein.

    


    NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual covenants and conditions
set forth below, the Company and the Holders hereby agree as
follows:

    


    1.   Registration
Rights.  The Company hereby grants to each Holder the
registration rights contained in this Agreement.

     

    2.   Definitions.  In
addition to the terms defined elsewhere in this Agreement (including the
preamble and recitals hereto), as used in this Agreement the following terms
have the definitions provided:

    


    (a)   The term
“Act” means the
Securities Act of 1933, as amended.

    


    (b)   The term
“Common Stock” means the
common stock of the Company, par value $0.0001 per share.

    


    (c)   The term
“Company” means
WindTamer Corporation, a company organized under the laws of the State of New
York.

     

    
      
        
        

      

      
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    (d)   The term
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.

    


    (e)   The term
“Holder,” and
collectively “Holders,”
means (a) each of Gerald Brock, Michael Hughes, William Schmitz and Molly
Hedges, as the purchasers of the Warrants under the Warrant Purchase Agreement
and (b) any permitted transferee (pursuant to the terms of the Warrants and the
Warrant Purchase Agreement) of a Warrant or any Registrable
Securities.

    


    (f)   The term
“Holder Contact” means
Michael Hughes.

    


    (g)   The terms
“register,” “registered” and “registration” refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of the effectiveness of
such registration statement by the SEC or such other procedure as may hereafter
be required to permit the public offering of securities under the
Act.

    


    (h)   The term
“Registrable Securities”
means (a) no less than 14,500,000  shares of Common Stock issued or
issuable to a Holder upon exercise of a Warrant (the “Warrant Shares”) and (b) any
Common Stock of the Company issued as a dividend or other distribution with
respect to, or in exchange or in replacement of, the Warrant Shares; provided, however, that any
Registrable Securities disposed of by any Holder or person pursuant to one or
more registration statements under the Act (including a transaction pursuant to
a registration statement under this Agreement), or pursuant to Rule 144
promulgated under the Act shall thereafter cease to be Registrable Securities
hereunder.

    


    (i)   The term
“Registration
Statement(s)” means a registration statement(s) of the Company under the
Act.

    


    (j)   The term
“Regulations” means the
rules and regulations promulgated by the SEC pursuant to the Act.

    


    (k)   The term
“SEC” means the
Securities and Exchange Commission, or any successor federal
agency.

    


    (l)   The term
“Warrant,” and
collectively “Warrants,”
means (a) those certain Warrants to purchase Common Stock of the Company issued
pursuant to the Warrant Purchase Agreement and (b) any Warrant to purchase
Common Stock of the Company issued as a replacement therefore or upon partial
exercise thereof pursuant to the terms thereof.

    


    (m)   The term
“Warrant Purchase
Agreement” means that certain Warrant Purchase Agreement dated of even
date herewith between the Company and the Holders, pursuant to which the Company
is selling the Warrants to the Holders.

     

    
      
        
        

      

      
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      3.           
Registration.

    

    


    (a)   Registration
Statements.

    


    (i)    No later than
November 26, 2010, the Company shall prepare and file with the SEC one (1)
Registration Statement on Form S-1 (or such other form of registration statement
as is then available to effect a registration for resale of the Registrable
Securities, subject to the consent of the Holder Contact) (the “Initial Registration
Statement”), covering the resale of all of the Registrable Securities
(the “Target Registration
Amount”).

    


    (ii)    In the event
that any Registration Statement filed hereunder shall (when combined with any
previous Registration Statements filed hereunder that are current and effective)
register a number of shares of Common Stock which is less than the Target
Registration Amount (a “Target
Registration Shortfall,” the date of each of which is referred to as a
“Registration Trigger
Date”), the Company shall file a new Registration Statement (an “Additional Registration
Statement”) covering the remaining unregistered portion of the Target
Registration Amount as of the Registration Trigger Date (the “Target Registration Shortfall
Amount”).  The Company shall prepare and file each Additional
Registration Statement as soon as practicable following any Registration Trigger
Date, but not later than the later of (i) the date that is sixty (60) days after
the date substantially all (as such term is then interpreted by the SEC) of the
Registrable Securities registered under the immediately preceding Registration
Statement are sold and (ii) the date that is six (6) months following the date
of effectiveness of the most recently effective Registration Statement or
Additional Registration Statement filed hereunder.

    


    (iii)    Registration
Statements shall also include, to the extent allowable under the Act and the
rules and regulations promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities.  Registration Statements shall not include any other
shares of Common Stock held by the Holders in addition to the Registrable
Securities without the prior written consent of the Company.

    


    (iv)    Registration
Statements (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided to the Holder Contact
at least five (5) business days prior to its filing or other
submission.

    


    (v)    The number of
Registrable Securities eligible for resale by each Holder as a selling
stockholder under any Registration Statement shall be allocated pro rata among the Holders
based on the number of Registrable Securities registered thereunder held by each
Holder as compared to the total number of Registrable Securities registered
thereunder, unless the Holders unanimously agree to an alternative allocation
and notify the Company in writing of such agreement at least three (3) business
days prior to the planned filing date of a Registration Statement.

    


    (vi)    Notwithstanding
the Company’s obligations with respect this Section 3(a), the parties
acknowledge that the Act and the Regulations may require, among other things,
the completion of the sale and purchase of the Warrants as determined in
accordance with the Act and the Regulations prior to the filing of the Initial
Registration Statement with respect to the resale of the underlying Warrant
Shares.  The Company agrees to use commercially reasonable efforts to
cause any filed Registration Statement to become effective.  However,
the parties agree that the Company’s ability to cause any Registration to become
effective and the Company’s other obligations pursuant to this Section 3(a) are
subject to the Act and the Regulations otherwise allowing the filing of any
Registration Statement.

     

    
      
        
        

      

      
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    (b)   Expenses.  The
Company will pay all expenses associated with each registration, including
filing and printing fees, the Company’s counsel and accounting fees and
expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws and listing fees, but excluding
discounts, commissions, fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals with respect to the Registrable
Securities being sold, transfer taxes, the fees and expenses of counsel to the
Holders and the Holders’ other out-of-pocket expenses in connection with the
registration.

    


    (c)   Effectiveness. 
The Company shall use commercially reasonable efforts to have a Registration
Statement covering the Target Registration Amount as soon as practicable
following the date on which the Company may register the Registrable Securities
pursuant to the Act and the Regulations.  Each Registration Statement
shall remain effective so long as is necessary to permit the Holders to offer
and sell the Registrable Securities without further registration.  The
Company shall notify each Holder by facsimile or e-mail as promptly as
practicable, and in any event, within twenty-four (24) hours, after any
Registration Statement is declared effective and shall simultaneously provide
each Holder with copies of any related prospectus or prospectus supplement to be
used in connection with the sale or other disposition of the securities covered
thereby.

    


    4.   Due Diligence Review;
Information.  The Company shall make available for inspection
and review by the Holders, advisors to and representatives of the Holders,
during normal business hours and upon reasonable prior notice, all financial and
other records, all SEC filings, and all other corporate documents and properties
of the Company as may be reasonably necessary for the purpose of such review,
and cause the Company’s officers, directors and employees, within a reasonable
time period, to supply all such information reasonably requested by the Holders
or any such representative, advisor or underwriter in connection with any
Registration Statement (including, without limitation, in response to all
questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of any
Registration Statement for the sole purpose of enabling the Holders and such
representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of any Registration Statement.

    


    5.   Obligations of the
Company.  In connection with the registration hereunder of any
Registrable Securities, the Company shall, at its sole expense:

    


    (a)   furnish
to the Holders and to their underwriters, if any, such number of copies of the
Registration Statement, prospectus, and preliminary prospectus, in conformity
with the requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration;

     

    
      
        
        

      

      
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    (b)   use its
reasonable efforts to register and qualify the Registrable Securities covered by
such Registration Statement under such other securities laws of such states or
other jurisdictions as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions; and

    


    (c)   notify
each Holder of Registrable Securities covered by such Registration Statement at
any time when a prospectus relating thereto is required to be delivered under
the Act of the happening of any event as a result of which the prospectus
included in such Registration Rtatement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.

    


    6.   Information by
Holders.  It shall be a condition precedent to the obligations
of the Company to take any action pursuant to Section 3(a) above that the
selling Holders with respect to any Registration Statement shall furnish to the
Company such information regarding themselves, the Registrable Securities held
by them, the intended method of disposition of such securities or such other
information as shall be reasonably required to timely effect the registration of
their Registrable Securities.

    


    7.   Delay of
Registration.  No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any such registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.

    


    8.   Indemnification.  In
the event any Registrable Securities are included in a Registration Statement
under this Agreement:

    


    (a)   Except as
provided in Section 8(b) below, and to the extent permitted by law, the Company
will indemnify and hold harmless each Holder (and, if applicable, each officer,
director and/or general partner of such Holder) of Registrable Securities with
respect to which a Registration Statement has been filed under the Act pursuant
to this Agreement, each underwriter of any of the Registrable Securities
included in such Registration Statement, and each person, if any, who controls
any such Holder or underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (collectively, the “Holder-Underwriters”), and to
reimburse each such Holder-Underwriter, with respect to the
following:

    


    (i)   
against any loss, liability (joint or several), claim, damage and expense
arising out of any misstatement of a material fact or alleged misstatement of a
material fact contained in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which they were made,
unless such misstatement of a material fact or omission was made in reliance
upon and in conformity with written information furnished to the Company by any
Holder expressly for use in connection with such registration; or

     

    
      
        
        

      

      
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    (ii)   
against any legal or other expenses reasonably incurred by the
Holder-Underwriters in connection with investigating or defending any such loss,
claim, damage, liability, or action provided, however, this Section 8(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the written consent
of the Company (which consent shall not be unreasonably withheld).

    


    (b)   Notwithstanding
Section 8(a) above, in no case shall the Company be liable under this indemnity
agreement with respect to any loss, liability, claim, damage or expense with
respect to any claim made against any Holder-Underwriter unless the Company
shall be notified in writing or otherwise becomes aware of the nature of the
claim within a reasonable time after such Holder-Underwriter’s knowledge of the
assertion thereof, but failure to so notify the Company shall not relieve the
Company from any liability which it may have otherwise than on account of this
indemnity agreement. In case of any such notice the Company shall be entitled to
participate at its expense in the defense or, if it so elects within a
reasonable time after receipt of such notice, to assume the defense of any suit
brought to enforce any such claim; but if it so elects to assume the defense
such defense shall be conducted by counsel chosen by it and approved by the
Holder-Underwriter or Holder-Underwriters and other defendant or defendants, if
any, in any suit so brought, which approval shall not be unreasonably withheld.
In the event that the Company elects to assume the defense of any suit and
retain such counsel and such defense is diligently pursued the
Holder-Underwriter or Holder-Underwriters and other defendant or defendants, if
any, in the suit, shall bear the fees and expenses of any additional counsel
thereafter retained by them other than for the reasonable cost of monitoring
such defense; provided, however, that in the event of any conflict of interest
between the Company and any Holder that requires the Holder to retain separate
counsel, the Company shall bear the fees and expenses of such separate
counsel.

    


    (c)   To the
extent permitted by law, each Holder severally will indemnify and hold harmless
the Company, each officer and director of the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Act, each
underwriter of Registrable Securities included in any Registration Statement
which has been filed under the Act pursuant to this Agreement, each person, if
any, who controls such underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, each other Holder, and each person
controlling such other Holder within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any loss, liability, claim, damage and
expense described in Sections 8(a)(i) and (a)(ii) above, but only with respect
to and to the extent such loss, liability, claim, damage or expense arises out
of or is caused by a misstatement of a material fact or omission or alleged
misstatement of a material fact or omission made in such Registration Statement,
preliminary prospectus, final prospectus, or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use in connection with such registration;
provided, however, that the obligations of each such Holder hereunder shall be
limited to an amount equal to the net proceeds to such Holder of Registrable
Securities sold as contemplated herein. In case any action shall be brought
against the Company or any person so indemnified pursuant to the provisions of
this subparagraph (b) and in respect of which indemnity may be sought against
any Holder, the Holders from whom indemnity is sought shall have the rights and
duties given to the Company, and the Company and the other persons so
indemnified shall have the rights and duties given to the persons entitled to
indemnification by the provisions of subparagraph (a) of this Section
8.

     

    
      
        
        

      

      
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    (d)   No
indemnifying party in the defense of any such claim or litigation, shall, except
with the consent of each indemnified party (which consent shall not be
unreasonably withheld), consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

    


    (e)   If for
any reason the foregoing indemnity is unavailable, or is insufficient to hold
harmless, an indemnified party, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law or provides a
lesser sum to the indemnified party than the amount hereinafter calculated, in
such pro-portion as is appropriate to reflect not only the relative benefits
received by the indemnifying party on the one hand (taking into consideration
the fact that the provision of the registration rights hereinafter is a material
inducement to the Holders to purchase the shares of Common Stock under the
Warrant Purchase Agreement) and the indemnified party on the other but also the
relative fault of the indemnifying party and the indemnified party as well as
any other relevant equitable considerations. Notwithstanding the foregoing, no
Holder shall be required to pay, whether by indemnification or contribution, an
aggregate amount in excess of the net proceeds received by such Holder in the
sale of Registrable Securities hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

    


    (f)   The
obligations of the Company and the Holders under this Section 8 shall survive
the completion of any offering of Registrable Securities in a Registration
Statement, and otherwise.

    


    9.   Assignment of Registration
Rights.  Notwithstanding anything herein to any the contrary,
the registration rights of a Holder hereunder may be assigned by a Holder only
to a party who acquires all or any portion of the Registrable Securities of such
Holder; provided, however that no party
may seek to enforce their rights with respect to any of the registration rights
hereunder unless the Company is given written notice of the assignment stating
the name and address of the assignee and identifying the securities of the
Company as to which the rights in question are being assigned; and provided, further that any such
assignee receives such assigned rights subject to all the terms and conditions
of this Agreement, including without limitation the provisions of this
Section 9, and agrees to the same in writing.

    


    10.       
Notices. Any notice required
or permitted under this Agreement shall be given in writing and shall be (i)
hand delivered, (ii) sent by a nationally recognized overnight courier for
next business day delivery or (iii) sent by telephone facsimile
transmission (with prompt oral confirmation of receipt).  Any such
notice to the Company or the Holder Contact shall be provided as
follows:

     

    
      
        
        

      

      
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    (a)   If to
Company:

    


    WindTamer
Corporaton

    6053 Ely
Avenue

    Livonia,
New York 14487

    Attention:
Chief Executive Officer

    Facsimile
No.: (585) 243-4142

    


    with a
copy to (which shall not constitute notice):

    


    Woods
Oviatt Gilman LLP

    700
Crossroads Building

    Rochester,
NY 14614

    Attention:
Gregory W. Gribben, Esq.

    Facsimile
No.: (585) 454-3968

     

    (b)   If to Holder
Contact:

    


    WindTamer
Corporaton

    6053 Ely
Avenue

    Livonia,
New York 14487

    Attention:
Michael Hughes

    Facsimile
No.: (585) 243-4142

    


    Any such
notice to all of the Holders shall be provided to the address on the books and
records of the Company, or at such other address as such party may designate by
five (5) days’ advance written notice to the other party.  The date of
giving of any such notice shall be the date of hand delivery, the business day
sent by telephone facsimile, and the day after delivery to the overnight courier
service.

     

    11.   Absence of Third Party Beneficiary
Rights.  No provisions of this Agreement are intended, nor will
be interpreted, to provide or create any third party beneficiary rights or any
other rights of any kind in any client, customer, affiliate, stockholder,
partner or any party hereto or any other person or entity unless specifically
provided otherwise herein, and, except as so provided, all provisions hereof
will be personal solely between the parties to this Agreement.

    


    12.   Miscellaneous.

    


    (a)   This
Agreement (i) sets forth the entire agreement between the parties hereto and
supersedes all prior agreements, written or oral, concerning the subject matter
herein, and there are no oral understandings, statements or stipulations bearing
upon the effect of this Agreement which have not been incorporated herein; (ii)
may be modified or amended only by a written instrument signed by all of the
parties; (iii) shall bind and inure to the benefit of the parties and their
respective heirs, successors and assigns; and (iv) may not be assigned by any
party except as provided in Section 9 above.  Any attempted assignment
of this Agreement other than as provided in Section 9 above shall be null and
void.

     

    (b)   This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York without reference to conflicts of law
principles.  With respect to any matters that may be heard before a
court of competent jurisdiction, the parties consent to the jurisdiction and
venue of the state and federal courts located in Monroe County, New
York.

    


    (c)   This
Agreement may be executed simultaneously in one or more counterparts, each one
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  All such counterparts may be delivered
by facsimile or other electronic means and each such electronically delivered
counterpart shall be deemed an original and shall be binding upon the parties
for all purposes herein.

    


    
      
        
        

      

      
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    IN WITNESS WHEREOF, the
undersigned has executed this Registration Rights Agreement as of the date first
above written.

     

    
      	 	WINDTAMER
      CORPORATION	 
	 	 	 	 
	
               

            	
              By:
      

            	 /s/
      William Schmitz	 
	 	 	William
      Schmitz	 
	 	 	Chief
      Executive Officer	 
	 	 	 	 


    

     

    
      
        
        

      

      
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COUNTERPART
SIGNATURE PAGE

    

    TO

    WINDTAMER
CORPORATION

    REGISTRATION
RIGHTS AGREEMENT

     

    IN WITNESS WHEREOF, the
undersigned have each executed and agreed to this Registration Rights Agreement
as of the date first above written.

     

    
      	 	HOLDERS	 
	 	 	 
	
               

            	/s/
      Michael Hughes	 
	 	Michael
      Hughes	 
	 	 	 
	 	
               

               

            	 
	 	/s/
      William Schmitz	 
	 	William
      Schmitz	 
	 	 	 
	 	
               

               

            	 
	 	/s/
      Molly Hedges	 
	 	Molly
      Hedges	 
	 	 	 
	 	
               

               

            	 
	 	/s/
      Gerald Brock	 
	 	Gerald
      Brock	 
	 	 	 


    

     

     

     

     

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