Document:

EXHIBIT 10.4

 

LYNX HOLDINGS I, LLC

700
Louisiana, Suite 4150

Houston,
Texas

77002

 

August 12, 2005

 

 

Plains All American GP LLC

333 Clay Street, Suite 1600

Houston, Texas 77002

 

 

Gentlemen:

 

Reference
is made to the Amended and Restated Limited Liability Company Agreement of
Plains All American GP LLC, dated as of June 8, 2001, as amended (the “LLC
Agreement”).  A subsidiary of Vulcan
Energy Corporation (“Vulcan Energy”) has become the beneficial owner of more
than 49.9% (a “Majority Holder”) of the Membership Interests (as defined in the
LLC Agreement) of Plains All American GP LLC, a Delaware limited liability
company (the “Company”).  Capitalized
terms that are not otherwise defined herein shall have the meanings set forth
in the LLC Agreement.

The
undersigned hereby agrees as follows:

1.             Subject to the terms and conditions
of this letter agreement, during the term of this letter agreement, at each
annual meeting of the Members, at each special meeting of the Members called
for the purpose of electing Independent Directors, and in respect of any action
by written consent to elect Independent Directors, the undersigned shall vote
or cause to be voted all Membership Interests held by it in favor of the
election of each nominee for Independent Director in the same proportion as all
Membership Interests (other than those beneficially owned by the undersigned
and/or Vulcan Energy or its affiliates) are voted with respect to such
election.  For the avoidance of doubt,
for purposes of this letter agreement the term “Independent Director” shall not
include any replacement Director who is to be elected by a Majority in Interest
pursuant to the second sentence of Section 7.1(a)(iv) of the LLC Agreement.

2.             Subject to the terms and conditions
of this letter agreement, during the term of this letter agreement, at each
special meeting of the Members called for the purpose of removing any
Independent Director without Good Cause, and in connection with any action by
the Members to remove any Independent Director without Good Cause, including
without limitation pursuant to Section 7.1(a)(iii) of the LLC Agreement, the
undersigned shall vote or cause to be voted the Membership Interests held by it
in favor of or against the removal of such Independent Director in the same proportion
as all 

 

 

Membership Interests (other than those
beneficially owned by the undersigned and/or Vulcan Energy or its affiliates)
are voted with respect to such removal. 
For the purposes of this letter agreement, the Members shall have “Good
Cause” to remove or fail to reelect any Independent Director only upon such
Independent Director’s (i) engaging in gross misconduct, including without
limitation any breach of his fiduciary duties, (ii) violation of the Company’s
Code of Business Conduct (unless waived in accordance with the terms thereof),
(iii) engaging in conduct which is demonstrably and materially injurious to the
Company or to Rodeo, L.P. and its subsidiaries, taken as a whole, (iv)
indictment for, or conviction of, a felony involving moral turpitude.

 

3.             The term of this letter agreement
shall commence on the date of this letter agreement and shall continue
thereafter unless terminated by the undersigned pursuant to this Section
3.  The undersigned shall be entitled to
terminate this letter agreement at any time upon (i) termination of the voting
agreement entered into between Vulcan Energy (or its relevant affiliate or
affiliates) and the Company on the date of this letter agreement or (ii) the
sale or transfer by the undersigned of all of its Membership Interests to an
unaffiliated third party.

4.             Except to the extent specifically
set forth above, nothing contained herein shall be deemed to modify, supersede
or in any manner limit any rights of the undersigned under the LLC
Agreement.  Nothing contained herein
shall be deemed to modify, supersede or in any manner limit any rights of the
undersigned under the Partnership Agreement or the Rodeo, L.P. Partnership
Agreement.

5.             This letter agreement is to be
governed by the laws of the State of Delaware, without giving effect to the
principles of conflicts of laws thereof. 
If any provision hereof is deemed unenforceable, the enforceability of
the other provisions hereof shall not be affected.

6.             The undersigned signs solely in
his, her or its individual capacity with respect to his, her or its beneficial
ownership of Membership Interests and makes no agreement or understanding
herein in any other capacity.

7.             This letter agreement may be
executed in two or more counterparts, each of which shall be considered an
original but all of which together shall constitute the same instrument.

8.             This letter agreement (including
the documents and instruments referred to herein) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, among the undersigned and the Company, or any of them, with
respect to the subject matter hereof.

9.             This letter agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by each of the undersigned and the
Company.

 

 

10.           This letter agreement shall not be
assigned by the Company by operation of law or otherwise without the prior
written consent of the undersigned.

11.           This letter agreement shall be
binding upon and inure solely to the benefit of each party to this letter
agreement and their permitted assignees, and nothing in this letter agreement,
express or implied, is intended to or shall confer upon any other Person any
rights, benefits or remedies of any nature whatsoever under or by reason of
this letter agreement.  Without limiting
the foregoing, no direct or indirect holder of any equity interests or
securities of any party to this letter agreement (whether such holder is a
limited or general partner, member, stockholder or otherwise), nor any
Affiliate of any party to this letter agreement (other than an Affiliate to
whom the undersigned assigns any part of its Membership Interests), nor any
director, officer, employee, representative, agent or other controlling Person
of each of the parties to this letter agreement and their respective Affiliates
shall have any liability or obligation arising under this letter agreement.

12.           The undersigned acknowledges and
agrees that the Company could not be made whole by monetary damages in the
event of any default by the undersigned of the terms and conditions set forth
in this letter agreement.  It is
accordingly agreed and understood that the Company, in addition to any other
remedy that it may have at law or in equity, shall be entitled to an injunction
or injunctions to prevent breaches of this letter agreement and specifically to
enforce the terms and provisions hereof in any action instituted in any court
of the United States or in any state having appropriate jurisdiction.

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lynx Holdings I, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John T. Raymond

  
	
   

  	
   

  	
   

  	
  John T. Raymond,

  
	
   

  	
   

  	
   

  	
  Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreed and accepted as of

  this 12th day of
  August, 2005:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PLAINS ALL AMERICAN GP LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Tim Moore

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:Exhibit 10.1

 

Senior
Executive Long Term Disability

Supplemental Coverage Reimbursement Policy

 

Coverages under the Company’s Group Long Term
Disability (LTD) Plan which only covers base salary and Supplemental LTD Plan
which covers any excess base salary and bonus are fully paid for by our
associates.   With one limited exception
for senior executives earning an annual base salary in excess of $400,000 (“Highly
Compensated Senior Executives”), associates are not reimbursed for this
expense.  The Company annually reimburses
through bonuses (on a grossed up basis) the Highly Compensated Senior
Executives for their premiums related to their supplemental LTD coverage, and
the Company expects such annual aggregate bonuses to be approximately $70,000.Exhibit 10.1

 

THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SATCON TECHNOLOGY
CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO SATCON TECHNOLOGY CORPORATION THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED.

 

FORM OF WARRANT TO
PURCHASE

 

SHARES OF COMMON
STOCK

 

OF

 

SATCON
TECHNOLOGY CORPORATION

 

 

Expires August 14,
2010

 

	
  No.: W-C-05-

  	
   

  	
  Number of Shares:

  
	
  Date of Issuance:
  August 15, 2005

  	
   

  	
   

  

 

 

FOR VALUE
RECEIVED, subject to the provisions hereinafter set forth, the undersigned,
SatCon Technology Corporation, a Delaware corporation (together with its
successors and assigns, the “Issuer”), hereby certifies that                                                      
or its registered assigns is entitled to subscribe for and purchase, during the
Term (as hereinafter defined), up to                                 
                     
(                   )
shares (subject to adjustment as hereinafter provided) of the duly authorized,
validly issued, fully paid and non-assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth.  Capitalized terms used in this
Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 7 hereof.

 

1.                                       Term.  The term of this Warrant shall commence on
August 15, 2005 and shall expire at 5:00 p.m., eastern time, on August 14, 2010
(such period being the “Term”).

 

2.                                       Method
of Exercise Payment; Issuance of New Warrant; Transfer and Exchange.

 

(a)                                  Time
of Exercise.  The purchase rights
represented by this Warrant may be exercised in whole or in part during the
Term.

 

 

(b)                                 Method
of Exercise.

 

(i)                                     Subject
to Section 2(b)(ii), the Holder hereof may exercise this Warrant, in whole or
in part, by the surrender of this Warrant (with the exercise form attached
hereto duly executed) at the principal office of the Issuer, and by the payment
to the Issuer of an amount of consideration therefor equal to the Warrant Price
in effect on the date of such exercise multiplied by the number of shares of
Warrant Stock with respect to which this Warrant is then being exercised,
payable by certified or official bank check or by wire transfer to an account
designated by the Issuer.

 

(ii)                                  In
the event a registration statement relating to the resale of the shares of
Warrant Stock underlying this Warrant is not effective at the time this Warrant
is exercised, then this Warrant may also be exercised by, and the Holder hereof
may pay the aggregate Warrant Price by, “Cashless Exercise.”  In effecting such Cashless Exercise, the Holder
shall include on the exercise form the number of shares for which this Warrant
is being exercised and a calculation of the number of shares of Common Stock to
be issued upon such exercise, which shall be determined by multiplying the
number of shares of Warrant Stock for which this Warrant is exercised by a
fraction, the numerator of which shall be the difference between the then
current Fair Market Value per share of the Common Stock and the applicable
Warrant Price, and the denominator of which shall be the then current Fair
Market Value per share of the Common Stock. 
For this purpose, the “Fair Market Value” of the Common Stock shall be
the average of the closing sale prices of the Common Stock as reported by the
principal stock exchange or quotation system on which the Common Stock is then
listed for trading for the ten (10) trading days immediately preceding the date
of the exercise form.

 

(c)                                  Issuance
of Stock Certificates.  In the event
of any exercise of the rights represented by this Warrant in accordance with
and subject to the terms and conditions hereof, (i) certificates for the shares
of Warrant Stock so purchased shall be dated the date of such exercise and
delivered to the Holder hereof within a reasonable time, not exceeding three
(3) Trading Days after such exercise or, at the request of the Holder (provided
that a registration statement under the Securities Act providing for the resale
of the Warrant Stock is then in effect), issued and delivered to the Depository
Trust Company (“DTC”) account on the Holder’s behalf via the Deposit
Withdrawal Agent Commission System (“DWAC”) within a reasonable time,
not exceeding three (3) Trading Days after such exercise, and the Holder hereof
shall be deemed for all purposes to be the holder of the shares of Warrant
Stock so purchased as of the date of such exercise and (ii) unless this Warrant
has expired, a new Warrant representing the number of shares of Warrant Stock,
if any, with respect to which this Warrant shall not then have been exercised
shall also be issued to the Holder hereof at the Issuer’s expense within such
time.  Notwithstanding the foregoing to
the contrary, the Issuer or its designated transfer agent shall only be
required to issue and deliver the shares to the DTC on a Holder’s behalf via
DWAC if such exercise is in connection with a sale and all requirements to
effect such DWAC have been met, including, but not limited to, the prospectus
delivery requirements.  If the Issuer or
its designated transfer agent cannot issue the shares to a Holder via DWAC
because the aforementioned conditions are not satisfied, the Issuer shall
deliver physical certificates to the Holder.

 

(d)                                 Transferability
of Warrant.  Subject to Section 2(f),
this Warrant may be transferred by a Holder without the consent of the
Issuer.  If transferred pursuant to this
paragraph and subject to the provisions of subsection (f) of this Section 2,
this Warrant may be transferred on the books of the Issuer by the Holder hereof
in person or by duly authorized

 

2

 

attorney, upon
surrender of this Warrant at the principal office of the Issuer, properly
endorsed (by the Holder executing an assignment in the form attached hereto)
and upon payment of any necessary transfer tax or other governmental charge
imposed upon such transfer.  This Warrant
is exchangeable at the principal office of the Issuer for Warrants for the
purchase of the same aggregate number of shares of Warrant Stock, each new
Warrant to represent the right to purchase such number of shares of Warrant
Stock as the Holder hereof shall designate at the time of such exchange.  All Warrants issued on transfers or exchanges
shall be dated the Original Issue Date and shall be identical with this Warrant
except as to the name of the Holder or the number of shares of Warrant Stock,
as applicable.

 

(e)                                  Continuing
Rights of Holder.  The Issuer will,
at the time of or at any time after each exercise of this Warrant, upon the
request of the Holder hereof, acknowledge in writing the extent, if any, of its
continuing obligation to afford to such Holder all rights to which such Holder
shall continue to be entitled after such exercise in accordance with the terms
of this Warrant, provided that if any such Holder shall fail to make any
such request, the failure shall not affect the continuing obligation of the
Issuer to afford such rights to such Holder.

 

(f)                                    Compliance
with Securities Laws.

 

(i)                                     The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or
the shares of Warrant Stock to be issued upon exercise hereof are being
acquired solely for the Holder’s own account and not as a nominee for any other
party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Stock to be issued
upon exercise hereof except pursuant to an effective registration statement, or
an exemption from registration, under the Securities Act and any applicable
state securities laws; provided, however, that by making the representations
herein, the Holder does not agree to hold this Warrant or the shares of Warrant
Stock to be issued upon exercise hereof for any minimum or other specific term
and reserves the right to dispose of this Warrant and the shares of Warrant Stock
to be issued upon exercise hereof at any time in accordance with Federal and
state securities laws applicable to such disposition.

 

(ii)                                  Except
as provided in paragraph (iii) below, this Warrant and all certificates
representing shares of Warrant Stock issued upon exercise hereof shall be
stamped or imprinted with a legend in substantially the following form:

 

THIS WARRANT AND
THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR SATCON TECHNOLOGY CORPORATION SHALL HAVE RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO SATCON TECHNOLOGY CORPORATION
THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

3

 

(iii)                               The
restrictions imposed by this subsection (f) upon the transfer of this Warrant
or the shares of Warrant Stock to be purchased upon exercise hereof shall
terminate (A) when such securities shall have been resold pursuant to an
effective registration statement under the Securities Act, (B) upon the
Issuer’s receipt of an opinion of counsel, in form and substance reasonably
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the Securities
Act and state securities laws or (C) upon the Issuer’s receipt of other
evidence reasonably satisfactory to the Issuer that such registration and
qualification under the Securities Act and state securities laws are not required.  Whenever such restrictions shall cease and
terminate as to any such securities, the Holder thereof shall be entitled to
receive from the Issuer (or its transfer agent and registrar), without expense
(other than applicable transfer taxes, if any), new Warrants (or, in the case
of shares of Warrant Stock, new stock certificates) of like tenor not bearing
the applicable legend required by paragraph (ii) above relating to the
Securities Act and state securities laws.

 

(g)                                 In
no event may the Holder exercise this Warrant in whole or in part unless the
Holder is an “accredited investor” as defined in Regulation D under the
Securities Act.

 

3.                                       Stock
Fully Paid; Reservation and Listing of Shares; Covenants.

 

(a)                                  Stock
Fully Paid.  The Issuer represents,
warrants, covenants and agrees that all shares of Warrant Stock which may be
issued upon the exercise of this Warrant or otherwise hereunder will, when
issued in accordance with the terms of this Warrant, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens
and charges created by or through Issuer. 
The Issuer further covenants and agrees that during the period within
which this Warrant may be exercised, the Issuer will at all times have
authorized and reserved for the purpose of the issue upon exercise of this
Warrant a sufficient number of shares of Common Stock to provide for the
exercise of this Warrant.

 

(b)                                 Reservation.  If any shares of Common Stock required to be
reserved for issuance upon exercise of this Warrant or as otherwise provided
hereunder require registration or qualification with any governmental authority
under any federal or state law before such shares may be so issued, the Issuer
will in good faith use its reasonable best efforts as expeditiously as possible
at its expense to cause such shares to be duly registered or qualified.  If the Issuer shall list any shares of Common
Stock on any securities exchange or market it will, at its expense, list
thereon, maintain and increase when necessary such listing, of, all shares of
Warrant Stock from time to time issued upon exercise of this Warrant or as
otherwise provided hereunder and, to the extent permissible under the
applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed.  The Issuer will also
so list on each securities exchange or market, and will maintain such listing
of, any other securities which the Holder of this Warrant shall be entitled to
receive upon the exercise of this Warrant if at the time any securities of the
same class shall be listed on such securities exchange or market by the Issuer.

 

(c)                                  Covenants.  The Issuer shall not by any action including,
without limitation, amending the Certificate of Incorporation or the by-laws of
the Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the

 

4

 

taking of all such
actions as may be necessary or appropriate to protect the rights of the Holder
hereof against dilution (to the extent specifically provided herein) or
impairment.  Without limiting the
generality of the foregoing, the Issuer will (i) not permit the par value, if
any, of its Common Stock to exceed the then effective Warrant Price, (ii) not
amend or modify any provision of the Certificate of Incorporation or by-laws of
the Issuer in any manner that would adversely affect the rights of the Holders
of the Warrants in their capacity as Holders of the Warrants, (iii) take all
such action as may be reasonably necessary in order that the Issuer may validly
and legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iv) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Issuer to perform its obligations under this Warrant.

 

(d)                                 Loss,
Theft, Destruction of Warrants.  Upon
receipt of an affidavit of loss and other evidence satisfactory to the Issuer
of the ownership of and the loss, theft, destruction or mutilation of any
Warrant and upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing
the right to purchase the same number of shares of Common Stock.

 

4.                                       Adjustment
of Warrant Price and Warrant Share Number. 
The number of shares of Common Stock for which this Warrant is
exercisable, and the price at which such shares may be purchased upon exercise
of this Warrant, shall be subject to adjustment from time to time as set forth
in this Section 4. The Issuer shall give the Holder notice of any event
described below which requires an adjustment pursuant to this Section 4 in
accordance with Section 5.

 

(a)                                  Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or Sale.

 

(i) In case the Issuer after the Original Issue
Date shall do any of the following (each, a “Triggering Event”): (a)
consolidate or merge with or into another corporation where the holders of
outstanding Voting Stock prior to such merger or consolidation do not own over
50% of the outstanding Voting Stock of the merged or consolidated entity
immediately after such merger or consolidation, or (b) sell all or
substantially all of its properties or assets to any other Person, or (c)
change the Common Stock to the same or different number of shares of any class
or classes of stock, whether by reclassification, exchange, substitution or
otherwise (other than by way of a stock split or combination of shares or stock
dividends provided for in Section 4(b)), or (d) effect a capital reorganization
(other than by way of a stock split or combination of shares or stock dividends
provided for in Section 4(b)), then, and in the case of each such Triggering
Event, proper provision shall be made so that, upon the basis and the terms and
in the manner provided in this Warrant, the Holder of this Warrant shall be
entitled upon the exercise hereof at any time after the consummation of such
Triggering Event, to the extent this Warrant is not exercised prior to such
Triggering Event, to receive at the Warrant Price in effect at the time
immediately prior to the consummation of such Triggering Event in lieu of the
Common Stock issuable upon such exercise of this Warrant prior to such
Triggering Event, the securities, cash and property to which such Holder would
have been entitled upon the consummation of such Triggering Event if such
Holder had exercised the rights represented by this Warrant immediately prior

 

5

 

thereto, subject
to adjustments (subsequent to such corporate action) as nearly equivalent as
possible to the adjustments provided for elsewhere in this Section 4.  The Issuer will not effect any consolidation,
merger or sale or conveyance unless prior to the consummation thereof, the
successor or acquiring entity (if other than the Issuer) and, if an entity different
from the successor or acquiring entity, the entity whose capital stock or
assets the holders of the Common Stock of the Issuer are entitled to receive as
a result of such consolidation, merger or sale or conveyance assumes by written
instrument the obligations under this Section 4 and the obligations to deliver
to the holder of this Warrant such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the holder may be entitled to
acquire.

 

(ii)                                  Notwithstanding
anything contained in this Warrant to the contrary, a Triggering Event shall
not be deemed to have occurred if, prior to the consummation thereof, each
Person (other than the Issuer) which may be required to deliver any securities,
cash or property upon the exercise of this Warrant as provided herein shall
assume, by written instrument delivered to, and reasonably satisfactory to, the
Holder of this Warrant, (A) the obligations of the Issuer under this Warrant
(and if the Issuer shall survive the consummation of such Triggering Event,
such assumption shall be in addition to, and shall not release the Issuer from,
any continuing obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to such Holder such shares of securities, cash or
property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder a written acknowledgement executed by the
President or Chief Financial Officer of the Issuer, stating that this Warrant shall
thereafter continue in full force and effect and the terms hereof (including,
without limitation, all of the provisions of this subsection (a)) shall be
applicable to the securities, cash or property which such Person may be
required to deliver upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.

 

(b)                                 Stock
Dividends, Subdivisions and Combinations. 
If at any time the Issuer shall:

 

(i)                                     make
or issue or set a record date for the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, shares of Common Stock,

 

(ii)                                effect
a stock split of its outstanding shares of Common Stock into a larger number of
shares of Common Stock, or

 

(iii)                             combine
its outstanding shares of Common Stock into a smaller number of shares of
Common Stock,

 

then (1) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
the occurrence of any such event shall be adjusted to equal the number of
shares of Common Stock which a record holder of the same number of shares of
Common Stock for which this Warrant is exercisable immediately prior to the
occurrence of such event would own or be entitled to receive after the
happening of such event, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the

 

6

 

adjustment divided by (B)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after such adjustment.

 

Notwithstanding the
foregoing, if such record date shall have been fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed
therefor, the Warrant Price shall be adjusted pursuant to this paragraph as of
the time of actual payment of such dividends or distributions.

 

(c)                                  Other
Provisions applicable to Adjustments under this Section.  The following provisions shall be applicable
to the making of adjustments of the number of shares of Common Stock for which
this Warrant is exercisable and the Warrant Price then in effect provided for
in this Section 4:

 

(i)                                     When
Adjustments to Be Made.  The
adjustments required by this Section 4 shall be made whenever and as often as
any specified event requiring an adjustment shall occur.  For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on
the date of its occurrence.

 

(ii)                                  Fractional
Interests.  In computing adjustments
under this Section 4, fractional interests in Common Stock shall be taken into
account to the nearest one one-hundredth (1/100th) of a share.

 

(iii)                               When
Adjustment Not Required.  If the
Issuer shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend and shall, thereafter and before the
dividend to stockholders thereof, legally abandon its plan to pay or deliver
such dividend, then thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made in respect
thereof shall be rescinded and annulled.

 

(d)                                 Form
of Warrant after Adjustments.  The
form of this Warrant need not be changed because of any adjustments in the
Warrant Price or the number and kind of Securities purchasable upon the
exercise of this Warrant.

 

5.                                       Notice
of Adjustments.  Whenever the Warrant
Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof
(for purposes of this Section 5, each an “adjustment”), the Issuer shall cause
its Chief Financial Officer (or equivalent officer) to prepare and execute a
certificate setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the Warrant Price and Warrant Share Number after giving
effect to such adjustment, and shall cause copies of such certificate to be
delivered to the Holder of this Warrant promptly after each adjustment.

 

6.                                       Fractional
Shares.  No fractional shares of
Warrant Stock will be issued in connection with and exercise hereof, but in
lieu of such fractional shares, the Issuer shall make a cash payment therefor
equal in amount to the product of the applicable fraction multiplied by the Per
Share Market Value then in effect.

 

7

 

7.                                       Definitions.  For the purposes of this Warrant, the
following terms have the following meanings:

 

“Capital Stock”
means and includes (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including,
without limitation, shares of preferred or preference stock, (ii) all
partnership interests (whether general or limited) in any Person which is a
partnership, (iii) all membership interests or limited liability company
interests in any limited liability company, and (iv) all equity or ownership
interests in any Person of any other type.

 

“Certificate of
Incorporation” means the Certificate of Incorporation of the Issuer as in
effect on the Original Issue Date, and as hereafter from time to time amended,
modified, supplemented or restated in accordance with the terms hereof and
thereof and pursuant to applicable law.

 

“Common Stock”
means the Common Stock, par value $.01 per share, of the Issuer and any other
Capital Stock into which such stock may hereafter be changed.

 

“Holders”
mean the Persons who shall from time to time own any Warrant.  The term “Holder” means one of the Holders.

 

“Independent
Appraiser” means a nationally recognized or major regional investment
banking firm or firm of independent certified public accountants of recognized
standing (which may be the firm that regularly examines the financial
statements of the Issuer) that is regularly engaged in the business of
appraising the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the
Holder of any Warrant.

 

“Issuer”
means SatCon Technology Corporation, a Delaware corporation, and its
successors.

 

“Majority
Holders” means at any time the Holders of Warrants exercisable for at least
50% of the shares of Warrant Stock issuable under the Warrants at the time
outstanding.

 

“Nasdaq”
means the Nasdaq National Market or the Nasdaq SmallCap Market.

 

“Original Issue
Date” means August 15, 2005.

 

“OTC Bulletin
Board” means the over-the-counter electronic bulletin board.

 

“Person”
means an individual, corporation, limited liability company, partnership, joint
stock company, trust, unincorporated organization, joint venture, governmental
authority or other entity of whatever nature.

 

“Per Share
Market Value” means on any particular date (a) the average of the closing
bid and asked price per share of the Common Stock on such date on Nasdaq or
another registered national stock exchange on which the Common Stock is then
listed, or if there is no such price on such date, then the average of the
closing bid and asked price on such exchange or quotation system on the date
nearest preceding such date, or (b) if

 

8

 

the Common Stock
is not listed then on Nasdaq or any registered national stock exchange, the
closing bid price for a share of Common Stock in the over-the-counter market,
as reported by the OTC Bulletin Board or in the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its functions of
reporting prices) at the close of business on such date, or (c) if the Common
Stock is not then reported by the OTC Bulletin Board or the National Quotation
Bureau Incorporated (or similar organization or agency succeeding to its
functions of reporting prices), then the average of the “Pink Sheet” quotes for
the relevant conversion period, as determined in good faith by the holder, or
(d) if the Common Stock is not then publicly traded the fair market value of a
share of Common Stock as determined by an Independent Appraiser selected in
good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser, shall
have the right to select an additional Independent Appraiser, in which case,
the fair market value shall be equal to the average of the determinations by
each such Independent Appraiser; and provided, further that all
determinations of the Per Share Market Value shall be appropriately adjusted
for any stock dividends, stock splits or other similar transactions during such
period.  The determination of fair market
value by an Independent Appraiser shall be based upon the fair market value of
the Issuer determined on a going concern basis as between a willing buyer and a
willing seller and taking into account all relevant factors determinative of
value, and shall be final and binding on all parties.  In determining the fair market value of any
shares of Common Stock, no consideration shall be given to any restrictions on
transfer of the Common Stock imposed by agreement or by federal or state
securities laws, or to the existence or absence of, or any limitations on,
voting rights.

 

“Purchase
Agreement” means the Common Stock Purchase Agreement dated as of August 11,
2005, among the Issuer and the investors a party thereto.

 

“Securities”
means any debt or equity securities of the Issuer, whether now or hereafter
authorized, any instrument convertible into or exchangeable for Securities or a
Security, and any option, warrant or other right to purchase or acquire any
Security.  “Security” means one of the
Securities.

 

“Securities Act”
means the Securities Act of 1933, as amended, or any similar federal statute
then in effect.

 

“Subsidiary”
means any corporation at least 50% of whose outstanding Voting Stock shall at
the time be owned directly or indirectly by the Issuer or by one or more of its
Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

 

“Term” has
the meaning specified in Section 1 hereof.

 

“Trading Day”
means (a) a day on which the Common Stock is traded on Nasdaq, or (b) if the
Common Stock is not listed on Nasdaq, a day on which the Common Stock is traded
on any other registered national stock exchange, or (c) if the Common Stock is
not traded on any other registered national stock exchange, a day on which the
Common Stock is traded on the OTC Bulletin Board, or (d) if the Common Stock is
not traded on the OTC Bulletin Board, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the National Quotation Bureau
Incorporated (or

 

9

 

any similar
organization or agency succeeding its functions of reporting prices); provided,
however, that in the event that the Common Stock is not listed or quoted
as set forth in (a), (b) or (c) hereof, then Trading Day shall mean any day
except Saturday, Sunday and any day which shall be a legal holiday or a day on
which banking institutions in the State of New York are authorized or required
by law or other government action to close.

 

“Voting Stock”
means, as applied to the Capital Stock of any corporation, Capital Stock of any
class or classes (however designated) having ordinary voting power for the
election of a majority of the members of the board of directors (or other
governing body) of such corporation, other than Capital Stock having such power
only by reason of the happening of a contingency.

 

“Warrants”
means the Warrants issued and sold pursuant to the Purchase Agreement,
including, without limitation, this Warrant, and any other warrants of like tenor
issued in substitution or exchange for any thereof pursuant to the provisions
of Section 2(c) or 2(d) hereof or of any of such other Warrants.

 

“Warrant Price”
initially means U.S. $1.99, as such Warrant Price may be adjusted from time to
time as shall result from the adjustments specified in this Warrant, including
Section 4 hereto.

 

“Warrant Share
Number” means at any time the aggregate number of shares of Warrant Stock
which may at such time be purchased upon exercise of this Warrant, after giving
effect to all prior adjustments and increases to such number made or required
to be made under the terms hereof.

 

“Warrant Stock”
means Common Stock issuable upon exercise of any Warrant or Warrants or
otherwise issuable pursuant to any Warrant or Warrants.

 

8.                                       Other
Notices.  In case at any time:

 

(A)                              the
Issuer shall make any distributions to the holders of Common Stock; or

 

(B)                                the
Issuer shall authorize the granting to all holders of its Common Stock of
rights to subscribe for or purchase any shares of Capital Stock of any class or
other rights; or

 

(C)                                there
shall be any reclassification of the Capital Stock of the Issuer; or

 

(D)                               there
shall be any capital reorganization by the Issuer; or

 

(E)                                 there
shall be any (i) consolidation or merger involving the Issuer or (ii) sale,
transfer or other disposition of all or substantially all of the Issuer’s
property, assets or business (except a merger or other reorganization in which
the Issuer

 

10

 

shall be the surviving
corporation and its shares of Capital Stock shall continue to be outstanding
and unchanged and except a consolidation, merger, sale, transfer or other
disposition involving a wholly-owned Subsidiary); or

 

(F)                                 there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of
the Issuer or any partial liquidation of the Issuer or distribution to holders
of Common Stock;

 

then, in each of
such cases, the Issuer shall give written notice to the Holder of the date on
which (i) the books of the Issuer shall close or a record shall be taken for
such dividend, distribution or subscription rights or (ii) such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be, shall take place.  Such notice also shall specify the date as of
which the holders of Common Stock of record shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange their certificates
for Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be.  Such notice shall be given at least twenty
(20) days prior to the record date or effective date for the event specified in
such notice.

 

9.                                       Amendment
and Waiver.  Any term, covenant,
agreement or condition in this Warrant may be amended, or compliance therewith
may be waived (either generally or in a particular instance and either retroactively
or prospectively), by a written instrument or written instruments executed by
the Issuer and the Holder.

 

10.                                 Governing
Law.  This Warrant shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to principles of conflicts of law. Each
of the Issuer and the Holder (i) hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York and the courts of the State of New York for the purposes of any suit,
action or proceeding arising out of or relating to this Warrant or any of the
other Transaction Documents (as defined in the Purchase Agreement) or the
transactions contemplated hereby or thereby and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper.  Each
of the Issuer and the Holder consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under the Purchase Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing in this Section 10
shall affect or limit any right to serve process in any other manner permitted
by law.

 

11.                                 Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earlier of (i) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified for notice prior to 5:00 p.m., eastern
time, on a Trading Day, (ii) the Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice

 

11

 

later than 5:00
p.m., eastern time, on any date and earlier than 11:59 p.m., eastern time, on
such date, (iii) the Trading Day following the date of mailing, if sent by
overnight delivery by nationally recognized overnight courier service or (iv)
actual receipt by the party to whom such notice is required to be given.  The addresses for such communications shall
be with respect to the Holder of this Warrant or of Warrant Stock issued
pursuant hereto, addressed to such Holder at its last known address or
facsimile number appearing on the books of the Issuer maintained for such
purposes, or with respect to the Issuer, addressed to:

 

SatCon Technology Corporation

27 Drydock Avenue

Boston, MA 02210

Attention: David B. Eisenhaure

Tel. No.: 617-897-2404

Fax No.: 
617-897-2401

 

Copies of notices
to the Issuer shall be sent to Greenberg Traurig LLP, One International Place,
Boston, MA 02110, Attention: Jonathan Bell, Esq., Tel. No.: (617) 310-6038, Fax
No.: (617) 279-8438.  Any party hereto
may from time to time change its address for notices by giving at least ten
(10) days written notice of such changed address to the other party hereto.

 

12.                                 Warrant
Agent.  The Issuer may, by written
notice to each Holder of this Warrant, appoint an agent having an office in New
York, New York for the purpose of issuing shares of Warrant Stock on the
exercise of this Warrant pursuant to subsection (b) of Section 2 hereof,
exchanging this Warrant pursuant to subsection (c) of Section 2 hereof or
replacing this Warrant pursuant to subsection (d) of Section 3 hereof, or any
of the foregoing, and thereafter any such issuance, exchange or replacement, as
the case may be, shall be made at such office by such agent.

 

13.                                 Remedies.  The Issuer stipulates that the remedies at
law of the Holder of this Warrant in the event of any default or threatened
default by the Issuer in the performance of or compliance with any of the terms
of this Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise, in addition to all
other remedies available.

 

14.                                 Successors
and Assigns.  This Warrant and the
rights evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Issuer, the Holder hereof and (to the extent
provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall
be enforceable by any such Holder or Holder of Warrant Stock.

 

15.                                 Modification
and Severability.  If, in any action
before any court or agency legally empowered to enforce any provision contained
herein, any provision hereof is found to be unenforceable, then such provision
shall be deemed modified to the extent necessary to make it enforceable by such
court or agency.  If any such provision
is not enforceable as set forth in the preceding sentence, the unenforceability
of such provision shall not affect the other provisions of this Warrant, but
this Warrant shall be construed as if such unenforceable provision had never
been contained herein.

 

12

 

16.                                 Headings.  The headings of the Sections of this Warrant
are for convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.

 

 

[Remainder
of Page Has Been Intentionally Left Blank]

 

13

 

IN WITNESS
WHEREOF, the Issuer has executed this Warrant as of the day and year first
above written.

 

 

	
   

  	
  SATCON TECHNOLOGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

14

 

EXERCISE FORM

SATCON
TECHNOLOGY CORPORATION

 

The undersigned                          ,
pursuant to the provisions of the within Warrant, hereby elects to purchase        
shares of Common Stock of SatCon Technology Corporation covered by the within
Warrant.

 

	
  Dated:

  	
   

  	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

Number
of shares of Common Stock beneficially owned or deemed beneficially owned by
the Holder on the date of Exercise:                          

 

ASSIGNMENT

 

FOR VALUE RECEIVED,                          
hereby sells, assigns and transfers unto                          
the within Warrant and all rights evidenced thereby and does irrevocably
constitute and appoint                    ,
attorney, to transfer the said Warrant on the books of the within named
corporation.

 

	
  Dated:

  	
   

  	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

PARTIAL ASSIGNMENT

 

FOR VALUE RECEIVED,                          
hereby sells, assigns and transfers unto                          
the right to purchase                
shares of Warrant Stock evidenced by the within Warrant together with all
rights therein, and does irrevocably constitute and appoint                          ,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.

 

	
  Dated:

  	
   

  	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

FOR USE BY THE ISSUER ONLY:

 

This Warrant No. W-      canceled (or
transferred or exchanged) this       day of               ,
       , shares of Common Stock issued
therefor in the name of                          ,
Warrant No. W-      issued for      
shares of Common Stock in the name of                          .

 

15

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