Document:

Exhibit 10.5

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

EMPLOYEE STOCK PURCHASE PLAN

(as amended and restated)

 

1.                                       PURPOSE

 

The purpose of this Plan is to provide an opportunity for Employees of
Seagate Technology plc, an Irish company (the “Corporation”) and its Designated
Subsidiaries, to purchase Ordinary Shares and thereby to have an additional
incentive to contribute to the prosperity of the Corporation. It is the
intention of the Corporation that the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the U.S. Internal Revenue Code of
1986, as amended (the “Code”), and the Plan shall be administered in accordance
with this intent. In addition, the Plan authorizes the grant of options
pursuant to sub-plans or special rules adopted by the Administrator
designed to achieve desired tax or other objectives in particular locations
outside of the United States, which sub-plans shall not be required to comply
with the requirements of Section 423 of the Code or all of the specific
provisions of the Plan, including but not limited to terms relating to
eligibility, Offering Periods, Purchase Periods, or Purchase Price.

 

2.                                    DEFINITIONS

 

2.1           “Applicable
Law” shall mean the legal requirements relating to the administration of an
employee stock purchase plan under applicable U.S. state corporate laws, U.S.
federal and applicable state securities laws, the Code, any stock exchange rules or
regulations and the applicable laws of any other country or jurisdiction, as
such laws, rules, regulations and requirements shall be in place from time to
time.

 

2.2           “Board”
shall mean the Board of Directors of the Corporation.

 

2.3           “Code”
shall mean the U.S. Internal Revenue Code of 1986, as amended. Any reference to
a section of the Code herein shall be a reference to any successor or amended
section of the Code.

 

2.4           “Committee”
shall mean the committee appointed by the Board in accordance with Section 15
of the Plan.

 

2.4           “Companies
Act” shall mean the Companies Act 1963 of Ireland.

 

2.5           “Compensation”
shall mean an Employee’s base cash compensation and commissions, but shall
exclude such items as allowances, differentials, bonuses or premiums such as
those for working shifts or overtime, payments for incentive compensation,
incentive payments, bonuses, income from the exercise or vesting or the sale,
exchange or other disposition of a compensatory share award granted to the
Employee by the Corporation or a Designated Subsidiary, and other forms of
extraordinary compensation. The Committee shall have the authority to determine
and 

 

(ESPP – JULY 2010)

 

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approve all forms of pay to be included in the definition of
Compensation and may change the definition on a prospective basis.

 

2.6           “Corporation”
shall mean Seagate Technology plc, a public company incorporated under the laws
of the Republic of Ireland with limited liability under registered number
480010, or any successor thereto.

 

2.7           “Designated
Subsidiary” shall mean a Subsidiary that has been designated by the Committee
in its sole discretion as eligible to participate in the Plan with respect to
its Employees.

 

2.8           “Effective
Date” shall mean the date on which the registration statement on Form S-1
filed with the U.S. Securities and Exchange Commission pursuant to Rule 424
under the Securities Act for the initial public offering of Seagate Technology
common stock (the “Registration Statement”) became effective.

 

2.9           “Employee”
shall mean an individual classified as an employee (within the meaning of Code Section 3401(c) and
the regulations thereunder) by the Corporation or a Designated Subsidiary on
the Corporation’s or such Designated Subsidiary’s payroll records during the
relevant participation period. Employee shall not include individuals whose
employment is for less than the specific number of days determined by the
Committee as of the “Offering Date.” Individuals classified as independent
contractors, consultants, advisers, or members of the Board or the board of
directors of a Designated Subsidiary are not considered “Employees” by virtue
of such station.

 

2.10         “Exchange
Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.

 

2.11         “Fair Market Value” on a given date of
determination (i.e., an Offering Date or Purchase Date, as appropriate) shall
mean the value of the Ordinary Shares determined as follows: (i) if the
Shares are listed on any established stock exchange or a national market
system, the Fair Market Value shall be the closing sales price for a Share (or
the closing bid, if no sales were reported) on the date of determination as
quoted on such exchange or system on which the Shares have the highest average
trading volume, as reported in The Wall Street Journal or such other
source as the Committee deems reliable, or (ii) if the Shares are
regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market Value shall be the mean of the closing bid and asked
prices for the Shares on the date of such determination, as reported in The
Wall Street Journal or such other source as the Committee deems reliable,
or, (iii) in the absence of an established market for the Shares, the Fair
Market Value thereof shall be determined in good faith by the Board. For
purposes of the Offering Date under the first Offering Period, the Fair Market
Value of a share of Seagate Technology common stock shall be the initial price
to the public as set forth in the final prospectus included with the
Registration Statement.

 

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2.12         “Offering
Date” shall mean the first Trading Day of an Offering Period under the
Plan; provided that the Offering Date of the first Offering Period will be the
Effective Date.

 

2.13         “Offering
Period” shall mean a period of approximately twelve (12) months during
which an option granted pursuant to the Plan may be exercised; provided,
however, that effective for Offering Periods commencing on or after February 1,
2006, the term “Offering Period” shall mean a period of approximately six (6) months
during which an option granted pursuant to the Plan may be exercised.  For Offering Periods that commence prior to February 1,
2006, the Plan shall be implemented by a series of Offering Periods of
approximately twelve (12) months duration, with new Offering Periods commencing
on the first Trading Day on or after February 1 and August 1 of each
year and ending on the last Trading Day in the twelve month period ending on January 31
and July 31 of the subsequent year; provided that the first Offering
Period shall commence on the Effective Date and shall end on the last Trading
Day on or before January 31, 2004. 
Effective for Offering Periods that commence on or after February 1,
2006, the Plan shall be implemented by a series of Offering Periods of
approximately six (6) months duration, with new Offering Periods
commencing on the first Trading Day on or after February 1 and August 1
of each year and ending on the last Trading Day in the six-month period ending
on the next July 31 and January 31, respectively.  The duration and timing of Offering Periods
may be changed or modified by the Committee.

 

2.14         “Offering
Price” shall mean the Fair Market Value of a Share on the Offering Date of
an Offering Period.

 

2.15         “Officer”
shall mean a person who is an officer of the Corporation within the meaning
of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

 

2.16         “Ordinary Share” or “Share” means an ordinary share of the
Company, nominal value US$0.00001.

 

2.17         “Participant”
shall mean a participant in the Plan as described in Section 5 of the
Plan.

 

2.18         “Plan”
shall mean this Employee Stock Purchase Plan, as amended and restated.

 

2.19         “Purchase
Date” shall mean the last Trading Day of each Purchase Period.

 

2.20         “Purchase
Period”  shall mean, with
respect to Offering Periods that commence on prior to February 1, 2006,
the period of approximately six (6) months commencing after one Purchase
Date and ending with the next Purchase Date, with new Purchase Periods
commencing on the first Trading Day on or after February 1 and August 1
of each year and ending on the last Trading Day in the six-month period ending
on the next July 31 and January 31, respectively; provided that the
first Purchase Period shall commence on the Effective Date and shall end at the
completion of the seventh complete calendar month following the Effective Date
unless otherwise determined by the 

 

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Committee. The second Purchase Period of the first Offering Period
shall begin on the first Trading Day following the end of the first Purchase
Period and shall end on the last Trading Day on or before January 31,
2004. Subsequent Purchase Periods, if any, shall run consecutively after the
termination of the preceding Purchase Period. 
Notwithstanding anything herein to the contrary, effective for Offering
Periods that commence on or after February 1, 2006, “Purchase Period”
shall have the same meaning as the term “Offering Period.”

 

2.21         “Purchase
Price” shall have the meaning set out in Section 8.2.

 

2.22         “Securities
Act” shall mean the U.S. Securities Act of 1933, as amended.

 

2.23         “Shareowner”
shall mean a record holder of Ordinary Shares entitled to vote such Shares
under the Corporation’s by-laws.

 

2.24         “Subsidiary”
shall mean any entity treated as a corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, within the
meaning of Code Section 424(f), whether or not such corporation now exists
or is hereafter organized or acquired by the Corporation or a Subsidiary, which
is also a subsidiary within the meaning of Section 155 of the Companies
Act.

 

2.25         “Trading
Day” shall mean a day on which U.S. national stock exchanges and the
national market system are open for trading and the Ordinary Shares are being
publicly traded on one or more of such exchanges or markets.

 

3.                                    ELIGIBILITY

 

3.1           Any
Employee employed by the Corporation or by any Designated Subsidiary on an
Offering Date shall be eligible to participate in the Plan with respect to the
Offering Period commencing on such Offering Date. The Committee may establish
administrative rules requiring that employment commence some minimum
period (not to exceed 30 days) prior to an Offering Date to be eligible to
participate with respect to the Offering Period beginning on that Offering
Date. The Committee may also determine that a designated group of highly
compensated Employees is ineligible to participate in the Plan so long as the
excluded category fits within the definition of “highly compensated employee”
in Code Section 414(q).

 

3.2           No
Employee may participate in the Plan if immediately after an option is granted
the Employee owns or is considered to own (within the meaning of Code Section 424(d))
Ordinary Shares, including Shares which the Employee may purchase by conversion
of convertible securities or under outstanding options granted by the
Corporation, possessing five percent (5%) or more of the total combined voting
power or value of all classes of securities of the Corporation or of any of its
Subsidiaries. All Employees who participate in the Plan shall have the same
rights and privileges under the Plan, except for differences that may be
mandated by local law and that are consistent with Code Section 423(b)(5);
provided that individuals participating in a sub-plan adopted pursuant to Section 16
which is not designed to qualify under Code section 423 need not have the 

 

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same rights and privileges as Employees participating in the Code
section 423 Plan. Eligible Employees may not participate in more than one
Offering Period at a time.

 

4.                                    OFFERING
PERIODS AND PURCHASE PERIODS

 

4.1           Offering
Periods.  With respect to Offering
Periods commencing prior to February 1, 2006, the Plan shall generally be
implemented by a series of twelve (12) month Offering Periods with new Offering
Periods commencing on the first Trading Day on or after February 1 and August 1
and ending on the last Trading Day in the twelve month periods ending on January 31
and July 31 of the next calendar year, respectively, or on such other date
as the Committee shall determine. The first Offering Period shall commence on
the Effective Date and shall end on the last Trading Day on or before January 31,
2004. With respect to Offering Periods commencing on or after February 1,
2006, the Plan shall generally be implemented by a series of six (6) month
Offering Periods with new Offering Periods commencing on the first Trading Day
on or after February 1 and August 1 and ending on the last Trading
Day in the six-month periods ending on the next July 31 and January 31,
respectively, or on such other date as the Committee shall determine, and
continuing thereafter until the Plan is terminated pursuant to Section 14
hereof. The Committee shall have the authority to change the frequency and/or
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected
thereafter.

 

4.2           Purchase
Periods.  With respect to Offering
Periods commencing prior to February 1, 2006, each Offering Period shall
generally consist of two (2) consecutive Purchase Periods of six (6) months’
duration, with new Purchase Periods commencing on the first Trading Day on or
after February 1 and August 1 of each year and ending on the last
Trading Day in the six-month period ending on the next July 31 and January 31,
respectively. With respect to Offering Periods commencing on or after February 1,
2006, each Offering Period shall generally consist of one (1) Purchase
Period that runs concurrently with the Offering Period. The last Trading Day of
each Purchase Period shall be the “Purchase Date” for such Purchase Period;
provided that the first Purchase Period shall commence on the Effective Date
and shall end at the completion of the seventh complete calendar month
following the Effective Date unless otherwise determined by the Committee. The
second Purchase Period of the first Offering Period shall begin on the first
Trading Day following the end of the first Purchase Period and shall end on the
last Trading Day on or before January 31, 2004. Subsequent Purchase
Periods, if any, shall run consecutively after the termination of the preceding
Purchase Period. The Committee shall have the power to change the duration
and/or frequency of Purchase Periods with respect to future purchases if such
change is announced at least five (5) days prior to the scheduled beginning
of the first Purchase Period to be affected.

 

5.                                    PARTICIPATION

 

5.1           An
Employee who is eligible to participate in the Plan in accordance with its
terms at the beginning of an Offering Period shall automatically receive an
option in accordance with Section 8.1 and may become a Participant by
completing and 

 

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submitting, on or before the date prescribed by the Committee with
respect to a given Offering Period, a completed payroll deduction authorization
and Plan enrollment form provided by the Corporation or by following an
electronic or other enrollment process as prescribed by the Committee. An
eligible Employee may authorize payroll deductions at the rate of any whole
percentage of the Employee’s Compensation, not to exceed ten percent (10%) of
the Employee’s Compensation (or such other percentage as the Committee may
establish from time to time before an Offering Date) of such Employee’s
Compensation on each payday during the Offering Period.  All payroll deductions will be held in a
general corporate account or a trust account. No interest shall be paid or
credited to the Participant with respect to such payroll deductions. The
Corporation shall maintain a separate bookkeeping account for each Participant
under the Plan and the amount of each Participant’s payroll deductions shall be
credited to such account. A Participant may not make any additional payments
into such account, unless payroll deductions are prohibited under Applicable
Law, in which case the provisions of Section 5.2 of the Plan shall apply.

 

5.2           Notwithstanding
any other provisions of the Plan to the contrary, in locations where local law
prohibits payroll deductions, an eligible Employee may elect to participate
through contributions to his or her account under the Plan in a form acceptable
to the Committee.  In such event, any
such Employees shall be deemed to be participating in a sub-plan, unless the
Committee otherwise expressly provides that such Employees shall be treated as
participating in the Plan.

 

5.3           Under
procedures and at times established by the Committee, a Participant may
withdraw from the Plan during a Purchase Period, by completing and filing a new
payroll deduction authorization and Plan enrollment form with the Corporation
or by following electronic or other procedures prescribed by the Committee. If
a Participant withdraws from the Plan during a Purchase Period, his or her
accumulated payroll deductions will be refunded to the Participant without
interest, his or her right to participate in the current Offering Period will
be automatically terminated and no further payroll deductions for the purchase
of Ordinary Shares will be made during the Offering Period. The Committee may
establish rules pertaining to the timing of withdrawals, limiting the
frequency with which Participants may withdraw and re-enroll in the Plan and
may impose a waiting period on Participants wishing to re-enroll following
withdrawal.

 

5.4           A
Participant may change his or her rate of contribution through payroll
deductions only during an open enrollment period or such other times specified
by the Committee by filing a new payroll deduction authorization and Plan
enrollment form or by following electronic or other procedures prescribed by
the Committee. If a Participant has not followed such procedures to change the
rate of contribution, the rate of contribution shall continue at the originally
elected rate throughout the Purchase Period and future Purchase Periods
(including Purchase Periods of subsequent Offering Periods). Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code, the Committee may reduce a Participant’s payroll deductions to zero
percent (0%) at any time during a Purchase Period scheduled to end during the
current calendar year. Payroll deductions shall re-commence at the rate
provided in such Participant’s enrollment form at the beginning of the first
Purchase Period which is scheduled to end in 

 

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the following calendar year, unless terminated by the Participant as
provided in Section 5.3.

 

6.                                    TERMINATION
OF EMPLOYMENT

 

In the event any Participant terminates employment with the Corporation
and its Designated Subsidiaries for any reason (including death) prior to the
expiration of a Purchase Period, the Participant’s participation in the Plan
shall terminate and all amounts credited to the Participant’s account shall be
paid to the Participant or, in the case of death, to the Participant’s heirs or
estate, without interest. Whether a termination of employment has occurred
shall be determined by the Committee. If a Participant’s termination of
employment occurs within a certain period of time as specified by the Committee
(not to exceed 30 days) prior to the Purchase Date of the Purchase Period then
in progress, his or her option for the purchase of Ordinary Shares will be
exercised on such Purchase Date in accordance with Section 9 as if such
Participant were still employed by the Corporation. Following the purchase of
Shares on such Purchase Date, the Participant’s participation in the Plan shall
terminate and all amounts credited to the Participant’s account shall be paid
to the Participant or, in the case of death, to the Participant’s heirs or
estate, without interest. The Committee may also establish rules regarding
when leaves of absence or changes of employment status will be considered to be
a termination of employment, including rules regarding transfer of
employment among Designated Subsidiaries, Subsidiaries and the Corporation, and
the Committee may establish termination-of-employment procedures for this Plan
that are independent of similar rules established under other benefit
plans of the Corporation and its Subsidiaries; provided that such procedures
are not in conflict with the requirements of Section 423 of the Code.

 

7.                                    SHARES

 

Subject to adjustment as set forth in Section 11, the maximum
number of Ordinary Shares, which may be issued pursuant to the Plan shall be
forty million (40,000,000) Shares, plus an automatic annual increase (the “Annual
Increase”) on the first day of the Corporation’s fiscal year beginning in 2003
equal to the lesser of two million five hundred thousand (2,500,000) Shares or
one-half of one percent (0.5%) of the outstanding Shares on the last day of the
immediately preceding fiscal year, or such lesser number of Shares as is
determined by the Board.(1) The maximum number of Shares that may be
granted collectively to all Participants within any given Purchase Period is
two and one-half million (2,500,000) Shares; provided, however, that unless and
until the Board determines otherwise, with respect to Purchase Periods
commencing on or after August 1, 2009, the maximum number of Shares that
may be granted collectively to all Participants within any given Purchase
Period shall be one and one-half million (1,500,000) Shares. If, on a given
Purchase Date, the number of Shares with respect to which options are to be
exercised exceeds either maximum, the Corporation shall make pro rata
allocation of the Shares remaining available for purchase in as uniform a
manner 

 

(1)  Under this provision, effective for fiscal years commencing
on or after fiscal year 2003, the Board has determined that no Shares will be
added pursuant to the Annual Increase until further affirmative action is taken
by the Board in the future.

 

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as shall be practicable and as it shall determine to be equitable. In
no event shall the total number of Shares issued under the Plan exceed
seventy-five million (75,000,000) Shares.

 

8.                                    OFFERING

 

8.1           On
the Offering Date of each Offering Period, each eligible Employee, whether or
not such Employee has elected to participate as provided in Section 5.1,
shall be granted an option to purchase that number of whole Shares, not to
exceed one thousand (1,000) Shares (or such other number of Shares as
determined by the Committee),
which may be purchased with the payroll deductions accumulated on behalf of
such Employee during each Purchase Period at the purchase price specified in Section 8.2
below, subject to the additional limitation that no Employee participating in
the Section 423 Plan shall be granted an option to purchase Shares under
the Plan if such option would permit his or her rights to purchase Shares under
all employee stock purchase plans (described in Section 423 of the Code)
of the Corporation and its Subsidiaries to accrue at a rate which exceeds U.S.
twenty-five thousand dollars (U.S. $25,000) of the Fair Market Value of such
Shares (determined at the time such option is granted) for each calendar year
in which such option is outstanding at any time. For purposes of the Plan, an
option is “granted” on a Participant’s Offering Date. An option will expire upon
the earlier to occur of (i) the termination of a Participant’s
participation in the Plan or such Offering Period (ii) the grant of an
option to such Participant on a subsequent Offering Date; or (iii) the
termination of the Offering Period. This Section 8.1 shall be interpreted
so as to comply with Code Section 423(b)(8).

 

8.2           The
Purchase Price under each option shall be with respect to a Purchase Period the
lower of (i) a percentage (not less than eighty-five percent (85%))
established by the Committee (“Designated Percentage”) of the Offering Price,
or (ii) the Designated Percentage of the Fair Market Value of a Share on
the Purchase Date on which the Shares are purchased; provided that the Purchase
Price may be adjusted by the Committee pursuant to Sections 11 or 12 in
accordance with Section 424(a) of the Code. The Committee may change
the Designated Percentage with respect to any future Offering Period, but not
to below eighty-five percent (85%), and the Committee may determine with
respect to any prospective Offering Period that the option price shall be the
Designated Percentage of the Fair Market Value of a Share on the Purchase Date.

 

9.                                    PURCHASE
OF SHARES

 

Unless a Participant withdraws from the Plan as provided in Section 5.3
or except as provided in Sections 12 or 14.2, upon the expiration of each
Purchase Period, a Participant’s option shall be exercised automatically for
the purchase of that number of whole Shares which the accumulated payroll
deductions credited to the Participant’s account at that time shall purchase at
the applicable price specified in Section 8.2. Notwithstanding the
foregoing, the Corporation or its designee may make such provisions and take
such action as it deems necessary or appropriate for the withholding of taxes
and/or social insurance which the Corporation or its Designated Subsidiary is
required by Applicable Law. Each Participant, however, shall be responsible for
payment of all individual tax liabilities arising under the Plan. The Shares
purchased upon exercise of an 

 

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option hereunder shall be considered for tax purposes to be sold to the
Participant on the Purchase Date.  During
his or her lifetime, a Participant’s option to purchase Shares hereunder is
exercisable only by him or her.

 

 

10.                             PAYMENT
AND DELIVERY

 

As soon as practicable after the exercise of an option, the Corporation
shall deliver to the Participant a record of the Ordinary Shares purchased and
the balance of any amount of payroll deductions credited to the Participant’s
account not used for the purchase, except as specified below. The Committee may
permit or require that Shares be deposited directly with a broker designated by
the Committee or to a designated agent of the Corporation, and the Committee
may utilize electronic or automated methods of share transfer. The Committee
may require that Shares be retained with such broker or agent for a designated
period of time and/or may establish other procedures to permit tracking of
disqualifying dispositions of such Shares. The Corporation shall retain the
amount of payroll deductions used to purchase Shares as full payment for the
Shares and the Shares shall then be fully paid and non-assessable. No
Participant shall have any voting, dividend, or other Shareowner rights with
respect to Shares subject to any option granted under the Plan until the Shares
subject to the option have been purchased and delivered to the Participant as
provided in this Section 10. The Committee may in its discretion direct
the Corporation to retain in a Participant’s account for the subsequent
Purchase Period or Offering Period any payroll deductions which are not
sufficient to purchase a whole Share or return such amount to the Participant.
Any other amounts left over in a Participant’s account after a Purchase Date
shall be returned to the Participant.

 

11.                             RECAPITALIZATION

 

Subject to any required action by the Shareowners of the Corporation,
if there is any change in the outstanding Ordinary Shares because of a merger,
consolidation, spin-off, reorganization, recapitalization, dividend in property
other than cash, share split, reverse share split, share dividend, liquidating
dividend, combination or reclassification of the Ordinary Shares (including any
such change in the number of Shares effected in connection with a change in
domicile of the Corporation), or any other increase or decrease in the number
of Ordinary Shares effected without receipt of consideration by the
Corporation, provided that conversion of any convertible securities of the
Corporation shall not be deemed to have been “effected without consideration,”
the number of securities covered by each option under the Plan which has not
yet been exercised and the number of securities which have been authorized and
remain available for issuance under the Plan, as well as the maximum number of
securities which may be purchased by a Participant in a Purchase Period, the
number of securities in the Annual Increase, and the price per share covered by
each option under the Plan which has not yet been exercised, may be
appropriately adjusted by the Board, and the Board shall take any further
actions which, in the exercise of its discretion, may be necessary or
appropriate under the circumstances. The Board’s determinations under this Section 11
shall be conclusive and binding on all parties.

 

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12.                             MERGER,
LIQUIDATION, OTHER CORPORATION TRANSACTIONS

 

12.1         In
the event of the proposed liquidation or dissolution of the Corporation, the
Offering Period will terminate immediately prior to the consummation of such
proposed transaction, unless otherwise provided by the Board in its sole
discretion, and all outstanding options shall automatically terminate and the
amounts of all payroll deductions will be refunded without interest to the
Participants.

 

12.2         In
the event of a proposed sale of all or substantially all of the assets of the
Corporation, or the merger or consolidation or similar combination of the
Corporation with or into another entity, then in the sole discretion of the
Board, (1) each option shall be assumed or an equivalent option shall be
substituted by the successor corporation or parent or subsidiary of such
successor entity, (2) a date established by the Board on or before the
date of consummation of such merger, consolidation, combination or sale shall
be treated as a Purchase Date, and all outstanding options shall be exercised
on such date, (3) all outstanding options shall terminate and the
accumulated payroll deductions will be refunded without interest to the
Participants, or (4) outstanding options shall continue unchanged.

 

13.                             TRANSFERABILITY

 

Neither payroll deductions credited to a Participant’s bookkeeping
account nor any rights to exercise an option or to receive Shares under the
Plan may be voluntarily or involuntarily assigned, transferred, pledged, or
otherwise disposed of in any way, and any attempted assignment, transfer,
pledge, or other disposition shall be null and void and without effect. If a Participant
in any manner attempts to transfer, assign or otherwise encumber his or her
rights or interests under the Plan, other than as permitted by the Code, such
act shall be treated as an election by the Participant to discontinue
participation in the Plan pursuant to Section 5.3.

 

14.                             AMENDMENT
OR TERMINATION OF THE PLAN

 

14.1                           The Plan shall continue
until terminated in accordance with Section 14.2.

 

14.2         The
Board may, in its sole discretion, insofar as permitted by law, terminate or
suspend the Plan, or revise or amend it in any respect whatsoever, except that,
without approval of the Shareowners, no such revision or amendment shall
increase the number of Shares subject to the Plan, other than an adjustment
under Section 7 and Section 11 of the Plan, or make other changes for
which Shareowner approval is required under Applicable Law. Upon a termination
or suspension of the Plan, the Board may in its discretion (i) return
without interest, the payroll deductions credited to Participants’ accounts to
such Participants or (ii) set an earlier Purchase Date with respect to an
Offering Period and Purchase Period then in progress.

 

15.                             ADMINISTRATION

 

15.1         The
Board shall appoint a committee of one or more individuals to administer the
Plan (the “Committee”), which, unless otherwise specified by the Board, shall
consist of 

 

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the members of the Corporation’s Administrative Committee, as
constituted from time to time in accordance with its charter, and generally
made up of senior members of management from the Corporation’s Legal, Finance
and Human Resources functions.  The
Committee will serve for such period of time as the Board or the Compensation
Committee of the Board may specify and whom the Board or the Compensation
Committee of the Board may remove at any time. The Committee will have the
authority and responsibility for the day-to-day administration of the Plan, the
authority and responsibility specifically provided in this Plan and any
additional duty, responsibility and authority delegated to the Committee by the
Board or the Compensation Committee of the Board, which may include any of the
functions assigned to the Board in this Plan. The Committee may delegate to one
or more individuals the day-to-day administration of the Plan. The Committee
shall have full power and authority to adopt, amend and rescind any rules and
regulations which it deems desirable and appropriate for the proper
administration of the Plan, to construe and interpret the provisions and
supervise the administration of the Plan, to make factual determinations
relevant to Plan entitlements and to take all action in connection with
administration of the Plan as it deems necessary or advisable, consistent with
the delegation from the Board or the Compensation Committee of the Board.
Decisions of the Board or the Compensation Committee of the Board and the
Committee shall be final and binding upon all participants. Any decision
reduced to writing and signed by a majority of the members of the Committee
shall be fully effective as if it had been made at a meeting of the Committee
duly held. The Corporation shall pay all expenses incurred in the
administration of the Plan.

 

15.2         In
addition to such other rights of indemnification as they may have as members of
the Board or officers or employees of the Corporation, members of the Board and
of the Committee shall be indemnified by the Corporation against all reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection
with the defense of any action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan, or any
right granted under the Plan, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct in
duties; provided, however, that within sixty (60) days after the institution of
such action, suit or proceeding, such person shall offer to the Corporation, in
writing, the opportunity at its own expense to handle and defend the same.

 

16.                             COMMITTEE
RULES FOR FOREIGN JURISDICTIONS

 

The Committee may adopt rules or procedures relating to the
operation and administration of the Plan to accommodate the specific
requirements of local laws and procedures. Without limiting the generality of
the foregoing, the Committee is specifically authorized to adopt rules and
procedures regarding handling of payroll deductions or other contributions by
Participants, payment of interest, conversion of local currency, payroll tax,
withholding procedures and handling of share certificates which

 

11

 

vary with local requirements; however, if such varying provisions are
not in accordance with the provisions of Section 423(b) of the Code,
including but not limited to the requirement of Section 423(b)(5) of
the Code that all options granted under the Plan shall have the same rights and
privileges unless otherwise provided under the Code and the regulations
promulgated thereunder, then the individuals affected by such varying
provisions shall be deemed to be participating under a sub-plan and not the Plan.  The Committee may also adopt sub-plans
applicable to particular Subsidiaries or locations, which sub-plans may be
designed to be outside the scope of Code section 423. The rules of such
sub-plans may take precedence over other provisions of this Plan, with the
exception of Section 7, but unless otherwise superseded by the terms of
such sub-plan, the provisions of this Plan shall govern the operation of such
sub-plan.

 

17.          SECURITIES
LAWS REQUIREMENTS

 

17.1         No
option granted under the Plan may be exercised to any extent unless the Shares
to be issued upon such exercise under the Plan are covered by an effective
registration statement pursuant to the Securities Act and the Plan is in
compliance with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, applicable state and foreign securities
laws and the requirements of any stock exchange upon which the Shares may then
be listed, subject to the approval of counsel for the Corporation with respect
to such compliance. If on a Purchase Date in any Offering Period hereunder, the
Plan is not so registered or in such compliance, options granted under the Plan
which are not in compliance shall not be exercised on such Purchase Date, and
the Purchase Date shall be delayed until the Plan is subject to such an
effective registration statement and such compliance, except that the Purchase
Date shall not be delayed more than twelve (12) months and the Purchase Date
shall in no event be more than twenty-seven (27) months from the Offering Date.
If, on the Purchase Date of any offering hereunder, as delayed to the maximum
extent permissible, the Plan is not registered and in such compliance, options
granted under the Plan which are not in compliance shall not be exercised and
all payroll deductions accumulated during the Offering Period (reduced to the
extent, if any, that such deductions have been used to acquire Shares) shall be
returned to the Participants, without interest. The provisions of this Section 17
shall comply with the requirements of Section 423(b)(5) of the Code
to the extent applicable.

 

17.2         As a condition to the
exercise of an option, the Corporation may require the person exercising such
option to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Corporation, such a representation is required by any of the aforementioned
applicable provisions of law.

 

18.          GOVERNMENTAL
REGULATIONS

 

This Plan and the Corporation’s obligation to sell and deliver Ordinary
Shares under the Plan shall be subject to the approval of any governmental authority
required in 

 

12

 

connection with the Plan or the authorization, issuance, sale, or
delivery of Shares hereunder.

 

19.          NO
ENLARGEMENT OF EMPLOYEE RIGHTS

 

Nothing contained in this Plan shall be deemed to give any Employee or
other individual the right to be retained in the employ or service of the
Corporation or any Designated Subsidiary or to interfere with the right of the
Corporation or Designated Subsidiary to discharge any Employee or other individual
at any time, for any reason or no reason, with or without notice.

 

20.          GOVERNING
LAW

 

This Plan shall be governed by applicable laws of the State of
California.

 

21.          EFFECTIVE
DATE

 

This Plan shall be effective on the Effective Date, subject to approval
of the Shareowners of the Corporation within twelve (12) months before or after
its date of adoption by the Board.

 

22.          REPORTS

 

Individual accounts shall be maintained for each Participant in the
Plan. Statements of account shall be given to Participants at least annually,
which statements shall set forth the amounts of payroll deductions, the
Purchase Price, the number of Shares purchased and the remaining cash balance,
if any.

 

23.          DESIGNATION
OF BENEFICIARY FOR OWNED SHARES

 

With respect to Ordinary Shares purchased by the Participant pursuant
to the Plan and held in an account maintained by the Corporation or its
assignee on the Participant’s behalf, the Participant may be permitted to file
a written designation of beneficiary, who is to receive any Shares and cash, if
any, from the Participant’s account under the Plan in the event of such
Participant’s death subsequent to the end of a Purchase Period but prior to
delivery to him or her of such Shares and cash. 
In addition, a Participant may file a written designation of a
beneficiary who is to receive any cash from the Participant’s account under the
Plan in the event of such Participant’s death prior to the Purchase Date of an
Offering Period.  If a Participant is
married and the designated beneficiary is not the spouse, spousal consent shall
be required for such designation to be effective, to the extent required by
local law. The Participant (and if required under the preceding sentence, his
or her spouse) may change such designation of beneficiary at any time by
written notice. Subject to local legal requirements, in the event of a
Participant’s death, the Corporation or its assignee shall deliver any Shares
and/or cash to the designated beneficiary. Subject to local law, in the event
of the death of a Participant and in the absence of a beneficiary validly
designated who is living at the time of such Participant’s death, the
Corporation shall deliver such Shares and/or cash to the executor or 

 

13

 

administrator of the estate of the Participant, or if no such executor
or administrator has been appointed (to the knowledge of the Corporation), the
Corporation in its sole discretion, may deliver (or cause its assignee to
deliver) such Shares and/or cash to the spouse, or to any one or more
dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Corporation, then to such other person as the
Corporation may determine. The provisions of this Section 23 shall in no
event require the Corporation to violate local law, and the Corporation shall
be entitled to take whatever action it reasonably concludes is desirable or
appropriate in order to transfer the assets allocated to a deceased Participant’s
account in compliance with local law.

 

24.          ADDITIONAL
RESTRICTIONS OF RULE 16b-3.

 

The terms and conditions of options granted
hereunder to, and the purchase of Ordinary Shares by, persons subject to Section 16
of the Exchange Act shall comply with the applicable provisions of Rule 16b-3.  This Plan shall be deemed to contain, and
such options shall contain, and the Shares issued upon exercise thereof shall
be subject to, such additional conditions and restrictions, if any, as may be
required by Rule 16b-3 to qualify for the maximum exemption from Section 16
of the Exchange Act with respect to Plan transactions.

 

25.          NOTICES

 

All notices or other communications by a Participant to the Corporation
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Corporation at the location, or by
the person, designated by the Corporation for the receipt thereof.

 

14

 

APPENDIX A

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

DESIGNATED SUBSIDIARIES

 

Seagate Technology (US) Holdings, Inc.

Seagate US LLC

Seagate Technology Australia Pty. Limited

Seagate Technology SAS

Seagate Technology GmbH

Seagate Technology (Hong Kong) Limited

Seagate Technology AB

Seagate Technology Taiwan Ltd.

Seagate Technology International (Wuxi) Co. Ltd.

Seagate Technology (Ireland)

Penang Seagate Industries (M) Sdn. Bhd.

Seagate Technology Media (Ireland)

Nippon Seagate Inc.

Seagate Singapore International Headquarters Pte. Ltd.

Seagate Technology (Marlow) Limited

Seagate Technology (Thailand) Limited

Seagate Technology International

Maxtor Technology (Suzhou) Co. Ltd.

Seagate International (Johor) Sdn. Bhd.

Seagate Technology Republic Ireland Limited

Seagate Technology HDD (India) Private Limited

Seagate Technology (Netherlands) B.V.

 

 

APPENDIX B

 

SUBPLAN UNDER THE SEAGATE TECHNOLOGY PUBLIC
LIMITED COMPANY EMPLOYEE STOCK PURCHASE PLAN

 

1.                                      Purpose.  The purpose of this subplan under the Seagate
Technology public limited company Employee Stock Purchase Plan (the “Subplan”)
is to permit eligible contract workers who perform work for the Corporation in
the countries designated from time to time by the Committee in its sole
discretion and listed on Exhibit A to the Subplan (any one such individual
a “Contractor,” and collectively, “Contractors”) to participate in the Seagate
Technology public limited company Employee Stock Purchase Plan (the “ESPP”).

 

2.                                      Terms
of the Subplan.  The terms and
conditions of the Subplan shall in all respects be identical to those set forth
in the ESPP except as set forth in this Subplan. Capitalized terms not
otherwise defined in this Subplan shall have the same meaning as set forth in
the ESPP.

 

3.                                      Definition
of Employee.  For purposes of the
Subplan, references to Employees in the ESPP shall include Contractors.

 

4.                                      Exhibit A.  The Committee shall have the authority in its
sole discretion to amend the list of countries on Exhibit A attached to
this Subplan as necessary and desirable and for such amendments to take effect
as shall be determined by the Committee in its sole and absolute discretion.

 

5.                                      Terms
of the ESPP.  Except as set forth
above, Contractors who participate under the ESPP shall be subject to the terms
and conditions set forth in the ESPP.

 

 

EXHIBIT A

 

Estonia

Lebanon

Poland

Russia

Turkey

 

 

APPENDIX C

 

SUBPLAN UNDER THE SEAGATE TECHNOLOGY PUBLIC
LIMITED COMPANY EMPLOYEE STOCK PURCHASE PLAN FOR EMPLOYEES IN MALAYSIA

 

1.                                      Purpose.  The purpose of this subplan under the Seagate
Technology public limited company Employee Stock Purchase Plan (the “Subplan”)
is to set forth requirements with respect to the participation by eligible
Employees at Penang Seagate Industries (M) Sdn. Bhd. and Seagate
International (Johor) Sdn. Bhd. in Malaysia in the Seagate Technology public limited
company Employee Stock Purchase Plan (the “ESPP”).

 

2.                                      Terms
of the Subplan.  The terms and
conditions of the Subplan shall in all respects be identical to those set forth
in the ESPP, except as set forth in this Subplan. Capitalized terms not
otherwise defined in this Subplan shall have the same meanings as set forth in
the ESPP.

 

3.             Conditions
Upon Issuance of Shares.

 

3.1           Notwithstanding
Sections 5.1 and 9 of the ESPP, no payroll deductions shall be made and no
Shares shall be issued with respect to options held by Participants in Malaysia
unless the exercise of such option and the issuance and delivery of such Shares
pursuant thereto shall comply with all applicable provisions of law, domestic
or foreign, including the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, the requirements of any share exchange upon
which the Shares may then be listed, and the Malaysian Employment Act of 1955
and the regulations promulgated thereunder, and shall be further subject to the
approval of counsel for the Corporation with respect to such compliance.

 

3.2           The Corporation’s
obligations to make payroll deductions pursuant to the written instructions of
Participants in Malaysia and to issue Shares to Participants in Malaysia under
the ESPP are specifically conditioned upon receiving approval in writing from
the Director General of Labour of the Ministry of Human Resources in Malaysia
authorizing payroll deductions for Participants in Malaysia. Unless and until
such approval is granted, the Committee shall have the authority in its sole
discretion to extend or terminate Purchase Periods and/or Offering Periods, and
to modify or rescind any conditional rights the Corporation or its Designated
Subsidiaries in Malaysia may have to receive funds from Participants in Malaysia
pursuant to such Participants’ written instructions.

 

4.                                      Minimum
Purchase.  Notwithstanding Sections 5
and 9 of the ESPP, purchases will not be made for Participants in Malaysia with
respect to a given Purchase Period unless the applicable Participant has
accumulated sufficient payroll deductions during such Purchase Period to
purchase at least ten (10) whole Shares. 
In the event a Participant in Malaysia has not accumulated sufficient
payroll deductions during a given Purchase Period to purchase at least ten (10) 

 

 

whole Shares, such Participant will be deemed to have withdrawn from
the Plan with respect to that Purchase Period and his or her payroll deductions
will be refunded to the Participant without interest promptly following the end
of the Purchase Period.

 

5.                                      Terms
of the ESPP.  Except as set forth
above, Participants in Malaysia shall be subject to the terms and conditions
set forth in the ESPP.

 

 

APPENDIX D

 

SUBPLAN UNDER THE SEAGATE TECHNOLOGY PUBLIC
LIMITED COMPANY EMPLOYEE STOCKPURCHASE PLAN FOR EMPLOYEES IN THAILAND

 

1.                                      Purpose.  The purpose of this subplan under the Seagate
Technology public limited company Employee Stock Purchase Plan (the “Subplan”)
is to set forth requirements with respect to the participation by eligible
Employees at Seagate Technology (Thailand) Limited in Thailand in the Seagate
Technology public limited company Employee Stock Purchase Plan (the “ESPP”).

 

2.                                      Terms
of the Subplan.  The terms and
conditions of the Subplan shall in all respects be identical to those set forth
in the ESPP, except as set forth in this Subplan. Capitalized terms not
otherwise defined in this Subplan shall have the same meanings as set forth in
the ESPP.

 

3.                                      Conditions
Upon Issuance of Shares.

 

3.1           Notwithstanding Section 9
of the ESPP, Shares shall not be issued with respect to options held by
Participants in Thailand unless the exercise of such options and the issuance
and delivery of such Shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including the Securities Act, the
Exchange Act, the rules and regulations promulgated thereunder, the
requirements of any share exchange upon which the Shares may then be listed,
and the Thai Securities and Exchange Act and the regulations promulgated thereunder,
and shall be further subject to the approval of counsel for the Corporation
with respect to such compliance.

 

3.2           The Corporation’s
obligation to issue Shares to Participants in Thailand under the ESPP is
specifically conditioned upon receiving approval from the Thai Securities and
Exchange Commission for the issuance of securities under the ESPP to
Participants in Thailand. Unless and until such approval is granted, the
Committee shall have the authority in its sole discretion to extend or terminate
Purchase Periods and/or Offering Periods, and to modify or rescind any
conditional rights the Corporation or its Designated Subsidiary in Thailand may
have to receive funds from Participants in Thailand pursuant to such
Participants’ written instructions.

 

4.                                      Minimum
Purchase.  Notwithstanding Sections 5
and 9 of the ESPP, purchases will not be made for Participants in Thailand with
respect to a given Purchase Period unless the applicable Participant has
accumulated sufficient payroll deductions during such Purchase Period to
purchase at least ten (10) whole Shares. 
In the event a Participant in Thailand has not accumulated sufficient
payroll deductions during a given Purchase Period to purchase at least ten (10) whole
Shares, such Participant will be deemed to have withdrawn from the Plan with
respect to that Purchase Period and his or her payroll deductions will be 

 

 

refunded to the Participant without interest promptly following the end
of the Purchase Period.

 

5.                                      Terms
of the ESPP.  Except as set forth
above, Participants in Thailand shall be subject to the terms and conditions
set forth in the ESPP.

 

 

APPENDIX E

 

SUBPLAN UNDER THE SEAGATE TECHNOLOGY PUBLIC
LIMTED COMPANY EMPLOYEE STOCK PURCHASE PLAN FOR EMPLOYEES IN SINGAPORE

 

1.                                      Purpose.  The purpose of this subplan under the Seagate
Technology public limited company Employee Stock Purchase Plan (the “Subplan”)
is to set forth requirements with respect to the participation by eligible
Employees at Seagate Technology International and Seagate Singapore
International Headquarters Pte. Ltd. in Singapore in the Seagate Technology public
limited company Employee Stock Purchase Plan (the “ESPP”).

 

2.                                      Terms
of the Subplan.  The terms and
conditions of the Subplan shall in all respects be identical to those set forth
in the ESPP, except as set forth in this Subplan. Capitalized terms not
otherwise defined in this Subplan shall have the same meanings as set forth in
the ESPP.

 

3.                                      Minimum
Purchase.  Notwithstanding Sections 5
and 9 of the ESPP, purchases will not be made for Participants in Singapore
with respect to a given Purchase Period unless the applicable Participant has
accumulated sufficient payroll deductions during such Purchase Period to
purchase at least ten (10) whole Shares. 
In the event a Participant in Singapore has not accumulated sufficient
payroll deductions during a given Purchase Period to purchase at least ten (10) whole
Shares, such Participant will be deemed to have withdrawn from the Plan with
respect to that Purchase Period and his or her payroll deductions will be
refunded to the Participant without interest promptly following the end of the
Purchase Period.

 

4.                                      Terms
of the ESPP.  Except as set forth
above, Participants in Singapore shall be subject to the terms and conditions
set forth in the ESPP.

 

 

APPENDIX F

 

SUBPLAN UNDER THE SEAGATE TECHNOLOGY PUBLIC
LIMITED COMPANY EMPLOYEE STOCK PURCHASE PLAN FOR EMPLOYEES IN CHINA

 

1.                                      Purpose.  The purpose of this subplan under the Seagate
Technology public limited company Employee Stock Purchase Plan (the “Subplan”)
is to set forth requirements with respect to the participation by eligible
Employees at Seagate Technology International (Wuxi) Co. Ltd. and Seagate
Technology (Suzhou) Co. Ltd.  in China in
the Seagate Technology public limited company Employee Stock Purchase Plan (the
“ESPP”).

 

2.                                      Terms
of the Subplan.  The terms and
conditions of the Subplan shall in all respects be identical to those set forth
in the ESPP, except as set forth in this Subplan. Capitalized terms not
otherwise defined in this Subplan shall have the same meanings as set forth in
the ESPP.

 

3.                                      Minimum
Purchase.  Notwithstanding Sections 5
and 9 of the ESPP, purchases will not be made for Participants in China with
respect to a given Purchase Period unless the applicable Participant has
accumulated sufficient payroll deductions during such Purchase Period to
purchase at least ten (10) whole Shares. 
In the event a Participant in China has not accumulated sufficient
payroll deductions during a given Purchase Period to purchase at least ten (10) whole
Shares, such Participant will be deemed to have withdrawn from the Plan with
respect to that Purchase Period and his or her payroll deductions will be
refunded to the Participant without interest promptly following the end of the
Purchase Period.

 

4.                                      Terms
of the ESPP.  Except as set forth
above, Participants in China shall be subject to the terms and conditions set
forth in the ESPP.Exhibit 10.1

 

Execution Copy

 

COMMON STOCK PURCHASE AGREEMENT

 

COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as
of July 2, 2010 by and between BEACON POWER CORPORATION,
a Delaware corporation (the “Company”), and ASPIRE
CAPITAL FUND, LLC, an Illinois
limited liability company (the “Buyer”). 
Capitalized terms used herein and not otherwise defined herein are
defined in Section 10 hereof.

 

WHEREAS:

 

Subject
to the terms and conditions set forth in this Agreement, the Company wishes to
sell to the Buyer, and the Buyer wishes to buy from the Company, up to Twenty
Five Million Dollars ($25,000,000) of the Company’s common stock, par value
$.01 per share (the “Common Stock”).  The
shares of Common Stock to be purchased hereunder are referred to herein as the “Purchase
Shares.”

 

NOW THEREFORE, the Company and the Buyer hereby agree as
follows:

 

1.             PURCHASE OF COMMON
STOCK.

 

Subject
to the terms and conditions set forth in this Agreement, the Company has the
right to sell to the Buyer, and the Buyer has the obligation to purchase from
the Company, Purchase Shares as follows:

 

(a)           Initial Purchase; Commencement of
Additional Purchases of Common Stock.  Following the satisfaction of the
conditions (the “Commencement”) as set forth in Sections 6 and 7 below (the
date of satisfaction of such conditions, the “Commencement Date”), the Buyer
shall purchase from the Company 1,543,210 Purchase Shares and upon receipt of
such Purchase Shares pay to the Company as the purchase price therefor, via
wire transfer, Five Hundred Thousand Dollars ($500,000) (such purchase the “Initial
Purchase” and such Purchase Shares are referred to herein as “Initial Purchase
Shares”).  Upon issuance and payment
therefor as provided herein, such Initial Purchase Shares shall be validly issued
and are fully paid and non-assessable. 
The Initial Purchase Shares shall be issued without any restrictive
legend.  Thereafter, the purchase and
sale of Purchase Shares hereunder shall occur from time to time upon written
notices by the Company to the Buyer on the terms and conditions as set forth
herein.

 

(b)           The Company’s Right to Require
Purchases.  Subject to the terms and
conditions set forth in this Agreement, on any given Business Day after the
Commencement Date, the Company shall have the right but not the obligation to
direct the Buyer by its delivery to the Buyer of a Purchase Notice from time to
time, and the Buyer shall thereupon have the obligation, to buy up to 400,000
Purchase Shares per Business Day (each such purchase, a “Purchase”) at the
Purchase Price on the Purchase Date. The Company and the Buyer may mutually
agree to increase the number of shares that can be sold per Business Day to as
much as an additional 1,000,000 shares per Business Day.  The Company may deliver multiple Purchase
Notices to the Buyer from time to time so long as the most recent Purchase has
been completed.  Share amounts subject to
purchase under this Section 1(b) shall be appropriately adjusted for
any reorganization, recapitalization, non-cash dividend, stock split, reverse
stock split or other similar transaction.

 

 

(c)           Payment for Purchase Shares.  In connection with any Purchase, the Buyer
shall pay to the Company an amount equal to the Purchase Amount with respect to
such Purchase Shares as full payment for such Purchase Shares via wire transfer
of immediately available funds on the same Business Day that the Buyer receives
such Purchase Shares if they are received by the Buyer before 1:00 p.m.
eastern time or if received by the Buyer after 1:00 p.m. eastern time, the
next Business Day.  All payments made
under this Agreement shall be made in lawful money of the United States of
America via wire transfer of immediately available funds to such account as the
Company may from time to time designate by written notice in accordance with
the provisions of this Agreement. 
Whenever any amount expressed to be due by the terms of this Agreement
is due on any day that is not a Business Day, the same shall instead be due on
the next succeeding day that is a Business Day.

 

(d)           Purchase Price Floor.  The Company and the Buyer shall not effect
any sales under this Agreement on any Purchase Date where the Closing Sale
Price is less than the Floor Price.  “Floor
Price” means $0.25, which shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction.

 

(e)           Records of Purchases.  The Buyer and the Company shall each maintain
records showing the remaining Available Amount at any give time and the dates
and Purchase Amounts for each purchase or shall use such other method,
reasonably satisfactory to the Buyer and the Company.

 

(f)            Taxes.  The Company shall pay any and all transfer,
stamp or similar taxes that may be payable with respect to the issuance and
delivery of any shares of Common Stock to the Buyer made under this Agreement.

 

(g)           Compliance with Principal Market
Rules.  Notwithstanding anything in
this Agreement to the contrary, and in addition to the limitations set forth in
Section 1(d), unless and until such time as the shareholders of the
Company approve the transaction contemplated by this Agreement, no Purchases
shall be made under Section 1(b) of this Agreement unless the Purchase Price thereunder equals or exceeds
the Base Price.  The “Base Price” is a
price per share of $0.34, equal to (x) the Signing Market Price plus (y) $0.03,
which shall be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other
similar transaction.  “Signing Market Price” shall mean $0.31, the last
consolidated closing bid price of the
Common Stock on the Principal Market immediately preceding the date of this
Agreement.  The Company hereby represents
and warrants to the Buyer that the book value per share of Common Stock as of
the date hereof is less than the Signing Market Price.  The Company shall not be required or
permitted to issue any shares of Common Stock under this Agreement if such issuance
would breach the Company’s obligations under the rules or regulations of
the Principal Market.

 

2

 

2.             BUYER’S
REPRESENTATIONS AND WARRANTIES.

 

The
Buyer represents and warrants to the Company that as of the date hereof and as
of the Commencement Date:

 

(a)           Investment Purpose.  The Buyer is entering into this Agreement and
acquiring the Purchase Shares and the Commitment Shares (as defined in Section 4(e) hereof)
(this Agreement, the Purchase Shares and the Commitment Shares are collectively
referred to herein as the “Securities”), for its own account for investment
only and not with a view towards, or for resale in connection with, the public
sale or distribution thereof; provided however, by making the representations
herein, the Buyer does not agree to hold any of the Securities for any minimum
or other specific term.

 

(b)           Accredited Investor Status.  The Buyer is an “accredited investor” as that
term is defined in Rule 501(a)(3) of Regulation D.

 

(c)           Intentionally
Omitted.

 

(d)           Information.  The Buyer has been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities that have been
reasonably requested by the Buyer, including, without limitation, the SEC
Documents (as defined in Section 3(f) hereof).  The Buyer understands that its investment in
the Securities involves a high degree of risk. 
The Buyer (i) is able to bear the economic risk of an investment in
the Securities including a total loss, (ii) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the proposed investment in the Securities and (iii) has
had an opportunity to ask questions of and receive answers from the officers of
the Company concerning the financial condition and business of the Company and
other matters related to an investment in the Securities.  Neither such inquiries nor any other due
diligence investigations conducted by the Buyer or its representatives shall
modify, amend or affect the Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below.  The Buyer has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.

 

(e)           No Governmental Review.  The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

 

(f)            Intentionally
Omitted.

 

(g)           Validity; Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable against the Buyer in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

 

3

 

(h)           Residency.  The Buyer is a resident of the State of
Illinois.

 

(i)            No Prior Short Selling.  The Buyer represents and warrants to the
Company that at no time prior to the date of this Agreement has any of the
Buyer, its agents, representatives or affiliates engaged in or effected, in any
manner whatsoever, directly or indirectly, any (i) “short sale” (as such
term is defined in Section 242.200 of Regulation SHO of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging
transaction which establishes a net short position with respect to the Common
Stock.

 

3.             REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.

 

The
Company represents and warrants to the Buyer that as of the date hereof and as
of the Commencement Date:

 

(a)           Organization and Qualification.  The Company and its “Subsidiaries” (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns 50% or more of the voting stock or capital stock or other
similar equity interests) are corporations duly organized and validly existing
in good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power and authority to own their
properties and to carry on their business as now being conducted.  Each of the Company and its Subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing could not
reasonably be expected to have a Material Adverse Effect.  As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on any of: (i) the business,
properties, assets, operations, results of operations or financial condition of
the Company and its Subsidiaries, taken as a whole, or (ii) the authority
or ability of the Company to perform its obligations under the Transaction
Documents (as defined in Section 3(b) hereof).  The Company has no Subsidiaries except as set
forth on Schedule 3(a).

 

(b)           Authorization; Enforcement;
Validity.  (i) The Company has
the requisite corporate power and authority to enter into and perform its
obligations under this Agreement, and each of the other agreements entered into
by the parties on the Commencement Date and attached hereto as exhibits to this
Agreement (collectively, the “Transaction Documents”), and to issue the Securities
in accordance with the terms hereof and thereof, (ii) the execution and
delivery of the Transaction Documents by the Company and the consummation by it
of the transactions contemplated hereby and thereby, including without
limitation, the issuance of the Commitment Shares and the reservation for
issuance and the issuance of the Purchase Shares issuable under this Agreement,
have been duly authorized by the Company’s Board of Directors and no further
consent or authorization is required by the Company, its Board of Directors or
its shareholders, (iii) this Agreement has been, and each other
Transaction Document shall be on the Commencement Date, duly executed and
delivered by the Company and (iv) this Agreement constitutes, and each
other Transaction Document upon its execution on behalf of the Company, shall
constitute, the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies.  The Board of Directors of the
Company has approved the resolutions (the “Signing 

 

4

 

Resolutions”)
substantially in the form as set forth as Exhibit C attached hereto
to authorize this Agreement and the transactions contemplated hereby.  The Signing Resolutions are valid, in full
force and effect and have not been modified or supplemented in any
respect.  The Company has delivered to
the Buyer a true and correct copy of a unanimous written consent adopting the
Signing Resolutions executed by all of the members of the Board of Directors of
the Company.  No other approvals or
consents of the Company’s Board of Directors and/or shareholders are necessary
under applicable laws and the Company’s Certificate of Incorporation and/or
Bylaws to authorize the execution and delivery of this Agreement or any of the
transactions contemplated hereby, including, but not limited to, the issuance
of the Commitment Shares and the issuance of the Purchase Shares.

 

(c)           Capitalization.  As of the date hereof, the authorized capital
stock of the Company consists of (i) 400 million shares of Common Stock,
of which as of the date hereof, 190,235,448 shares are issued and outstanding,
421,692 are held as treasury shares, 
18,349,526 shares are reserved for future issuance pursuant to the
Company’s stock option plans of which only approximately 2,278,996 shares
remain available for future option grants and 66,196,416 shares are issuable
and reserved for issuance pursuant to securities (other than stock options
issued pursuant to the Company’s stock option plans) exercisable or
exchangeable for, or convertible into, shares of Common Stock and (ii) 10
million shares of Preferred Stock, $0.01 par value, of which as of the date
hereof none are issued and outstanding. 
All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable.  Except as disclosed in Schedule 3(c), (i) no
shares of the Company’s capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding debt securities, (iii) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by
which the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, (iv) there
are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act (except the Registration Rights Agreement), (v) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered  by the issuance of the Securities as
described in this Agreement and (vii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement.  The Company has furnished
or made available to the Buyer true and correct copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”), and the Company’s By-laws, as amended and
as in effect on the date hereof (the “By-laws”), and summaries of the terms of
all securities convertible into or exercisable for Common Stock, if any, and
copies of any documents containing the material rights of the holders thereof
in respect thereto.

 

(d)           Issuance of Securities.  The Commitment Shares have been duly
authorized and, upon issuance in accordance with the terms hereof, the
Commitment Shares shall be (i) validly issued, fully paid and
non-assessable and (ii) free from all taxes, liens and charges with
respect to the issue thereof. 

 

5

 

Upon
issuance and payment therefor in accordance with the terms and conditions of
this Agreement, the Purchase Shares shall be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock.

 

(e)           No Conflicts.  Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance and
issuance of the Purchase Shares) will not (i) result in a violation of the
Certificate of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company or the
By-laws or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations and the rules and regulations of the Principal Market
applicable to the Company or any of its Subsidiaries) or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected, except
in the case of conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations under clause (ii), which could not reasonably be
expected to result in a Material Adverse Effect.  Except as disclosed in Schedule 3(e), neither
the Company nor its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any Certificate of Designation,
Preferences and Rights of any outstanding series of preferred stock of the
Company or By-laws or their organizational charter or by-laws,
respectively.  Except as disclosed in
Schedule 3(e), neither the Company nor any of its Subsidiaries is in violation
of any term of or is in default under any material contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations or amendments which could
not reasonably be expected to have a Material Adverse Effect.  The business of the Company and its
Subsidiaries is not being conducted, and shall not be conducted, in violation
of any law, ordinance, regulation of any governmental entity, except for
possible violations, the sanctions for which either individually or in the
aggregate could not reasonably be expected to have a Material Adverse
Effect.  Except as specifically
contemplated by this Agreement or as required under the 1933 Act, the rules of
the Principal Market or applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of
its obligations under or contemplated by the Transaction Documents in
accordance with the terms hereof or thereof. 
Except as disclosed in Schedule 3(e) or as expressly contemplated
herein, all consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence shall be
obtained or effected on or prior to the Commencement Date.  Except as listed in Schedule 3(e), since January 1,
2009 the Company has not received nor delivered any notices or correspondence
from or to the Principal Market.  The
Principal Market has not commenced any delisting proceedings against the
Company.

 

(f)            SEC Documents; Financial
Statements. Except as disclosed in Schedule 3(f), since January 1,
2009, the Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior to the
date hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein being hereinafter 

 

6

 

referred
to as the “SEC Documents”).  As of their
respective dates (except as they have been correctly amended), the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC (except as they may have been properly amended), contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.  As of their respective dates (except as they
have been properly amended), the financial statements of the Company included
in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto.  Such
financial statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such financial statements or
the notes thereto or (ii) in the case of unaudited interim statements, to
the extent they may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).  Except as listed in Schedule 3(f) or routine
correspondence which are available on the SEC’s Edgar database as of the date
hereof, the Company has received no notices or correspondence from the SEC
since January 1, 2009.  The SEC has not commenced any enforcement
proceedings against the Company or any of its subsidiaries.

 

(g)           Absence of Certain Changes.  Except as disclosed in Schedule 3(g), since March 31,
2010, there has been no material adverse change in the business, properties,
operations, financial condition or results of operations of the Company or its
Subsidiaries.  The Company has not taken
any steps, and does not currently expect to take any steps, to seek protection
pursuant to any Bankruptcy Law nor does the Company or any of its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy  or
insolvency proceedings.  The Company is
financially solvent and is generally able to pay its debts as they become due.

 

(h)           Absence of Litigation. There
is no action, suit, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company, the Common Stock or any of the
Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’
officers or directors in their capacities as such, which could reasonably be
expected to have a Material Adverse Effect. 
A description of each action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body which, as of the date of this Agreement, is pending or
threatened in writing against or affecting the Company, the Common Stock or any
of the Company’s Subsidiaries or any of the Company’s or the Company’s
Subsidiaries’ officers or directors in their capacities as such, is set forth
in Schedule 3(h).

 

(i)            Acknowledgment Regarding Buyer’s
Status.  The Company acknowledges and
agrees that the Buyer is acting solely in the capacity of arm’s length
purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The
Company further acknowledges that the Buyer is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect
to the Transaction Documents and the transactions contemplated hereby and
thereby and any advice given by the Buyer or any of its representatives or
agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely 

 

7

 

incidental
to the Buyer’s purchase of the Securities. 
The Company further represents to the Buyer that the Company’s decision
to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives and advisors.

 

(j)           Intellectual Property Rights.  The Company and its Subsidiaries own or
possess adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective businesses
as now conducted.  Except as set forth on
Schedule 3(j), none of the Company’s material trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, government authorizations, trade
secrets or other intellectual property rights have expired or terminated, or,
by the terms and conditions thereof, could expire or terminate within two years
from the date of this Agreement.  The
Company and its Subsidiaries do not have any knowledge of any infringement by
the Company or its Subsidiaries of any material trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names,
service marks, service mark registrations, trade secret or other similar rights
of others, or of any such development of similar or identical trade secrets or
technical information by others and, except as set forth on Schedule 3(j),
there is no claim, action or proceeding being made or brought against, or to the
Company’s knowledge, being threatened against, the Company or its Subsidiaries
regarding trademark, trade name, patents, patent rights, invention, copyright,
license, service names, service marks, service mark registrations, trade secret
or other infringement, which could reasonably be expected to have a Material
Adverse Effect.

 

(k)           Environmental Laws.  The Company and its Subsidiaries (i) are
in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval, except
where, in each of the three foregoing clauses, the failure to so comply could
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

(l)            Title.  The Company and its Subsidiaries have good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in Schedule 3(l) or
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company and
any of its Subsidiaries.  Any real
property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.

 

(m)          Insurance.  The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged.  Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason
to 

 

8

 

believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a whole.

 

(n)           Regulatory Permits.  The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses as currently conducted, and neither the Company nor any
such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.

 

(o)           Tax Status.  The Company and each of its Subsidiaries has
made or filed all federal and state income and all other material tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its Subsidiaries
has set aside on its books provisions reasonably adequate for the payment of
all unpaid and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. 
There are no unpaid taxes in any material amount claimed to be due by
the taxing authority of any jurisdiction, and the officers of the Company know
of no basis for any such claim.

 

(p)           Transactions With Affiliates.  Except as set forth on Schedule 3(p) and
other than in connection with the grant or exercise of stock options or the
grant of restricted stock, restricted stock units or similar equity awards, in
each case issued for compensatory purposes, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has an interest or is an officer, director, trustee or partner.

 

(q)           Application of Takeover
Protections.  Assuming that at all times the Buyer maintains its
beneficial ownership of the Common Stock, as calculated under section 13(d) of
the 1934 Act and related regulations, at a level below 15%, the Company
and its board of directors have taken or will take prior to the Commencement
Date all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Certificate of Incorporation or the laws of the state of its
incorporation which is or could become applicable to the Buyer as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and the Buyer’s ownership of the
Securities.

 

(r)            Registration Statements.  The Shelf Registration Statements (as defined
in Section 4(a) hereof) have been declared effective by the SEC, and
no stop order has been issued or is pending or threatened by the SEC with
respect thereto.  As of the date hereof,
the Company has a maximum dollar amount certain of securities registered and
unsold under the Shelf Registration Statements, in

 

9

 

aggregate,
which are in an amount not less than the sum of (i) the Available Amount
and (ii) the market value of the Commitment Shares on the date hereof.

 

4.             COVENANTS.

 

(a)           Filing of Form 8-K and
Registration Statement.  The Company
agrees that it shall, within the time required under the 1934 Act, file a
Report on Form 8-K disclosing this Agreement and the transaction
contemplated hereby.  The Company shall
also file within ten (10) Business Days from the date hereof prospectus
supplements to the Company’s existing shelf registration statements on Form S-3
(nos. 333-152140 and 333-161648, and together the “Shelf Registration
Statements”) covering the sale of the Commitment Shares and Purchase Shares
(together, the “Prospectus Supplement”) in accordance with the terms of the
Registration Rights Agreement between the Company and the Buyer, dated as of
the date hereof (“Registration Rights Agreement”).   The Company shall use reasonable best
efforts to keep the Shelf Registration Statements effective pursuant to Rule 415
promulgated under the 1933 Act and available for sales of all Commitment Shares
and Purchase Shares until such time as (i) it no longer qualifies to make
sales under the Shelf Registration Statements or (ii) the date on which
all Purchase Shares have been sold under this Agreement and no Available Amount
remains thereunder.   The Shelf
Registration Statements (including any amendments or supplements thereto and
prospectuses or prospectus supplements, including the Prospectus Supplement,
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading.

 

(b)           Blue Sky. The Company shall
take such action, if any, as is reasonably necessary in order to obtain an
exemption for or to qualify (i) the initial sale of the Commitment Shares
and any Purchase Shares to the Buyer under this Agreement and (ii) any
subsequent sale of the Commitment Shares and any Purchase Shares by the Buyer,
in each case, under applicable securities or “Blue Sky” laws of the states of
the United States in such states as is reasonably requested by the Buyer from
time to time, and shall provide evidence of any such action so taken to the
Buyer.

 

(c)           Listing.  The Company shall promptly secure the listing
of all of the Purchase Shares and Commitment Shares upon each national
securities exchange and automated quotation system, if any, upon which shares
of Common Stock are then listed (subject to official notice of issuance) and
shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all such securities from time to time issuable under the terms
of the Transaction Documents.  The
Company shall maintain the Common Stock’s authorization for quotation on a
Principal Market, and neither the Company nor any of its Subsidiaries shall
take any action that would be reasonably expected to result in the delisting or
suspension of the Common Stock on a Principal Market; provided, that nothing in
this Section 4(c) shall prevent or inhibit the Company from causing
its Common Stock to be listed or quoted on a Principal Market that is different
from the Principal Market on the date hereof. 
The Company shall promptly, and in no event later than the following
Business Day, provide to the Buyer copies of any notices it receives from the
Principal Market regarding the continued eligibility of the Common Stock for
listing on such automated quotation system or securities exchange.  The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section.

 

10

 

(d)           Limitation on Short Sales and Hedging
Transactions.  The Buyer agrees that
beginning on the date of this Agreement and ending on the date of termination
of this Agreement as provided in Section 11(k), the Buyer and its agents,
representatives and affiliates shall not in any manner whatsoever enter into or
effect, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the 1934 Act) of the
Common Stock or (ii) hedging transaction, which establishes a net short
position with respect to the Common Stock.

 

(e)           Issuance of Commitment Shares.  In connection with the Commencement, the
Company shall issue to the Buyer as consideration for the Buyer entering into
this Agreement 3,086,420 shares of Common Stock (the “Commitment Shares”).  The Commitment Shares shall be issued without
any restrictive legend.

 

(f)            Due Diligence.  The Buyer shall have the right, from time to
time as the Buyer may reasonably deem appropriate, to perform reasonable due
diligence on the Company during normal business hours.  The Company and its officers and employees
shall provide information and reasonably cooperate with the Buyer in connection
with any reasonable request by the Buyer related to the Buyer’s due diligence
of the Company, including, but not limited to, any such request made by the
Buyer in connection with (i) the filing of the registration statement
described in Section 4(a) hereof and (ii) the Commencement.  Each party hereto agrees not to disclose any
Confidential Information of the other party to any third party and shall not
use the Confidential Information for any purpose other than in connection with,
or in furtherance of, the transactions contemplated hereby.  Each party hereto acknowledges that the
Confidential Information shall remain the property of the disclosing party and
agrees that it shall take all reasonable measures to protect the secrecy of any
Confidential Information disclosed by the other party.

 

(g)           Ownership.  The Buyer agrees to take such action as shall
be necessary at all times to maintain its beneficial ownership of the Company’s
Common Stock, as calculated under section 13(d) of the 1934 Act and
related regulations, at a level below 15%.  
The Company will not issue and the Buyer will not purchase, any Purchase
Shares which, when aggregated with all other shares of Common Stock then
beneficially owned by the Buyer, would result in the beneficial ownership by
the Buyer of more than 14.99% of the then issued and outstanding Common
Stock.  The Buyer will, upon the
reasonable request of the Company, either (i) inform the Company of the
number of shares of Common Stock beneficially owned by it or (ii) confirm
to the Company that its beneficial ownership (as calculated above) at the time
does not exceed 10%.

 

5.             TRANSFER AGENT
INSTRUCTIONS.

 

All
of the Purchase Shares to be issued under this Agreement shall be issued
without any restrictive legend unless the Buyer expressly consents
otherwise.  The Company shall issue
irrevocable instructions to the Transfer Agent, and any subsequent transfer
agent, to issue Purchase Shares in the name of the Buyer for the Purchase
Shares (the “Irrevocable Transfer Agent Instructions”).  The Company warrants to the Buyer that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5, will be given by the Company to the Transfer Agent with
respect to the Purchase Shares and that the Commitment Shares  and the Purchase Shares shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration Rights Agreement.

 

11

 

6.                                      CONDITIONS
TO THE COMPANY’S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK UNDER THIS
AGREEMENT.

 

The
right of the Company hereunder to commence sales of the Purchase Shares is
subject to the satisfaction of each of the following conditions on or before
the Commencement Date (the date that the Company may begin sales):

 

(a)           The Buyer shall have executed each of
the Transaction Documents and delivered the same to the Company;

 

(b)           No stop order with respect to the
Company’s Shelf Registration Statements shall be pending or threatened by the
SEC.

 

7.                                      CONDITIONS
TO THE BUYER’S OBLIGATION TO MAKE PURCHASES OF SHARES OF COMMON STOCK.

 

The
obligation of the Buyer to buy Purchase Shares under this Agreement is subject
to the satisfaction of each of the following conditions on or before the
Commencement Date (the date that the Company may begin sales) and once such
conditions have been initially satisfied, there shall not be any ongoing
obligation to satisfy such conditions after the Commencement has occurred:

 

(a)           The Company shall have executed each
of the Transaction Documents and delivered the same to the Buyer;

 

(b)           The Company shall have issued to the
Buyer the Commitment Shares;

 

(c)           The Common Stock shall be authorized
for quotation on the Principal Market, trading in the Common Stock shall not
have been within the last 365 days suspended by the SEC or the Principal Market
and the Purchase Shares and the Commitment Shares shall be approved for listing
upon the Principal Market;

 

(d)           The Buyer shall have received the
opinions of the Company’s legal counsel dated as of the Commencement Date
substantially in the form of Exhibit A
attached hereto;

 

(e)           The representations and warranties of
the Company shall be true and correct in all material respects (except to the
extent that any of such representations and warranties is already qualified as
to materiality in Section 3 above, in which case, such representations and
warranties shall be true and correct without further qualification) as of the
date when made and as of the Commencement Date as though made at that time
(except for representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied with the
covenants, agreements and conditions required by the Transaction Documents to
be performed, satisfied or complied with by the Company at or prior to the
Commencement Date.  The Buyer shall have
received a certificate, executed by the CEO, President or CFO of the Company,
dated as of the Commencement Date, to the foregoing effect in the form attached
hereto as Exhibit B;

 

12

 

(f)            The Board of Directors of the
Company shall have adopted resolutions substantially in the form attached
hereto as Exhibit C which shall be
in full force and effect without any material amendment or supplement thereto
as of the Commencement Date;

 

(g)           Intentionally Omitted.

 

(h)           The Irrevocable Transfer Agent
Instructions, in form acceptable to the Buyer shall have been delivered to and
acknowledged in writing by the Company and the Company’s Transfer Agent;

 

(i)            The Company shall have delivered to
the Buyer a certificate evidencing the incorporation and good standing of the
Company in the State of Delaware issued by the Secretary of State of the State
of Delaware as of a date within ten (10) Business Days of the Commencement
Date;

 

(j)            The Company shall have delivered to
the Buyer a certified copy of the Certificate of Incorporation as certified by
the Secretary of State of the State of Delaware within ten (10) Business
Days of the Commencement Date;

 

(k)           The Company shall have delivered to
the Buyer a secretary’s certificate executed by the Secretary of the Company,
dated as of the Commencement Date, in the form attached hereto as Exhibit D;

 

(l)            The Company’s Shelf Registration
Statements shall have been declared effective under the 1933 Act by the SEC and
no stop order with respect thereto shall be pending or threatened by the
SEC.  The Company shall have prepared and
delivered to the Buyer a final and complete form of prospectus supplement,
dated and current as of the Commencement Date, to be used in connection with any
sales of any Commitment Shares or any Purchase Shares, and to be filed by the
Company one Business Day after the Commencement Date. The Company shall have
made all filings under all applicable federal and state securities laws
necessary to consummate the issuance of the Commitment Shares and the Purchase
Shares pursuant to this Agreement in compliance with such laws;

 

(m)          No Event of Default has occurred, or
any event which, after notice and/or lapse of time, would become an Event of
Default has occurred;

 

(n)           On or prior to the Commencement Date,
assuming that at all times the Buyer
maintains its beneficial ownership of the Common Stock, as calculated under
section 13(d) of the 1934 Act and related regulations, at a level below
15%, the Company shall take all necessary action, if any, and such
actions as reasonably requested by the Buyer, in order to render inapplicable
any control share acquisition, business combination, shareholder rights plan or
poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Certificate of Incorporation or the
laws of the state of its incorporation which is or could become applicable to
the Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company’s issuance of the Securities and the Buyer’s
ownership of the Securities; and

 

(o)           The Company shall have provided the
Buyer with the information requested by the Buyer in connection with its due
diligence requests made prior to, or in connection with, the Commencement, in
accordance with the terms of Section 4(f) hereof.

 

13

 

8.                                      INDEMNIFICATION.

 

In
consideration of the Buyer’s execution and delivery of the Transaction Documents
and acquiring the Securities hereunder and in addition to all of the Company’s
other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless the Buyer and all of its affiliates,
shareholders, officers, directors and employees and any of the foregoing person’s
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses (irrespective of whether any such Indemnitee is a party
to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents
or any other certificate, instrument or document contemplated hereby or
thereby, or (c) any cause of action, suit or claim brought or made against
such Indemnitee and arising out of or resulting from the execution, delivery,
performance or enforcement of the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby, other than with respect
to Indemnified Liabilities which directly and primarily result from the gross
negligence or willful misconduct of the Indemnitee.  To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

 

9.             EVENTS OF DEFAULT.

 

An
“Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:

 

(a)           while any registration statement is
required to be maintained effective pursuant to the terms of the Registration
Rights Agreement, the effectiveness of such registration statement lapses for
any reason (including, without limitation, the issuance of a stop order) or is
unavailable to the Buyer for sale of all of the Registrable Securities (as
defined in the Registration Rights Agreement) in accordance with the terms of
the Registration Rights Agreement, and such lapse or unavailability continues
for a period of ten (10) consecutive Business Days or for more than an
aggregate of thirty (30) Business Days in any 365-day period;

 

(b)           the suspension from trading or
(except as contemplated under clause (c) below) failure of the Common
Stock to be listed on a Principal Market for a period of three (3) consecutive
Business Days;

 

14

 

(c)           the delisting of the Common Stock
from the Principal Market, provided, however, that the Common Stock is not
immediately thereafter trading on the New York Stock Exchange, the Nasdaq
Global Market, the Nasdaq Global Select Market, the NYSE Amex Equities or the
OTC Bulletin Board;

 

(d)           the failure for any reason by the
Transfer Agent to issue Purchase Shares to the Buyer within five (5) Business
Days after the applicable Purchase Date which the Buyer is entitled to receive;

 

(e)           the Company breaches any
representation, warranty, covenant or other term or condition under any
Transaction Document if such breach could have a Material Adverse Effect and
except, in the case of a breach of a covenant which is reasonably curable, only
if such breach continues for a period of at least five (5) Business Days;

 

(f)            if any Person commences a proceeding
against the Company pursuant to or within the meaning of any Bankruptcy Law ;

 

(g)           if the Company pursuant to or within
the meaning of any Bankruptcy Law; (A) commences a voluntary case, (B) consents
to the entry of an order for relief against it in an involuntary case, (C) consents
to the appointment of a Custodian of it or for all or substantially all of its
property, (D) makes a general assignment for the benefit of its creditors,
(E) becomes insolvent, or (F) is generally unable to pay its debts as
the same become due; or

 

(h)           a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that (A) is for relief
against the Company in an involuntary case, (B) appoints a Custodian of
the Company or for all or substantially all of its property, or (C) orders
the liquidation of the Company or any Subsidiary.

 

In
addition to any other rights and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof,
so long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Closing Sale Price is below the
Floor Price (or, to the extent applicable, the Purchase Price is below the Base
Price), the Buyer shall not be obligated to purchase any shares of Common Stock
under this Agreement.  If pursuant to or
within the meaning of any Bankruptcy Law, the Company commences a voluntary
case or any Person commences a proceeding against the Company, a Custodian is
appointed for the Company or for all or substantially all of its property, or
the Company makes a general assignment for the benefit of its creditors, (any
of which would be an Event of Default as described in Sections 9(f), 9(g) and
9(h) hereof) this Agreement shall automatically terminate without any
liability or payment to the Company without further action or notice by any
Person.  No such termination of this
Agreement under Section 11(k)(i) shall affect the Company’s or the
Buyer’s obligations under this Agreement with respect to pending purchases and
the Company and the Buyer shall complete their respective obligations with
respect to any pending purchases under this Agreement.

 

15

 

10.          CERTAIN DEFINED
TERMS.

 

For
purposes of this Agreement, the following terms shall have the following
meanings:

 

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

 

(b)           “Available Amount” means initially
Twenty Five Million Dollars ($25,000,000) in the aggregate which amount shall
be reduced by the Purchase Amount each time the Buyer purchases shares of
Common Stock pursuant to Section 1 hereof.

 

(c)           “Bankruptcy Law” means Title 11, U.S.
Code, or any similar federal or state law for the relief of debtors.

 

(d)           “Business Day” means any day on which
the Principal Market is open for trading including any day on which the
Principal Market is open for trading for a period of time less than the
customary time.

 

(e)           “Closing Sale Price” means, the last
closing trade price for the Common Stock on the Principal Market as reported by
the Principal Market.

 

(f)            “Confidential Information” means any
information disclosed by either party to the other party, either directly or
indirectly, in writing, orally or by inspection of tangible objects (including,
without limitation, documents, prototypes, samples, plant and equipment), which
is designated as “Confidential,” “Proprietary” or some similar designation.
Information communicated orally shall be considered Confidential Information if
such information is confirmed in writing as being Confidential Information
within ten (10) Business Days after the initial disclosure. Confidential
Information may also include information disclosed to a disclosing party by
third parties. Confidential Information shall not, however, include any
information which (i) was publicly known and made generally available in
the public domain prior to the time of disclosure by the disclosing party; (ii) becomes
publicly known and made generally available after disclosure by the disclosing
party to the receiving party through no action or inaction of the receiving
party; (iii) is already in the possession of the receiving party at the
time of disclosure by the disclosing party as shown by the receiving party’s
files and records immediately prior to the time of disclosure; (iv) is
obtained by the receiving party from a third party without a breach of such
third party’s obligations of confidentiality; (v) is independently
developed by the receiving party without use of or reference to the disclosing
party’s Confidential Information, as shown by documents and other competent
evidence in the receiving party’s possession; or (vi) is required by law
to be disclosed by the receiving party, provided that the receiving party gives
the disclosing party prompt written notice of such requirement prior to such
disclosure and assistance in obtaining an order protecting the information from
public disclosure.

 

(g)           “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

(h)           “Maturity Date” means August 31,
2012.

 

16

 

(i)            “Person” means an individual or
entity including any limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.

 

(j)            “Principal Market” means the Nasdaq
Capital Market; provided however, that
in the event the Company’s Common Stock is ever listed or traded on the Nasdaq
Global Market, the Nasdaq Global Select Market, the OTC Bulletin Board, the New
York Stock Exchange or the NYSE Amex Equities, then the “Principal Market”
shall mean such other market or exchange on which the Company’s Common Stock is
then listed or traded.

 

(k)           “Purchase Amount” means, with respect
to any particular purchase made hereunder, the portion of the Available Amount
to be purchased by the Buyer pursuant to Section 1 hereof as set forth in
a valid Purchase Notice which the Company delivers to the Buyer.

 

(l)            “Purchase Date” means with respect
to any Purchase made hereunder, the Business Day of receipt by the Buyer of a
valid Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1
hereof.

 

(m)          “Purchase Notice” shall mean an
irrevocable written notice from the Company to the Buyer directing the Buyer to
buy Purchase Shares as specified by the Company therein at the applicable
Purchase Price on the Purchase Date.

 

(n)           “Purchase Price” means the lower of
the (A) the lowest Sale Price of the Common Stock on the Purchase Date and
(B) the arithmetic average of the three (3) lowest Closing Sale
Prices for the Common Stock during the twelve (12) consecutive Business Days
ending on the Business Day immediately preceding such Purchase Date (to be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction).

 

(o)           “Sale Price” means, any trade price
for the shares of Common Stock on the Principal Market as reported by the
Principal Market.

 

(p)           “SEC” means the United States
Securities and Exchange Commission.

 

(q)           “Transfer Agent” means the transfer
agent of the Company as set forth in Section 11(f) hereof or such
other person who is then serving as the transfer agent for the Company in
respect of the Common Stock.

 

11.          MISCELLANEOUS.

 

(a)           Governing Law; Jurisdiction; Jury
Trial.  The corporate laws of the
State of Delaware shall govern all issues concerning the relative rights of the
Company and its shareholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the other
Transaction Documents shall be governed by the internal laws of the State of
Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Illinois.  Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and

 

17

 

federal
courts sitting in the City of Chicago, for the adjudication of any dispute
hereunder or under the other Transaction Documents or in connection herewith or
therewith, or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law.  EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 

(b)           Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original,
not a facsimile signature.

 

(c)           Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement.

 

(d)           Severability.  If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

(e)           Entire Agreement.  With the exception of the Mutual
Nondisclosure Agreement between the parties dated as of June 28, 2010,
this Agreement supersedes all other prior oral or written agreements between
the Buyer, the Company, their affiliates and persons acting on their behalf
with respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. 
The Company acknowledges and agrees that is has not relied on, in any
manner whatsoever, any representations or statements, written or oral, other
than as expressly set forth in this Agreement.

 

(f)            Notices.  Any notices, consents or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt when
delivered personally; (ii) upon receipt when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

18

 

If
to the Company:

Beacon Power Corporation

65 Middlesex Road

Tyngsboro, MA 01879

Phone: 978-694-9121

Fax:     978-694-9127

Attention:  Chief Financial
Officer

 

With
a copy to:

	
  Edwards Angell Palmer & Dodge LLP

  
	
  111 Huntington Avenue

  
	
  Boston, MA 02199-7613

  
	
  Telephone:

  	
  617-239-0100

  
	
  Facsimile:

  	
  617-227-4420

  
	
  Attention:

  	
  Albert
  L. Sokol, Esq.

  

 

If
to the Buyer:

	
  Aspire Capital Fund, LLC

  
	
  155 North Wacker Drive, Suite 1600

  
	
  Chicago, IL 60606

  
	
  Telephone:

  	
  312-658-0400

  
	
  Facsimile:

  	
  312-658-4005

  
	
  Attention:

  	
  Steven
  G. Martin

  

 

If
to the Transfer Agent:

Computershare
Limited

250
Royall Street

Canton,
MA 02021

Telephone:  781-575-4179

Facsimile:
781-575-2549

Attention:  Monique Hughes

 

or
at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party one (1) Business Day prior to the effectiveness of such
change.  Written confirmation of receipt (A) given
by the recipient of such notice, consent or other communication, (B) mechanically
or electronically generated by the sender’s facsimile machine containing the
time, date, and recipient facsimile number or (C) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.  Any party to this
Agreement may give any notice or other communication hereunder using any other
means (including messenger service, ordinary mail or electronic mail), but no
such notice or other communication shall be deemed to have duly given unless it
actually is received by the party for whom it is intended.

 

(g)                                 Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns.  The Company
shall not assign this Agreement 

 

19

 

or
any rights or obligations hereunder without the prior written consent of the
Buyer, including by merger or consolidation. 
The Buyer may not assign its rights or obligations under this Agreement.

 

(h)                                 No Third Party
Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.

 

(i)                                     Publicity.  The Buyer shall have the right to approve
before issuance any press release, SEC filing or any other public disclosure
made by or on behalf of the Company whatsoever with respect to, in any manner,
the Buyer, its purchases hereunder or any aspect of this Agreement or the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of the Buyer, to make any press release or
other public disclosure (including any filings with the SEC) with respect to
such transactions as is required by applicable law and regulations so long as
the Company and its counsel consult with the Buyer in connection with any such
press release or other public disclosure at least two (2) Business Days
prior to its release.  The Buyer must be
provided with a copy thereof at least two (2) Business Days prior to any release
or use by the Company thereof.

 

(j)                                     Further
Assurances.  Each party
shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.

 

(k)                                  Termination.  This Agreement may be terminated only as follows:

 

(i)                                     By the Buyer
any time an Event of Default exists without any liability or payment to the
Company.  However, if pursuant to or
within the meaning of any Bankruptcy Law, the Company commences a voluntary
case or any Person commences a proceeding against the Company, a Custodian is
appointed for the Company or for all or substantially all of its property, or
the Company makes a general assignment for the benefit of its creditors, (any
of which would be an Event of Default as described in Sections 9(f), 9(g) and
9(h) hereof) this Agreement shall automatically terminate without any
liability or payment to the Company without further action or notice by any
Person.  No such termination of this
Agreement under this Section 11(k)(i) shall affect the Company’s or
the Buyer’s obligations under this Agreement with respect to pending purchases
and the Company and the Buyer shall complete their respective obligations with
respect to any pending purchases under this Agreement.

 

(ii)                                  In the event
that the Commencement shall not have occurred, the Company shall have the
option to terminate this Agreement for any reason or for no reason without any
liability whatsoever of any party to any other party under this Agreement.

 

(iii)                               In the event
that the Commencement shall not have occurred on or before August 1, 2010,
due to the failure to satisfy the conditions set forth in Sections 6 and 7
above with respect to the Commencement, the non-breaching party shall have the
option to terminate this Agreement at the close of business on such date or
thereafter without liability of any party to any other party.

 

20

 

(iv)                              At any time
after the Commencement Date, the Company shall have the option to terminate
this Agreement for any reason or for no reason by delivering notice (a “Company
Termination Notice”) to the Buyer electing to terminate this Agreement without
any liability whatsoever of any party to any other party under this
Agreement.  The Company Termination
Notice shall not be effective until one (1) Business Day after it has been
received by the Buyer.

 

(v)                                 This Agreement
shall automatically terminate on the date that the Company sells and the Buyer
purchases the full Available Amount as provided herein, without any action or
notice on the part of any party and without any liability whatsoever of any
party to any other party under this Agreement.

 

(vi)                              If by the
Maturity Date for any reason or for no reason the full Available Amount under
this Agreement has not been purchased as provided for in Section 1 of this
Agreement, this Agreement shall automatically terminate on the Maturity Date,
without any action or notice on the part of any party and without any liability
whatsoever of any party to any other party under this Agreement. In such case,
the Buyer shall be required to immediately pay to the Company a termination fee
(the “Termination Fee”), equal to the number of Commitment Shares multiplied by
$0.324 multiplied by Unfunded Amount Percentage (as defined below).  The Termination Fee may, at the election of
the Buyer, be paid in cash or in shares of common stock valued at $0.324 per
share. “Unfunded Amount Percentage” means the percentage of the Aggregate
Amount that the Company did not receive from the Buyer during the term of this
Agreement.

 

Except
as set forth in Sections 11(k)(i) (in respect of an Event of Default under
Sections 9(f), 9(g) and 9(h)) and 11(k)(vi), any termination of this
Agreement pursuant to this Section 11(k) shall be effected by written
notice from the Company to the Buyer, or the Buyer to the Company, as the case
may be, setting forth the basis for the termination hereof.  The representations and warranties of the
Company and the Buyer contained in Sections 2, 3 and 5 hereof, the
indemnification provisions set forth in Section 8 hereof and the
agreements and covenants set forth in Section 11, shall survive the
Commencement and any termination of this Agreement.  No termination of this Agreement shall affect
the Company’s or the Buyer’s rights or obligations (i) under the
Registration Rights Agreement which shall survive any such termination or (ii) under
this Agreement with respect to pending purchases and the Company and the Buyer
shall complete their respective obligations with respect to any pending
purchases under this Agreement.

 

(l)                                     No Financial
Advisor, Placement Agent, Broker or Finder.  The Company represents and warrants to the
Buyer that it has not engaged any financial advisor, placement agent, broker or
finder in connection with the transactions contemplated hereby.  The Buyer represents and warrants to the
Company that it has not engaged any financial advisor, placement agent, broker
or finder in connection with the transactions contemplated hereby.  The Company shall be responsible for the
payment of any fees or commissions, if any, of any financial advisor, placement
agent, broker or finder relating to or arising out of the transactions
contemplated hereby.  The Company shall
pay, and hold the Buyer harmless against, any liability, loss or expense
(including, without limitation, attorneys’ fees and out of pocket expenses)
arising in connection with any such claim.

 

21

 

(m)                               No Strict
Construction.  The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

 

(n)                                 Remedies, Other
Obligations, Breaches and Injunctive Relief.  Each party’s remedies provided in this Agreement
shall be cumulative and in addition to all other remedies available to it under
this Agreement, at law or in equity (including a decree of specific performance
and/or other injunctive relief), no remedy of either party contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit either party’s right to pursue actual
damages for any failure by other party to comply with the terms of this
Agreement.  Each party acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the
other and that the remedy at law for any such breach may be inadequate.  Each party therefore agrees that, in the
event of any such breach or threatened breach, the other party shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

 

(0)                                  Enforcement
Costs.  If: (i) this Agreement is
placed by the Buyer in the hands of an attorney for enforcement or is enforced
by the Buyer through any legal proceeding; or (ii) an attorney is retained
to represent the Buyer in any bankruptcy, reorganization, receivership or other
proceedings affecting creditors’ rights and involving a claim under this
Agreement; or (iii) an attorney is retained to represent the Buyer in any
other proceedings whatsoever in connection with this Agreement, then the
Company shall pay to the Buyer, as incurred by the Buyer, all reasonable costs
and expenses including attorneys’ fees incurred in connection therewith, in
addition to all other amounts due hereunder.

 

(p)                                 Failure or
Indulgence Not Waiver.  No
failure or delay in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege.

 

*     *     *    
*     *

 

22

 

IN WITNESS WHEREOF, the Buyer and the Company
have caused this Common Stock Purchase Agreement to be duly executed as of the
date first written above.

 

 

	
   

  	
  THE
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  BEACON
  POWER CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James M. Spiezio

  
	
   

  	
  Name:

  	
  James
  M. Spiezio

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  ASPIRE
  CAPITAL FUND, LLC

  
	
   

  	
  BY: ASPIRE CAPITAL PARTNERS, LLC

  
	
   

  	
  BY:
  SGM HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven G. Martin

  
	
   

  	
  Name:

  	
  Steven
  G. Martin

  
	
   

  	
  Title:

  	
  President

  

 

23

 

SCHEDULES

 

Schedule 3(a)                                                                        Subsidiaries

Schedule 3(c)                                                                        Capitalization

Schedule 3(e)                                                                        Conflicts

Schedule 3(f)                                                                          1934 Act
Filings

Schedule 3(g)                                                                       Material
Changes

Schedule 3(h)                                                                       Litigation

Schedule 3(j)                                                                           Intellectual
Property

Schedule 3(l)                                                                           Liens

Schedule 3(p)                                                                       Certain
Transactions

 

EXHIBITS

 

Exhibit A                                                                                               Form of
Company Counsel Opinion

Exhibit B                                                                                                 Form of
Officer’s Certificate

Exhibit C                                                                                                 Form of
Resolutions of Board of Directors of the Company

Exhibit D                                                                                                Form of
Secretary’s Certificate

 

 

DISCLOSURE SCHEDULES

 

Schedule 3(a) — Subsidiaries

 

Schedule 3(c) - Capitalization

 

Schedule 3(e) - No Conflicts

 

Schedule 3(f) - 1934 Act Filings

 

Schedule 3(g) - Absence of Certain
Changes

 

Schedule 3(h) - Litigation

 

Schedule 3(j) - Intellectual Property
Rights

 

Schedule 3(l) - Title

 

Schedule 3(p) - Transactions with
Affiliates

 

 

EXHIBIT A

 

FORM OF COMPANY COUNSEL OPINION

 

Capitalized terms used herein but not defined herein, have the meaning
set forth in the Common Stock Purchase Agreement.  Based on the foregoing, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:

 

1.               The Company is
a corporation existing and in good standing under the laws of the State of
Delaware.  The Company is qualified to do
business as a foreign corporation and is in good standing in the States of
                                                    .

 

2.               The Company has
the corporate power to execute and deliver, and perform its obligations under,
each Transaction Document to which it is a party.  The Company has the corporate power to
conduct its business as, to the best of our knowledge, it is now conducted, and
to own and use the properties owned and used by it.

 

3.               The execution,
delivery and performance by the Company of the Transaction Documents to which
it is a party have been duly authorized by all necessary corporate action on
the part of the Company.  The execution
and delivery of the Transaction Documents by the Company, the performance of
the obligations of the Company thereunder and the consummation by it of the
transactions contemplated therein have been duly authorized and approved by the
Company’s Board of Directors and no further consent, approval or authorization
of the Company, its Board of Directors or its stockholders is required.  The Transaction Documents to which the
Company is a party have been duly executed and delivered by the Company and are
the valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency, liquidation
or similar laws relating to, or affecting creditor’s rights and remedies.

 

4.               The execution,
delivery and performance by the Company of the Transaction Documents, the
consummation by the Company of the transactions contemplated thereby including
the offering, sale and issuance of the Commitment Shares, and the Purchase
Shares in accordance with the terms and conditions of the Common Stock Purchase
Agreement, and fulfillment and compliance with terms of the Transaction
Documents, does not and shall not: (i) conflict with, constitute a breach
of or default (or an event which, with the giving of notice or lapse of time or
both, constitutes or could constitute a breach or a default), under (a) the
Certificate of Incorporation or the Bylaws of the Company, or (b) any
material agreement, note, lease, mortgage, deed or other material instrument to
which to our knowledge the Company is a party or by which the Company or any of
its assets are bound, (ii) result in any violation of any statute, law, rule or
regulation applicable to the Company, or (iii) to our knowledge, violate
any order, writ, injunction or decree applicable to the Company or any of its
subsidiaries.

 

5.               The issuance of
the Purchase Shares and Commitment Shares pursuant to the terms and conditions
of the Transaction Documents has been duly authorized and the Commitment Shares
are validly issued, fully paid and non-assessable, to our knowledge, free of
all taxes, liens, charges, restrictions, rights of first refusal and preemptive
rights. When issued and paid for in accordance with the Common Stock Purchase
Agreement, the Purchase Shares shall be validly issued, fully paid and non-assessable,
to our knowledge, free of all taxes, liens, charges, restrictions, rights of
first refusal and 

 

 

preemptive
rights.  To our knowledge, the execution
and delivery of the Registration Rights Agreement do not, and the performance
by the Company of its obligations thereunder shall not, give rise to any rights
of any other person for the registration under the 1933 Act of any shares of
Common Stock or other securities of the Company which have not been waived.

 

6.               As of the date
hereof, the authorized capital stock of the Company consists of 400 million
shares of common stock, par value $0.01 per share.  Except as set forth on Schedule 3(c) of
the Common Stock Purchase Agreement, to our knowledge, there are no outstanding
shares of capital stock or other securities convertible into or exchangeable or
exercisable for shares of the capital stock of the Company.

 

7.               Other than that
which has been obtained and completed prior to the date hereof, and except as
contemplated by the Common Stock Purchase Agreement and the Registration Rights
Agreement, no authorization, approval, consent, filing or other order of any
federal or state governmental body, regulatory agency, or stock exchange or
market, or any court, or, to our knowledge, any third party is required to be
obtained by the Company to enter into and perform its obligations under the
Transaction Documents or for the Company to issue and sell the Commitment
Shares and the Purchase Shares as contemplated by the Transaction Documents.

 

8.  The Common Stock is
registered pursuant to Section 12(b) of the 1934 Act.  To our knowledge, since January 1, 2009,
the Company has been in compliance with the reporting requirements of the 1934
Act applicable to it.  To our knowledge,
since January 1, 2009, the Company has not received any written notice
from the Principal Market stating that the Company has not been in compliance
with any of the rules and regulations (including the requirements for
continued listing) of the Principal Market, except as disclosed in its filings
with the SEC.

 

We further advise you that to our knowledge, except as disclosed on
Schedule 3(h) in the Common Stock Purchase Agreement, there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board
or body, any governmental agency, any stock exchange or market, or
self-regulatory organization, which has been threatened in writing or which is
currently pending against the Company, any of its subsidiaries, any officers or
directors of the Company or any of its subsidiaries or any of the properties of
the Company or any of its subsidiaries.

 

In addition, we have participated in the preparation of the
Registration Statement (SEC File
#                )
covering the sale of the Purchase Shares, the Commitment Shares including the
prospectus supplement dated
                        ,
contained therein and in conferences with officers and other representatives of
the Company (including the Company’s independent auditors) during which the
contents of the Registration Statement and related matters were discussed and
reviewed and, although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, on the basis of the information that
was developed in the course of the performance of the services referred to
above, considered in the light of our understanding of the applicable law,
nothing came to our attention that caused us to believe that the Registration
Statement (other than the financial statements and schedules and the other
financial and statistical data included therein, as to which we express no
belief), as of their dates, contained any untrue statement of a material fact
or omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 

 

EXHIBIT B

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”)
is being delivered pursuant to Section 7(e) of that certain Common
Stock Purchase Agreement dated as of
                  ,
(“Common Stock Purchase Agreement”), by
and between BEACON POWER CORPORATION, a
Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC (the “Buyer”).  Terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Common Stock Purchase
Agreement.

 

The undersigned,
                      ,
                            
of the Company, hereby certifies as follows:

 

1.                                       I am the
                          
of the Company and make the statements contained in this Certificate;

 

2.                                       The
representations and warranties of the Company are true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 of the
Common Stock Purchase Agreement, in which case, such representations and
warranties are true and correct without further qualification) as of the date
when made and as of the Commencement Date as though made at that time (except
for representations and warranties that speak as of a specific date);

 

3.                                       The Company has
performed, satisfied and complied in all material respects with covenants,
agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
Commencement Date.

 

4.                                       The Company has
not taken any steps, and does not currently expect to take any steps, to seek
protection pursuant to any Bankruptcy Law nor does the Company or any of its
Subsidiaries have any knowledge or reason to believe that its creditors intend
to initiate involuntary bankruptcy or insolvency proceedings. The Company is
financially solvent and is generally able to pay its debts as they become due.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this
       day of
                      .

 

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

The undersigned as Secretary of
                ,
a
                
corporation, hereby certifies that
                      
is the duly elected, appointed, qualified and acting
                
of
                  
and that the signature appearing above is his genuine signature.

 

	
   

  	
   

  
	
   

  	
  Secretary
  

  

 

 

EXHIBIT C

 

FORM OF
COMPANY RESOLUTIONS

FOR SIGNING
PURCHASE AGREEMENT

 

UNANIMOUS
WRITTEN CONSENT OF

BEACON POWER CORPORATION

 

Pursuant
to Section             
of the
                  ,
the undersigned, being all of the directors of BEACON POWER
CORPORATION, a Delaware corporation (the “Corporation”) do hereby
consent to and adopt the following resolutions as the action of the Board of
Directors for and on behalf of the Corporation and hereby direct that this
Consent be filed with the minutes of the proceedings of the Board of Directors:

 

WHEREAS,
there has been presented to the Board of Directors of the Corporation a draft
of the Common Stock Purchase Agreement (the “Purchase Agreement”) by and
between the Corporation and Aspire Capital Fund, LLC (“Aspire”), providing for
the purchase by Aspire of up to Twenty Five Million Dollars ($25,000,000) of
the Corporation’s common stock, par value $.01 (the “Common Stock”); and

 

WHEREAS,
after careful consideration of the Purchase Agreement, the documents incident thereto
and other factors deemed relevant by the Board of Directors, the Board of
Directors has determined that it is advisable and in the best interests of the
Corporation to engage in the transactions contemplated by the Purchase
Agreement, including, but not limited to, the issuance of
                  
shares of Common Stock to Aspire as a commitment fee (the “Commitment Shares”)
and the sale of shares of Common Stock to Aspire up to the available amount
under the Purchase Agreement (the “Purchase Shares”).

 

Transaction Documents

 

NOW,
THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase
Agreement are hereby approved and
                                                                                
(the “Authorized Officers”) are severally authorized to execute and deliver the
Purchase Agreement, and any other agreements or documents contemplated thereby
including, without limitation, a registration rights agreement (the
“Registration Rights Agreement”) providing for the registration of the shares
of the Company’s Common Stock issuable in respect of the Purchase Agreement on
behalf of the Corporation, with such amendments, changes, additions and
deletions as the Authorized Officers may deem to be appropriate and approve on
behalf of, the Corporation, such approval to be conclusively evidenced by the
signature of an Authorized Officer thereon; and

 

FURTHER
RESOLVED, that the Authorized Officers are hereby authorized to approve any
amendments or supplements to the prospectus or prospectuses forming a part of
the Company’s outstanding shelf registration statements in Form S-3, and
to file or cause to be filed the same in order to cover the offer and sale of
the Commitment Shares and the Purchase Shares under the Purchase Agreement; and
that terms and provisions of the Registration Rights Agreement by and among the
Corporation and Aspire are hereby approved and the Authorized Officers are
authorized to execute and deliver the Registration Rights Agreement (pursuant
to the terms of the Purchase Agreement), with such amendments, changes,
additions and deletions as the Authorized Officer may deem appropriate 

 

 

and
approve on behalf of, the Corporation, such approval to be conclusively
evidenced by the signature of an Authorized Officer thereon; and

 

FURTHER
RESOLVED, that the terms and provisions of the Form of Transfer Agent
Instructions (the “Instructions”) are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to
the terms of the Purchase Agreement), with such amendments, changes, additions
and deletions as the Authorized Officers may deem appropriate and approve on
behalf of, the Corporation, such approval to be conclusively evidenced by the
signature of an Authorized Officer thereon; and

 

Execution of Purchase Agreement

 

FURTHER
RESOLVED, that the Corporation be and it hereby is authorized to execute the
Purchase Agreement providing for the purchase of common stock of the
Corporation having an aggregate value of up to $20,000,000; and

 

Issuance of
Common Stock

 

FURTHER
RESOLVED, that the Corporation is hereby authorized to issue
                
shares of Common Stock to Aspire Capital Fund, LLC as  Commitment Shares and that upon issuance of the Commitment
Shares pursuant to the Purchase Agreement, the Commitment Shares shall be duly
authorized, validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof; and

 

FURTHER
RESOLVED, that the Corporation is hereby authorized to issue shares of Common
Stock upon the purchase of Purchase Shares up to the available amount under the
Purchase Agreement in accordance with the terms of the Purchase Agreement and
that, upon issuance of the Purchase Shares pursuant to the Purchase Agreement,
the Purchase Shares will be duly authorized, validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership thereof;
and

 

FURTHER
RESOLVED, that the Corporation shall initially reserve
                    
shares of Common Stock for issuance as Purchase Shares under the Purchase
Agreement.

 

Listing Of The Shares On The Nasdaq Capital Market

 

FURTHER
RESOLVED, that the officers of the Corporation with the assistance of counsel
be, and each of them hereby is, authorized and directed to take all necessary
steps and do all other things necessary and appropriate to effect the listing
of the Shares on the Nasdaq Capital Market.

 

Approval of
Actions

 

FURTHER
RESOLVED, that, without limiting the foregoing, the Authorized Officers are,
and each of them hereby is, authorized and directed to proceed on behalf of the
Corporation and to take all such steps as deemed necessary or appropriate, with
the advice and assistance of counsel, to cause the Corporation to consummate
the agreements referred to herein and to perform its obligations under such
agreements; and

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them
hereby is, authorized, empowered and directed on behalf of and in the name of
the Corporation, to take or cause to be taken

 

 

all such further actions and to execute and deliver or cause to be
executed and delivered all such further agreements, amendments, documents,
certificates, reports, schedules, applications, notices, letters and
undertakings and to incur and pay all such fees and expenses as in their
judgment shall be necessary, proper or desirable to carry into effect the
purpose and intent of any and all of the foregoing resolutions, and that all
actions heretofore taken by any officer or director of the Corporation in
connection with the transactions contemplated by the agreements described
herein are hereby approved, ratified and confirmed in all respects.

 

IN WITNESS WHEREOF, the Board of Directors has executed and delivered
this Consent effective as of
                    ,
2010.

 

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

being all of the directors of BEACON POWER CORPORATION.

 

EXHIBIT D

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (“Certificate”) is being delivered
pursuant to Section 7(k) of that certain Common Stock Purchase
Agreement dated as of
                    ,
(“Common Stock Purchase Agreement”), by and between BEACON POWER
CORPORATION, a Delaware corporation (the “Company”) and ASPIRE CAPITAL FUND, LLC (the “Buyer”), pursuant to which
the Company may sell to the Buyer up to Twenty Five Million Dollars
($25,000,000) of the Company’s Common Stock, par value $.01 per share (the
“Common Stock”).  Terms used herein and
not otherwise defined shall have the meanings ascribed to them in the Common
Stock Purchase Agreement.

 

 

The undersigned,
                        ,
Secretary of the Company, hereby certifies as follows:

 

1.                                       I am the
Secretary of the Company and make the statements contained in this Secretary’s
Certificate.

 

2.                                       Attached hereto
as Exhibit A and Exhibit B are true, correct and
complete copies of the Company’s bylaws (“Bylaws”) and Certificate of
Incorporation (“Articles”), in each case, as amended through the date hereof,
and no action has been taken by the Company, its directors, officers or
shareholders, in contemplation of the filing of any further amendment relating
to or affecting the Bylaws or Articles.

 

3.                                       Attached hereto
as Exhibit C are true, correct and complete copies of the
resolutions duly adopted by the Board of Directors of the Company on
                          ,
at which a quorum was present and acting throughout.  Such resolutions have not been amended,
modified or rescinded and remain in full force and effect and such resolutions
are the only resolutions adopted by the Company’s Board of Directors, or any
committee thereof, or the shareholders of the Company relating to or affecting
(i) the entering into and performance of the Common Stock Purchase
Agreement, or the issuance, offering and sale of the Purchase Shares and the
Commitment Shares and (ii) and the performance of the Company of its
obligation under the Transaction Documents as contemplated therein.

 

4.                                       As of the date
hereof, the authorized, issued and reserved capital stock of the Company is as
set forth on Exhibit D hereto.

 

IN WITNESS WHEREOF, I have hereunder
signed my name on this        day of
                        .

 

	
   

  	
   

  
	
   

  	
  Secretary

  

 

The undersigned as
                      
of
                    ,
a
                
corporation, hereby certifies that
                        
is the duly elected, appointed, qualified and acting Secretary of
                  ,
and that the signature appearing above is his genuine signature.

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