-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LRttZfHDxsEk/zwMak1sPRizaVxmMSEcxZw5kJ0SQEoVsHB+OUCkx0UDQGfvQ2Tg +S/yRNrWU844hYVkXSWhkA== 0000950133-07-001232.txt : 20070323 0000950133-07-001232.hdr.sgml : 20070323 20070323072357 ACCESSION NUMBER: 0000950133-07-001232 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20070323 DATE AS OF CHANGE: 20070323 GROUP MEMBERS: NORSK HYDRO PRODUKSJON AS SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Ascent Solar Technologies, Inc. CENTRAL INDEX KEY: 0001350102 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 203672603 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-82435 FILM NUMBER: 07713411 BUSINESS ADDRESS: STREET 1: 8120 SHAFFER PARKWAY CITY: LITTLETON STATE: CO ZIP: 80127 BUSINESS PHONE: 303 420 1141 MAIL ADDRESS: STREET 1: 8120 SHAFFER PARKWAY CITY: LITTLETON STATE: CO ZIP: 80127 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NORSK HYDRO A S A CENTRAL INDEX KEY: 0000900268 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: DRAMMENSVEIEN 264, V?KER? STREET 2: N-0240 OSLO CITY: NORWAY STATE: Q8 ZIP: 00000 BUSINESS PHONE: 2126886606 MAIL ADDRESS: STREET 1: DRAMMENSVEIEN 264, V?KER? STREET 2: N-0240 OSLO CITY: NORWAY STATE: Q8 ZIP: 00000 SC 13D 1 w32275sc13d.htm SC 13D sc13d
 

     
 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. [          ])*

Ascent Solar Technologies, Inc.
(Name of Issuer)
Common Shares, par value $0.0001
(Title of Class of Securities)
043635101
(CUSIP Number)
Stig E. Smedsvig
Norsk Hydro ASA
Drammensveien 264
N-0240 Oslo, Norway
Telephone: +47 (0) 2253 8100
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
with a copy to:
George Karafotias
Shearman & Sterling LLP
Broadgate West, 9 Appold Street
London EC2A 2AP, United Kingdom
+44 (0) 20 7655 5576
March 13, 2007
(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box. o

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 
 

 

SCHEDULE 13D

                     
CUSIP No.
  
043635101 
   Page  
2 
   of   
19 Pages

 

           
1   NAMES OF REPORTING PERSONS:
   
  I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
 
  Norsk Hydro ASA
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
  (a)   o 
  (b)   þ 
     
3   SEC USE ONLY:
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS):
   
  AF
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION:
   
  Kingdom of Norway
       
  7   SOLE VOTING POWER:
     
NUMBER OF   0
       
SHARES 8   SHARED VOTING POWER:
BENEFICIALLY    
OWNED BY   1,600,000
       
EACH 9   SOLE DISPOSITIVE POWER:
REPORTING    
PERSON   0
       
WITH 10   SHARED DISPOSITIVE POWER:
     
    1,600,000
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
   
  1,600,000
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
   
  23.0%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
   
  CO

 

SCHEDULE 13D

                     
CUSIP No.
  
043635101 
   Page  
3 
   of   
19 Pages

 

           
1   NAMES OF REPORTING PERSONS:
   
  I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
 
  Norsk Hydro Produksjon AS
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
  (a)   o 
  (b)   þ 
     
3   SEC USE ONLY:
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS):
   
  WC
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION:
   
  Kingdom of Norway
       
  7   SOLE VOTING POWER:
     
NUMBER OF   0
       
SHARES 8   SHARED VOTING POWER:
BENEFICIALLY    
OWNED BY   1,600,000
       
EACH 9   SOLE DISPOSITIVE POWER:
REPORTING    
PERSON   0
       
WITH 10   SHARED DISPOSITIVE POWER:
     
    1,600,000
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
   
  1,600,000
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
   
  23.0%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
   
  CO

 

Item 1. Security and Issuer.
          This Statement on Schedule 13D (this “Statement”) relates to the common shares, par value $0.0001 per share (the “Shares”), of Ascent Solar Technologies, Inc., a Delaware corporation (the “Company”), whose principal executive offices are located at 8120 Shaffer Parkway, Littleton, Colorado 80127, United States.
Item 2. Identity and Background.
          This Statement is being filed by Norsk Hydro ASA, a public limited liability company organized under the laws of the Kingdom of Norway (“Norsk Hydro”), and Norsk Hydro Produksjon AS, a limited liability company organized under the laws of the Kingdom of Norway (“Produksjon”).
          Norsk Hydro is engaged in the oil and energy, light metals and petrochemicals industries. Produksjon is a wholly-owned subsidiary of Norsk Hydro and is engaged in the oil and energy and petrochemicals industries.
          The principal executive offices of each of Norsk Hydro and Produksjon are located at Drammensveien 264, N-0240 Oslo, Norway.
          The name, business address, present principal occupation or employment and citizenship of each of the executive officers and directors of Norsk Hydro and Produksjon are set forth in Schedule A hereto and are incorporated by reference herein.
          During the last five years, neither Norsk Hydro nor Produksjon nor, to the best of their knowledge, any of the persons listed in Schedule A hereto has been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
          Norsk Hydro and Produksjon have entered into a Joint Filing Agreement, dated March 22, 2007, a copy of which is filed with this Schedule 13D as Exhibit A, pursuant to which they have agreed to file this Schedule 13D jointly in accordance with the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 3. Source and Amount of Funds or Other Considerations.
          On March 13, 2007, Produksjon and the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”), a copy of which is attached as Exhibit B hereto. The description of the Securities Purchase Agreement contained herein is qualified in its entirety by reference to Exhibit B, which is incorporated herein by reference.

Page 4 of 19

 

          Tranche 1 Shares
          Pursuant to the Securities Purchase Agreement, the Company issued to Produksjon, and Produksjon purchased, accepted and acquired from the Company an aggregate of 1,600,000 Shares (the “Tranche 1 Shares”), at an issue price of $5.7725 in cash per Tranche 1 Share, or $9,236,000 in the aggregate, at a closing that occurred on March 13, 2007 (the “First Closing”).
          The funds for the subscription price for the Tranche 1 Shares were obtained by Produksjon from its working capital.
          Initial Warrants Call Option
          Pursuant to the Securities Purchase Agreement, the Company granted to Produksjon, and Produksjon acquired from the Company, the option to acquire from the Company, and to require the Company to sell to Produksjon (the “Initial Warrants Call Option”), (i) a number of restricted, redeemable Class A public warrants otherwise identical to the publicly traded Class A public warrants of the Company, each of which entitles the holder thereof to purchase one Share at an exercise price of $6.60 per Share (the “Class A Warrants”), that will result in Produksjon owning 23% of all issued and outstanding Class A Warrants immediately after such sale and purchase (the “Initial Class A Warrants”) and (ii) a number of restricted, non-redeemable Class B public warrants otherwise identical to the publicly traded Class B public warrants of the Company, each of which entitles the holder thereof to purchase one Share at an exercise price of $11.00 per Share (the “Class B Warrants”; together with the Class A Warrants, the “Warrants”), that will result in Produksjon owning 23% of all issued and outstanding Class B Warrants immediately after such sale and purchase (the “Initial Class B Warrants”; together with the Initial Class A Warrants, the “Initial Warrants”).
          The Initial Warrants Call Option may be exercised by Produksjon at any time after the Company’s stockholders approve in a regular or special meeting (the “Stockholders’ Meeting”) the issuance of the Initial Warrants and the issuance of the Tranche 2 Securities (defined below) (such approval by the Company’s stockholders, the “Stockholder Approval”) until two years from the date thereof. Pursuant to the Securities Purchase Agreement, the Stockholders’ Meeting will be held as promptly as practicable, but in no case later than July 13, 2007.
          The purchase price for each (i) Initial Class A Warrant will be an amount equal to the average of the closing bids for the Company’s Class A Warrants on Nasdaq Stock Market (“Nasdaq”) during the five consecutive trading days ending on (and including) the trading day that is one day prior to the date of exercise of the Initial Warrants Call Option and (ii) Initial Class B Warrant will be an amount equal to the average of the closing bids for the Company’s Class B Warrants on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one day prior to the date of exercise of the Initial Warrants Call Option. The issuance, purchase and sale of the Initial Warrants is hereinafter referred to as the “Initial Warrants Closing”.

Page 5 of 19

 

          Pursuant to a Stockholders’ Agreement entered into by the Company and Produksjon on the First Closing (the “Stockholders’ Agreement”), Produksjon can exercise the Initial Warrants only to maintain its 23.0% ownership of the Company’s Common Shares.
          Produksjon expects to obtain the funds for the purchase of the Initial Class A Warrants and the Initial Class B Warrants, if any, from its working capital.
          Tranche 2 Call Option
          Pursuant to the Securities Purchase Agreement, the Company granted to Produksjon, and Produksjon acquired from the Company, the option to acquire from the Company, and to require the Company to sell to Produksjon (the “Tranche 2 Call Option”), up to a maximum of (i) an additional number of Shares that will result in Produksjon owning 35% of all issued and outstanding Shares immediately after such sale and purchase (the “Tranche 2 Shares”), (ii) an additional number of restricted Class A Warrants that will result in Produksjon owning 35% of all issued and outstanding Class A Warrants immediately after such sale and purchase (the “Option Class A Warrants”) and (iii) an additional number of restricted Class B Warrants that will result in Produksjon owning 35% of all issued and outstanding Class B Warrants immediately after such sale and purchase (the “Option Class B Warrants”; together with the Option Class A Warrants, the “Option Warrants”; the Option Warrants together with the Tranche 2 Shares, the “Tranche 2 Securities”; and the Tranche 2 Securities together with the Tranche 1 Shares and the Initial Warrants, the “Purchased Securities”).
          The Tranche 2 Call Option may be exercised by Produksjon at any time during the period (i) after 9:00 a.m. Denver, Colorado time, on the date that is the later of (x) December 13, 2007 and (y) the date the Stockholder Approval is obtained and (ii) prior to 5:00 p.m., Denver, Colorado time on the date two years thereafter.
          The purchase price for each (i) Tranche 2 Share will be an amount equal to the average of the closing bids for the Shares on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one day prior to the date of exercise of the Tranche 2 Call Option, (ii) Option Class A Warrant will be an amount equal to the average of the closing bids for the Class A Warrants on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one day prior to the date of exercise of the Tranche 2 Call Option and (iii) Option Class B Warrant will be an amount equal to the average of the closing bids for the Class B Warrants on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one day prior to the date of exercise of the Tranche 2 Call Option.
          Pursuant to the Stockholders’ Agreement, Produksjon can exercise the Option Warrants only to maintain its percentage ownership of the Company’s Common Shares existing immediately after the closing of the issuance, purchase and sale of the Tranche 2 Securities (the “Second Closing”).
          Produksjon expects to obtain the funds for the purchase of the Tranche 2 Shares, the Option Class A Warrants and the Option Class B Warrants, if any, from its working capital.

Page 6 of 19

 

          Redemption of Class A Warrants
          If the Class A Warrants have been redeemed by the Company in accordance with their terms on or prior to the Initial Warrants Closing or the Second Closing, as the case may be, the Company will issue to Produksjon, and Produksjon will purchase, accept and acquire from the Company, a number of Shares, at a price per Share equal to the average of the closing bids for the Shares on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one day prior to the date of exercise of the Initial Warrants Call Option or the Tranche 2 Call Option, as the case may be, sufficient to ensure that Produksjon acquires the percentage ownership of the Company that it would otherwise have acquired had the Company not redeemed the Class A Warrants on or prior to such date.
Item 4. Purpose of Transaction.
          The information set forth in Items 3 and 6 is hereby incorporated by reference in this Item 4.
          Stockholders’ Agreement
          On the First Closing, the Company and Produksjon entered into the Stockholders’ Agreement, a copy of which is attached as Exhibit C hereto, pursuant to which, among other things, the Company has agreed to cause its Nominating and Governance Committee to recommend for election to the Company’s board of directors (the “Board”) one director designated by Produksjon (the “Investor Designated Director”). From and after the Company’s 2007 annual shareholders meeting, so long as Produksjon beneficially owns 15% or more of the outstanding Shares, the Company and Produksjon will use all reasonable efforts to cause there to be one Investor Designated Director elected as a member of the Board. In the event Produksjon beneficially owns less than 15% of the outstanding Shares, Produksjon will have no right to designate an Investor Designated Director, and, at the request of the Board, will cause any Investor Designated Director then in office to resign immediately. However, if the Stockholder Approval has not been obtained by July 13, 2007, regardless of Produksjon’s beneficial ownership of the outstanding Shares, the Company and Produksjon will use all reasonable efforts (i) to cause there to be one Investor Designated Director elected as a member of the Board as soon as reasonably practicable and (ii) to cause the Board to include one Investor Designated Director at least until March 13, 2009.
          To the extent permitted by the rules and regulations of Nasdaq or the Boston Stock Exchange, Incorporated (“Exchange Regulation”), so long as Produksjon beneficially owns 15% or more of the outstanding Shares, the Company and the Board will take all necessary action to permit one individual designated by Produksjon (in addition to the Investor Designated Director) to attend each meeting of the Board at which non-independent or management directors are permitted to be in attendance (the “Observer”). The Observer will have no right to vote at any meeting of the Board. Notwithstanding the foregoing, if the Stockholder Approval has not been obtained by July 13, 2007, regardless of Produksjon’s beneficial ownership of the outstanding Shares, to the extent permitted by Exchange Regulation, the Company and the Board will take all necessary actions (i) to permit the Observer to attend each meeting of the Board at which non-independent or management directors are permitted to be in attendance and (ii) to provide the

Page 7 of 19

 

Observer with notice of and information regarding each such meeting as is provided to members of the Board, in each case for the period beginning on July 13, 2007 and ending on March 13, 2009.
          Subject to the receipt of the Stockholder Approval, from the date Produksjon beneficially acquires 35% of the issued and outstanding Shares until the second anniversary of the receipt of the Stockholder Approval, without the prior approval of the Board, Produksjon will not purchase or otherwise acquire, directly or indirectly, beneficial ownership of any Shares such that the aggregate beneficial ownership of Produksjon, after giving effect to any such acquisition, would be in excess of 35% of the issued and outstanding Shares.
          In addition, subject to the receipt of the Stockholder Approval, from the date Produksjon beneficially acquires 35% of the issued and outstanding Shares, Produksjon agrees that, prior to the second anniversary of the receipt of the Stockholder Approval and subject to certain exceptions, Produksjon will not, without the prior approval of the Board, directly or indirectly:
     (i) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any securities or direct or indirect rights to acquire any securities of the Company, or of any successor to or person in control of the Company, or any assets of the Company or any division thereof or of any such successor or controlling person;
     (ii) make or in any way participate, directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in the rules of the Securities and Exchange Commission (the “SEC”)) to vote any voting securities of the Company, other than solicitations exempted from the proxy solicitation rules by Rule 14a-2 under the Exchange Act or any successor provision;
     (iii) submit to the Board a written proposal for or offer of (with or without conditions), any merger, recapitalization, reorganization, business combination or other extraordinary transaction involving the Company or any of its securities or assets, or make any public announcement with respect to such a proposal or offer; or
     (iv) with certain exceptions, enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing, or otherwise form, join or in any way engage in discussions relating to the formation of, or participate in, a group with any third party, in connection with any of the foregoing;
          provided, however, that none of the foregoing (i) will prevent, restrict, encumber or in any way limit the exercise of the fiduciary rights and obligations of the Investor Designated Director as a director or prevent, restrict, encumber or in any way limit the ability of the Investor Designated Director to vote on matters, influence officers, employees, agents, management or the other directors of the Company, take any action or make any statement at any meeting of the Board or any committee thereof, or otherwise to act in his or her capacity as a director; (ii) will prevent Produksjon from selling any Purchased Securities or any Shares then owned or thereafter acquired by Produksjon (the “Covered Securities”) or voting its Shares; (iii) will apply to or restrict any discussions or other communications between or among directors, officers,

Page 8 of 19

 

employees or agents of Produksjon or any affiliate thereof; (iv) will prohibit Produksjon from soliciting, offering, seeking to effect or negotiating with any person with respect to transfers of Covered Securities otherwise permitted by the Stockholders’ Agreement or (v) restrict any disclosure or statements required to be made by the Investor Designated Director or Produksjon under applicable law or Exchange Regulation.
          The foregoing restrictions applicable to Produksjon from the date it beneficially acquires 35% of the issued and outstanding Shares will terminate upon the earliest of: (i) such date as the Board determines to solicit any acquisition proposal with respect to 20% of more of the consolidated assets or any class of equity securities of the Company (an “Acquisition Proposal”), (ii) such date as the Board approves, accepts, authorizes or recommends to the Company’s stockholders their approval of any Acquisition Proposal, (iii) such date that the Company or any affiliate thereof has entered into a letter of intent, agreement in principle, definitive agreement or any other agreement with any party, with respect to an Acquisition Proposal and (iv) such date that any person or group, other than Produksjon or any of its affiliates, will have acquired or announced its intention to acquire beneficial ownership of 20% of the Company’s outstanding Shares.
          During the period ending six months after (i) March 13, 2007 in the case of the Tranche 1 Shares, (ii) the date of the Initial Warrants Closing in the case of the Initial Warrants and (iii) the date of the Second Closing in the case of the Tranche 2 Securities (in any case, the “Initial Restricted Period”), Produksjon agreed not to make or solicit any sale of the Tranche 1 Shares, the Initial Warrants or the Tranche 2 Securities, respectively, subject to certain exceptions. After the Initial Restricted Period, neither Produksjon nor any of its affiliates will sell any of the Covered Securities except in certain limited circumstances, such as a sale or transfer in compliance with Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a bona fide public offering registered under the Securities Act or in certain business combination transactions, among others.
          Subject to certain exceptions, in the event that the Company proposes to issue any capital stock of the Company, rights, options or warrants to purchase such capital stock or securities convertible into such capital stock (“New Securities”), Produksjon will have the right, within 30 days after receipt of a notice from the Company describing the material terms of such New Securities, (i) to purchase in lieu of the person to whom the Company proposed to issue such New Securities, in accordance with certain procedures, or, (ii) at its option, to exercise Warrants to purchase, a number of New Securities equal to the product of (A) the total number or amount of New Securities that the Company proposes to issue at such time and (B) a fraction, the numerator of which will be the total number of Shares that Produksjon owns at such time, and the denominator of which will be the total number of Shares then outstanding.
          If, at any time and from time to time, the Company issues Shares that are not New Securities, Produksjon will have the right, for a period of 30 days, to exercise such number of Warrants beneficially owned by Produksjon as is necessary to maintain its percentage ownership of the Company’s Shares.
          The description of the Stockholders’ Agreement contained herein is qualified in its entirety by reference to Exhibit C, which is incorporated herein by reference.

Page 9 of 19

 

          Voting Agreement
          On the First Closing, Dr. Mohan S. Misra, Chairman of the Board (“Dr. Misra”), Inica, Inc., a Colorado corporation (“Inica”), ITN Energy Systems, Inc., a Colorado corporation (“ITN”; and together with Dr. Misra and Inica, the “Stockholders”), and Produksjon entered into a Voting Agreement (the “Voting Agreement”), a copy of which is attached as Exhibit D hereto, pursuant to which each Stockholder agreed that he or it will, among other things:
     (i) vote (or cause to be voted) in person or by proxy all Shares beneficially owned by such Stockholder and any Shares of which such Stockholder subsequently acquires beneficial ownership (collectively, the “Covered Shares”) (A) in favour of the approval of the issuance of the Initial Warrants and the issuance of the Tranche 2 Securities to Produksjon and (B) against any proposal, action or transaction involving the Company which would impede, frustrate, prevent or materially delay the consummation of the issuance of the Initial Warrants or the issuance of the Tranche 2 Securities or the other transactions contemplated by the Securities Purchase Agreement, the Stockholders’ Agreement or the Voting Agreement or the approval of the issuance of the Initial Warrants or the issuance of the Tranche 2 Securities to Produksjon; and
     (ii) vote (or cause to be voted) in person or by proxy all Covered Shares (A) in favor of the appointment of the Investor Designated Director to the Board and (B) against any proposal, action or transaction involving the Company, which proposal, action or transaction would impede, frustrate, prevent or materially delay the appointment of the Investor Designated Director to the Board.
          The Stockholders’ Agreement will terminate upon the earliest of (i) the later of the Initial Warrants Closing and the Second Closing, (ii) the termination of the Securities Purchase Agreement in accordance with its terms and (iii) written notice of termination of the Stockholders’ Agreement by Produksjon to the Stockholders; provided, however, that each Stockholder’s obligation to vote in favor of the appointment of the Investor Designated Director to the Board will terminate (y) when Produksjon beneficially owns less than 15% of the Company’s Shares or (z) on March 13, 2009 if the Stockholder Approval has not been obtained by July 13, 2007.
          The description of the Voting Agreement contained herein is qualified in its entirety by reference to Exhibit D, which is incorporated herein by reference.
          Registration Rights Agreement
          On the First Closing, the Company and Produksjon entered into a Registration Rights Agreement (the “Registration Rights Agreement”), a copy of which is attached as Exhibit E hereto, pursuant to which the Company agreed to provide Produksjon with certain registration rights in respect of the Shares held by Produksjon.
          At any time after March 13, 2008, Produksjon may request that the Company file a registration statement with the SEC covering at least 250,000 Shares in respect of which Produksjon has requested registration (a “Demand Registration”). Produksjon is entitled to demand up to three Demand Registrations provided that (i) no more than one Demand

Page 10 of 19

 

Registration may be requested in any twelve-month period and (ii) no request for a Demand Registration may be made within 120 days of the date of effectiveness of any other registration statement filed by the Company pursuant to the Registration Rights Agreement.
          If, at any time, the Company files a registration statement with the SEC, Produksjon will be entitled, subject to certain exceptions, to exercise “piggyback” registration rights requiring the Company to include in any such registration that number of Shares held by Produksjon as Produksjon may request, subject only to certain prescribed limitations provided in the Registration Rights Agreement.
          The Company may, on a limited number of occasions, and in certain prescribed circumstances, delay the filing or effectiveness of any registration statement required to be filed pursuant to the Registration Rights Agreement.
          The description of the Registration Rights Agreement contained herein is qualified in its entirety by reference to Exhibit E, which is incorporated herein by reference.
          Although Norsk Hydro and Produksjon have no present intention to acquire securities of the Company other than pursuant to the Securities Purchase Agreement or the Stockholders’ Agreement, they intend to review their investment on a regular basis and, as a result thereof and subject to the terms and conditions of the Securities Purchase Agreement and the Stockholders’ Agreement, may at any time or from time to time determine, either alone or as part of a group, (i) to acquire additional securities of the Company, through open market purchases, privately negotiated transactions or otherwise, (ii) to dispose of all or a portion of the securities of the Company owned by them in the open market, in privately negotiated transactions or otherwise or (iii) to take any other available course of action, which could involve one or more of the types of transactions or have one or more of the results described in the next paragraph of this Item 4. Any such acquisition or disposition or other transaction would be made in compliance with all applicable laws and regulations. Notwithstanding anything contained herein, each of Norsk Hydro and Produksjon specifically reserves the right to change its intention with respect to any or all of such matters. In reaching any decision as to its course of action (as well as to the specific elements thereof), each of Norsk Hydro and Produksjon currently expects that it would take into consideration a variety of factors, including, but not limited to, the following: the Company’s business and prospects; other developments concerning the Company and its businesses generally; other business opportunities available to Norsk Hydro and Produksjon; changes in law and government regulations; general economic conditions; and money and stock market conditions, including the market price of the securities of the Company.
          Except as set forth in this Schedule 13D, Norsk Hydro and Produksjon have no present plans or proposals that relate to or would result in:
     (i) The acquisition by any person of additional securities of the Company, or the disposition of securities of the Company,
     (ii) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company,
     (iii) A sale or transfer of a material amount of assets of the Company,

Page 11 of 19

 

     (iv) Any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board,
     (v) Any material change in the present capitalization or dividend policy of the Company,
     (vi) Any other material change in the Company’s business or corporate structure,
     (vii) Changes in the Company’s charter, bylaws or instruments corresponding thereto or other actions that may impede the acquisition of control of the Company by any person;
     (viii) A class of securities of the Company being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association,
     (ix) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act, or
     (x) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
          The responses of Norsk Hydro and Produksjon to Rows (7) through (13) of the cover pages of this Schedule 13D and the information set forth in Item 3 is hereby incorporated by reference in this Item 5.
          Pursuant to the Securities Purchase Agreement, on the First Closing, Produksjon acquired 1,600,000 Shares, representing 23.0% of the Company’s outstanding Shares. Each of Norsk Hydro and Produksjon is deemed to beneficially own 1,600,000 Shares representing 23.0% of the Company’s outstanding Shares.
          In addition, the Shares deemed beneficially owned by each of Norsk Hydro and Produksjon with respect to which such person (i) has sole voting power, (ii) shares voting power, (iii) has sole dispositive power and (iv) shares dispositive power are listed in the responses to Items 7, 8, 9 and 10, respectively, of the cover page of this Schedule 13D relating to such person.
          Except as disclosed in this Schedule 13D, neither Norsk Hydro nor Produksjon nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, beneficially owns any Shares or has the right to acquire any Shares.
          Except as disclosed in this Schedule 13D, neither Norsk Hydro nor Produksjon nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Shares that they may be deemed to beneficially own.

Page 12 of 19

 

          Except as disclosed in this Schedule 13D, neither Norsk Hydro nor Produksjon nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, has effected any transaction in the Shares during the past 60 days.
          To the best knowledge of Norsk Hydro and Produksjon, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares beneficially owned by Norsk Hydro and Produksjon.
    Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
          The information set forth in Items 3 and 4 is hereby incorporated by reference in this Item 6.
          Pursuant to the Stockholders’ Agreement, the Company has agreed that it will use all proceeds received from Produksjon for the sale of the Purchased Securities pursuant to the Securities Purchase Agreement for the development and installation of a 1.5 MW production line, purchase of capital equipment, and for general corporate purposes, including salary, overhead and other expenses.
          Except as described above or elsewhere in this Schedule 13D or incorporated by reference in this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between Norsk Hydro and Produksjon or, to the best of their knowledge, any of the persons named in Schedule A hereto or between Norsk Hydro or Produksjon and any other person or, to the best of their knowledge, any person named in Schedule A hereto and any other person with respect to any securities of the Company, including, but not limited to, transfer or voting of any securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

Page 13 of 19

 

Item 7. Material to Be Filed as Exhibits.
     
Exhibit No.   Description
 
    
A
  Joint Filing Agreement, dated March 22, 2007, between Norsk Hydro ASA and Norsk Hydro Produksjon AS
 
    
B
  Securities Purchase Agreement, dated as of March 13, 2007, between Ascent Solar Technologies, Inc. and Norsk Hydro Produksjon AS
 
    
C
  Stockholders’ Agreement, dated as of March 13, 2007, between Ascent Solar Technologies, Inc. and Norsk Hydro Produksjon AS
 
    
D
  Voting Agreement, dated as of March 13, 2007, among Dr. Mohan S. Misra, Inica, Inc., ITN Energy Systems, Inc. and Norsk Hydro Produksjon AS
 
    
E
  Registration Rights Agreement, dated as of March 13, 2007, by and between Ascent Solar Technologies, Inc. and Norsk Hydro Produksjon AS

Page 14 of 19

 

SIGNATURE
     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated:
         
March 22, 2007
  NORSK HYDRO ASA    
 
        
 
  /s/ Jørgen C. Arentz Rostrup
 
Signature 		   
 
        
 
  Jørgen C. Arentz Rostrup, Senior Vice President
 
Name/Title 		   
 
        
 
  NORSK HYDRO PRODUKSJON AS    
 
        
 
  /s/ Jørgen C. Arentz Rostrup
 
Signature 		   
 
        
 
  Jørgen C. Arentz Rostrup, Chief Executive Officer
 
Name/Title 		   

Page 15 of 19

 

SCHEDULE A
Norsk Hydro ASA
Directors and Executive Officers
             
    Present Principal        
Name   Occupation   Business Address   Citizenship
Directors
            
 
            
Jan Reinås
   Chairperson   Norsk Hydro ASA   Norwegian
 
       Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Elisabeth Grieg
   Chief Executive Officer   Grieg International   Norwegian
 
       Karenslyst Allé 2    
 
       P.O. Box 513 Skøyen    
 
       0214 Oslo    
 
       Norway    
 
            
Håkan Mogren
   Corporate Director   Norsk Hydro ASA   Swedish
 
       Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Grete Faremo
   Director for Legal and Corporate   Microsoft Norway   Norwegian
 
   Affairs, Western Europe   Lilleakerveien 6    
 
       0283 Oslo    
 
       Norway    
 
            
Lena Olving
   Senior Vice President   Volvo Car Corporation   Swedish
 
   Process and   405 31 Göteborg    
 
   Operational Excellence   Sweden    
 
            
Kurt Anker Nielsen
   Corporate Director   Norsk Hydro ASA   Norwegian
 
       Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Terje Friestad
   Senior Engineer   Norsk Hydro ASA   Norwegian
 
       Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Sten Roar Martinsen
   Process Operator   Norsk Hydro ASA   Norwegian
 
       Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Geir Nilsen
   Maintenance Supervisor   Norsk Hydro ASA   Norwegian
 
       Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            

Page 16 of 19

 

             
    Present Principal        
Name   Occupation   Business Address   Citizenship
Executive Officers
            
 
            
Eivind Reiten
   President and Chief Executive   Norsk Hydro ASA   Norwegian
 
   Officer   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
John Ove Ottestad
   Executive Vice President and   Norsk Hydro ASA   Norwegian
 
   Chief Financial Officer   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Cecilie Ditlev-Simonsen
   Executive Vice President   Norsk Hydro ASA   Norwegian
 
   Communication and Reputation   Drammensveien 264,    
 
   Management   N-0240 Oslo    
 
       Norway    
 
            
Torstein Dale Sjøtveit
   Executive Vice President   Norsk Hydro ASA   Norwegian
 
   Aluminium Metal   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Svein Richard Brandtzæg
   Executive Vice President   Norsk Hydro ASA   Norwegian
 
   Aluminium Products   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Tore Torvund
   Executive Vice President Oil and   Norsk Hydro ASA   Norwegian
 
   Energy   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    

Page 17 of 19

 

Norsk Hydro Produksjon AS
Directors and Executive Officers
             
Name   Present Principal Occupation   Business Address   Citizenship
Directors
            
 
            
Jørgen Kristian Andersen
   Senior Vice President Finance,   Norsk Hydro ASA   Norwegian
 
   Oil & Energy   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Ida Helliesen
   Senior Vice President,   Norsk Hydro ASA   Norwegian
 
   Corporate Finance   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Gunnar Andreas Hvattum
   Legal Counsel,   Norsk Hydro ASA   Norwegian
Heiberg
   Corporate Legal Department   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    
 
            
Executive Officers
            
 
            
Jørgen Christian Arentz
   Senior Vice President,   Norsk Hydro ASA   Norwegian
Rostrup
   Oil & Energy Markets   Drammensveien 264,    
 
       N-0240 Oslo    
 
       Norway    

Page 18 of 19

 

EXHIBIT INDEX
     
Exhibit No.   Description
 
    
A
  Joint Filing Agreement, dated March 22, 2007, between Norsk Hydro AS and Norsk Hydro Produksjon AS
 
    
B
  Securities Purchase Agreement, dated as of March 13, 2007, between Ascent Solar Technologies, Inc. and Norsk Hydro Produksjon AS
 
    
C
  Stockholders’ Agreement, dated as of March 13, 2007, between Ascent Solar Technologies, Inc. and Norsk Hydro Produksjon AS
 
    
D
  Voting Agreement, dated as of March 13, 2007, among Dr. Mohan S. Misra, Inica, Inc., ITN Energy Systems, Inc. and Norsk Hydro Produksjon AS
 
    
E
  Registration Rights Agreement, dated as of March 13, 2007, by and between Ascent Solar Technologies, Inc. and Norsk Hydro Produksjon AS

Page 19 of 19

EX-99.A 2 w32275exv99wa.htm EXHIBIT A exv99wa
 

EXHIBIT A
JOINT FILING AGREEMENT
     The undersigned hereby agree that the Statement on Schedule 13D, dated March 22, 2007, with respect to the common shares, par value $0.0001 per share, of Ascent Solar Technologies, Inc. is, and any amendments thereto executed by each of us shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, and that this Agreement shall be included as an Exhibit to the Schedule 13D and each such amendment. Each of the undersigned agrees to be responsible for the timely filing of the Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning itself contained therein. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.
     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 22 day of March, 2007.
         
  NORSK HYDRO ASA
 		  
  By:   /s/ Jørgen C. Arentz Rostrup    
    Name:   Jørgen C. Arentz Rostrup   
    Title:   Senior Vice President   
 
         
  NORSK HYDRO PRODUKSJON AS
 		  
  By:   /s/ Jørgen C. Arentz Rostrup    
    Name:   Jørgen C. Arentz Rostrup   
    Title:   Chief Executive Officer   
 

 

EX-99.B 3 w32275exv99wb.htm EXHIBIT B exv99wb
 

EXECUTION COPY
 
SECURITIES PURCHASE AGREEMENT
Dated as of March 13, 2007
between
Norsk Hydro Produksjon AS
and
Ascent Solar Technologies, Inc.
 

 

 

TABLE OF CONTENTS
Page
         
ARTICLE I
 
        
DEFINITIONS
 
        
SECTION 1.01. Definitions
    2  
ARTICLE II
 
        
PURCHASE AND SALE OF TRANCHE 1 SHARES
 
        
SECTION 2.01. Purchase and Sale of the Tranche 1 Shares
    8  
 
SECTION 2.02. Tranche 1 Purchase Price
    8  
 
SECTION 2.03. First Closing
    8  
 
SECTION 2.04. First Closing Deliveries by the Company
    9  
 
SECTION 2.05. First Closing Deliveries by the Investor
    9  
 
        
ARTICLE III
 
        
CALL OPTIONS
 
        
SECTION 3.01. Initial Warrants Call Option
    9  
 
SECTION 3.02. Initial Warrants Purchase Price
    10  
 
SECTION 3.03. Initial Warrants Closing
    10  
 
SECTION 3.04. Initial Warrants Closing Deliveries by the Company
    10  
 
SECTION 3.05. Initial Warrants Closing Deliveries by the Investor
    10  
 
SECTION 3.06. Tranche 2 Call Option
    11  
 
SECTION 3.07. Tranche 2 Purchase Price
    11  
 
SECTION 3.08. Second Closing
    11  
 
SECTION 3.09. Second Closing Deliveries by the Company
    12  
 
SECTION 3.10. Second Closing Deliveries by the Investor
    12  
 
SECTION 3.11. Redemption of Class A Warrants
    12  

i

 

         
ARTICLE IV
        
 
        
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
        
 
        
SECTION 4.01. Organization and Qualification; No Subsidiaries
    12  
 
SECTION 4.02. Certificate of Incorporation and Bylaws
    13  
 
SECTION 4.03. Capitalization
    13  
 
SECTION 4.04. Authority
    14  
 
SECTION 4.05. No Conflict; Required Filings and Consents
    14  
 
SECTION 4.06. Permits; Compliance
    15  
 
SECTION 4.07. SEC Filings; Financial Statements
    16  
 
SECTION 4.08. Absence of Certain Changes or Events
    17  
 
SECTION 4.09. Absence of Litigation
    18  
 
SECTION 4.10. Employee Benefit Plans
    18  
 
SECTION 4.11. Labor Matters
    19  
 
SECTION 4.12. [Intentionally Omitted.]
    20  
 
SECTION 4.13. Property and Leases
    20  
 
SECTION 4.14. Intellectual Property
    21  
 
SECTION 4.15. Taxes
    23  
 
SECTION 4.16. Environmental Matters
    24  
 
SECTION 4.17. Contracts; Debt Instruments
    25  
 
SECTION 4.18. Related Party Transactions
    26  
 
SECTION 4.19. Insurance
    26  
 
SECTION 4.20. Controls
    26  
 
SECTION 4.21. Private Offering
    27  
 
SECTION 4.22. Vote Required
    27  
 
SECTION 4.23. Section 203 of the DGCL; Takeover Statute
    27  
 
SECTION 4.24. Brokers
    27  

ii

 

         
ARTICLE V
        
 
        
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
        
 
        
SECTION 5.01. Organization
    28  
 
SECTION 5.02. Authority
    28  
 
SECTION 5.03. No Conflict; Required Filings and Consents
    28  
 
SECTION 5.04. Investment Purpose
    29  
 
SECTION 5.05. Status of Shares; Limitations on Transfer and Other Restrictions
    29  
 
SECTION 5.06. Sophistication and Financial Condition of the Investor
    29  
 
SECTION 5.07. Available Funds
    29  
 
SECTION 5.08. Proxy Statement
    29  
 
SECTION 5.09. Ownership of Company Capital Stock
    29  
 
SECTION 5.10. Brokers
    30  
ARTICLE VI
        
 
        
CONDUCT OF BUSINESS PENDING THE STOCKHOLDERS’ MEETING
        
 
        
SECTION 6.01. Conduct of Business by the Company Pending the Stockholders’ Meeting
    30  
 
        
ARTICLE VII
        
 
        
ADDITIONAL AGREEMENTS
        
 
        
SECTION 7.01. Stockholders’ Meeting
    31  
 
SECTION 7.02. Proxy Statement; Other SEC Filings
    31  
 
SECTION 7.03. Access to Information; Confidentiality
    32  
 
SECTION 7.04. Further Action; Reasonable Best Efforts; Consents; Filings
    32  
 
SECTION 7.05. Public Announcements
    34  
 
SECTION 7.06. Board Representation
    34  
 
SECTION 7.07. Cooperation
    34  
 
SECTION 7.08. Certain Notices
    34  

iii

 

         
SECTION 7.09. FIRPTA
    35  
ARTICLE VIII
        
 
        
CONDITIONS TO INITIAL WARRANTS TRANSACTIONS
        
 
        
SECTION 8.01. Conditions to the Obligations of Each Party
    35  
 
SECTION 8.02. Conditions to the Obligations of the Investor
    36  
 
SECTION 8.03. Conditions to the Obligations of the Company
    37  
 
        
ARTICLE IX
        
 
        
CONDITIONS TO TRANCHE 2 TRANSACTIONS
        
 
        
SECTION 9.01. Conditions to the Obligations of Each Party
    37  
 
SECTION 9.02. Conditions to the Obligations of the Investor
    38  
 
SECTION 9.03. Conditions to the Obligations of the Company
    39  
 
        
ARTICLE X
        
 
        
TERMINATION, AMENDMENT AND WAIVER
        
 
        
SECTION 10.01. Termination
    39  
 
SECTION 10.02. Effect of Termination
    40  
 
SECTION 10.03. Fees and Expenses
    40  
 
SECTION 10.04. Amendment
    40  
 
SECTION 10.05. Waiver
    41  
ARTICLE XI
        
 
        
GENERAL PROVISIONS
        
 
        
SECTION 11.01. Survival of Representations and Warranties; Indemnification
    41  
 
SECTION 11.02. Notices
    43  
 
SECTION 11.03. Severability
    44  
 
SECTION 11.04. Entire Agreement; Assignment
    45  
 
SECTION 11.05. Parties in Interest
    45  

iv

 

         
SECTION 11.06. Specific Performance
    45  
 
SECTION 11.07. Governing Law
    45  
 
SECTION 11.08. Waiver of Jury Trial
    45  
 
SECTION 11.09. Attorneys’ Fees
    46  
 
SECTION 11.10. Counterparts
    46  
 
        
EXHIBITS
        
 
        
Exhibit A       Registration Rights Agreement
        
 
        
Exhibit B       Stockholders’ Agreement
        
 
        
Exhibit C       Voting Agreement
        
 
        
Exhibit D       Form of Initial Warrants Call Notice
        
 
        
Exhibit E       Form of Tranche 2 Call Notice
        

v

 

               SECURITIES PURCHASE AGREEMENT, dated as of March 13, 2007 (this “Agreement”), between NORSK HYDRO PRODUKSJON AS, a corporation organized under the laws of the Kingdom of Norway (the “Investor”), and ASCENT SOLAR TECHNOLOGIES, INC., a corporation organized under the laws of the State of Delaware (the “Company”).
RECITALS
               WHEREAS, the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, on the date hereof, pursuant to the terms and conditions set forth in this Agreement, an aggregate of 1,600,000 shares (the “Tranche 1 Shares”) of the common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”);
               WHEREAS, pursuant to the terms and conditions set forth in this Agreement, the Company desires to grant to the Investor, and the Investor desires to acquire from the Company, the option to acquire from the Company, and to require the Company to sell to the Investor, (i) a number of restricted Class A Warrants otherwise identical to the publicly traded Class A Warrants that will result in the Investor owning twenty-three percent (23.0%) of all issued and outstanding Class A Warrants immediately after such sale and purchase (the “Initial Class A Warrants”) and (ii) a number of restricted Class B Warrants otherwise identical to the publicly traded Class B Warrants that will result in the Investor owning twenty-three percent (23.0%) of all issued and outstanding Class B Warrants immediately after such sale and purchase (the “Initial Class B Warrants”; together with the Initial Class A Warrants, the “Initial Warrants”);
               WHEREAS, pursuant to the terms and conditions set forth in this Agreement, the Company desires to grant to the Investor, and the Investor desires to acquire from the Company, the option to acquire from the Company, and to require the Company to sell to the Investor, up to a maximum of (i) an additional number of shares of Company Common Stock that will result in the Investor owning thirty-five percent (35.0%) of all issued and outstanding Company Common Stock immediately after such sale and purchase (the “Tranche 2 Shares” and, together with the Tranche 1 Shares, the “Shares”), (ii) an additional number of restricted Class A Warrants that will result in the Investor owning thirty-five percent (35.0%) of all issued and outstanding Class A Warrants immediately after such sale and purchase (the “Option Class A Warrants”) and (iii) an additional number of restricted Class B Warrants that will result in the Investor owning thirty-five percent (35.0%) of all issued and outstanding Class B Warrants immediately after such sale and purchase (the “Option Class B Warrants”; together with the Option Class A Warrants, the “Option Warrants”, and the Option Warrants together with the Tranche 2 Shares, the “Tranche 2 Securities”);
               WHEREAS, concurrently with execution of this Agreement the Investor will enter into (i) a registration rights agreement with the Company with respect to the Shares and shares of Company Common Stock issuable upon exercise of the Initial Warrants and the Option Warrants, in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), (ii) a stockholders’ agreement with the Company, in the form attached hereto as Exhibit B (the “Stockholders’ Agreement”) and (iii) a voting agreement with Dr. Mohan S. Misra, Chairman of the Board of the Company, Inica, Inc., a corporation organized under the laws of the State of Colorado, and ITN Energy Systems, Inc., a corporation organized under the laws of the State of Colorado, in the form attached hereto as Exhibit C (the “Voting Agreement”); and

1

 

               WHEREAS, certain terms used in this Agreement are defined in Section 1.01.
AGREEMENT
               NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
               SECTION 1.01. Definitions.
               (a) For purposes of this Agreement:
          “affiliate” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.
          “Ancillary Agreements” means the Registration Rights Agreement, the Stockholders’ Agreement and the Voting Agreement.
          “beneficial owner” (and related terms such as “beneficially owned” or “beneficial ownership”) has the meaning ascribed to such term under Rule 13d-3 of the Exchange Act.
          “Board” means the Board of Directors of the Company.
          “business day” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized to close in New York City, New York; Denver, Colorado; or Oslo, Norway.
          “Bylaws” means the Bylaws of the Company, dated October 26, 2005.
          “Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, dated as of October 26, 2005.
          “Class A Warrants” means redeemable Class A public warrants of the Company traded on Nasdaq under the symbol ASTIW, each of which entitles the holder thereof to purchase one share of Company Common Stock at an exercise price of $6.60 per share.
          “Class B Warrants” means non-redeemable Class B public warrants of the Company traded on Nasdaq under the symbol ASTIZ, each of which entitles the holder thereof to purchase one share of Company Common Stock at an exercise price of $11.00 per share.
          “Code” means the Internal Revenue Code of 1986, as amended.
          “contract” means any agreement, contract, lease, power of attorney, note, loan, evidence of indebtedness, purchase order, letter of credit, settlement agreement, franchise agreement,

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undertaking, covenant not to compete, employment agreement, license agreement, instrument, obligation, commitment, understanding, policy which constitutes an executory obligation, purchase and sales order, quotation which constitutes an executory commitment and other executory commitments to which a person is a party or to which any of the assets of such person are subject, whether oral or written, express or implied.
          “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract, credit arrangement or otherwise; including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such person.
          “DGCL” means the General Corporation Law of the State of Delaware.
          “Environmental Laws” means any United States federal, state or local Laws in existence on the date hereof relating to pollution or the protection, investigation or restoration of the environment or human health due to exposure to Hazardous Substances.
          “Equity Interest” means any share, capital stock, partnership, member or similar interest in any person, and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable therefor.
          “Expenses” means all reasonable and documented out-of-pocket costs, fees and expenses (including all fees and expenses of counsel, accountants, experts and consultants to a party hereto and its affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation and execution of this Agreement and the Ancillary Agreements and the performance of the Transactions.
          “Hazardous Substances” means (i) those substances defined in or regulated under the following federal United States statutes and their state counterparts, as each may be amended from time to time, and all regulations thereunder: the Hazardous Materials Transportation Act, the Solid Waste Disposal Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide, and Rodenticide Act, the Occupational Health and Safety Act and the Clean Air Act; (ii) petroleum and petroleum products, including crude oil and any fractions thereof; (iii) natural gas, synthetic gas and any mixtures thereof; (iv) polychlorinated biphenyls, asbestos and radon and (v) any substance, material or waste defined as toxic or hazardous or as a pollutant or contaminant, or regulated by any Governmental Authority pursuant to any Environmental Law.
          “Initial Warrants Transactions” means, upon the exercise of the Investor Warrants Call Option by the Investor, the issuance, purchase and sale of the Initial Warrants as contemplated by this Agreement and the performance of the obligations contemplated by this Agreement and the Ancillary Agreements in respect thereto.
          “Intellectual Property” means, in any and all jurisdictions throughout the world, all (a) inventions and discoveries (whether or not patentable and whether or not reduced to practice),

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improvements thereto, and patents, patent applications, invention disclosures and other rights of invention, including any reissues, divisionals, continuations and continuations-in-part, provisionals, reexamined patents or other applications or patents claiming the benefit of the filing date of any such application or patent; (b) trademarks, service marks, trade names, trade dress, logos, Internet domain names, product names, slogans and other identifiers of source or goodwill, including any common law rights, registrations, and applications for registration for any of the foregoing, and including the goodwill symbolized by or associated with any of the foregoing; (c) copyrightable works, all rights in copyrights, including moral rights, copyrights, website content, packaging design and art work and other rights of authorship and exploitation and any applications, registrations and renewals in connection therewith; (d) confidential and proprietary information, including customer and supplier lists and related information, pricing and cost information, business and marketing plans, research and development, advertising statistics, any other financial, marketing and business data, technical data, databases, specifications, designs, drawings, methods, schematics and know-how; (e) to the extent not covered by subsections (a) through (d), above, software and website content; (f) rights of privacy and publicity; (g) any other proprietary, intellectual property and other rights relating to any or all of the foregoing and (h) all claims, causes of action and rights to sue for past, present and future infringement, misappropriation or unconsented use of any of the foregoing intellectual property, the right to file applications and obtain registrations and all products, proceeds and revenues arising from or relating to any and all of the foregoing.
          “knowledge of the Company” means the actual knowledge of the directors and executive officers of the Company, in each case, after reasonable inquiry.
          “Lien” means any charge, mortgage, pledge, deed of trust, hypothecation, right of others, claim, security interest, encumbrance, burden, title defect, title retention agreement, lease, sublease, license, occupancy agreement, easement, covenant, condition, encroachment, voting trust agreement, interest, option, right of first offer, negotiation or refusal, proxy, lien or other similar restrictions or limitations.
          “Material Adverse Effect” means any event, circumstance, change or effect that (i) has or would have a material adverse effect on the business, operations, assets, liabilities (including contingent liabilities), financial condition or results of operations of the Company or (ii) materially impairs or would materially impair the ability of the Company to consummate the Transactions and perform its other obligations under this Agreement; provided, however, that “Material Adverse Effect” shall not include any event, circumstance, change or effect arising out of or attributable to (i) any increase or decrease in the market price of the shares of the Company Common Stock (but not any event, circumstance, change or effect underlying such increase or decrease to the extent that such event, circumstance, change or effect would otherwise constitute a Material Adverse Effect), (ii) any events, circumstances, changes or effects that generally affect the industries in which the Company operates and that do not materially disproportionately impact the Company, (iii) any changes in the securities markets generally that do not materially disproportionately impact the Company or (iv) any changes in general economic, legal, regulatory or political conditions in the geographic regions in which the Company operates that do not materially disproportionately impact the Company.

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          “Option Exercise Period” means the period beginning on the date that is the later of (i) nine (9) months from the date hereof and (ii) the date the Stockholder Approval is obtained and ending on the date that is two (2) years from the date thereof.
          “Other Filings” means all filings made by, or required to be made by, the Company with the SEC other than the Proxy Statement.
          “Permitted Liens” means (i) liens for current Taxes not yet due and payable and liens for Taxes being contested in good faith through proper proceedings (for which contested Taxes adequate reserves have been made), (ii) inchoate mechanics’ and materialmen’s liens for construction in progress and (iii) such (A) inchoate workmen’s, repairmen’s, warehousemen’s and carriers’ liens arising in the ordinary course of business of the Company consistent with past practice, and (B) zoning restrictions, survey exceptions, utility easements, rights of way and similar Liens that are typical for the applicable property type and locality (excluding, in each case, any mortgages or other Liens securing borrowed money) which do not materially interfere with the current use of such Leased Real Property.
          “person” means any individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” or “group” each within the meaning of Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.
          “Purchased Securities” means the Shares, the Initial Warrants and the Option Warrants.
          “Release” shall have the meaning given to such term in the United States Comprehensive Environmental Response, Compensation and Liability Act, 42 USC Section 9601 et seq.
          “Representative Warrants” means those certain warrants issued to underwriters of the Company’s initial public offering in July 2006 to purchase, for $6.60 in the aggregate, one share of Company Common Stock, one Class A Warrant and two Class B Warrants.
          “subsidiary” or “subsidiaries” of any person means an affiliate controlled by such person, directly or indirectly, through one or more intermediaries.
          “Tax Returns” means any return, declaration, report, election, claim for refund or information return or other statement or form filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in respect of Taxes, including any schedule or attachment thereto or amendment thereof.
          “Taxes” means any and all taxes, fees, levies, duties, tariffs, imposts and other similar charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority or taxing authority, including taxes or other charges on or with respect to income, franchise, windfall or other profits, gross receipts, property (real or personal), sales, use, capital stock, payroll, employment, occupation, severance, disability, premium, environmental (including taxes under Code Section 59A), social security, workers’ compensation, estimated, unemployment compensation or net worth; alternative or add-on minimum; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes; license, registration and documentation fees; and customs’ duties, tariffs and similar charges.

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          “Tranche 2 Transactions” means, upon the exercise of the Tranche 2 Call Option by the Investor, the issuance, purchase and sale of the Tranche 2 Securities as contemplated by this Agreement and the performance of the obligations contemplated by this Agreement and the Ancillary Agreements in respect thereto.
          “Transactions” means execution and delivery of this Agreement and the Ancillary Agreements, the purchase and sale of the Purchased Securities as contemplated by this Agreement, the issuance of the Purchased Securities by the Company and the performance of the obligations contemplated by this Agreement and the Ancillary Agreements.
          “Warrants” means the Class A Warrants and the Class B Warrants.
               (b) The following terms have the meanings set forth in the Sections set forth below:
     
Defined Term   Location of Definition
Action
 
§ 4.09
Agreement
 
Preamble
Blue Sky Laws
 
§ 4.05(b)
BSE
 
§ 4.05(b)
Claim Notice
 
§ 11.01(e)
Company
 
Preamble
Company Common Stock
 
Recitals
Company Intellectual Property
 
§ 4.14(b)
Company Material Contract
 
§ 4.17
Company Options
 
§ 4.03(a)
Company Preferred Stock
 
§ 4.03(a)
Company Stock Option Plan
 
§ 4.03(a)
Confidentiality Agreement
 
§ 7.03(b)
Disclosure Schedule
 
Article IV
Dispute Notice
 
§ 11.01(h)
ERISA
 
§ 4.10(a)
Exchange Act
 
§ 4.05(b)
First Closing
 
§ 2.03
GAAP
 
§ 4.07(b)
Governmental Authority
 
§ 4.05(b)
Indemnified Party
 
§ 11.01(e)
Indemnifying Party
 
§ 11.01(e)
Indemnity Notice
 
§ 11.01(h)
Initial Class A Warrant Purchase Price
 
§ 3.02
Initial Class B Warrant Purchase Price
 
§ 3.02
Initial Class A Warrants
 
Recitals
Initial Class B Warrants
 
Recitals
Initial Warrants
 
Recitals
Initial Warrants Call Notice
 
§ 3.01
Initial Warrants Call Option
 
§ 3.01
Initial Warrants Closing
 
§ 3.03

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Defined Term   Location of Definition
Initial Warrants Purchase Price
 
§ 3.02
Investor
 
Preamble
Investor Director Designee
 
§ 7.06(a)
IRS
 
§ 4.10(a)
Law
 
§ 4.05(a)
Leased Real Property
 
§ 4.13(a)
Losses
 
§ 11.01(b)
Nasdaq
 
§ 4.05(b)
Open Years
 
§ 4.15(c)
Option Class A Warrant Purchase Price
 
§ 3.07
Option Class B Warrant Purchase Price
 
§ 3.07
Option Class A Warrants
 
Recitals
Option Class B Warrants
 
Recitals
Option Warrants
 
Recitals
Permits
 
§ 4.06
Plans
 
§ 4.10(a)
Proxy Statement
 
§ 4.05(b)
Purchase Price
 
§ 3.07
R&D Sponsor
 
§ 4.14(f)
Registered IP
 
§ 4.14(a)
Registration Rights Agreement
 
Recitals
SEC
 
§ 4.05(b)
SEC Reports
 
§ 4.07(a)
Second Closing
 
§ 3.08
Securities Act
 
§ 4.07(a)
Shares
 
Recitals
SOX
 
§ 4.20
Stockholder Approval
 
§ 7.01
Stockholders’ Agreement
 
Recitals
Stockholders’ Meeting
 
§ 7.01
Tenant Leases
 
§ 4.13(a)
Termination Date
 
§ 10.01
Third Party Claim
 
§ 11.01(e)
Tranche 1 Purchase Price
 
§ 2.02
Tranche 1 Shares
 
Recitals
Tranche 2 Call Notice
 
§ 3.06
Tranche 2 Call Option
 
§ 3.06
Tranche 2 Purchase Price
 
§ 3.07
Tranche 2 Securities
 
Recitals
Tranche 2 Share Purchase Price
 
§ 3.07
Tranche 2 Shares
 
Recitals
Voting Agreement
 
Recitals
Warrant Shares
 
§ 5.04
               (c) Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

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               (i) When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement, unless otherwise indicated;
               (ii) The table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;
               (iii) Whenever the words “include”, “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;
               (iv) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;
               (v) All terms defined in this Agreement have the defined meanings when used in any certificate or other document delivered pursuant hereto, unless otherwise defined therein;
               (vi) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;
               (vii) References to a person are also to its successors and permitted assigns;
               (viii) References to this Agreement, the Confidentiality Agreement, the Registration Rights Agreement, the Stockholders’ Agreement or the Voting Agreement are deemed to include a reference to such agreement, as amended, modified or supplemented; and
               (ix) The use of “or” is not intended to be exclusive unless expressly indicated otherwise.
ARTICLE II
PURCHASE AND SALE OF TRANCHE 1 SHARES
          SECTION 2.01. Purchase and Sale of the Tranche 1 Shares. Upon the terms and subject to the conditions of this Agreement, on the date hereof, the Company shall issue to the Investor, and the Investor shall purchase, accept and acquire from the Company, the Tranche 1 Shares.
          SECTION 2.02. Tranche 1 Purchase Price. The purchase price for each Tranche 1 Share shall be $5.7725, or $9,236,000 in the aggregate (the “Tranche 1 Purchase Price”).
          SECTION 2.03. First Closing. The closing of the issuance, purchase and sale of the Tranche 1 Shares (the “First Closing”) will take place at 12:30 p.m., Portland, Oregon time, on the date hereof, at the offices of Holland & Knight LLP, 2300 U.S. Bancorp Tower, 111 S.W.

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Fifth Avenue, Portland, Oregon 97204, unless another time, date or place is agreed to by the Investor and the Company.
               SECTION 2.04. First Closing Deliveries by the Company. At the First Closing, the Company shall deliver or cause to be delivered to the Investor:
          (a) duly executed certificates evidencing the Tranche 1 Shares, registered in the name of the Investor;
          (b) executed counterparts of each Ancillary Agreement (other than the Voting Agreement);
          (c) a receipt for the Tranche 1 Purchase Price;
          (d) certified copies of resolutions duly adopted by the Board authorizing the execution, delivery and performance of this Agreement, the Ancillary Agreements to which the Company is a party and the sale and issuance of the Tranche 1 Shares to the Investor;
          (e) a certificate of the President of the Company, as to the incumbency of the director or officer (who shall not be such President) executing this Agreement and the other instruments, documents, certificates and agreements contemplated hereby;
          (f) a short form certificate of good standing of the Company, certified by the Secretary of State of the State of Delaware, as of a date not more than two (2) business days prior to the date hereof; and
          (g) certified copies of Listing of Additional Shares Notices filed with Nasdaq by or on behalf of the Company in respect of the Tranche 1 Shares and a certificate of the President of the Company certifying that no objection has been received by the Company from Nasdaq regarding such notices that has not been cured or waived.
               SECTION 2.05. First Closing Deliveries by the Investor. At the First Closing, the Investor shall deliver to the Company:
          (a) the Tranche 1 Purchase Price by wire transfer in immediately available funds to an account specified by the Company in writing no less than two (2) business days prior to the First Closing; and
          (b) executed counterparts of each Ancillary Agreement (other than the Voting Agreement).
ARTICLE III
CALL OPTIONS
               SECTION 3.01. Initial Warrants Call Option. Upon the terms and subject to the conditions of this Agreement, the Company hereby irrevocably grants to the Investor the right to acquire and to require the Company to sell to the Investor the Initial Warrants (the “Initial

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Warrants Call Option”). The Initial Warrants Call Option may be exercised by the Investor by providing written notice to the Company in accordance with Section 11.02, substantially in the form attached as Exhibit D hereto (the “Initial Warrants Call Notice”) at any time after the receipt of the Stockholder Approval until two (2) years from the date thereof. Such Initial Warrants Call Notice shall state (i) that the Investor is exercising the Initial Warrants Call Option and (ii) the number of (A) Initial Class A Warrants and (B) Initial Class B Warrants the Investor wishes to purchase, and, upon receipt of an Initial Warrants Call Notice, the Company shall be obligated to sell the number of Initial Class A Warrants and Initial Class B Warrants set forth in such Initial Warrants Call Notice, upon the terms and subject to the conditions set forth herein.
               SECTION 3.02. Initial Warrants Purchase Price. The purchase price for each (i) Initial Class A Warrant shall be an amount equal to the average of the closing bids for the Company’s Class A Warrants on Nasdaq during the five (5) consecutive trading days ending on (and including) the trading day that is one (1) day prior to the date of exercise of the Initial Warrants Call Option (the “Initial Class A Warrant Purchase Price”) and (ii) Initial Class B Warrant shall be an amount equal to the average of the closing bids for the Company’s Class B Warrants on Nasdaq during the five (5) consecutive trading days ending on (and including) the trading day that is one (1) day prior to the date of exercise of the Initial Warrants Call Option (the “Initial Class B Warrant Purchase Price” and together with the Initial Class A Warrant Purchase Price, the “Initial Warrants Purchase Price”).
               SECTION 3.03. Initial Warrants Closing. Unless this Agreement shall have been terminated in accordance with Section 10.01, and subject to the satisfaction or waiver of the conditions set forth in Article VIII (except for Section 8.01(a), which must be satisfied as a condition to the Initial Warrants Closing and cannot be waived), if an Initial Warrants Call Notice has been duly delivered pursuant to Section 3.01, the closing of the issuance, purchase and sale of the Initial Warrants provided for in this Article III (the “Initial Warrants Closing”) will take place at 12:30 p.m., Portland, Oregon time, on the second (2nd) business day after the satisfaction or waiver of the conditions set forth in Article VIII (other than those that by their terms are to be satisfied or waived at the Initial Warrants Closing), at the offices of Holland & Knight LLP, 2300 U.S. Bancorp Tower, 111 S.W. Fifth Avenue, Portland, Oregon 97204, unless another time, date or place is agreed to by the Investor and the Company.
               SECTION 3.04. Initial Warrants Closing Deliveries by the Company. At the Initial Warrants Closing, the Company shall deliver or cause to be delivered to the Investor:
          (a) duly executed certificates evidencing the Initial Warrants, registered in the name of the Investor;
          (b) a receipt for the Initial Warrants Purchase Price; and
          (c) the documents, instruments, writings and payments contemplated or required to be delivered by the Company at the Initial Warrants Closing pursuant to Section 8.02.
               SECTION 3.05. Initial Warrants Closing Deliveries by the Investor. At the Initial Warrants Closing, the Investor shall deliver to the Company:

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          (a) the Initial Warrants Purchase Price by wire transfer in immediately available funds to an account specified by the Company in writing no less than two (2) business days prior to the Initial Warrants Closing; and
          (b) the documents, instruments and writings contemplated or required to be delivered by the Investor at the Initial Warrants Closing pursuant to Section 8.03.
               SECTION 3.06. Tranche 2 Call Option. Upon the terms and subject to the conditions of this Agreement, the Company hereby irrevocably grants to the Investor the right to acquire and to require the Company to sell to the Investor the Tranche 2 Securities (the “Tranche 2 Call Option”). The Tranche 2 Call Option may be exercised by the Investor by providing written notice to the Company in accordance with Section 11.02, substantially in the form attached as Exhibit E hereto (the “Tranche 2 Call Notice”) at any time after 9:00 a.m., Denver, Colorado time, on the first day of the Option Exercise Period and prior to 5:00 p.m., Denver, Colorado time, on the last day of the Option Exercise Period. Such Tranche 2 Call Notice shall state (i) that the Investor is exercising the Tranche 2 Call Option and (ii) the number of (A) Tranche 2 Shares, (B) Option Class A Warrants and (C) Option Class B Warrants the Investor wishes to purchase, and, upon receipt of a Tranche 2 Call Notice, the Company shall be obligated to sell the number of Tranche 2 Shares, Option Class A Warrants and Option Class B Warrants set forth in such Tranche 2 Call Notice, upon the terms and subject to the conditions set forth herein.
               SECTION 3.07. Tranche 2 Purchase Price. The purchase price for each (i) Tranche 2 Share shall be an amount equal to the average of the closing bids for the Company Common Stock on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one (1) day prior to the date of exercise of the Tranche 2 Call Option (the “Tranche 2 Share Purchase Price”), (ii) Option Class A Warrant shall be an amount equal to the average of the closing bids for the Company’s Class A Warrants on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one (1) day prior to the date of exercise of the Tranche 2 Call Option (the “Option Class A Warrant Purchase Price”) and (iii) Option Class B Warrant shall be an amount equal to the average of the closing bids for the Company’s Class B Warrants on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one (1) day prior to the date of exercise of the Tranche 2 Call Option (the “Option Class B Warrant Purchase Price” and, together with the Tranche 2 Share Purchase Price and the Option Class A Warrant Purchase Price, the “Tranche 2 Purchase Price” and, together with the Tranche 1 Purchase Price and the Initial Warrants Purchase Price, the “Purchase Price”).
               SECTION 3.08. Second Closing. Unless this Agreement shall have been terminated in accordance with Section 10.01, and subject to the satisfaction or waiver of the conditions set forth in Article IX (except for Section 9.01(a), which must be satisfied as a condition to the Second Closing and cannot be waived), if a Tranche 2 Call Notice has been duly delivered pursuant to Section 3.06, the closing of the issuance, purchase and sale of the Tranche 2 Securities provided for in this Article III (the “Second Closing”) will take place at 12:30 p.m., Portland, Oregon time, on the second (2nd) business day after the satisfaction or waiver of the conditions set forth in Article IX (other than those that by their terms are to be satisfied or waived at the Second Closing), at the offices of Holland & Knight LLP, 2300 U.S. Bancorp

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Tower, 111 S.W. Fifth Avenue, Portland, Oregon 97204, unless another time, date or place is agreed to by the Investor and the Company.
               SECTION 3.09. Second Closing Deliveries by the Company. At the Second Closing, the Company shall deliver or cause to be delivered to the Investor:
          (a) duly executed certificates evidencing the Tranche 2 Securities, registered in the name of the Investor;
          (b) a receipt for the Tranche 2 Purchase Price; and
          (c) the documents, instruments, writings and payments contemplated or required to be delivered by the Company at the Second Closing pursuant to Section 9.02.
               SECTION 3.10. Second Closing Deliveries by the Investor. At the Second Closing, the Investor shall deliver to the Company:
          (a) the Tranche 2 Purchase Price by wire transfer in immediately available funds to an account specified by the Company in writing no less than two (2) business days prior to the Second Closing; and
          (b) the documents, instruments and writings contemplated or required to be delivered by the Investor at the Second Closing pursuant to Section 9.03.
               SECTION 3.11. Redemption of Class A Warrants. If the Class A Warrants have been redeemed by the Company in accordance with their terms on or prior to the date of the Initial Warrants Closing or the Second Closing, as the case may be, the Company shall issue to the Investor, and the Investor shall purchase, accept and acquire from the Company, a number of shares of Company Common Stock, at a price per share equal to the average of the closing bids for the Company Common Stock on Nasdaq during the five consecutive trading days ending on (and including) the trading day that is one (1) day prior to the date of exercise of the Initial Warrants Call Option or the Tranche 2 Call Option, as the case may be, sufficient to ensure that the Investor acquires the percentage ownership of the Company that it would otherwise have acquired had the Company not redeemed the Class A Warrants on or prior to such date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
               As an inducement to the Investor to enter into this Agreement, except as set forth in the Disclosure Schedule, which identifies exceptions by specific Section references, dated as of the date hereof delivered by the Company to the Investor (the “Disclosure Schedule”), the Company hereby represents and warrants to the Investor that:
               SECTION 4.01. Organization and Qualification; No Subsidiaries.
               (a) The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware and has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being

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conducted. The Company is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
               (b) The Company does not (i) directly or indirectly own any Equity Interest, or any interest convertible into or exchangeable or exercisable for any Equity Interest in, any person or (ii) have any subsidiaries.
               SECTION 4.02. Certificate of Incorporation and Bylaws. The Company has heretofore made available to the Investor a complete and correct copy of the Certificate of Incorporation and the Bylaws, each as amended to date, of the Company. Such Certificate of Incorporation and Bylaws of the Company are in full force and effect. The Company is not in violation of any of the provisions of its Certificate of Incorporation or Bylaws. True and complete copies of all minute books of the Company containing minutes for the period from October 26, 2005 to the date of this Agreement have been made available by the Company to the Investor.
               SECTION 4.03. Capitalization.
               (a) The authorized capital stock of the Company consists of 75,000,000 shares of Company Common Stock and 25,000,000 shares of preferred stock, par value $0.0001 per share (the “Company Preferred Stock”). As of March 1, 2007, (i) 5,363,760 shares of Company Common Stock were issued and outstanding, all of which were validly issued, fully paid, nonassessable and free of preemptive rights and (ii) no shares of Company Common Stock were held in the treasury of the Company. As of March 1, 2007, 725,000 shares of Company Common Stock were issued or issuable (and 750,000 shares of Company Common Stock were reserved for issuance) upon exercise of outstanding employee stock options granted pursuant to the Company’s 2005 Stock Option Plan, as amended through the date of this Agreement (the “Company Stock Option Plan”), and 300,000 shares of Company Common Stock, 300,000 Class A Warrants and 600,000 Class B Warrants were issuable upon exercise of the Representative Warrants. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. As of March 1, 2007, (i) 3,290,894 Class A Warrants were issued and outstanding and (ii) 6,581,788 Class B Warrants were issued and outstanding. Except as set forth in this Section 4.03 and Section 4.10, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or by which the Company is bound relating to the issued or unissued capital stock or other Equity Interests of the Company, or securities convertible into or exchangeable for such capital stock or other Equity Interests, or obligating the Company to issue or sell any shares of its capital stock or other Equity Interests, or securities convertible into or exchangeable for such capital stock of, or other Equity Interests in, the Company. Since March 1, 2007 the Company has not issued any shares of its capital stock, or securities convertible into or exchangeable for such capital stock or other Equity Interests, other than those shares of capital stock reserved for issuance as set forth in this Section 4.03 or in Section 4.03(a) of the Disclosure Schedule. Set forth in Section 4.03(a) of the Disclosure Schedule is a true and complete list, as of March 1, 2007, of the prices at which outstanding options issued under the Company Stock Option Plan (the “Company Options”) may

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be exercised under the Company Stock Option Plan, the number of Company Options outstanding at each such price and the vesting schedule of the Company Options (i) granted to each “executive officer” of the Company (within the meaning of such term under Section 16 of the Exchange Act) or which are “incentive stock options” within the meaning of Section 422 of the Code granted to any person. All shares of Company Common Stock issued upon exercise of a Company Option have been and will be duly authorized, validly issued, fully paid and nonassessable. Except as set forth in Section 4.03(a) of the Disclosure Schedule, there are no outstanding contractual obligations of the Company (A) restricting the transfer of, (B) affecting the voting rights of, (C) requiring the repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (D) requiring the registration for sale of or (E) granting any preemptive or antidilutive right with respect to, any shares of Company Common Stock or any capital stock of, or other Equity Interests in, the Company. There are no outstanding contractual obligations of the Company to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any person.
               (b) The Shares, when issued, paid for and delivered in accordance with the terms of this Agreement, and the shares of Company Common Stock to be issued upon exercise of the Class A Warrants and the Class B Warrants, will be duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights.
               SECTION 4.04. Authority. The Company has all necessary power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The Company’s execution and delivery of this Agreement and the Ancillary Agreements to which it is a party and the consummation by the Company of the Transactions have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the Ancillary Agreements to which the Company is a party or to consummate the Transactions (other than with respect to the Initial Warrants Transactions and the Tranche 2 Transactions, which require the approval of a majority of the votes cast at the Stockholders’ Meeting). The Board has approved this Agreement, each Ancillary Agreement to which the Company is a party and the issuance of the Purchased Securities and has directed that the issuance of the Initial Warrants and the Tranche 2 Securities be submitted to the Company’s stockholders for approval at the Stockholders’ Meeting. This Agreement and each of the Ancillary Agreements to which the Company is a party have been duly authorized and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Investor, this Agreement and each of the Ancillary Agreements to which the Company is a party constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms.
               SECTION 4.05. No Conflict; Required Filings and Consents.
               (a) The execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is a party do not, and the performance of its obligations hereunder and thereunder will not, (i) conflict with or violate the Certificate of Incorporation or Bylaws of the Company, (ii) assuming that all consents, approvals, authorizations and other actions described in subsection (b) have been obtained and all filings and obligations described in subsection (b) have been made, conflict with or violate any domestic or, to the knowledge of the Company, foreign, statute, law, ordinance, regulation, rule, code, executive order, injunction,

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judgment, decree or other order (“Law”) applicable to the Company or by which any property or asset of the Company is bound or affected or (iii) require any consent or approval under, result in any breach of 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 right of termination, amendment, acceleration or cancellation of, or give to others a right to require any payment to be made under, or result in the creation of a Lien or other encumbrance on any property or asset of the Company pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
               (b) The execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is a party do not, and the performance of its obligations hereunder and thereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any United States federal, state, county or local or, to the knowledge of the Company, foreign, government, governmental, Tax, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal or judicial or arbitral body (a “Governmental Authority”), except (i) for (A) applicable requirements, if any, of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), state securities or “blue sky” laws (“Blue Sky Laws”), (B) solely in respect of the exercise of the Initial Warrants Call Option and the Tranche 2 Call Option pursuant to Sections 3.01 and 3.06, respectively, the filing with the Securities and Exchange Commission (the “SEC”) of a proxy statement relating to the issuance of the Initial Warrants and the Tranche 2 Securities to be sent to the Company’s stockholders (as amended or supplemented from time to time, the “Proxy Statement”) and (C) any filings required under the rules and regulations of the Nasdaq Stock Market (“Nasdaq”) or the Boston Stock Exchange (the “BSE”) and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to (1) prevent or materially delay consummation of the Transactions, (2) otherwise prevent or materially delay performance by the Company of any of its material obligations under this Agreement or any Ancillary Agreement or (3) have a Material Adverse Effect.
               SECTION 4.06. Permits; Compliance. The Company is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any United States Governmental Authority and, to the knowledge of the Company, any foreign Governmental Authority, necessary for the Company to own, lease and operate its properties or to carry on its business as it is now being conducted and substantially as described in the Company’s SEC Reports filed prior to the date hereof (the “Permits”), and all such Permits are valid, and in full force and effect, except where the failure to have, or the suspension or cancellation of, or failure to be valid or in full force and effect of, any of the Permits would not, individually or in the aggregate, reasonably be expected to (A) prevent or materially delay consummation of the Transactions, (B) otherwise prevent or materially delay performance by the Company of any of its material obligations under this Agreement or any Ancillary Agreement to which it is a party or (C) have a Material Adverse Effect. As of the date hereof, no suspension or cancellation of any of the Permits is pending or, to the knowledge of the Company, threatened, except where the failure to have, or the suspension or cancellation of, any of the Permits would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is not in conflict with, or in default, breach or violation

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of, (i) any domestic United States Law or, to the knowledge of the Company, any foreign Law, applicable to the Company or by which any property or asset of the Company is bound or affected, or (ii) any Permits, except for any such conflicts, defaults or violations that would not, individually or in the aggregate, reasonably be expected to (A) prevent or materially delay consummation of the Transactions, (B) otherwise prevent or materially delay performance by the Company of any of its material obligations under this Agreement or any Ancillary Agreement to which it is a party or (C) have a Material Adverse Effect. Since the enactment of SOX, the Company and each of its officers and directors have been and are in compliance in all material respects with (A) the applicable provisions of SOX and the related rules and regulations promulgated thereunder and under the Exchange Act and (B) the applicable listing and corporate governance rules and regulations of Nasdaq and the BSE.
               SECTION 4.07. SEC Filings; Financial Statements.
               (a) The Company has timely filed all forms, reports and documents (including all exhibits) required to be filed by it with the SEC since July 10, 2006 (the “SEC Reports”). The SEC Reports (i) were prepared in accordance with the requirements of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”) or the Exchange Act, as the case may be and (ii) did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. As of the date hereof, the Company is eligible to register securities on Form SB-2 of the Securities Act.
               (b) Each of the financial statements (including, in each case, any notes thereto) contained in the SEC Reports was prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and the Company’s books and records, and each fairly presented the financial position, results of operations and cash flows of the Company as at the respective dates thereof and for the respective periods indicated therein except as otherwise noted therein (subject, in the case of unaudited statements, to normal year-end adjustments which individually or in the aggregate did not have, and would not reasonably be expected to have, a Material Adverse Effect). The books and records of the Company have been, and are being, maintained in accordance with applicable legal and accounting requirements in all material respects.
               (c) Except as and to the extent set forth on the balance sheet of the Company as of September 30, 2006 included in the Company Form 10-QSB for the quarterly period ended September 30, 2006, including the notes thereto, the Company has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise), except for liabilities or obligations incurred since September 30, 2006 that would not, individually or in the aggregate, reasonably be expected to (A) prevent or materially delay consummation of the Transactions, (B) otherwise prevent or materially delay performance by the Company of any of its material obligations under this Agreement or any Ancillary Agreement to which it is a party or (C) have a Material Adverse Effect.
               (d) The Company has previously made available to the Investor a complete and correct copy of any amendment or modification which has not yet been filed with the SEC to any

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agreement, document or other instrument which previously had been filed by the Company with the SEC pursuant to the Securities Act or the Exchange Act.
               (e) As of the date hereof, neither the Company nor, to the knowledge of the Company, any of the Company’s employees, is the subject of any formal or informal investigation by the SEC, and, to the knowledge of the Company, no such investigation has been threatened or in fact exists which would reasonably be expected to result in the institution of any such investigation. Written correspondence (other than any transmittal letter or other correspondence that does not address substantively any comments or questions from, or ongoing discussions with, the SEC), with the SEC since July 10, 2006 until the date hereof has been made available to the Investor. The audit committee of the Board has established “whistleblower” procedures that meet the requirements of Exchange Act Rule 10A-3, and has made available to the Investor true, complete and correct copies of such procedures. The Company has received no “complaints” (within the meaning of Exchange Act Rule 10A-3) in respect of any accounting, internal accounting controls or auditing matters. To the knowledge of the Company, no complaints seeking relief under Section 806 of SOX have been filed with the United States Secretary of Labor and no employee has threatened to file any such complaint.
               SECTION 4.08. Absence of Certain Changes or Events. Except as expressly contemplated by this Agreement or as set forth in Section 4.08 of the Disclosure Schedule, since July 10, 2006 through the date hereof, the Company has conducted its business in the ordinary course consistent with past practice and, since such date through the date hereof, (i) there has not occurred any Material Adverse Effect or an event or development that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or any event or development that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the performance of this Agreement or any Ancillary Agreement by the Company and (ii) the Company has not (A) issued, sold, pledged, disposed, granted or encumbered any shares of any class of capital stock or other Equity Interests in or of the Company, (B) sold, pledged, disposed, transferred, leased, licensed, guaranteed or encumbered any material property or assets of the Company, except in the ordinary course of business consistent with past practice, (C) acquired (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof, (D) incurred any indebtedness for borrowed money which, individually or together with all such other indebtedness, exceeds $200,000, (E) granted any security interest in any of its material assets except for such security interests as would constitute a Permitted Lien, (F) made or authorized any capital expenditure or purchase of fixed assets other than in the ordinary course of business, (G) increased the compensation or benefits payable to or to become payable to its directors, officers or employees, except for increases in accordance with past practices in salaries or wages of employees of the Company which are not across-the-board increases, or granted any rights to severance or termination pay to, or entered into any employment or severance agreement with, any director, officer or other employee (other than severance for employees other than officers, in accordance with past practice, in connection with such employee’s termination of employment with the Company) of the Company, or taken any affirmative action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Plan, (H) made, revoked or changed any election in respect of Taxes, adopted or changed any material accounting method in respect of Taxes or settled or compromised any material claim, notice, audit report, liability or assessment in respect of Taxes, (I) made any material change, other than changes required by GAAP or in the ordinary course of

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business, with respect to accounting policies or procedures of the Company, (J) pre-paid any long-term debt or paid, discharged or satisfied any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except for such payments, discharges or satisfaction of claims as were in the ordinary course of business consistent with past practice or (K) written up, written down or written off the book value of any material assets, or a material amount of any other assets, other than in the ordinary course of business or except as required by GAAP.
          SECTION 4.09. Absence of Litigation. There is no litigation, suit, claim, action, formal complaint, prosecution, indictment, formal investigation, arbitration or proceeding (whether civil, criminal or administrative, an “Action”) pending or, to the knowledge of the Company, threatened against the Company, or any property or asset of the Company, or, to the knowledge of the Company, for which the Company is obligated to indemnify a third party, before any Governmental Authority that (i) has had or would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) challenges the validity or propriety or seeks to materially delay or prevent the consummation of the Transactions and which is reasonably expected to be adversely determined against the Company. Neither the Company nor any property or asset of the Company is subject to any order of, consent decree, settlement agreement or similar written agreement with, any Governmental Authority, or any order, writ, judgment, injunction, decree, ruling, determination or award of any Governmental Authority that would, individually or in the aggregate, reasonably be expected to (A) prevent or materially delay consummation of the Transactions, (B) otherwise prevent or materially delay performance by the Company of any of its material obligations under this Agreement or any Ancillary Agreement to which it is a party or (C) result in a Material Adverse Effect.
          SECTION 4.10. Employee Benefit Plans.
          (a) Section 4.10(a)(i) of the Disclosure Schedule lists (i) all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and all bonus, incentive, stock option, stock purchase, restricted stock, phantom stock, or other stock-based compensation, deferred compensation, retiree medical or life insurance, supplemental executive retirement, severance or other benefit plans, programs, trusts or arrangements, and all employment, termination, severance, compensation or other contracts or agreements, to which the Company or any of its affiliates is a party, or which are sponsored by the Company or any of its affiliates for the benefit of any employee, officer or director of the Company, and (ii) any contracts, arrangements, agreements, policies, practices or understandings between the Company or any of its affiliates and any employee of the Company, including any contracts, arrangements or understandings or change in control arrangements relating to a sale of the Company (collectively, the “Plans”). All Plans are in writing and the Company has made available to the Investor true, correct and complete copies of (i) such Plans, (ii) the most recent annual report (Form 5500) filed with the Internal Revenue Service (the “IRS”), if any, with respect to any Plan, (iii) the most recent summary plan description for each Plan for which a summary plan description is available or is required by applicable Law, (iv) the most recent actuarial report or valuation, if any, relating to a Plan, and (v) the most recent determination letter, if any, issued by the IRS with respect to any Plan that is intended to qualify under Section 401(a) of the Code.
          (b) Each Plan has been operated and administered in all respects in accordance with its terms and in all material respects with the requirements of all applicable

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Laws, including ERISA and the Code. As of the date hereof, no action, claim or proceeding is pending or, to the knowledge of the Company, threatened with respect to any Plan (other than claims for benefits in the ordinary course) that would result in any material liability to the Company and, to the knowledge of the Company, no fact, condition or event exists that would give rise to any such action, claim or proceeding.
          (c) Each Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code is a nonstandardized prototype plan. The National Office of the IRS has issued a favorable determination letter to the effect that the form of the nonstandardized prototype plan satisfies the requirements of Section 401(a) of the Code. No fact or event has occurred since the date of such determination letter or letters from the IRS that could reasonably be expected to adversely affect the qualified status of any such Plan or the exempt status of any such trust.
          (d) None of the Plans is (i) an “employee benefit plan” as defined in Section 3(2) of ERISA, (ii) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or (iii) a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for which the Company could incur liability under Section 4063 or 4064 of ERISA. None of the Plans provides medical, health or life insurance or any other welfare-type benefits for current or future retired or terminated employees of the Company or their spouses of dependents (other than in accordance with Part 6 of Title I of ERISA or Code Section 4980B). None of the Plans are “non-qualified deferred compensation plans” (within the meaning of Section 409A of the Code).
          (e) The Transactions will not entitle any employee, officer or director of the Company to any amount (whether in cash or property) that would be received under any Plan, or increase the amount of or accelerate the time of payment of vesting thereof.
          (f) No amount or acceleration referred to in subsection (e) above (whether or not disclosed on Section 4.10(f) of the Disclosure Schedule) would (i) be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code) or (ii) not be deductible under Section 162(a)(1) or 404 of the Code.
          (g) Except as set forth in Section 4.10(g) of the Disclosure Schedule, all of the options issued under the Company Stock Option Plan are (i) unvested and (ii) were issued at no less than fair market value on the date of grant.
          SECTION 4.11. Labor Matters(a) . The Company is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by the Company, nor, to the knowledge of the Company as of the date hereof, are there any activities or proceedings of any labor union to organize any such employees. There are no controversies pending or, to the knowledge of the Company, threatened between the Company and any of its employees, and there is no organized strike, slowdown, work stoppage or lockout by or with respect to any employees of the Company. The Company has complied in all material respects with all applicable Laws relating to employment, equal employment opportunity, labor, nondiscrimination, immigration, wages, hours, benefits, collective bargaining and occupational safety and health. The Company has properly classified for Tax purposes, and for the purpose of determining eligibility to participate in any Plan, all employees, leased employees, independent

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contractors and consultants who have provided or who are currently providing services to the Company and made all appropriate filings in connection with services provided by such persons to the Company in accordance with their classification.
          SECTION 4.12. [Intentionally Omitted.]
          SECTION 4.13. Property and Leases.
          (a) The Company owns no real property. As of the date hereof, Section 4.13 of the Disclosure Schedule contains (i) a true, correct and complete list of all leases, subleases or other occupancy agreements relating to all real property that the Company leases or subleases or otherwise has any right, title or interest in or to (the property demised thereunder herein referred to as the “Leased Real Property”) and (ii) with respect to each of the Leased Real Properties, all existing leases, subleases, licenses or other occupancy agreements to which the Company is a party as landlord or lessor thereunder or by which the Company is bound as landlord or lessor thereunder, and all amendments, modifications, extensions and supplements thereto (collectively, the “Tenant Leases”), regardless of whether the terms thereof have commenced. Section 4.13 of the Disclosure Schedule briefly describes the current use or non-use, as the case may be, of such Leased Real Property, and the Company does not have any interest in any other real property.
          (b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company has valid and enforceable leasehold interests in all Leased Real Property and (ii) none of the Leased Real Property is subject to any Liens (other than Permitted Liens) or any other easements, rights of way, licenses, grants, building or use restrictions, exceptions, reservations, limitations or other impediments. No person other than the Company leases, has a tenancy or otherwise occupies, or has the right to occupy or use, the Leased Real Property other than pursuant to a Tenant Lease.
          (c) With respect to each Leased Real Property and Tenant Lease, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (i) such lease or sublease is legal, valid, binding, enforceable and in full force and effect; (ii) there exists no default under any such lease or sublease by the Company which has not been cured, and, to the knowledge of the Company, there has not occurred any event that (with the lapse of time or the giving of notice or both) would constitute, and no party to any such lease has given the Company written notice of or made a claim with respect to, a default on the part of the Company under any such lease or sublease; (iii) to the knowledge of the Company, no party (other than the Company) is in default, and there has not occurred any event that (with the lapse of time or giving of notice or both) would constitute a default by any such party under any such lease or sublease; (iv) all leasing, brokerage, finder and other similar fees and commissions that are due and payable by the Company with respect to such leases and subleases have been paid in full and (v) a true, correct and complete copy of each such lease and sublease (including any renewal notices delivered thereunder) and any guaranty given with respect thereto has been furnished or made available to the Investor.
          (d) Except in each case as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all Leased Real Property is in good and usable condition, subject to normal wear and tear and normal industry practice with respect to maintenance, and has such rights of egress and ingress, and such easements, rights of way and

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grants, as are necessary to allow such real property to be operated, and the business of the Company conducted with respect thereto to be conducted, as now operated and conducted. Except in each case as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, to the Company’s knowledge, no improvement on any Leased Real Property encroaches on an adjacent property owner’s property, and no property owner’s property encroaches on any Leased Real Property. The Leased Real Property is all of the material real property assets which are used in or necessary to the continued conduct of the Company’s business as it is currently operated.
          (e) Except in each case as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company, with respect to the Leased Real Property, has not violated (or will not violate with notice or the passing of time or both) any zoning, subdivision or building Law applicable thereto, including all applicable health, fire and safety Laws, ordinances and administrative regulations and (ii) the Company has not violated (or will not violate with notice or the passing of time or both) any covenants, conditions or restrictions contained in any easement, restrictive covenant or other similar instrument or agreement affecting the Leased Real Property. As of the date hereof the Company has not received from any Governmental Authority or any other person any written notice of any current or potential material violation of or material noncompliance with any of the matters set forth in clauses (i) and (ii) of the immediately preceding sentence.
          (f) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there is no pending or, to the knowledge of the Company, threatened condemnation or eminent domain proceeding or changes in zoning affecting the Leased Real Property that would adversely affect the use, operation, maintenance, enjoyment or value thereof in any material respect.
          SECTION 4.14. Intellectual Property.
          (a) Section 4.14(a) of the Disclosure Schedule sets forth a true and complete list of all (i) registered trademarks, service marks and applications therefor, (ii) registered copyrights and applications therefor, (iii) issued patents and applications therefor and (iv) domain names, in each case, that are owned by the Company (collectively, the “Registered IP”), including an indication for each such item of Registered IP, as applicable, the application or registration number, date and jurisdiction or filing or issuance, and the identity of the current applicant or registered owner.
          (b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company owns, or otherwise have a valid right to use, free and clear of all Liens (other than Permitted Liens and encumbrances arising pursuant to license agreements), all Intellectual Property used or held for use in connection with the operation of its business as presently or as contemplated to be conducted (“Company Intellectual Property”) and (ii) there are no other items of Intellectual Property that are material to or necessary for the operation of the Company’s business or for the continued operation of the Company’s business immediately after the consummation of the Transactions in substantially the same manner as operated prior to the consummation of the Transactions.

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          (c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company and the operation of its business does not, and has not, infringed, misappropriated or otherwise violated or conflicted with the Intellectual Property rights of any other person, (ii) there is no action or claim pending, asserted or threatened against the Company concerning any of the foregoing or otherwise concerning any Company Intellectual Property, nor has the Company received any notification that a license under any other person’s Intellectual Property is or may be required and (iii) no person is engaging in any activity that infringes, misappropriates or otherwise violates or conflicts with any Company Intellectual Property.
          (d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company has taken reasonable measures to maintain the confidentiality and value of all confidential information and other confidential Intellectual Property used or held for use in connection with the operation of its business and (ii) no confidential information, trade secrets or other confidential Intellectual Property have been disclosed by the Company to any person except pursuant to valid and appropriate non-disclosure and/or license agreements that have not been breached.
          (e) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Company Intellectual Property is (i) valid, subsisting and enforceable, (ii) currently in compliance with any and all formal legal requirements necessary to maintain the validity and enforceability thereof and (iii) not subject to any outstanding order, judgment, injunction, decree, ruling or agreement adversely affecting the Company’s use thereof or rights thereto, or that would impair the validity or enforceability thereof. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Registered IP is currently in compliance with any and all formal legal requirements necessary to record and perfect the Company’s interest therein and the chain of title thereof.
          (f) Except as set forth in Section 4.14(f) of the Disclosure Schedule, or except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) no university, military, educational institution, research center, Governmental Authority, or other organization (each, an “R&D Sponsor”) has sponsored research and development conducted by the Company, or has any claim of right to, ownership of or other Lien on any Company Intellectual Property, (ii) no research and development conducted by or for the Company’s business was performed by a graduate student or employee of any R&D Sponsor and (iii) the Company has not participated in any standards-setting activities or joined any standards setting or similar organization that would affect the proprietary nature of any Company Intellectual Property or restrict the ability of the Company to enforce, license or exclude others from using any Company Intellectual Property.
          (g) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) to the knowledge of the Company, no employee, independent contractor, or agent of the Company is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of invention agreement or similar agreement relating to the protection, ownership, development, use or transfer of Company Intellectual Property or any other Intellectual Property and (ii) to the extent that any Intellectual Property has been conceived, developed or created for the Company by any other person, the Company has executed valid and enforceable written agreements with such person with respect

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thereto transferring to the Company the entire and unencumbered right, title and interest therein and thereto by operation of law or by valid written assignment.
          (h) The execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is a party do not, and the performance of its obligations hereunder and thereunder will not, adversely affect the validity of, or the Company rights in, any Company Intellectual Property.
          SECTION 4.15. Taxes
          (a) Filing of Tax Returns. The Company has timely filed with the appropriate taxing authorities all Tax Returns required to be filed through the date hereof (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so or otherwise permitted by applicable Law). All such Tax Returns are true, complete and accurate. All income Taxes and other material Taxes due and owing by the Company on or before the date hereof (whether or not shown on any Tax Return) have been paid. The Company is not doing business in and is not engaged in a trade or business in any jurisdiction in which Tax Returns have not been filed. No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.
          (b) Reserves for Taxes. The unpaid Taxes of the Company (i) did not, as of the dates of the financial statements contained in the SEC Reports filed with the SEC prior to the date of the Agreement, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) included in the balance sheets contained in such financial statements, and (ii) will not exceed that reserve as adjusted for operations and transactions through the later of the Initial Warrants Closing and the Second Closing, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Since the date of the most recent financial statement contained in the SEC Reports filed with the SEC prior to the date of this Agreement, the Company has not incurred any liability for Taxes outside the ordinary course of business or otherwise inconsistent with past custom and practice.
          (c) Claims and Provisions of Tax Returns. No deficiencies for Taxes against the Company have been claimed or assessed in writing by a Governmental Authority. There are no pending or, to the knowledge of any of the Company, threatened audits, assessments, adjustments or other Actions for or relating to any liability in respect of Taxes of the Company, and there are no matters under discussion with any Governmental Authority, or known to the Company, with respect to Taxes that are likely to result in any additional liability for Taxes with respect to the Company. The Company has made available to the Investor complete and accurate copies of all federal income and material state income Tax Returns filed by or on behalf of the Company for the ended years for which the applicable statute of limitations has not yet expired taking into account any extensions thereof (the “Open Years”) and complete and accurate copies of all examination reports and statements of deficiencies assessed against or agreed to by the Company during the

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applicable Open Years. The Company has delivered or made available to the Investor complete and accurate copies of local and other material Tax Returns filed by or on behalf of the Company for the Open Years and complete and accurate copies of all examination reports and statements of deficiencies assessed against or agreed to by the Company during the applicable Open Years. None of the Company or, to the knowledge of the Company, any of its predecessors, has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency (other than as a result of a valid extension of time to file a Tax Return).
          (d) Liens. There are no Liens for Taxes other than Permitted Liens on any assets of the Company.
          (e) Tax Sharing Agreements. There are no Tax sharing or allocation agreements or similar arrangements (including indemnity arrangements) with respect to or involving the Company, and, after the date of the later of the Initial Warrants Closing and the Second Closing, the Company shall not be bound by any such Tax sharing or allocation agreements or similar arrangements or have any liability thereunder for amounts due in respect of periods prior to the date of the later of the Initial Warrants Closing and the Second Closing.
          (f) Other Entity Liability. The Company has not been a member of an affiliated group filing a consolidated federal income Tax Return. The Company does not have any liability for the Taxes of any person (other than Taxes of the Company) (i) under Treasury Regulation Section 1.1502-6 (or any similar provision of state or local Law), (ii) as a transferee or successor, (iii) by contract, or (iv) otherwise.
          (g) Withholding Taxes. The Company has withheld, collected and deposited all Taxes required under applicable Law to have been withheld, collected and deposited in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
          (h) Tax Shelters. The Company has not entered into any transaction identified as a “reportable transaction” or a “listed transaction” for purposes of Treasury Regulations Sections 1.6011-4(b) or 301.6111-2(b).
          (i) Ownership Changes. The Company has not undergone any ownership change since its inception that would cause an annual limitation on the utilization of its net operating losses pursuant to Section 382 of the Code, subject to such exceptions as would not materially decrease the amount of its net operating losses utilized in such prior taxable years.
          (j) Transfer Tax. No Tax or duty (including any stamp, registration, documentation, transfer or other similar Tax or duty and any Tax or duty on capital gains or income, whether chargeable on a withholding basis or otherwise) is payable by the Investor or the Company in connection with the Transactions.
          (k) Documentation. During the applicable statute of limitations period for Taxes, the Company and, to the knowledge of the Company, its predecessors, have properly maintained documentation for all Taxes and Tax Returns.
          SECTION 4.16. Environmental Matters. (i) The Company is not in violation of, and is not subject to any liability with respect to, any Environmental Law; (ii) there has not been a Release of any Hazardous Substances at any properties operated by the Company; (iii) to the knowledge of the Company, the Company is not liable for any off-site Releases of Hazardous Substances; (iv) the Company has all Permits, licenses and other authorizations required for its

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current operations under any Environmental Law and is in compliance with all such Permits, licenses and authorizations; (v) the Company has not received any notice, demand, letter, claim or request for information alleging that the Company, any property operated by the Company or any of its current operations is in violation of, or liable under, any Environmental Law; (vi) the Company (A) has not entered into or agreed to any consent decree or order and is not subject to any judgment, decree or judicial order relating to compliance with Environmental Laws, any Permits, licenses or authorizations under Environmental Laws or the investigation, remediation or removal of Hazardous Substances and, to the knowledge of the Company, no investigation, litigation or other proceeding is pending or threatened with respect thereto and (B) is not an indemnitor in connection with any claim asserted in writing by any third-party indemnitee for any liability under any Environmental Law or relating to any Hazardous Substances and (vii) the execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is a party, and the performance of its obligations hereunder, does not require any action with regard to, any property operated by the Company, pursuant to any so-called property transfer law, including the New Jersey Industrial Site Recovery Act.
          SECTION 4.17. Contracts; Debt Instruments. The Company is not a party to or bound by any contract:
          (i) which contains any non-compete provisions with respect to any line of business or any or geographic area with respect to the Company or any of the Company’s current or planned affiliates, or restricts the conduct of any line of business by the Company or any of the Company’s current or planned affiliates or any geographic area in which the Company or any of the Company’s current or planned affiliates may conduct business, in each case in any material respect,
          (ii) which would prohibit or materially delay the consummation of the Transactions,
          (iii) which, as of the date hereof, is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) and has not been filed with the SEC, or
          (iv) which, as of the date hereof,
               (A) involves aggregate annual expenditures or other payments in excess of $500,000, except (1) those contracts cancelable (without material penalty, cost or other liability) within ninety (90) days and (2) purchase orders for inventory entered into in the ordinary course of business consistent with past practice,
               (B) contain minimum purchase conditions or requirements or other terms that restrict or limit the purchasing relationships of the Company, except (1) those contracts cancelable (without material penalty, cost or other liability) within ninety (90) days and (2) purchase orders for inventory entered into in the ordinary course of business consistent with past practice, or
               (C) concerns any material Company Intellectual Property.
          Each contract of the type described above in this Section 4.17, whether or not filed as an exhibit to any SEC Report or otherwise set forth in Section 4.17 of the Disclosure

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Schedule, is referred to herein as a “Company Material Contract.” Each Company Material Contract is valid and binding on the Company and, to the Company’s knowledge, each other party thereto, and in full force and effect, and the Company has in all material respects performed all obligations required to be performed by it to the date hereof under each Company Material Contract and, to the Company’s knowledge, each other party to each Company Material Contract has in all material respects performed all obligations required to be performed by it under such Company Material Contract, except as would not, individually or in the aggregate, reasonably be expected to (1) prevent or materially delay consummation of the Transactions, (2) otherwise prevent or materially delay performance by the Company of any of its material obligations under this Agreement or any Ancillary Agreement to which it is a party or (3) result in a Material Adverse Effect. The Company does not know of, nor has it received notice of, any violation or default under (or any condition which with the passage of time or the giving of notice would cause such a violation of or default under) any Company Material Contract or any other contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to (1) prevent or materially delay consummation of the Transactions, (2) otherwise prevent or materially delay performance by the Company of any of its material obligations under this Agreement or any Ancillary Agreement to which it is a party or (3) result in a Material Adverse Effect.
          SECTION 4.18. Related Party Transactions. Other than as set forth on Section 4.18 of the Disclosure Schedule, the Company is not a party to any agreement or arrangement with or for the benefit of any person who, to the Company’s knowledge, is a holder of 5% or more of the outstanding equity securities of the Company or any officer, director, partner or affiliate of any such person.
          SECTION 4.19. Insurance. The Company maintains, with reputable insurers or through self-insurance, insurance in such amounts, including deductible arrangements, and of such a character as is customary for companies engaged in the same or similar business. All policies of title, fire, liability, casualty, business interruption, workers’ compensation and other forms of insurance including directors and officers insurance, held by the Company as of the date hereof, are in full force and effect in accordance with their terms. The Company is not in default under any provisions of any such policy of insurance and the Company has not received notice of cancellation of any such insurance.
          SECTION 4.20. Controls. The Company has established and maintains, to the extent required by Rule 13a-15 of the Exchange Act, (i) a system of internal control over financial reporting that is sufficient to ensure that (A) transactions are executed in accordance with management’s general or specific authorizations, (B) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain asset accountability, (C) access to assets is permitted only in accordance with management’s general or specific authorization, (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (E) records are maintained that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets and (ii) a system of disclosure controls and procedures (as defined in the Exchange Act) that is sufficient to ensure that all material information required to be disclosed by the Company in the SEC Reports is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including controls

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and procedures designed to ensure that information required to be disclosed by the Company in the SEC Reports is accumulated and communicated to the Company’s management, as appropriate to allow timely decisions regarding required disclosure. The Company has disclosed, and will continue to disclose, based on its most recent evaluation, to the Company’s external auditors, the audit committee of the Board and to the Investor (i) any potential significant deficiencies and potential material weaknesses in the design or operation of its systems of internal control over financial reporting which are reasonably expected to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud or allegation of fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. There have been no changes in the Company’s disclosure controls and procedures or internal control over financial reporting. The Company is currently implementing such programs and is taking such steps as it believes are necessary to effect compliance (not later than the relevant statutory and regulatory deadline therefor) with all applicable provisions of Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”).
          SECTION 4.21. Private Offering. None of the Company or anyone acting on its behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action that would reasonably be expected to subject the offer, issuance or sale of the Purchased Securities, as contemplated hereby, to the registration provisions of the Securities Act.
          SECTION 4.22. Vote Required. No vote of the holders of any class or series of capital stock or other Equity Interests of the Company is necessary to approve the issuance of the Tranche 1 Shares. The affirmative vote of a majority of the votes cast at the Stockholders’ Meeting on the issuance of the Initial Warrants and the Tranche 2 Securities is the only vote of the holders of any class or series of capital stock or other Equity Interests of the Company necessary to approve the issuance of the Initial Warrants and the Tranche 2 Securities.
          SECTION 4.23. Section 203 of the DGCL; Takeover Statute. The Board has taken all actions necessary or advisable to ensure that Section 203 of the DGCL does not apply to any of the Transactions (including the purchase of the Shares hereunder and any exercise of the Warrants). The execution, delivery and performance of this Agreement and the Ancillary Agreements will not cause to be applicable to the Company any “fair price,” “moratorium,” “control share acquisition” or other similar antitakeover statute or regulation enacted under state or federal Laws.
          SECTION 4.24. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
          As an inducement to the Company to enter into this Agreement, the Investor hereby represents and warrants to the Company that:

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          SECTION 5.01. Organization. The Investor is a corporation duly organized and validly existing under the Laws of the Kingdom of Norway.
          SECTION 5.02. Authority. The Investor has all necessary power and authority to execute and deliver this Agreement and the Ancillary Agreements, to perform its obligations hereunder and thereunder and to consummate the Transactions. The Investor’s execution and delivery of this Agreement and the Ancillary Agreements and the consummation by it of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Investor are necessary to authorize this Agreement or the Ancillary Agreements or to consummate the Transactions. This Agreement and each of the Ancillary Agreements have been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company and, in the case of the Ancillary Agreements, any other party thereto, this Agreement and each of the Ancillary Agreements constitute a legal, valid and binding obligation of the Investor enforceable against it in accordance with its terms.
          SECTION 5.03. No Conflict; Required Filings and Consents.
          (a) The execution and delivery by the Investor of this Agreement and the Ancillary Agreements do not, and the performance of its obligations hereunder and thereunder will not, (i) conflict with or violate its organizational documents, (ii) assuming that all consents, approvals, authorizations and other actions described in subsection (b) have been obtained and all filings and obligations described in subsection (b) have been made, conflict with or violate any Law applicable to it or by which any of its properties or assets is bound or affected or (iii) result in any breach of, 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, or result in the creation of a Lien or other encumbrance on any of its properties or assets pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which it is a party or by which it or any of its properties or assets is bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, reasonably be expected to (1) prevent or materially delay consummation of the Transactions, (2) otherwise prevent or materially delay its performance of any of its material obligations under this Agreement or any Ancillary Agreement or (3) have a material adverse effect on the Investor.
          (b) The execution and delivery by the Investor of this Agreement and the Ancillary Agreements do not, and the performance of its obligations hereunder and thereunder will not, require any consent, approval, authorization or permit of, or filing with, or notification to, any Governmental Authority, except (i) for (A) applicable requirements, if any, of the Exchange Act and Blue Sky Laws, (B) solely in respect of the exercise of the Initial Warrants Call Option and the Tranche 2 Call Option pursuant to Sections 3.01 and 3.06, respectively, the filing with the SEC of the Proxy Statement and (C) any filings required under the rules and regulations of Nasdaq or the BSE and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to (1) prevent or materially delay consummation of the Transactions, (2) otherwise prevent or materially delay its performance of any of its material

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obligations under this Agreement or any Ancillary Agreement or (3) have a material adverse effect on the Investor.
          SECTION 5.04. Investment Purpose(a) . The Investor is acquiring the Purchased Securities for its own account solely for the purpose of investment and not with a view to, or for resale in connection with, any distribution of the Purchased Securities, the shares of Company Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) or any interest therein.
          SECTION 5.05. Status of Shares; Limitations on Transfer and Other Restrictions(a) . The Investor acknowledges and understands that (i) the Purchased Securities and the Warrant Shares have not been and will not be registered under the Securities Act or any under any state securities laws (other than in accordance with the Registration Rights Agreement) and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (ii) that such exemption depends in part upon, and such Purchased Securities are being sold in reliance on, the representations and warranties set forth in this Article V, (iii) it must bear the economic risk of its investment in the Purchased Securities for an indefinite period of time because the Purchased Securities must be held indefinitely unless subsequently registered under the Securities Act and applicable state securities laws or unless an exemption from such registration is available, (iv) the Purchased Securities will be subject to certain restrictions on transfer and voting, as set forth in the Stockholders’ Agreement and (v) a restrictive legend in the form set forth in Section 5.03 of the Stockholders’ Agreement shall be placed on all certificates evidencing the Purchased Securities and the Warrant Shares.
          SECTION 5.06. Sophistication and Financial Condition of the Investor. The Investor is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act, a sophisticated investor and, by virtue of its business or financial experience, is capable of evaluating the merits and risks of the investment in the Purchased Securities. The Investor has been provided an opportunity to ask questions of and receive answers from representatives of the Company concerning the terms and conditions of this Agreement and the purchase of the Purchased Securities contemplated hereby.
          SECTION 5.07. Available Funds. The Investor has sufficient funds in its possession to permit it to acquire and pay for the Purchased Securities to be purchased by it and to perform its obligations under this Agreement.
          SECTION 5.08. Proxy Statement. None of the information supplied by the Investor in writing for inclusion in the Proxy Statement shall, at the date the Proxy Statement (or any amendment or supplement thereto) is first mailed to stockholders of the Company and at the time of the Stockholders’ Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
          SECTION 5.09. Ownership of Company Capital Stock. As of the date of this Agreement, the Investor and its affiliates, taken together, are the beneficial owners of no shares of capital stock of the Company.

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          SECTION 5.10. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Investor.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE STOCKHOLDERS’ MEETING
          SECTION 6.01. Conduct of Business by the Company Pending the Stockholders’ Meeting. The Company agrees that, between the date of this Agreement and the Stockholders’ Meeting, except as set forth in Section 6.01 of the Disclosure Schedule or as contemplated by any other provision of this Agreement, except as provided below, the business of the Company shall be conducted in, and the Company shall not take any action except in, the ordinary course of business consistent with past practice; and the Company shall use its reasonable efforts to preserve substantially intact the business organization of the Company, to keep available the services of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations. Except as contemplated by this Agreement and Section 6.01 of the Disclosure Schedule, the Company shall not, between the date of this Agreement and the Stockholders’ Meeting, directly or indirectly, do, or propose to do, any of the following without the prior written consent of the Investor:
          (a) amend or otherwise change its Certificate of Incorporation or Bylaws;
     (b) (1) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock or other Equity Interests in or of the Company, or any options, warrants, convertible
     securities or other rights of any kind to acquire any shares of such capital stock or other Equity Interests, or any other ownership interest (including any phantom interest or other interest represented by contract), of the Company (except for the issuance of shares of Company Common Stock issuable pursuant to the terms of the Company Stock Option Plan, as in effect as of the date of this Agreement, or the Representative Warrants) or (2) sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets of the Company;
     (c) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests;
     (d) (1) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or (2) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets except in the ordinary course of business;

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     (e) adopt, or propose to adopt, or maintain any shareholders’ rights plan, “poison pill” or other similar plan or agreement, unless the Investor is exempted from the provisions of such shareholders’ rights plan, “poison pill” or other similar plan or agreement;
     (f) to the extent required or applicable, take any action to exempt or make not subject to (1) the provisions of Section 203 of the DGCL or (2) any other state takeover Law or state Law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any person (other than the Investor or any of its affiliates) or any action taken thereby, which person or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom; or
     (g) announce an intention, enter into any agreement or otherwise make a commitment, to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
          SECTION 7.01. Stockholders’ Meeting. The Company, acting through the Board, shall, in accordance with applicable Law and the Company’s Certificate of Incorporation and Bylaws, (a) duly call, give notice of, convene and hold a regular or special meeting of its stockholders as promptly as practicable after the date of this Agreement (but in no case later than four (4) months from the date hereof) for the purpose of considering, taking action on, and voting on the issuance of the Initial Warrants and the issuance of the Tranche 2 Securities (the “Stockholders’ Meeting”), (b) submit the issuance of the Initial Warrants and the issuance of the Tranche 2 Securities to a vote of the Company’s stockholders and (c) (i) unless the Board determines, after consultation with its outside legal counsel, that it would be inconsistent with its fiduciary obligations to stockholders of the Company under applicable Laws, include in the Proxy Statement the recommendation of the Board that the stockholders of the Company approve the issuance of the Initial Warrants and the issuance of the Tranche 2 Securities (such approval by the Company’s stockholders, the “Stockholder Approval”) and (ii) use all reasonable efforts to obtain the Stockholder Approval, including postponing or adjourning the Stockholders’ Meeting to obtain a quorum or to solicit additional proxies or calling, giving notice of, convening and holding additional Stockholders’ Meetings.
          SECTION 7.02. Proxy Statement; Other SEC Filings. As promptly as practicable after the date hereof, the Company shall file a preliminary Proxy Statement with the SEC under the Exchange Act, and shall use its reasonable best efforts to have the Proxy Statement cleared by the SEC. In addition, the Company shall prepare and file with the SEC any Other Filings as and when required or requested by the SEC. The Investor and the Company shall cooperate with each other in the preparation of the Proxy Statement and any Other Filings, and the Company shall promptly notify the Investor of the receipt of any comments of the SEC with respect to the Proxy Statement or any Other Filings and of any requests by the SEC for any amendment or supplement thereto or for additional information and shall provide to the Investor copies of all correspondence between the Company or any representative of the Company and the SEC. The Company shall give the Investor and its counsel the opportunity to review the Proxy Statement and any Other Filings for a reasonable time prior to their being filed with the

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SEC and shall give the Investor and its counsel the opportunity to review all amendments and supplements to the Proxy Statement and all responses to requests for additional information and replies to comments for a reasonable time prior to their being filed with, or sent to, the SEC. The Company shall in good faith consider the Investor’s comments on any such documents. Each of the Company and the Investor agrees to use its reasonable best efforts, after consultation with the other party hereto, to respond promptly to all such comments of and requests by the SEC and the Company agrees to use its reasonable best efforts to cause the Proxy Statement and all required amendments and supplements thereto to be mailed to the holders of shares of Company Common Stock entitled to vote at the Stockholders’ Meeting at the earliest practicable time. If at any time prior to the Initial Warrants Closing or the Second Closing, any event or circumstance relating to the Company or its officers or directors, should be discovered by the Company which should be set forth in an amendment or a supplement to the Proxy Statement or any Other Filing, the Company shall promptly inform the Investor. The Proxy Statement shall not, at the date the Proxy Statement (or any amendment or supplement thereto) is first mailed to stockholders of the Company and at the time of the Stockholders’ Meeting, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading except that no representation, warranty or covenant is made by the Company with respect to any information supplied by the Investor for inclusion in the Proxy Statement. The Proxy Statement, any amendments or supplements thereto, and all other documents that the Company is responsible for filing in connection with the Transactions will comply as to form and substance in all material respects with the applicable requirements of the Exchange Act and other applicable Laws.
          SECTION 7.03. Access to Information; Confidentiality.
          (a) From the date hereof to the later of the Initial Warrants Closing and the Second Closing and in compliance with applicable Laws, the Company shall, and shall cause the officers, directors, employees, auditors and agents of the Company to, afford the officers, employees, accountants, counsel and other agents of the Investor reasonable access at all reasonable times to the officers, employees, agents, properties, offices and other facilities, books and records of the Company, and shall furnish the Investor with such financial, operating and other data and information as the Investor, through its officers, employees or agents, may reasonably request.
          (b) All information obtained by the Investors pursuant to this Section 7.03 shall be kept confidential in accordance with the confidentiality agreement, dated as of February 20, 2007 (the “Confidentiality Agreement”), between the Investor and the Company, and shall not be used by the Investor in contravention of applicable Laws relating to the buying and selling of securities.
          (c) No investigation pursuant to this Section 7.03 shall affect any representation or warranty in this Agreement of any party hereto or any condition to the obligations of the parties hereto.
          SECTION 7.04. Further Action; Reasonable Best Efforts; Consents; Filings.

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          (a) Upon the terms and subject to the conditions hereof, each of the parties hereto shall use its reasonable best efforts to (i) take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws to consummate and make effective the Transactions, (ii) obtain from any Governmental Authorities any consents, licenses, Permits, waivers, approvals, authorizations or orders required to be obtained or made by the Investor or the Company, or to avoid any action or proceeding by any Governmental Authority, in connection with the authorization, execution and delivery of this Agreement and each Ancillary Agreement and the consummation of the Transactions and (iii) make promptly its respective filings, and thereafter make any other submissions required, in connection with the Transactions, under (y) the Exchange Act, and any other applicable federal or state securities Laws and (z) any other applicable Law; provided, however, that the Investor and the Company shall cooperate with each other in connection with the making of all such filings, including providing copies of all such documents to the non-filing party and its advisors prior to filing and, if requested, to accept all reasonable additions, deletions or changes suggested in connection therewith.
          (b) The parties hereto shall cooperate and assist one another in connection with all actions to be taken pursuant to Section 7.04(a), including the preparation and making of the filings referred to therein and, if requested, amending or furnishing additional information thereunder, including, subject to applicable Law and the Confidentiality Agreement, providing copies of all related documents to the non-filing party and their advisors prior to filing, and to the extent practicable neither of the parties will file any such document or have any communication with any Governmental Authority without prior consultation with the other party. Each party shall keep the other party apprised of the content and status of any communications with, and communications from, any Governmental Authority with respect to the Transactions. To the extent practicable and permitted by a Governmental Authority, each party hereto shall permit representatives of the other party to participate in meetings (whether by telephone or in person) with such Governmental Authority.
          (c) Each of the parties hereto agrees to cooperate and use its reasonable best efforts to defend through litigation on the merits any Action, including any administrative or judicial Action, asserted by any party in order to avoid the entry of, or to have vacated, lifted, reversed, terminated or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) that in whole or in part restricts, prevents or prohibits consummation of the Transactions, including by vigorously pursuing all available avenues of administrative and judicial appeal.
          (d) The Company and the Investor shall give any notices to third parties, and use all reasonable efforts to obtain any third party consents, (i) necessary, proper or advisable to consummate the Transactions or (ii) required to be disclosed in the Disclosure Schedule. In the event that either party shall fail to obtain any third party consent described in the first sentence of this Section 7.04(d), such party shall use all reasonable efforts, and shall take any such actions reasonably requested by the other party hereto, to minimize any adverse effect upon the Company and the Investor, and their respective businesses resulting, or which would reasonably be expected to result after the later of the Initial Warrants Closing and the Second Closing, from the failure to obtain such consent.

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          (e) From the date of this Agreement until the later of the Initial Warrants Closing and the Second Closing, the Company shall promptly notify the Investor in writing of any pending or, to the knowledge of the Company, threatened Action by any Governmental Authority or any other person (i) challenging or seeking material damages in connection with the Transactions or (ii) seeking to restrain or prohibit the consummation of the Transactions, which in either case would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect prior to or after the later of the Initial Warrants Closing and the Second Closing.
          SECTION 7.05. Public Announcements. The Investor and the Company agree that no public release or announcement concerning the Transactions shall be issued by either party without the prior consent of the other party (which consent shall not be unreasonably withheld), except as such release or announcement may be required by Law or the rules or regulations of Nasdaq or the BSE, in which case the party required to make the release or announcement shall use its best efforts to allow the other party reasonable time to comment on such release or announcement in advance of such issuance.
          SECTION 7.06. Board Representation.
          (a) Within thirty (30) business days after the date hereof, the Investor shall notify the Board in writing of the name of one individual that the Investor designates as the individual who shall be appointed to the Board effective as of the date of the Stockholders’ Meeting. The individual so designated (the “Investor Director Designee”) shall be disclosed in the Proxy Statement, and such individual shall consent to serve if appointed.
          (b) As soon as practicable after the date of the Stockholders’ Meeting, the Company and the Board shall take all actions necessary to (i) increase the authorized number of directors to seven and (ii) effective as of a date no more than twenty (20) days from the date of the Stockholders’ Meeting, appoint the Investor Director Designee and one new independent director as directors of the Company.
          SECTION 7.07. Cooperation. The Company and the Investor shall coordinate and cooperate in connection with (i) the preparation of the Proxy Statement and any Other Filings, (ii) determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any Company Material Contracts, in connection with the consummation of the Transactions and (iii) seeking any such actions, consents, approvals or waivers or making any such filings, furnishing information required in connection therewith or with the Proxy Statement or any Other Filings and timely seeking to obtain any such actions, consents, approvals or waivers.
          SECTION 7.08. Certain Notices. From and after the date of this Agreement until the later of the Initial Warrants Closing and the Second Closing, each party shall promptly notify the other party of (i) the occurrence, or non-occurrence, of any event or any breach or misrepresentation that would reasonably be expected to cause any condition to the obligations of such party to effect the Transactions not to be satisfied or (ii) the failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement or any Ancillary Agreement that would reasonably be expected to result in any condition to the obligations of such party to effect the Transactions not to be

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satisfied; provided, however, that the delivery of any notice pursuant to this Section 7.08 shall not cure any breach of any representation or warranty requiring disclosure of such matter prior to the date of this Agreement or otherwise limit or affect the remedies available hereunder to the party receiving such notice.
          SECTION 7.09. FIRPTA. For so long as the Investor owns an Equity Interest in the Company, the Company agrees to use its reasonable best efforts to produce and deliver to the Investor, upon the Investor’s written request, certification of the Company’s status as a non-U.S. real property interest (as defined in Section 897(c) of the Code) in the form and with respect to the applicable period as specified in Treasury Regulation Section 1.897-2(h), or any successor provision. This covenant shall survive the Initial Warrants Closing and the Second Closing hereunder.
ARTICLE VIII
CONDITIONS TO INITIAL WARRANTS TRANSACTIONS
          SECTION 8.01. Conditions to the Obligations of Each Party. If the Investor exercises the Initial Warrants Call Option pursuant to Section 3.01, the obligations of each party to effect the Initial Warrants Transactions shall be subject to the satisfaction or waiver, at or prior to the Initial Warrants Closing, of the following conditions:
     (a) Stockholder Approval. The issuance of the Initial Warrants shall have been approved and adopted by the requisite affirmative vote of the stockholders of the Company in accordance with the DGCL, the Certificate of Incorporation of the Company and Nasdaq Rule 4350(i)(B);
     (b) No Order. No Governmental Authority in the United States shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) which is then in effect and has the effect of making the Initial Warrants Transactions illegal or otherwise restricting, preventing or prohibiting consummation of the Initial Warrants Transactions; and
     (c) Court Proceedings. No Action shall be pending or threatened before any Governmental Authority wherein an unfavorable injunction, judgment, order, decree, ruling or charge would reasonably be expected to (A) (1) prevent consummation of any of the Initial Warrants Transactions, (2) cause any of the Initial Warrants Transactions to be rescinded following consummation thereof or (3) materially adversely affect the rights and powers of the Investor to own the Initial Warrants, and exercise all of its rights as a stockholder of the Company and as a party to the Ancillary Agreements, and in each case, no such injunction, judgment, order, decree, ruling or charge shall be in effect or (B) cause or require the payment by the Company (including as the result of the acceleration, or other obligation to repay prior to scheduled maturity, any indebtedness) or, to the extent such Action relates to the Company or the Initial Warrants Transactions, the Investor, of damages, fines or other penalties or awards that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; provided, however, that, in each case, any such threatened Action would reasonably be expected to be adversely determined against the Company, the Investor or their respective affiliates.

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          SECTION 8.02. Conditions to the Obligations of the Investor. If the Investor exercises the Initial Warrants Call Option pursuant to Section 3.01, the obligations of the Investor to consummate the Initial Warrants Transactions shall be subject to the satisfaction or waiver of the following additional conditions:
     (a) Representations and Warranties. Each of the representations and warranties of the Company contained in this Agreement and each Ancillary Agreement that are qualified by materiality or Material Adverse Effect shall be true and correct as of the date hereof and as of the Initial Warrants Closing as though made on and as of the Initial Warrants Closing (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date), and all representations and warranties which are not so qualified shall be true and correct in all material respects (except that those representations and warranties which address matters only as of a particular date need only remain true and correct in all material respects as of such date);
     (b) Agreements and Covenants. The Company shall have performed, in all material respects, all obligations and complied with, in all material respects, its agreements and covenants to be performed or complied with by it under this Agreement and the Ancillary Agreements to which it is a party on or prior to the Initial Warrants Closing;
     (c) Officer’s Certificate. The Company shall have delivered to the Investor a certificate, dated the date of the Initial Warrants Closing, signed by the President and Chief Executive Officer of the Company, certifying as to the satisfaction of the conditions specified in Sections 8.02(a), (b) and, (d);
     (d) Material Adverse Effect. No Material Adverse Effect shall have occurred since the date of this Agreement;
     (e) Certified Resolutions. Certified copies of resolutions duly adopted by (i) the Board authorizing the execution, delivery and performance of this Agreement, the Ancillary Agreements to which the Company is a party and the Initial Warrants Transactions and (ii) the stockholders of the Company authorizing the Initial Warrants Transactions;
     (f) Incumbency Certificate. A certificate of the President of the Company, as to the incumbency of the director or officer (who shall not be such President) executing this Agreement and the other instruments, documents, certificates and agreements contemplated hereby;
     (g) Good Standing Certificate. A short form certificate of good standing of the Company, certified by the Secretary of State of the State of Delaware, as of a date not more than two (2) business days prior to the Initial Warrants Closing; and
     (h) Consents and Approvals. All consents, approvals and authorizations of any person with respect to the Initial Warrants Transactions set forth on Section 8.02(h) of the Disclosure Schedule shall have been obtained (and a copy delivered to the Investor).

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          SECTION 8.03. Conditions to the Obligations of the Company. . If the Investor exercises the Initial Warrants Call Option pursuant to Section 3.01, the obligations of the Company to consummate the Initial Warrants Transactions shall be subject to the satisfaction or waiver of the following additional conditions:
     (a) Representations and Warranties. Each of the representations and warranties of the Investor contained in this Agreement and each Ancillary Agreement that are qualified by materiality or material adverse effect shall be true and correct as of the date hereof and as of the Initial Warrants Closing as though made on and as of the Initial Warrants Closing (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date), and all representations and warranties which are not so qualified shall be true and correct in all material respects (except that those representations and warranties which address matters only as of a particular date need only remain true and correct in all material respects as of such date);
     (b) Agreements and Covenants. The Investor shall have performed, in all material respects, all obligations or complied with, in all material respects, all agreements and covenants to be performed or complied with by it under this Agreement on or prior to the Initial Warrants Closing; and
     (c) Officer’s Certificate. The Investor shall have delivered to the Company a certificate, dated the date of the Initial Warrants Closing, signed by a duly authorized representative of the Investor, certifying as to the satisfaction of the conditions specified in Sections 8.03(a) and (b).
ARTICLE IX
CONDITIONS TO TRANCHE 2 TRANSACTIONS
          SECTION 9.01. Conditions to the Obligations of Each Party. If the Investor exercises the Tranche 2 Call Option pursuant to Section 3.06, the obligations of each party to effect the Tranche 2 Transactions shall be subject to the satisfaction or waiver, at or prior to the Second Closing, of the following conditions:
     (a) Stockholder Approval. The issuance of the Tranche 2 Securities shall have been approved and adopted by the requisite affirmative vote of the stockholders of the Company in accordance with the DGCL, the Certificate of Incorporation of the Company and Nasdaq Rule 4350(i)(B);
     (b) No Order. No Governmental Authority in the United States shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) which is then in effect and has the effect of making the Tranche 2 Transactions illegal or otherwise restricting, preventing or prohibiting consummation of the Tranche 2 Transactions; and
     (c) Court Proceedings. No Action shall be pending or threatened before any Governmental Authority wherein an unfavorable injunction, judgment, order, decree, ruling or charge would reasonably be expected to (A) (1) prevent consummation of any

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of the Tranche 2 Transactions, (2) cause any of the Tranche 2 Transactions to be rescinded following consummation thereof or (3) materially adversely affect the rights and powers of the Investor to own the Tranche 2 Securities, and exercise all of its rights as a stockholder of the Company and as a party to the Ancillary Agreements, and in each case, no such injunction, judgment, order, decree, ruling or charge shall be in effect or (B) cause or require the payment by the Company (including as the result of the acceleration, or other obligation to repay prior to scheduled maturity, any indebtedness) or, to the extent such Action relates to the Company or the Tranche 2 Transactions, the Investor, of damages, fines or other penalties or awards that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; provided, however, that, in each case, any such threatened Action would reasonably be expected to be adversely determined against the Company, the Investor or their respective affiliates.
          SECTION 9.02. Conditions to the Obligations of the Investor. If the Investor exercises the Tranche 2 Call Option pursuant to Section 3.06, the obligations of the Investor to consummate the Tranche 2 Transactions shall be subject to the satisfaction or waiver of the following additional conditions:
     (a) Representations and Warranties. Each of the representations and warranties of the Company contained in this Agreement and each Ancillary Agreement that are qualified by materiality or Material Adverse Effect shall be true and correct as of the date hereof and as of the Second Closing as though made on and as of the Second Closing (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date), and all representations and warranties which are not so qualified shall be true and correct in all material respects (except that those representations and warranties which address matters only as of a particular date need only remain true and correct in all material respects as of such date);
     (b) Agreements and Covenants. The Company shall have performed, in all material respects, all obligations and complied with, in all material respects, its agreements and covenants to be performed or complied with by it under this Agreement and the Ancillary Agreements to which it is a party on or prior to the Second Closing;
     (c) Officer’s Certificate. The Company shall have delivered to the Investor a certificate, dated the date of the Second Closing, signed by the President and Chief Executive Officer of the Company, certifying as to the satisfaction of the conditions specified in Sections 9.02(a), (b) and (d);
     (d) Material Adverse Effect. No Material Adverse Effect shall have occurred since the date of this Agreement;
     (e) Certified Resolutions. Certified copies of resolutions duly adopted by (i) the Board authorizing the execution, delivery and performance of this Agreement, the Ancillary Agreements to which the Company is a party and the Tranche 2 Transactions and (ii) the stockholders of the Company authorizing the Tranche 2 Transactions;
     (f) Incumbency Certificate. A certificate of the President of the Company, as to the incumbency of the director or officer (who shall not be such President) executing this

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Agreement and the other instruments, documents, certificates and agreements contemplated hereby;
     (g) Good Standing Certificate. A short form certificate of good standing of the Company, certified by the Secretary of State of the State of Delaware, as of a date not more than two (2) business days prior to the Second Closing;
     (h) Consents and Approvals. All consents, approvals and authorizations of any person with respect to the Tranche 2 Transactions set forth on Section 9.02(h) of the Disclosure Schedule shall have been obtained (and a copy delivered to the Investor); and
     (i) Listing. A Listing of Additional Shares Notice in respect of the Tranche 2 Shares shall have been submitted to Nasdaq by or on behalf of the Company, and the Company shall not have received notice of objection from Nasdaq that has not been cured or waived.
          SECTION 9.03. Conditions to the Obligations of the Company. If the Investor exercises the Tranche 2 Call Option pursuant to Section 3.06, the obligations of the Company to consummate the Tranche 2 Transactions shall be subject to the satisfaction or waiver of the following additional conditions:
     (a) Representations and Warranties. Each of the representations and warranties of the Investor contained in this Agreement and each Ancillary Agreement that are qualified by materiality or material adverse effect shall be true and correct as of the date hereof and as of the Second Closing as though made on and as of the Second Closing (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date), and all representations and warranties which are not so qualified shall be true and correct in all material respects (except that those representations and warranties which address matters only as of a particular date need only remain true and correct in all material respects as of such date);
     (b) Agreements and Covenants. The Investor shall have performed, in all material respects, all obligations or complied with, in all material respects, all agreements and covenants to be performed or complied with by it under this Agreement on or prior to the Second Closing; and
     (c) Officer’s Certificate. The Investor shall have delivered to the Company a certificate, dated the date of the Second Closing, signed by a duly authorized representative of the Investor, certifying as to the satisfaction of the conditions specified in Sections 9.03(a) and (b).
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
          SECTION 10.01. Termination. This Agreement may be terminated and (i) the Initial Warrants Transactions and (ii) the Tranche 2 Transactions may be abandoned at any time prior to (A) the Initial Warrants Closing and (B) the Second Closing, respectively, whether or not

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the Stockholder Approval has been obtained (the date of any such termination, the “Termination Date”):
     (a) By mutual written consent of the Investor and the Company;
     (b) By the Investor or the Company if the Stockholder Approval is not obtained at the Stockholders’ Meeting;
     (c) By the Investor, if since the date of this Agreement, there shall have been any event, development or change of circumstance that constitutes, has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and such Material Adverse Effect is not cured within twenty (20) days after the Company receives written notice thereof from the Investor; or
     (d) By the Investor, if (i) the Company shall have breached any representation, covenant or agreement set forth in this Agreement, (ii) such breach or misrepresentation is not cured within twenty (20) days after the Company receives written notice thereof from the Investor and (iii) such breach or misrepresentation would cause the conditions set forth in Section 8.02(a), Section 8.02(b), Section 9.02(a) or Section 9.02(b) not to be satisfied; or
     (e) By the Company, if (i) the Investor shall have breached any representation, covenant or agreement set forth in this Agreement, (ii) such breach or misrepresentation is not cured within twenty (20) days after any the Investor receives written notice thereof from the Company and (iii) such breach or misrepresentation would cause the conditions set forth in Section 8.03(a), Section 8.03(b), Section 9.03(a) or Section 9.03(b) not to be satisfied.
          SECTION 10.02. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 10.01, this Agreement shall forthwith become void, and there shall be no liability or obligation on the part of any party hereto, except (i) with respect to Article X and Article XI, which shall survive any such termination and remain in full force and effect and (ii) with respect to any liabilities or damages incurred or suffered by a party as a result of the material breach by the other party of any of its representations, warranties, covenants or other agreements set forth in this Agreement or any Ancillary Agreement.
          SECTION 10.03. Fees and Expenses. All Expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such Expenses, whether or not the Transactions are consummated; provided, however that the Company shall pay all of the Expenses related to printing, filing and mailing the Proxy Statement and all SEC and other regulatory filing fees incurred.
          SECTION 10.04. Amendment. This Agreement may be amended by the parties hereto at any time prior to the later of the Initial Warrants Closing and the Second Closing; provided, however, that, after the Stockholder Approval is obtained, no amendment may become effective that would by Law require approval of the stockholders of the Company, without approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed by the parties hereto.

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          SECTION 10.05. Waiver. At any time prior to the later of the Initial Warrants Closing and the Second Closing, either party hereto may (i) extend the time for the performance of any obligation or other act of the other party hereto, (ii) waive any inaccuracy in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any agreement or condition contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party to be bound thereby.
ARTICLE XI
GENERAL PROVISIONS
          SECTION 11.01. Survival of Representations and Warranties; Indemnification.
          (a) All representations and warranties contained in this Agreement shall be deemed made at the Initial Warrants Closing and at the Second Closing as if made at such time and shall survive for twelve (12) months after having been made or deemed made, except that (i) with respect to claims asserted pursuant to this Section 11.01 before the expiration of the applicable representation or warranty, such claims shall survive until the date they are finally liquidated or otherwise resolved, (ii) Section 4.15 shall survive until 120 days after the expiration of the applicable statute of limitations for the Tax liabilities in question and (iii) Sections 4.01, 4.02, 4.03, 4.04, 4.05(a)(i), 4.16, 5.01, 5.02 and 5.03(a)(i) shall survive indefinitely. A claim shall be made or commenced hereunder by the Indemnified Party delivering to the Indemnifying Party a written notice specifying in reasonable detail the nature of the claim, the amount claimed (if known or reasonably estimable), and the factual basis for the claim.
          (b) The Company agrees to indemnify and hold harmless the Investor and its officers, directors, employees, duly authorized agents and affiliates from and against all losses, claims, damages, diminution in value of the Purchased Securities, expenses (including reasonable counsel fees and disbursements) or liabilities (“Losses”) that are related to or arise out of (1) any breach by the Company of any of its representations or warranties in this Agreement or (2) failure to perform any of the covenants or agreements made by the Company in this Agreement. The term “Losses” as used in this Section 11.01 is not limited to matters asserted by third parties against an Indemnified Party, but includes Losses incurred or sustained by an Indemnified Party in the absence of third party claims, and shall be net of any Tax benefit available to the Indemnified Party.
          (c) The Investor agrees to indemnify and hold harmless the Company and its officers, directors, employees, duly authorized agents and affiliates from and against all Losses that are related to or arise out of (1) any breach by the Investor of any of its representations or warranties in this Agreement or (2) failure to perform any of the covenants or agreements made by the Investor in this Agreement.
          (d) Notwithstanding anything to the contrary contained in this Agreement: (i) an Indemnifying Party shall not be liable for any claim for indemnification pursuant to this Section 11.01 with respect to any breach of any representation or warranty, unless and until the aggregate amount of indemnifiable Losses which may be recovered from the Indemnifying Party equals or exceeds $250,000, after which the Indemnifying Party shall be liable for the entire aggregate

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amount of any such indemnifiable Losses; (ii) no Losses may be claimed under Section 11.01 by any Indemnified Party or shall be included in calculating the aggregate Losses set forth in clause (i) above other than Losses in excess of $100,000 resulting from any single claim or aggregated claims arising out of the same facts, events or circumstances; (iii) with respect to any breach of any representation or warranty, the maximum amount of indemnifiable Losses which may be recovered from an Indemnifying Party arising out of or resulting from the causes set forth in Section 11.01 shall be an amount equal to the Purchase Price and (iv) neither party hereto shall have any liability under any provision of this Agreement or any Ancillary Agreement for any punitive damages.
          (e) A party claiming indemnification under this Agreement (an “Indemnified Party”) with respect to any claims asserted against the Indemnified Party by a third party (“Third Party Claim”) that would give rise to a right of indemnification under this Agreement shall promptly (i) notify the party from whom indemnification is sought (the “Indemnifying Party”) of the Third Party Claim and (ii) transmit to the Indemnifying Party a written notice (“Claim Notice”) describing in reasonable detail the nature of the Third Party Claim, a copy of all papers served with respect to such claim (if any) and the basis of the Indemnified Party’s request for indemnification under this Agreement. Failure to provide such Claim Notice shall not affect the right of the Indemnified Party’s indemnification hereunder, except to the extent the Indemnifying Party demonstrates actual and material prejudice as a result of such failure. The Indemnifying Party shall have the right to defend the Indemnified Party against such Third Party Claim provided that such Indemnifying Party has acknowledged in writing its obligation to fully indemnify the Indemnified Party with respect to such Third Party Claim pursuant to this Section 11.01.
          (f) If the Indemnifying Party notifies the Indemnified Party that the Indemnifying Party elects to assume the defense of the Third Party Claim, then the Indemnifying Party shall have the right to defend such Third Party Claim with counsel selected by the Indemnifying Party, who is reasonably acceptable to the Indemnified Party, by all appropriate proceedings, which proceedings shall be prosecuted reasonably diligently by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party in accordance with this Section 11.01(f). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof, provided, however, that the Indemnifying Party shall not consent to the entry of a judgment or enter into any settlement with respect to the matter (i) which does not contain a complete release of the Indemnified Party, contains a finding of responsibility or liability on the part of the Indemnified Party or the violation of any applicable legal requirement, provides any material sanction or material restriction upon the conduct of any business by the Indemnified Party, or provides for any relief other than monetary damages which are paid in full by the Indemnifying Party or (ii) without the prior written consent of the Indemnified Party, which consent shall not be unreasonably conditioned, withheld or delayed. If requested by the Indemnifying Party, the Indemnified Party agrees, at the sole cost and expense of the Indemnifying Party, to cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim which the Indemnifying Party elects to contest, including the making of any related counterclaim against the person asserting the Third Party Claim or any cross-complaint against any person. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 11.01, and the Indemnified Party shall bear its own costs and expenses with respect to such participation; provided, however, if in

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the opinion of counsel of the Indemnified Party there is a reasonable likelihood of a conflict of interest between the Indemnifying Party and the Indemnified Party, the Indemnifying Party shall bear the reasonable costs and expenses of one counsel to the Indemnified Party in connection with such defense. Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party that the Indemnified Party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages.
          (g) If the Indemnifying Party fails to notify the Indemnified Party within the thirty (30) days after receipt of any Claim Notice that the Indemnifying Party elects to defend the Indemnified Party pursuant to Section 11.01(f), or if the Indemnifying Party elects to defend the Indemnified Party pursuant to Section 11.01(f) but fails to reasonably diligently defend or settle the Third Party Claim, then the Indemnified Party shall have the right to defend the Third Party Claim by all appropriate proceedings, which proceedings shall be promptly and vigorously defended by the Indemnified Party to a final conclusion or settled (with the reasonable costs and expenses of such defense borne by the Indemnifying Party). The Indemnified Party shall have full control of such defense and proceedings; provided, however, that the Indemnified Party may not enter into any compromise or settlement of such Third Party Claim if indemnification is to be sought hereunder, without the Indemnifying Party’s consent, which shall not be unreasonably withheld or delayed. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this Section 11.01(g), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.
          (h) In the event any Indemnified Party should have a claim against any Indemnifying Party hereunder which does not involve a Third Party Claim, the Indemnified Party shall promptly transmit to the Indemnifying Party a written notice (the “Indemnity Notice”) describing in reasonable detail the nature of the claim, the Indemnified Party’s best estimate of the amount of Losses attributable to such claim and the basis of the Indemnified Party’s request for indemnification under this Agreement. If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days from its receipt of the Indemnity Notice that the Indemnifying Party disputes such claim (the “Dispute Notice”), the Indemnifying Party shall be deemed to have accepted and agreed with such claim. If the Indemnifying Party has disputed such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution to such dispute. If the Indemnifying Party and the Indemnified Party cannot resolve such dispute in thirty (30) days after delivery of the Dispute Notice, such dispute shall be resolved by litigation in an appropriate court of competent jurisdiction.
          (i) The parties agree to treat all indemnification payments made under this Section 11.01 or otherwise under this Agreement as an adjustment to the Purchase Price or as capital contributions for Tax purposes and that such treatment shall govern for purposes hereof except to the extent that the Laws of a particular jurisdiction provide otherwise, in which case such payments shall be made in an amount sufficient to indemnify the relevant party on an after-Tax basis.
          SECTION 11.02. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by telecopy, by a recognized overnight

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courier service or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.02):
if to the Investor:
Norsk Hydro Produksjon AS
Drammensveien 264
N-0240 Oslo
Norway
Facsimile:      + 47 22 53 27 25
Attention:      Richard G. Erskine
with a copy to:
Shearman & Sterling LLP
Broadgate West
9 Appold Street
London EC2A 2AP
United Kingdom
Facsimile:       +44 (0)207 655-5265
Attention:       George Karafotias
Facsimile:       +44 (0)207 655-5216
Attention:       Sean J. Skiffington
if to the Company:
Ascent Solar Technologies, Inc.
8120 Shaffer Parkway
Littleton, Colorado 80127
United States
Facsimile:       +1 (303) 420-1551
Attention:       Matthew B. Foster, President and Chief Executive Officer
with a copy to:
Holland & Knight LLP
2300 U.S. Bancorp Tower
111 S.W. Fifth Avenue
Portland, Oregon 97204
United States
Facsimile:       +1 (503) 241-8014
Attention:       Mark A. von Bergen
                       David C. Wang
          SECTION 11.03. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner

44

 

materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible.
          SECTION 11.04. Entire Agreement; Assignment. This Agreement, the Confidentiality Agreement and the Ancillary Agreements constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof. This Agreement shall not be assigned by operation of law or otherwise; provided, however, that the Investor may assign its right, title and interest under this Agreement to any of its affiliates; provided further, however, that no such assignment shall relieve the Investor of any of its obligations hereunder.
          SECTION 11.05. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
          SECTION 11.06. Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity.
          SECTION 11.07. Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle County. The parties hereto hereby (a) submit to the exclusive jurisdiction of any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle County, for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper or that this Agreement or the Transactions may not be enforced in or by any of the above-named courts.
          SECTION 11.08. Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the Transactions. Each of the parties hereto (a) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other party hereto have been induced to enter into this Agreement and the Transactions, as applicable, by, among other things, the mutual waivers and certifications in this Section 11.08.

45

 

          SECTION 11.09. Attorneys’ Fees. If any legal action is brought by reason of any breach of any covenant, condition or agreement of the parties in this Agreement or the Ancillary Agreements, the prevailing party shall be entitled to recover from the other party to the action all costs and expenses of suit, including attorneys’ fees.
          SECTION 11.10. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

46

 

          IN WITNESS WHEREOF, the Investor and the Company have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
                 
    NORSK HYDRO PRODUKSJON AS    
 
                
    By:   /s/ Richard G. Erskine    
             
 
      Name:   Richard G. Erskine    
 
      Title:   Authorized Representative    
 
                
    ASCENT SOLAR TECHNOLOGIES, INC.    
 
                
    By:   /s/ Mohan S. Misra    
             
 
      Name:   Dr. Mohan S. Misra    
 
      Title:   Chairman    
S-1

 

 

EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
A-1

 

 

EXHIBIT B
STOCKHOLDERS’ AGREEMENT
B-1

 

 

EXHIBIT C
VOTING AGREEMENT
C-1

 

 

EXHIBIT D
FORM OF INITIAL WARRANTS CALL NOTICE
     
To:
  Ascent Solar Technologies, Inc.
 
  8120 Shaffer Parkway
 
  Littleton, Colorado 80127
 
  United States
 
  Attention: Mr. Matthew B. Foster
Date:
Dear Mr. Foster:
          We refer to the Securities Purchase Agreement, dated as of March 13, 2007 (the “Securities Purchase Agreement”), between Norsk Hydro Produksjon AS (the “Investor”) and Ascent Solar Technologies, Inc. (the “Company”). All capitalized terms used herein shall have the meanings set forth in the Securities Purchase Agreement.
          This notice is an Initial Warrants Call Notice for purposes of Section 3.01 of the Securities Purchase Agreement.
          The Investor hereby exercises the Initial Warrants Call Option and wishes to purchase, subject to the terms and conditions of the Securities Purchase Agreement, the following number of Initial Class A Warrants and Initial Class B Warrants:
          Initial Class A Warrants                                                   
          Initial Class B Warrants                                                   
          Upon receipt of this Initial Warrants Call Notice, the Company shall be obligated to sell to the Investor the number of Initial Class A Warrants and Initial Class B Warrants set forth above, upon the terms and subject to the conditions set forth in the Securities Purchase Agreement.
Yours faithfully,
NORSK HYDRO PRODUKSJON AS
By:                                         
       Name:
       Title:
D-1

 

 

         
c.c.:   Holland & Knight LLP
    2300 U.S. Bancorp Tower
    111 S.W. Fifth Avenue
    Portland, Oregon 97204
    United States
 
  Facsimile:   +1 (503) 241-8014
 
  Attention:   Mark A. von Bergen
 
      David C. Wang
D-2

 

 

EXHIBIT E
FORM OF TRANCHE 2 CALL NOTICE
     
To:
  Ascent Solar Technologies, Inc.
 
  8120 Shaffer Parkway
 
  Littleton, Colorado 80127
 
  United States
 
  Attention: Mr. Matthew B. Foster
Date:
Dear Mr. Foster:
          We refer to the Securities Purchase Agreement, dated as of March 13, 2007 (the “Securities Purchase Agreement”), between Norsk Hydro Produksjon AS (the “Investor”) and Ascent Solar Technologies, Inc. (the “Company”). All capitalized terms used herein shall have the meanings set forth in the Securities Purchase Agreement.
          This notice is a Tranche 2 Call Notice for purposes of Section 3.06 of the Securities Purchase Agreement.
          The Investor hereby exercises the Tranche 2 Call Option and wishes to purchase, subject to the terms and conditions of the Securities Purchase Agreement, the following number of Tranche 2 Shares, Option Class A Warrants and Option Class B Warrants:
          Tranche 2 Shares                                                                   
          Option Class A Warrants                                                     
          Option Class B Warrants                                                     
          Upon receipt of this Tranche 2 Call Notice, the Company shall be obligated to sell to the Investor the number of Tranche 2 Shares, Option Class A Warrants and Option Class B Warrants set forth above, upon the terms and subject to the conditions set forth in the Securities Purchase Agreement.
Yours faithfully,
NORSK HYDRO PRODUKSJON AS
By:                                         
       Name:
       Title:
E-1

 

 

         
c.c.:   Holland & Knight LLP
    2300 U.S. Bancorp Tower
    111 S.W. Fifth Avenue
    Portland, Oregon 97204
    United States
 
  Facsimile:   +1 (503) 241-8014
 
  Attention:   Mark A. von Bergen
 
      David C. Wang
E-2

 

EX-99.C 4 w32275exv99wc.htm EXHIBIT C exv99wc
 

EXECUTION COPY
 
STOCKHOLDERS’ AGREEMENT
Dated as of March 13, 2007
between
Ascent Solar Technologies, Inc.
and
Norsk Hydro Produksjon AS
 

 

 

Table of Contents
             
        Page
ARTICLE 1
 
            
DEFINITIONS
 
            
SECTION 1.01
  Certain Definitions     2  
 
            
ARTICLE 2
 
            
CORPORATE GOVERNANCE
 
            
SECTION 2.01
  Composition of the Board     7  
SECTION 2.02
  Vacancies     7  
SECTION 2.03
  Certificate of Incorporation and Bylaws to Be Consistent     8  
SECTION 2.04
  Observer     8  
 
            
ARTICLE 3
 
            
VOTING OF SHARES
 
            
SECTION 3.01
  Agreement with Respect to Voting of Common Stock     8  
 
            
ARTICLE 4
 
            
STANDSTILL, ACQUISITIONS OF SECURITIES AND OTHER MATTERS
 
            
SECTION 4.01
  Acquisitions of Common Stock     8  
SECTION 4.02
  No Participation in a Group or Solicitation of Proxies     9  
SECTION 4.03
  Rights to Purchase New Securities or Exercise Warrants     10  
SECTION 4.04
  Termination of Standstill Provisions     10  
SECTION 4.05
  Restriction on Exercise of Warrants by the Investor     11  
SECTION 4.06
  Quarterly Exercise of Warrants by the Investor     11  
 
            
ARTICLE 5
 
            
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES
 
            
SECTION 5.01
  General     12  
SECTION 5.02
  Improper Sale     13  
SECTION 5.03
  Restrictive Legends     13  
 
            
ARTICLE 6
 
            
STRATEGIC RELATIONSHIP AND USE OF PROCEEDS
 
            
SECTION 6.01
  Strategic Relationship     14  
SECTION 6.02
  Use of Proceeds     14  

i

 

             
        Page
ARTICLE 7
 
            
REPRESENTATIONS AND WARRANTIES
 
            
SECTION 7.01
  Representations of the Company     14  
SECTION 7.02
  Representations of the Investor     15  
 
            
ARTICLE 8
 
            
CONFIDENTIALITY
 
            
SECTION 8.01
  Confidentiality     15  
SECTION 8.02
  Furnishing of Information     16  
 
            
ARTICLE 9
 
            
MISCELLANEOUS
 
            
SECTION 9.01
  Termination     17  
SECTION 9.02
  Notices     17  
SECTION 9.03
  Parties in Interest     18  
SECTION 9.04
  Expenses     18  
SECTION 9.05
  Governing Law     18  
SECTION 9.06
  Waiver of Jury Trial     19  
SECTION 9.07
  Specific Performance     19  
SECTION 9.08
  Counterparts     19  
SECTION 9.09
  Entire Agreement     19  
SECTION 9.10
  Assignment     19  
SECTION 9.11
  Amendment     19  
SECTION 9.12
  Waiver     19  
SECTION 9.13
  Severability     20  
SECTION 9.14
  No Partnership     20  
SECTION 9.15
  Construction     20  
SECTION 9.16
  Director Duties     20  

ii

 

STOCKHOLDERS’ AGREEMENT
     STOCKHOLDERS’ AGREEMENT, dated as of March 13, 2007 (this “Agreement”), between ASCENT SOLAR TECHNOLOGIES, INC., a corporation organized under the laws of the State of Delaware (the “Company”), and NORSK HYDRO PRODUKSJON AS, a corporation organized under the laws of the Kingdom of Norway (the “Investor”).
RECITALS
     WHEREAS, the Company and the Investor have entered into a Securities Purchase Agreement dated as of the date hereof (the “Securities Purchase Agreement”);
     WHEREAS, on the date hereof, upon consummation of the First Closing (as defined in the Securities Purchase Agreement) contemplated by the Securities Purchase Agreement, the Investor will own an aggregate of 1,600,000 shares (the “Tranche 1 Shares”) of common stock, par value $0.0001 per share, of the Company (the “Common Stock”);
     WHEREAS, upon consummation of the Initial Warrants Closing contemplated by the Securities Purchase Agreement, the Investor will own a number of restricted Class A Warrants that will result in the Investor owning twenty-three percent (23.0%) of all issued and outstanding Class A Warrants immediately after such sale and purchase and a number of restricted Class B Warrants that will result in the Investor owning twenty-three percent (23.0%) of all issued and outstanding Class B Warrants immediately after such sale and purchase (together, the “Initial Warrants”);
     WHEREAS, upon consummation of the Second Closing (as defined in the Securities Purchase Agreement) contemplated by the Securities Purchase Agreement, the Investor will own up to a maximum of (i) an additional number of shares of Company Common Stock that will result in the Investor owning thirty-five percent (35.0%) of all issued and outstanding Common Stock immediately after such sale and purchase (the “Tranche 2 Shares” and, together with the Tranche 1 Shares, the “Shares”), (ii) an additional number of restricted Class A Warrants that will result in the Investor owning thirty-five percent (35.0%) of all issued and outstanding Class A Warrants immediately after such sale and purchase (the “Option Class A Warrants”) and (iii) an additional number of restricted Class B Warrants that will result in the Investor owning thirty-five percent (35.0%) of all issued and outstanding Class B Warrants immediately after such sale and purchase (the “Option Class B Warrants”; together with the Option Class A Warrants, the “Option Warrants”; the Option Warrants together with the Tranche 2 Shares, the “Tranche 2 Securities”; and the Tranche 2 Securities together with the Tranche 1 Shares and the Initial Warrants, the “Purchased Securities”);
     WHEREAS, the parties hereto wish to enter into this Agreement to set forth their agreement as to the matters set forth herein; and
     WHEREAS, certain terms used in this Agreement are defined in Section 1.01.

 

 

AGREEMENT
     NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
     SECTION 1.01 Certain Definitions . (a) For purposes of this Agreement:
     “Acquisition Proposal” means any proposal or offer from any person other than the Investor relating to any direct or indirect (i) sale, lease or other disposition directly or indirectly by merger, consolidation, business combination, share exchange, joint venture or otherwise of assets of the Company representing twenty percent (20%) or more of the consolidated assets of the Company; (ii) issuance, sale or other disposition, directly or indirectly (including by way of merger, consolidation, business combination, share exchange, joint venture or any similar transaction), of securities (or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing twenty percent (20%) or more of any class of equity securities of the Company; (iii) tender offer or exchange offer as defined pursuant to the Exchange Act that, if consummated, would result in any person beneficially owning twenty percent (20%) or more of any class or series (or the voting power of any class or series) of equity securities of the Company or any other transaction in which any person shall acquire beneficial ownership or the right to acquire beneficial ownership, of twenty percent (20%) or more of any class or series (or the voting power of any class or series) of equity securities; (iv) merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction to which the Company is a party involving a change of control of the Company or (v) combination of the foregoing (in each case, other than the transactions contemplated by the Securities Purchase Agreement).
     “affiliate” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.
     “beneficial owner” (and related terms such as “beneficially owned” or “beneficial ownership”) has the meaning ascribed to such term under Rule 13d-3 of the Exchange Act.
     “Board” means the Board of Directors of the Company.
     “Bylaws” means the Bylaws of the Company, dated October 26, 2005.
     “Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof, (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof

2

 

maturing within one year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc., (c) commercial paper maturing not more than one year from the date of issuance thereof and, at the time of acquisition, having the highest rating obtainable from either Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc., (d) certificates of deposit or bankers’ acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the Laws of the United States or any state thereof having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) demand deposit accounts maintained with any bank organized under the Laws of the United States or any state thereof so long as the amount maintained with any individual bank is less than or equal to $100,000 and is insured by the Federal Deposit Insurance Corporation and (f) investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (e) above.
     “Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, dated as of October 26, 2005.
     “Class A Warrants” means redeemable Class A public warrants of the Company traded on Nasdaq under the symbol ASTIW, each of which entitles the holder thereof to purchase one share of Company Common Stock at an exercise price of $6.60 per share.
     “Class B Warrants” means non-redeemable Class B public warrants of the Company traded on Nasdaq under the symbol ASTIZ, each of which entitles the holder thereof to purchase one share of Company Common Stock at an exercise price of $11.00 per share.
     “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract, credit arrangement or otherwise; including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such person.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
     “Exchange Regulation” means the rules and regulations of Nasdaq, the Boston Stock Exchange, Incorporated or any other applicable securities exchange on which the Common Stock is then listed.
     “group” means a “group” within the meaning of Section 13(d)(3) of the Exchange Act.
     “Initial Warrants Closing” means the closing of the issuance, purchase and sale of the Initial Warrants contemplated by the Securities Purchase Agreement.
     “Investor Designated Director” means such person as is so designated by the Investor from time to time in accordance with this Agreement, to serve as a member of the Board and who is elected or appointed to serve as a member of the Board pursuant to Section 2.01.

3

 

     “Law” means any foreign or domestic statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order (including any requirements under the Exchange Act).
     “Marketable Securities” means securities that are (a) (i) securities of or other interests in any person that are traded on a United States national securities exchange or quoted on Nasdaq or (ii) debt securities on market terms of an issuer that has debt or equity securities that are so traded or so reported on and in which Marketable Securities a nationally recognized securities firm has agreed to make a market and (b) not subject to restrictions on transfer as a result of any applicable contractual provisions or the provisions of the Securities Act or, if subject to such restrictions under the Securities Act, are also subject to registration rights reasonably acceptable to the person receiving such Marketable Securities as consideration in a transaction pursuant to Section 4.03.
     “Nasdaq” means The Nasdaq Stock Market, Inc.
     “New Securities” means any capital stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, convertible into capital stock; provided that the term “New Securities” does not include (i) the Purchased Securities or other securities acquired pursuant to the Securities Purchase Agreement or the Ancillary Agreements (as defined in the Securities Purchase Agreement); (ii) securities issued or issuable upon conversion or exercise of the securities in subsection (i) above; (iii) securities issued pursuant to the acquisition of another business entity or business segment of any such entity by the Company by merger, purchase of substantially all the assets or other reorganization whereby the Company will own more than fifty percent (50%) of the voting power of such business entity or business segment of any such entity; (iv) any borrowings by the Company, direct or indirect, from financial institutions, whether or not presently authorized, including any type of loan or payment evidenced by any type of debt instrument, provided such borrowings shall be approved by the Board; (v) securities issued to employees, consultants, officers or directors of the Company pursuant to any stock option, stock purchase or stock bonus plan, agreement or arrangement approved by the Board; (vi) securities issued in connection with a bona fide underwritten public offering; (vii) securities issued in connection with any stock split, stock dividend, reclassification or recapitalization of the Company; (viii) securities issued or issuable upon conversion or exercise of options, warrants or rights outstanding as of the date hereof; and (ix) any right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to subsections (i) through (viii) above.
     “Permitted Transferee” means, with respect to a specified person, any affiliate of such person.
     “person” means any individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” or “group” each within the meaning of Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.

4

 

     The terms “register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and the declaration or ordering of the effectiveness of such registration statement by the SEC.
     “Related Agreements” means the Securities Purchase Agreement, that certain Registration Rights Agreement between the parties hereto dated as of the date hereof and the Voting Agreement, dated as of the date hereof, among the Investor, Dr. Mohan S. Misra, Chairman of the Board, Inica, Inc., a Colorado corporation, and ITN Energy Systems, Inc., a Colorado corporation.
     “Representative” means, as to any person, such person’s affiliates and its and their directors, officers, employees, agents, advisors (including financial advisors, counsel and accountants) and such person’s financing sources.
     “Rule 144” means Rule 144 (or any successor provisions) under the Securities Act.
     “Sale” means, in respect of any Common Stock, Warrants or any other voting capital stock, any sale, assignment, transfer, distribution or other disposition thereof or of a participation therein, or other conveyance of legal or beneficial interest therein, or any short position in a security or any other action or position otherwise reducing risk related to ownership through hedging or other derivative instruments, whether voluntarily or by operation of Law.
     “SEC” means the United States Securities and Exchange Commission, or any successor thereto.
     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
     “Sell” and “Sold” means to complete a Sale.
     “Stockholder Approval” means the approval by the stockholders of the Company of the issuance of the Initial Warrants and the issuance of the Tranche 2 Securities.
     “Stockholders’ Meeting” shall have the meaning set forth in the Securities Purchase Agreement.
     “subsidiary” or “subsidiaries” of any person means an affiliate controlled by such person, directly or indirectly, through one or more intermediaries.
     “Warrants” means the Class A Warrants and the Class B Warrants.
     (b) The following terms have the meaning set forth in the Sections set forth below:
         
Term       Section
Agreement
      Preamble
Common Stock
      Recitals

5

 

         
Term       Section
Company
      Preamble
Confidential Information
      § 8.01(b)
Covered Securities
      § 5.01(a)
Initial Restricted Period
      § 5.01(a)
Initial Warrants
      Recitals
Investor
      Preamble
Notice of Issuance
      § 4.03(b)
Observer
      § 2.04
Option Class A Warrants
      Recitals
Option Class B Warrants
      Recitals
Option Warrants
      Recitals
Ordinary Dilutive Issuance
      § 4.06
Purchased Securities
      Recitals
Quarterly Anti-Dilution Notice
      § 4.06
Securities Purchase Agreement
      Recitals
Shares
      Recitals
Tranche 2 Securities
      Recitals
Tranche 1 Shares
      Recitals
Tranche 2 Shares
      Recitals
          (c) Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires:
     (i) When a reference is made in this Agreement to an Article or Section, such reference is to an Article or Section of this Agreement, unless otherwise indicated;
     (ii) The table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;
     (iii) Whenever the words “include”, “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;
     (iv) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;
     (v) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;
     (vi) References to a person are also to its successors and permitted assigns; and
     (vii) The use of “or” is not intended to be exclusive unless expressly indicated otherwise.

6

 

ARTICLE 2
CORPORATE GOVERNANCE
     SECTION 2.01 Composition of the Board.
          (a) As soon as practicable after the Company’s 2007 annual shareholders meeting, the Company shall expand the size of the Board to seven directors and cause its Nominating and Governance Committee to recommend for election to the Board one director designated by the Investor, who shall be designated by the Investor in accordance with Section 7.06 of the Securities Purchase Agreement. The Investor Designated Director shall serve in a manner consistent with the terms of the Certificate of Incorporation and Bylaws.
          (b) From and after the Company’s 2007 annual shareholders meeting, so long as the Investor beneficially owns fifteen percent (15%) or more of the Common Stock outstanding, the parties hereto shall use all reasonable efforts under applicable Law and Exchange Regulations to cause there to be one Investor Designated Director elected as a member of the Board. In the event the Investor beneficially owns less than fifteen percent (15%) of the Common Stock outstanding, the Investor shall have no right to designate an Investor Designated Director, and, at the request of the Board, shall cause any Investor Designated Director then in office to resign immediately upon such event; provided, however, that if the Stockholder Approval has not been obtained by the date that is four (4) months from the date hereof, regardless of the Investor’s beneficial ownership of Common Stock, the parties hereto shall use all reasonable efforts under applicable Law and Exchange Regulations (i) to cause there to be one Investor Designated Director elected as a member of the Board as soon as reasonably practicable after such four (4) month period and (ii) to cause the Board to include one Investor Designated Director for a period of at least two (2) years from the date hereof.
          (c) At each stockholders’ meeting of the Company at which directors will be elected, the Investor shall be entitled, any time prior to the mailing of the applicable proxy statement of the Company, to propose and nominate an Investor Designated Director as set forth in Section 2.01(b) as a member of the Board. The Company and the Board will include the person so nominated by the Investor in each slate of directors proposed, recommended or nominated for election by the Company or the Board and will (unless the Board determines, after consultation with its outside legal counsel, that it would be inconsistent with its fiduciary obligations to stockholders of the Company under applicable Law) recommend and use all reasonable efforts to cause the election of such person nominated. The Company agrees to use all reasonable efforts to solicit proxies for such nominee for director from all holders of voting stock entitled to vote thereon. Such nominee shall serve in a manner consistent with the terms of the Certificate of Incorporation and Bylaws.
     SECTION 2.02 Vacancies. In the event of any vacancy for any reason in the Board seat reserved for the Investor Designated Director, the Investor shall have the sole right to nominate another individual to serve as the Investor Designated Director. In each case,

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to the extent permitted by the Certificate of Incorporation and Bylaws, the Board shall elect each such person so nominated as soon as possible after the occurrence of the nomination to fill such vacancy. The Investor Designated Director shall not be removed as a director of the Company without cause.
     SECTION 2.03 Certificate of Incorporation and Bylaws to Be Consistent. The Board shall take or cause to be taken all lawful action necessary or appropriate to ensure that none of the Certificate of Incorporation or the Bylaws contain any provisions inconsistent with this Agreement or which would in any way nullify or impair the terms of this Agreement or the rights of the Company or of the Investor hereunder.
     SECTION 2.04 Observer. To the extent permitted by Exchange Regulation, so long as the Investor beneficially owns fifteen percent (15%) or more of the Common Stock outstanding, the Company and the Board shall take all necessary action to permit one individual designated by the Investor (in addition to the Investor Designated Director) to attend each meeting of the Board at which non-independent or management directors are permitted to be in attendance (the “Observer”). The Observer shall be provided with notice of and information regarding each such meeting as is provided to members of the Board. The Observer shall have no right to vote at any meeting of the Board. Notwithstanding anything in this Section 2.04 to the contrary, if the Stockholder Approval has not been obtained by the date that is four (4) months from the date hereof, regardless of the Investor’s beneficial ownership of Common Stock, to the extent permitted by Exchange Regulation, the Company and the Board shall take all necessary action (i) to permit the Observer to attend each meeting of the Board and (ii) to provide the Observer with notice of and information regarding each such meeting as is provided to members of the Board, in each case for the period beginning on the date that is four (4) months from the date hereof and ending on a date that is at least two (2) years from the date hereof.
ARTICLE 3
VOTING OF SHARES
     SECTION 3.01 Agreement with Respect to Voting of Common Stock. With respect to all matters submitted to a vote of holders of Common Stock, the Investor may vote, or abstain from voting, or fail to vote, some or all shares of Common Stock held by it, in its sole and absolute discretion.
ARTICLE 4
STANDSTILL, ACQUISITIONS OF SECURITIES AND OTHER MATTERS
     SECTION 4.01 Acquisitions of Common Stock. Subject to the receipt of the Stockholder Approval, from the date the Investor beneficially acquires thirty-five percent (35%) of the issued and outstanding shares of Common Stock of the Company until the second (2nd) anniversary of the receipt of the Stockholder Approval, without the prior approval of the Board, the Investor shall not purchase or otherwise acquire, directly or indirectly, beneficial ownership of any shares of Common Stock such that the aggregate beneficial ownership of the

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Investor, after giving effect to any such acquisition, would be in excess of thirty-five percent (35%) of the issued and outstanding shares of Common Stock of the Company.
     SECTION 4.02 No Participation in a Group or Solicitation of Proxies. Subject to the receipt of the Stockholder Approval, from the date the Investor beneficially acquires thirty-five percent (35%) of the issued and outstanding shares of Common Stock of the Company, except for actions permitted by, or taken in compliance with, Sections 4.01 or 4.03 and its exercise of rights pursuant to this Agreement, the Investor agrees that, prior to the second (2nd) anniversary of the receipt of the Stockholder Approval, it will not, without the prior approval of the Board, directly or indirectly:
          (a) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any securities or direct or indirect rights to acquire any securities of the Company, or of any successor to or person in control of the Company, or any assets of the Company or any division thereof or of any such successor or controlling person;
          (b) make or in any way participate, directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in the rules of the SEC) to vote any voting securities of the Company; provided, however, that the prohibition in this Section 4.02(b) shall not apply to solicitations exempted from the proxy solicitation rules by Rule 14a-2 under the Exchange Act or any successor provision;
          (c) submit to the Board a written proposal for or offer of (with or without conditions), any merger, recapitalization, reorganization, business combination or other extraordinary transaction involving the Company or any of its securities or assets, or make any public announcement with respect to such a proposal or offer; or
          (d) enter into any discussions, negotiations, arrangements or understandings with any third party (other than any person that would be a Permitted Transferee) with respect to any of the foregoing, or otherwise form, join or in any way engage in discussions relating to the formation of, or participate in, a group with any third party (other than any person that would be a Permitted Transferee), in connection with any of the foregoing.
provided, however, that none of the foregoing (i) shall prevent, restrict, encumber or in any way limit the exercise of the fiduciary rights and obligations of the Investor Designated Director as a director or prevent, restrict, encumber or in any way limit the ability of the Investor Designated Director to vote on matters, influence officers, employees, agents, management or the other directors of the Company, take any action or make any statement at any meeting of the Board or any committee thereof, or otherwise to act in his or her capacity as a director; (ii) shall prevent the Investor from Selling any Covered Securities held by it or voting its Common Stock; (iii) shall apply to or restrict any discussions or other communications between or among directors, officers, employees or agents of the Investor or any affiliate thereof; (iv) shall prohibit the Investor from soliciting, offering, seeking to effect or negotiating with any person with respect to transfers of Covered Securities otherwise permitted by Section 5.01 or (v) restrict any disclosure or statements required to be made by the Investor Designated Director or the Investor under applicable Law or Exchange Regulation.

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     SECTION 4.03 Rights to Purchase New Securities or Exercise Warrants.
          (a) In the event that the Company proposes to issue New Securities, the Investor shall have the right (i) to purchase in lieu of the person to whom the Company proposed to issue such New Securities, in accordance with paragraph (b) below, or, (ii) at its option, to exercise Warrants to purchase, a number of New Securities equal to the product of (A) the total number or amount of New Securities which the Company proposes to issue at such time and (B) a fraction, the numerator of which shall be the total number of shares of Common Stock which the Investor owns at such time, and the denominator of which shall be the total number of shares of Common Stock then outstanding.
          (b) In the event that the Company proposes to undertake an issuance of New Securities, it shall give written notice (a “Notice of Issuance”) of its intention to the Investor, describing the material terms of the New Securities, including the price thereof, and the material terms upon which the Company proposes to issue such New Securities. The Investor shall have thirty (30) days from the date of receipt of the Notice of Issuance (i) to agree to purchase all or a portion of the Investor’s pro rata share of such New Securities (as determined pursuant to paragraph (a) above) for the same consideration, if such proposed consideration shall consist solely of cash, or, if such consideration consists of property or assets other than cash, for cash, Cash Equivalents or Marketable Securities having an equivalent value (as reasonably determined by the Board) to the consideration payable by the person to whom the Company proposes to issue such New Securities at the time of payment, and otherwise upon the terms specified in the Notice of Issuance by giving written notice to the Company and stating therein the quantity of New Securities to be purchased by the Investor or (ii) to exercise Warrants to purchase a sufficient number of shares of Common Stock so that the Investor beneficially owns the same percentage of the outstanding Common Stock immediately after such issuance of New Securities as it did immediately before such issuance of New Securities. The rights given by the Company under this Section 4.03(b) shall terminate if unexercised within thirty (30) days after receipt of the Notice of Issuance referred to in this Section 4.03(b).
          (c) The Company and the Investor, if it elects to purchase the New Securities to be sold by the Company, shall select a date not later than twenty (20) days (or longer if required by Law) after the expiration of the (thirty) 30-day notice period referenced in Section 4.03(b) for the closing of the purchase and sale of the New Securities. In the event any purchase by the Investor is not consummated, other than as a result of the fault of the Company, within the provided time period, the Company may issue the New Securities subject to purchase by the Investor free and clear from the restrictions under this Section 4.03. Any New Securities not elected to be purchased by the Investor may be sold by the Company to the person to which the Company intended to sell such New Securities on terms and conditions no less favorable to the Company than those offered to the Investor.
       SECTION 4.04 Termination of Standstill Provisions. The provisions of Sections 4.01 and 4.02 of this Agreement shall terminate without any further action by any party upon the earlier of:

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     (i) the second (2nd) anniversary of the receipt of the Stockholder Approval;
     (ii) such date as the Board determines to solicit, or publicly announces, whether by press release, filing with the SEC or otherwise, its intention to solicit, an Acquisition Proposal;
     (iii) such date as the Board publicly approves, accepts, authorizes or recommends to the Company’s stockholders their approval of, or their conveyance of any Common Stock or other securities pursuant to, any Acquisition Proposal;
     (iv) such date that the Company or any affiliate thereof has entered into a letter of intent, agreement in principle, definitive agreement or any other agreement with any party, with respect to an Acquisition Proposal for the Company; and
     (v) such date that any person or group, other than the Investor or any of its affiliates, shall have acquired or announced its intention to acquire, including by commencement of a tender offer or exchange offer, beneficial ownership of twenty percent (20%) of the Company’s outstanding Common Stock.
     SECTION 4.05 Restriction on Exercise of Warrants by the Investor. The Investor understands and agrees that, subject to the provisions of Section 4.03, from the date it first acquires Warrants pursuant to the transactions contemplated by the Securities Purchase Agreement until the date that is two (2) years from the receipt of the Shareholder Approval, (a) the Warrants acquired by the Investor pursuant to the Securities Purchase Agreement can be exercised by the Investor only to maintain its percentage ownership of the Company’s Common Stock (i) existing immediately after the First Closing (as defined in the Securities Purchase Agreement), in the case of the Initial Warrants, and (ii) existing immediately after the Second Closing (as defined in the Securities Purchase Agreement), in the case of the Option Warrants; and (b) the Company and any transfer agent of its Warrants will not be required to honor or record any exercise of the Warrants beneficially owned by the Investor other than in accordance with the provisions of this Section 4.05. The Investor consents to the Company making a notation on its records and giving instructions to any transfer agent of its Warrants in order to implement the restrictions on exercise established in this Section 4.05.
     SECTION 4.06 Quarterly Exercise of Warrants by the Investor. Notwithstanding anything to the contrary in this Agreement, if, at any time and from time to time, the Company issues shares of Common Stock that are not New Securities (an “Ordinary Dilutive Issuance”), the Company will give notice (in accordance with Section 9.02) of any such issuance to the Investor (a “Quarterly Anti-Dilution Notice”) not later than five (5) days after the last day of the calendar quarter in which the Ordinary Dilutive Issuance occurred. The Quarterly Anti-Dilution Notice will describe the aggregate number of shares of Common Stock issued in all Quarterly Dilutive Issuances that occurred during the calendar quarter then ended. Upon its receipt of a Quarterly Anti-Dilution Notice, the Investor shall have the right, for a period of thirty (30) days, to exercise such number of Warrants beneficially owned by the Investor as is necessary so that the percentage of outstanding Common Stock that the Investor owns immediately after the exercise of such Warrants is the same as the percentage of outstanding

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Common Stock that the Investor owned at the beginning of the calendar quarter to which the Quarterly Anti-Dilution Notice relates.
ARTICLE 5
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES
     SECTION 5.01 General.
          (a) The Investor understands and agrees that the shares of Common Stock acquired pursuant to the Securities Purchase Agreement have not been registered and are restricted securities under the Securities Act. During the period ending six (6) months after (i) the date hereof in the case of the Tranche 1 Shares, (ii) the date of the Initial Warrants Closing in the case of the Initial Warrants and (iii) the date of the Second Closing (as defined in the Securities Purchase Agreement) in the case of the Tranche 2 Securities (in any case, the “Initial Restricted Period”), the Investor shall not make or solicit any Sale of the Tranche 1 Shares, the Initial Warrants, the Tranche 2 Securities, respectively, or any shares of Common Stock now owned or hereafter acquired by it (collectively, the “Covered Securities”); provided, however, that the Investor may, during the Initial Restricted Period, make or solicit a Sale to a Permitted Transferee or as described in clauses (iv), (vi) and (vii) below.
          (b) After the Initial Restricted Period (other than with respect to clauses (iv), (vi) and (vii) below which may occur at any time), the Investor agrees that neither it nor any of its affiliates will make any Sale of any of the Covered Securities except for a Sale or transfer:
     (i) in compliance with Rule 144 under the Securities Act;
     (ii) (x) pursuant to a bona fide public offering registered under the Securities Act, or
     (y) in one or more block trades or privately negotiated transactions exempt from the registration requirements of the Securities Act;
     (iii) to one or more Permitted Transferees in accordance with Section 5.01(c);
     (iv) (x) pursuant to any business combination, tender or exchange offer to acquire Common Stock or other extraordinary transaction that the Board has recommended or (y) pursuant to a tender or exchange offer that the Board has not recommended but only after such time as a majority of the shares of Common Stock outstanding (other than those owned by the Investor) have been tendered into such offer and after all material conditions with respect to such offer (including any financing condition, any minimum condition with respect to number of shares tendered and any condition with respect to removal of any anti-takeover protections) have been satisfied or irrevocably waived by the offeror;
     (v) to the Company or a subsidiary of the Company;

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     (vi) swaps, exchanges, hedges or other similar agreements or arrangements designed to protect against fluctuations in the value of the equity securities of the Company and not entered into with the purpose of circumventing the provisions of this Section 5.01; or
     (vii) pledges of Covered Securities in connection with any margin loan or other extensions of credit from a broker-dealer, bank or other financial institution and not entered into with the purpose of circumventing the provisions of this Section 5.01.
          (c) No Sale of Covered Securities to a Permitted Transferee shall be effective until such time as such Permitted Transferee has executed and delivered to the Company, as a condition precedent to such Sale, an instrument or instruments, reasonably acceptable to the Company, confirming that such Permitted Transferee agrees to be bound by all obligations of the Investor hereunder.
     SECTION 5.02 Improper Sale. Any attempt not in compliance with this Agreement to make any Sale of any Covered Securities shall be null and void and of no force and effect, the purported transferee shall have no rights or privileges in or with respect to the Company, and the Company shall not give any effect in the Company’s stock records to such attempted Sale.
     SECTION 5.03 Restrictive Legends.
          (a) Each certificate evidencing the Covered Securities shall be stamped or otherwise imprinted with legends in substantially the following form (in addition to any legends required by agreement or by applicable state securities Laws):
  (i)   THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. SUCH SECURITIES GENERALLY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
 
  (ii)   THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UNDER THE TERMS OF THE STOCKHOLDERS’ AGREEMENT DATED MARCH 13, 2007, AS AMENDED FROM TIME TO TIME, BETWEEN THE ISSUER AND THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS OF THAT AGREEMENT.
          (b) Each certificate evidencing any shares of Common Stock or other securities of the Company acquired by the Investor other than the Covered Securities shall

13

 

be stamped or otherwise imprinted with legends in substantially the following form (in addition to any legends required by agreement or by applicable state securities Laws):
THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UNDER THE TERMS OF THE STOCKHOLDERS’ AGREEMENT DATED MARCH 13, 2007, AS AMENDED FROM TIME TO TIME, BETWEEN THE ISSUER AND THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS OF THAT AGREEMENT.
          (c) The Investor consents to the Company making a notation on its records and giving instructions to any transfer agent of its capital stock in order to implement the restrictions on transfer established in this Agreement.
          (d) The Company shall, at the request of a holder of Purchased Securities, remove from each certificate evidencing Purchased Securities transferred in compliance with the terms of Section 5.01 and with respect to which no rights or obligations under this Agreement shall transfer, the legend described in Sections 5.03(a)(ii) and 5.03(b), and shall remove from each certificate evidencing such Purchased Securities the legend described in Section 5.03(a)(i) if, at the request of the Company, such requesting holder provides, at its expense, an opinion of counsel satisfactory to the Company that the securities evidenced thereby may be transferred without the imposition of such legend.
ARTICLE 6
STRATEGIC RELATIONSHIP AND USE OF PROCEEDS
     SECTION 6.01 Strategic Relationship. After the receipt of the Stockholder Approval, the Investor and the Company agree to work diligently together to develop and enter a strategic relationship in which the Investor will use its commercially reasonable efforts to provide a non-exclusive market for the Company’s thin-film photovoltaic products for use in connection with the Investor’s building systems business.
     SECTION 6.02 Use of Proceeds. From the date hereof until the termination of this Agreement in accordance with Section 9.01, the Company agrees to use all proceeds received from the Investor for the sale of the Purchased Securities pursuant to the Securities Purchase Agreement for the development and installation of a 1.5 MW production line, purchase of capital equipment, and for general corporate purposes, including salary, overhead and other expenses.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
     SECTION 7.01 Representations of the Company. The Company hereby represents and warrants to the Investor that:

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          (a) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby are within the Company’s power and authority and have been duly authorized by all necessary corporate action. This Agreement constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.
          (b) The execution, delivery and performance by the Company of this Agreement require no action by or in respect of, or filing with, any governmental body, agency, official or authority, other than (i) compliance with any applicable requirements of the federal securities Laws and (ii) compliance with any applicable foreign or state securities or blue sky Laws.
          (c) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby do not and will not (i) contravene or conflict with the Certificate of Incorporation or the Bylaws and (ii) assuming compliance with the matters referred to in Section 7.01(b), contravene or conflict with or constitute a violation of, provision of any Law applicable to the Company.
     SECTION 7.02 Representations of the Investor. The Investor hereby represents and warrants to the Company that:
          (a) The execution, delivery and performance by the Investor of this Agreement and the consummation by the Investor of the transactions contemplated hereby are within the Investor’s power and authority and have been duly authorized by all necessary corporate action. This Agreement constitutes a valid and binding agreement of the Investor, enforceable against the Investor in accordance with its terms.
          (b) The execution, delivery and performance by the Investor of this Agreement require no action by or in respect of, or filing with, any governmental body, agency, official or authority, other than (i) compliance with any applicable requirements of the federal securities Laws and (ii) compliance with any applicable foreign or state securities or blue sky Laws.
          (c) The execution, delivery and performance by the Investor of this Agreement and the consummation by the Investor of the transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational documents of the Investor and (ii) assuming compliance with the matters referred to in Section 7.02(b), contravene or conflict with or constitute a violation of, provision of any Law applicable to the Investor.
ARTICLE 8
CONFIDENTIALITY
     SECTION 8.01 Confidentiality

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          (a) Unless otherwise agreed to in writing by the Company, the Investor, on behalf of itself and its Representatives, agrees (i) except as required by Law, to keep confidential and not to disclose or reveal any Confidential Information (as defined below) to any person (other than such member’s Representatives), (ii) not to use Confidential Information for any purpose other than in connection with its ownership of Company securities and not in any way detrimental to the Company or its stockholders and (iii) except as required by Law, not to disclose to any person (other than such member’s Representatives) any Confidential Information. In the event that the Investor or its Representatives are requested pursuant to, or required by, Law to disclose any Confidential Information, the Investor agrees that it will provide the Company with prompt notice of such request or requirement in order to enable the Company to seek an appropriate protective order or other remedy (and if the Company seeks such an order, such person will provide such cooperation as the Company shall reasonably request) or to consult with the Investor with respect to the Company taking steps to resist or narrow the scope of such request or legal process.
          (b) “Confidential Information” means all information about the Company furnished by the Company, whether furnished before or after the date hereof, whether oral or written, and regardless of the manner or form in which it is furnished, including all notes, analyses, compilations, studies, forecasts, interpretations or other documents prepared by the Investor or its Representatives which contain, reflect or are based upon, in whole or in part, the information furnished to the Investor or its Representatives. Confidential Information does not include, however, information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Investor or its Representatives in violation of this Agreement, the Confidentiality Agreement, dated as of February 20, 2007, between the Company and the Investor, or other obligation of confidentiality, (ii) was available to the Investor on a non-confidential basis prior to its disclosure by the Company to the Investor or (iii) becomes available to the Investor on a non-confidential basis from a person (other than the Company) who is not prohibited from disclosing such information to the Investor by a legal, contractual or fiduciary obligation to the Company.
          (c) Notwithstanding anything to the contrary contained in this Agreement, the Investor Designated Director shall be permitted to provide to the Investor and its Representatives information concerning the Company that the Investor Designated Director receives in his or her capacity as a director; provided, however, that with respect to any such information provided, the Investor and its Representatives shall be bound by the same restrictions on disclosure and use of confidential information as apply to the Investor Designated Director in his or her capacity as a director, in addition to any applicable restrictions under this Article VIII.
          (d) As used in this Article VIII, the term “Company” includes the Company and all of its subsidiaries, and the term “Investor” includes the Investor and all of its affiliates (other than the Company).
          SECTION 8.02 Furnishing of Information. The Company shall furnish or make available to the Investor and its Representatives any documents filed by the Company

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pursuant to each of Sections 13, 14 and 15(d) of the Exchange Act and all annual, quarterly or other reports furnished to the Company’s public security holders and all such other information concerning the Company as the Investor may reasonably request. The Company shall provide the Investor and its Representatives with reasonable access to the books and records of the Company during normal business hours upon reasonable notice, including financial data (including projections) and operating data covering each of the Company, its business, operations and financial performance.
ARTICLE 9
MISCELLANEOUS
       SECTION 9.01 Termination. This Agreement shall terminate upon the earliest to occur of:
  (i) written agreement to that effect, signed by all parties hereto or all parties then possessing any rights hereunder;
  (ii) the Investor ceasing to beneficially own at least fifteen percent (15%) of the outstanding Common Stock; provided that prior to such termination the Investor Designated Director shall have resigned if required to do so under Section 2.01(b); provided further that Sections 4.01, 4.02 and 4.04 shall survive such termination; and
  (iii) the Investor becoming the beneficial owner of ninety percent (90%) or more of the outstanding Common Stock.
provided that no termination of this Agreement pursuant to this Section 9.01 shall affect the right of any party to recover damages for any breach of the representations, warranties or covenants herein that occurred prior to such termination; provided further that the provisions of Article VIII shall continue in effect for a period of one (1) year following any such termination.
       SECTION 9.02 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by telecopy, by a recognized overnight courier service or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02):
if to the Investor:
Norsk Hydro Produksjon AS
Drammensveien 264
N-0240 Oslo
Norway
Facsimile:     + 47 22 53 27 25
Attention:     Richard G. Erskine

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with a copy to:
Shearman & Sterling LLP
Broadgate West
9 Appold Street
London EC2A 2AP
United Kingdom
Facsimile:     +44 (0)207 655-5265
Attention:     George Karafotias
Facsimile:     +44 (0)207 655-5216
Attention:     Sean J. Skiffington
if to the Company:
Ascent Solar Technologies, Inc.
8120 Shaffer Parkway
Littleton, Colorado 80127
United States
Facsimile:     +1 (303) 420-1551
Attention:     Matthew B. Foster, President and Chief Executive Officer
with a copy to:
Holland & Knight LLP
2300 U.S. Bancorp Tower
111 S.W. Fifth Avenue
Portland, Oregon 97204
United States
Facsimile:     +1 (503) 241-8014
Attention:     Mark A. von Bergen
                        David C. Wang
     SECTION 9.03 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
     SECTION 9.04 Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.
     SECTION 9.05 Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle County. The parties hereto hereby (a) submit to the exclusive jurisdiction of any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle

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County, for the purpose of any action arising out of or relating to this Agreement brought by any party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the above-named courts.
     SECTION 9.06 Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby. Each of the parties hereto (a) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other party hereto have been induced to enter into this Agreement and the transactions contemplated hereby, as applicable, by, among other things, the mutual waivers and certifications in this Section 9.06.
     SECTION 9.07 Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity.
     SECTION 9.08 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
     SECTION 9.09 Entire Agreement. This Agreement and the Related Agreements constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and thereof.
     SECTION 9.10 Assignment. This Agreement shall not be assigned by operation of law or otherwise; provided, however, that the Investor may assign its right, title and interest under this Agreement to any of its affiliates; provided further, however, that no such assignment shall relieve the Investor of any of its obligations hereunder.
     SECTION 9.11 Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Company and the Investor or (b) by a waiver in accordance with Section 9.12.
     SECTION 9.12 Waiver. Any party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party or (b) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or

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condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
     SECTION 9.13 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
     SECTION 9.14 No Partnership. No partnership, joint venture or joint undertaking is intended to be, or is, formed among the parties hereto or any of them by reason of this Agreement or the transactions contemplated herein.
     SECTION 9.15 Construction. Each party hereto acknowledges and agrees it has had the opportunity to draft, review and edit the language of this Agreement and that no presumption for or against any party arising out of drafting all or any part of this Agreement will be applied in any controversy, claim or dispute relating to, in connection with or involving this Agreement. Accordingly, the parties hereto hereby waive the benefit of any rule of Law or any legal decision that would require, in cases of uncertainty, that the language of a contract should be interpreted most strongly against the party who drafted such language.
     SECTION 9.16 Director Duties. Notwithstanding anything to the contrary in this Agreement, no provision hereof shall prevent, restrict, encumber or in any way limit the exercise of the fiduciary rights and obligations of any Investor Designated Director as a director, or his or her ability to vote on matters, influence management or the other directors or otherwise to discharge their fiduciary or other duties as directors. The Company shall not approve or recommend to its stockholders any transaction or resolution, or approve, recommend or take any other action (other than those expressly contemplated by this Agreement) that would restrict the right of any Investor Designated Director to vote on any matter as such director believes appropriate in light of his or her duties as a director or the manner in which an Investor Designated Director may participate in his or her capacity as a director in deliberations or discussions at meetings of the Board or any committee thereof.
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
         
  ASCENT SOLAR TECHNOLOGIES, INC.
 		  
  By:   /s/ Mohan S. Misra    
    Name:   Dr. Mohan S. Misra   
    Title:   Chairman   
 
  NORSK HYDRO PRODUKSJON AS
 		  
  By:   /s/ Richard G. Erskine    
    Name:   Richard G. Erskine   
    Title:   Authorized Representative   
 

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EX-99.D 5 w32275exv99wd.htm EXHIBIT D exv99wd
 

EXECUTION COPY
VOTING AGREEMENT
          VOTING AGREEMENT, dated as of March 13, 2007 (this “Agreement”), among NORSK HYDRO PRODUKSJON AS, a company organized under the laws of the Kingdom of Norway (“Norsk Hydro”), DR. MOHAN S. MISRA (“Dr. Misra”), INICA, INC., a corporation organized under the laws of the State of Colorado (“Inica”), and ITN ENERGY SYSTEMS, INC., a corporation organized under the laws of the State of Colorado (“ITN” and, together with Dr. Misra and Inica, the “Stockholders”).
          WHEREAS, concurrently herewith, Ascent Solar Technologies, Inc., a Delaware corporation (the “Company”), and Norsk Hydro are entering into a Securities Purchase Agreement (the “Securities Purchase Agreement”; capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Securities Purchase Agreement), pursuant to which, upon the terms and subject to the conditions thereof, Norsk Hydro will acquire, on the date hereof, 1,600,000 shares of common stock, par value $0.0001 per share (the “Common Shares”), of the Company and will have the option to acquire, subject to the terms and conditions of the Securities Purchase Agreement, including the Stockholder Approval, up to 35% of the Common Shares, Class A Warrants and Class B Warrants of the Company (the “Investment”);
          WHEREAS, ITN is a wholly-owned subsidiary of Inica, which is wholly-owned by Dr. Misra and an immediate family member of Dr. Misra;
          WHEREAS, Dr. Misra is the record owner of 430,000 Common Shares and the beneficial owner of 1,028,000 Common Shares which are held by ITN as the record owner;
          WHEREAS, the Stockholders collectively and beneficially own 1,458,000 Common Shares (the “Owned Shares”; all such Owned Shares and, together with any Common Shares of which any of the Stockholders acquire beneficial ownership after the date hereof and prior to the termination hereof, whether by purchase or upon exercise of options, warrants, conversion of other convertible securities or otherwise, are collectively referred to herein as the “Covered Shares”);
          WHEREAS, the Stockholders acknowledge that Norsk Hydro is entering into the Securities Purchase Agreement in reliance on the representations, warranties, covenants and other agreements of the Stockholders set forth in this Agreement and would not enter into the Securities Purchase Agreement if the Stockholders did not enter into this Agreement; and
          WHEREAS, concurrently herewith, Norsk Hydro and the Company are entering into a Stockholders’ Agreement (the “Stockholders’ Agreement”), pursuant to which, among other things, the Company has agreed to cause its Nominating and Governance Committee to recommend for election to the Company’s board of directors (the “Board”) one director designated by Norsk Hydro.
          NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereby agree as follows:

 

 

            
          1.Agreement to Vote.
          (a) Prior to any termination of this Agreement, each Stockholder hereby agrees that he or it shall, and shall cause any other holder of record of any Covered Shares to, at any meeting of the stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting), however called, or in any action by written consent of the stockholders of the Company:
     (i) when a meeting is held, appear at such meeting or otherwise cause the Covered Shares to be counted as present thereat for the purpose of establishing a quorum;
     (ii) vote (or cause to be voted) in person or by proxy all Covered Shares (A) in favor of the approval of (y) the issuance of the Initial Warrants to Norsk Hydro and (z) the Tranche 2 Transactions and (B) against any proposal, action or transaction involving the Company, which proposal, action or transaction would impede, frustrate, prevent or materially delay the consummation of (y) the issuance of the Initial Warrants to Norsk Hydro or (z) the Tranche 2 Transactions or the other transactions contemplated by the Securities Purchase Agreement, the Stockholders’ Agreement or this Agreement or the approval of the issuance of the Initial Warrants to Norsk Hydro or the Tranche 2 Transactions; and
     (iii) vote (or cause to be voted) in person or by proxy all Covered Shares (A) in favor of the appointment of the Investor Director Designee to the Board and (B) against any proposal, action or transaction involving the Company, which proposal, action or transaction would impede, frustrate, prevent or materially delay the appointment of the Investor Director Designee to the Board.
          (b) Except as set forth in clause (a) of this Section 1, none of the Stockholders shall be restricted from voting in favor of, against or abstaining with respect to any matter presented to the stockholders of the Company.
          2.   Termination. This Agreement shall terminate upon the earliest of (a) the later of the Initial Warrants Closing and the Second Closing, (b) the termination of the Securities Purchase Agreement in accordance with its terms and (c) written notice of termination of this Agreement by Norsk Hydro to the Stockholders, such earliest date being referred to herein as the “Termination Date”; provided, however, that (i) the provisions set forth in Section 1(a)(iii) shall survive the termination of this Agreement and shall terminate only when the Investor beneficially owns less than fifteen percent (15%) of the Company’s Common Shares and (ii) if the Stockholder Approval has not been obtained by the date that is four (4) months from the date hereof, the provisions set forth in Section 1(a)(iii) shall survive the termination of this Agreement until the second (2nd) anniversary of the date hereof; provided further, however, that termination of this Agreement shall not prevent any party hereto from seeking any remedies (at law or in equity) against any other party hereto for such party’s breach of any of the terms of this Agreement prior to termination in accordance with this Section 2.

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          3.   Representations and Warranties.
          (a) Representations and Warranties of Norsk Hydro. Norsk Hydro hereby represents and warrants to the Stockholders as follows:
     (i) Organization and Authority. Norsk Hydro is a corporation duly incorporated and validly existing under the laws of the Kingdom of Norway and has all necessary corporate power and authority to enter into, execute and deliver this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Norsk Hydro, the performance by Norsk Hydro of its obligations hereunder and the consummation by Norsk Hydro of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Norsk Hydro. This Agreement has been duly executed and delivered by Norsk Hydro, and, assuming due authorization, execution and delivery by the other parties hereto, this Agreement is a legal, valid and binding obligation of Norsk Hydro, enforceable against it in accordance with its terms.
     (ii) Consents; No Conflicts. Except for the applicable requirements of the Exchange Act, the execution, delivery and performance by Norsk Hydro of this Agreement do not and will not (A) require any consent, approval, authorization or other order of, action by, filing with, or notification to, any Governmental Authority, (B) violate, conflict with or result in the breach of any provision of the organizational documents of Norsk Hydro, (C) conflict with or violate any Law or Governmental Order applicable to Norsk Hydro or its assets, properties or businesses or (D) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which Norsk Hydro is a party, except, in the case of clauses (C) and (D), as would not materially and adversely affect the ability of Norsk Hydro to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement.
          (b) Representations and Warranties of the Stockholders. The Stockholders hereby jointly and severally represent and warrant to Norsk Hydro as follows:
     (i) Ownership of Securities. As of the date of this Agreement, (A) Dr. Misra is the record and/or beneficial owner of, and has sole voting power and sole power of disposition with respect to, 430,000 of the Owned Shares, and (B) the Stockholders are the beneficial owners of, and have shared voting power and shared power of disposition with respect to, 1,028,000 of the Owned Shares, in each case free and clear of Liens, proxies, powers of attorney, voting trusts or agreements (other than (Y) any Lien or proxy created by this Agreement or pursuant to any pledge in existence as of the date hereof and (Z) a lock-up agreement with Paulson Investment Company, Inc., the underwriter of the Company’s initial public offering, none of which would materially and adversely affect the ability of the Stockholders to carry out the Stockholders’ obligations under, and to consummate the transactions contemplated by, this Agreement). As used in this

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Agreement, the terms “beneficial owner”, “beneficial ownership”, “beneficially owns” or “owns beneficially”, with respect to any securities, refer to the beneficial ownership of such securities as determined under Rule 13d-3(a) of the Exchange Act.
     (ii) Organization and Authority. With respect to ITN and Inica, both are companies duly organized, validly existing and in good standing under the laws of the State of Colorado. The execution and delivery of this Agreement by ITN and Inica and the consummation by ITN and Inica of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of ITN and Inica are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. Dr. Misra has all necessary power and capacity to enter into, execute and deliver this Agreement, to carry out his obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Stockholders, and, assuming due authorization, execution and delivery by Norsk Hydro, this Agreement is a legal, valid and binding obligation of the Stockholders, enforceable against the Stockholders in accordance with its terms.
     (iii) Consents; No Conflicts. Except for the applicable requirements of the Exchange Act, the execution, delivery and performance by the Stockholders of this Agreement do not and will not (A) with respect to ITN and Inica, conflict with or violate their respective organizational documents, (B) require any consent, approval, authorization or other order of, action by, filing with, or notification to, any Governmental Authority, (C) conflict with or violate any Law or Governmental Order applicable to the Stockholders or the Stockholders’ respective assets, properties or businesses or (D) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which any of the Stockholders is a party, except, in the case of clauses (C) and (D), as would not materially and adversely affect the ability of any of the Stockholders to carry out their respective obligations under, and to consummate the transactions contemplated by, this Agreement.
          4.   Restriction on Transfer, Proxies. Each Stockholder hereby agrees, while this Agreement is in effect, not to (a) except as set forth in Section 7 hereof or pursuant to pledges in existence as of the date hereof (none of which would materially and adversely affect the ability of any of the Stockholders to carry out their respective obligations under, and to consummate the transactions contemplated by, this Agreement), sell, transfer, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, pledge, encumbrance, assignment or other disposition of, any of the Owned Shares, (b) grant any proxies or powers of attorney, deposit any Owned Shares into a voting trust or enter into a voting agreement with respect to any Owned Shares or (c) take any action that would make any representation or warranty of any of the Stockholders contained herein untrue or incorrect or have the effect of preventing or disabling any of the Stockholders from performing its obligations under this Agreement.

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          5.   Further Assurances. From time to time, at another party’s request and without further consideration, each party hereto shall take such reasonable further action as may reasonably be necessary or desirable to consummate and make effective the transactions contemplated by this Agreement.
          6.   Fiduciary Duties. Notwithstanding anything in this Agreement to the contrary: (a) the Stockholders make no agreement or understanding herein in any capacity other than in their capacity as a record holder and/or beneficial owner of Covered Shares and (b) nothing herein shall be construed to limit or affect any action or inaction by Dr. Misra acting in his capacity as a director or officer of the Company in a manner consistent with the Securities Purchase Agreement.
          7.   Permitted Transfers. Notwithstanding anything in this Agreement to the contrary, Dr. Misra may transfer any or all of the Covered Shares (i) in accordance with provisions of applicable Law, to his spouse, ancestors, descendants or any trust controlled by Dr. Misra for any of their benefit or (ii) with the prior written consent of Norsk Hydro; provided, however, that, prior to and as a condition to the effectiveness of such transfer, each person to which any of such Covered Shares or any interest in any of such Covered Shares is or may be transferred shall have executed and delivered to Norsk Hydro a counterpart of this Agreement pursuant to which such person shall be bound by all of the terms and provisions of this Agreement, and shall have agreed in writing with Norsk Hydro to hold such Covered Shares or interest in such Covered Shares subject to all of the terms and provisions of this Agreement.
          8.   Amendment. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto.
          9.   Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9):
     (a)    if to Norsk Hydro:
Norsk Hydro Produksjon AS
Drammensveien 264
N-0240 Oslo
Norway
Facsimile: + 47 22 53 27 25
Attention: Richard G. Erskine
with a copy to:
Shearman & Sterling LLP
Broadgate West
9 Appold Street
London EC2A 2AP

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United Kingdom
Facsimile: +44 (0)207 655-5265
Attention: George Karafotias
Facsimile: +44 (0)207 655-5216
Attention: Sean J. Skiffington
     (b)    if to the Stockholders:
Dr. Mohan S. Misra
c/o ITN Energy Systems, Inc.
8130 Shaffer Parkway
Littleton, Colorado 80127-4107
United States
Facsimile: +1 (303) 420-1551
with a copy to:
Ireland, Stapleton, Pryor & Pascoe, P.C.
1675 Broadway, Suite 2600
Denver, Colorado 80202
United States
Facsimile: +1 (303) 623-2062
Attention: William E. Tanis
          10.   Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
          11.   Entire Agreement; Assignment. This Agreement (together with the Securities Purchase Agreement and the Stockholders’ Agreement to the extent referred to herein) (a) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties hereto with respect to the subject matter hereof and (b) shall not be assigned by operation of law or otherwise without the prior written consent of the other parties hereto; provided, however, that the Investor may assign its right, title and interest under this Agreement to any of its affiliates.
          12.   Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof and that the parties hereto shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

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          13.   Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle County. The parties hereto hereby (a) submit to the exclusive jurisdiction of any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle County, for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper or that this Agreement or the Transactions may not be enforced in or by any of the above-named courts.
          14.   Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14.
          15.   Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
          16.   Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
         
     
  /s/ Mohan S. Misra    
  Dr. Mohan. S. Misra   
     
 
         
  INICA, INC.
 		  
  By:   /s/ Mohan S. Misra    
    Name:   Dr. Mohan S. Misra   
    Title:   President   
 
         
  ITN ENERGY SYSTEMS, INC.
 		  
  By:   /s/ Mohan S. Misra    
    Name:   Dr. Mohan S. Misra   
    Title:   President   
 
         
  NORSK HYDRO PRODUKSJON AS
 		  
  By:   /s/ Richard G. Erskine    
    Name:   Richard G. Erskine   
    Title:   Authorized Representative   

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EX-99.E 6 w32275exv99we.htm EXHIBIT E exv99we
 

EXECUTION COPY
 
REGISTRATION RIGHTS AGREEMENT
Dated as of March 13, 2007
between
Ascent Solar Technologies, Inc.
and
Norsk Hydro Produksjon AS
 

 

 

REGISTRATION RIGHTS AGREEMENT
          REGISTRATION RIGHTS AGREEMENT, dated as of March 13, 2007 (this “Agreement”), between NORSK HYDRO PRODUKSJON AS, a company organized under the laws of the Kingdom of Norway (“Norsk Hydro”, and together with its permitted assignees, “Selling Shareholder”), and ASCENT SOLAR TECHNOLOGIES, INC., a corporation organized under the laws of the State of Delaware (“ASTI”).
RECITALS
          WHEREAS, concurrently herewith, ASTI and Norsk Hydro are entering into a Securities Purchase Agreement (the “Securities Purchase Agreement”; capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Securities Purchase Agreement), pursuant to which, upon the terms and subject to the conditions thereof, Norsk Hydro will acquire, on the date hereof, 1,600,000 shares of common stock, par value $0.0001 per share (“Common Shares”), of ASTI (the “ASTI Shares”) and will have the option to acquire, subject to the terms and conditions of the Securities Purchase Agreement, including the Stockholder Approval, up to 35% of the Common Shares, Class A Warrants and Class B Warrants of ASTI (the “Investment”);
          WHEREAS, in connection with the Investment, ASTI has agreed to provide Norsk Hydro certain registration rights with respect to its ASTI Shares; and
          WHEREAS, certain terms used in this Agreement are defined in Section 1.
AGREEMENT
          NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
          1. Definitions.
          (a) For purposes of this Agreement:
          “affiliate” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.
          “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract, credit arrangement or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such person.
          “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and all rules and regulations promulgated thereunder.

 

 

          “NASD” means the National Association of Securities Dealers, Inc., or any successor entity thereof.
          “person” means any individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” or “group” each within the meaning of Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.
          “Registrable Securities” means all and any Tranche 1 Shares, Tranche 2 Shares and the Common Shares issued or issuable upon conversion of the Initial Warrants and the Option Warrants held by Selling Shareholder (including any securities issuable or issued or distributed in respect of any such Purchased Securities by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, reorganization, merger, amalgamation, consolidation or otherwise). For purposes of this Agreement, Registrable Securities shall cease to be Registrable Securities when (i) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the SEC and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (ii) the entire amount of the Registrable Securities proposed to be sold by Selling Shareholder in a single sale, in the opinion of counsel satisfactory to ASTI and Selling Shareholder, each in their reasonable judgment, may be distributed to the public in the United States pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act in any three-month period, (iii) any such Registrable Securities have been sold in a sale made pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act or (iv) the Registrable Securities are saleable pursuant to Rule 144(k) under the Securities Act.
          “Registration Expenses” means all expenses in connection with or incident to the registration of Registrable Securities hereunder, including (a) all SEC and any NASD registration and filing fees and expenses, (b) all fees and expenses in connection with the registration or qualification of Registrable Securities for offering and sale under the securities or “blue sky” laws of any state or other jurisdiction of the United States of America and, in the case of an underwritten offering, determination of their eligibility for investment under the laws of such jurisdictions as the managing underwriter or underwriters may reasonably designate, including reasonable fees and disbursements, if any, of counsel for the underwriters in connection with such registrations or qualifications and determination, (c) all expenses relating to the preparation, printing, distribution and reproduction of any Registration Statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing Registrable Securities in a form for delivery for purchase pursuant to such registration or qualification and the expense of printing or producing any underwriting agreement(s) and agreement(s) among underwriters and any “blue sky” or legal investment memoranda, any selling agreements and all other documents approved for use in writing by ASTI to be used in connection with the offering, sale or delivery of Registrable Securities, (d) messenger, telephone and delivery expenses of ASTI and out-of-pocket travel expenses incurred by or for ASTI’s personnel for travel undertaken for any “road show” made in connection with the offering of securities registered thereby, (e) fees and expenses of any transfer agent and registrar with respect to the delivery of any Registrable Securities and any escrow agent or custodian involved in the offering, (f) fees, disbursements and expenses of counsel of ASTI and independent certified public accountants of

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ASTI incurred in connection with the registration, qualification and offering of the Registrable Securities (including the expenses of any opinions or “comfort” letters required by or incident to such performance and compliance), (g) fees, expenses and disbursements of counsel and any other persons retained by ASTI, including special experts retained by ASTI in connection with such registration, (h) Securities Act liability insurance, if ASTI desires such insurance and (i) the fees and expenses incurred by ASTI and its advisers in connection with the quotation or listing of Registrable Securities on any securities exchange or automated securities quotation system. Any brokerage commissions attributable to the sale of any of the Registrable Securities, and any commissions, fees, discounts or, except as specified in the immediately preceding sentence, expenses of any underwriter or placement agent incurred in connection with an offering of securities registered in accordance with this Agreement and any fees and expenses of any counsel or other advisors to Selling Shareholder and any other out-of-pocket expenses of Selling Shareholder shall not be “Registration Expenses.”
          “Registration Statement” means a Demand Registration Statement or a Piggy-Back Registration Statement, as the case may be.
          “SEC” means the United States Securities and Exchange Commission, or any successor thereto.
          “Securities Act” means the United States Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder.
          (b) The following terms have the meaning set forth in the Sections set forth below:
     
Term   Section
Agreement
   Preamble
ASTI
   Preamble
ASTI Shares
   Recitals
Blackout Period
   4
Common Shares
   Recitals
Demand Registration
   2(a)
Demand Registration Statement
   2(a)
Indemnified Party
   8(c)
Indemnifying Party
   8(c)
Investment
   Recitals
Maximum Number of Securities
   3(c)
Norsk Hydro
   Preamble
Piggy-Back Registration
   3(a)
Piggy-Back Registration Statement
   3(a)
Securities Purchase Agreement
   Recitals
Selling Shareholder
   Preamble
          (c) Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

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     (i) The headings in this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;
     (ii) Whenever the words “include”, “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;
     (iii) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;
     (iv) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;
     (v) References to a person are also to its successors and permitted assigns; and
     (vi) The use of “or” is not intended to be exclusive unless expressly indicated otherwise.
          2. Demand Registration.
          (a) At any time after the twelve (12) month anniversary of the date of the Securities Purchase Agreement, after receipt of a written request from Selling Shareholder requesting that ASTI effect a registration (a “Demand Registration”) under the Securities Act covering at least 250,000 shares of the Registrable Securities, and which notice shall specify the number of Registrable Securities for which registration is requested and the intended method or methods of distribution thereof, ASTI shall, as soon as practicable, but in any event no later than forty-five (45) days (excluding any days which occur during a permitted Blackout Period under Section 4 below) after receipt of such written request, file with the SEC and use its reasonable best efforts to cause to be declared effective, a registration statement (a “Demand Registration Statement”) relating to all of the Registrable Securities that ASTI has been so requested to register for sale, to the extent required to permit the disposition (in accordance with the intended method or methods of distribution thereof) of the Registrable Securities so registered.
          (b) If the Demand Registration relates to an underwritten public offering and the managing underwriter of such proposed public offering advises ASTI and Selling Shareholder that, in its opinion, the number of securities requested to be included in the Demand Registration (including securities to be sold by ASTI or any other security holder) exceeds the number which can be sold in such offering within an acceptable price range, then ASTI shall include in such Demand Registration first, the Registrable Securities Selling Shareholder proposes to register, and second, any securities ASTI proposed to register. ASTI shall not hereafter enter into any agreement which is inconsistent with the rights of priority provided in this Section 2(b).
          (c) Selling Shareholder shall be entitled to an aggregate of three (3) registrations of Registrable Securities pursuant to this Section 2; provided, that a registration requested pursuant to this Section 2 shall not be deemed to have been effected for purposes of this Section 2(c) unless (i) it has been declared effective by the SEC, (ii) it has remained effective for the period set forth in Section 5(a) and (iii) the offering of Registrable Securities

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pursuant to such registration is not subject to any stop order, injunction or other order or requirement of the SEC.
          (d) Notwithstanding anything to the contrary contained herein, ASTI shall not be required to prepare and file (i) more than one (1) Demand Registration Statement in any twelve-month period, or (ii) any Demand Registration Statement within 120 days following the date of effectiveness of any other Registration Statement.
          3. Piggy-Back Registration.
          (a) If ASTI proposes to file on its behalf and/or on behalf of any holder of its securities (other than a holder of Registrable Securities) a registration statement under the Securities Act on any form (other than a registration statement on Form S-4 or S-8 (or any successor form) for securities to be offered in a transaction of the type referred to in Rule 145 under the Securities Act or to employees of ASTI pursuant to any employee benefit plan, respectively) for the registration of ASTI Shares (a “Piggy-Back Registration”), it shall give written notice to Selling Shareholder at least thirty (30) days before the initial filing with the SEC of such piggy-back registration statement (a “Piggy-Back Registration Statement”), which notice shall set forth the number of ASTI Shares ASTI and other holders, if any, then contemplate including in such registration and the intended method of disposition of such ASTI Shares. The notice shall offer to include in such filing the aggregate number of Registrable Securities as Selling Shareholder may request.
          (b) If Selling Shareholder desires to have Registrable Securities registered under this Section 3, it shall advise ASTI in writing within ten (10) days after the date of receipt of such offer from ASTI of its desire to have Registrable Securities registered under this Section 3, and shall set forth the number of Registrable Securities for which registration is requested. ASTI shall thereupon include, or in the case of a proposed underwritten public offering, use its reasonable best efforts to cause the managing underwriter or underwriters to permit such Selling Shareholder to include, in such filing the number of Registrable Securities for which registration is so requested by Selling Shareholder, subject to paragraph (c) below, and shall use its reasonable best efforts to effect registration of such Registrable Securities under the Securities Act. Any withdrawal of the registration statement by ASTI for any reason shall constitute and effect an automatic withdrawal of any Piggy-Back Registration related thereto.
          (c) If the Piggy-Back Registration relates to an underwritten public offering and the managing underwriter of such proposed public offering advises ASTI and Selling Shareholder in writing that, in its opinion, the number of Registrable Securities requested to be included in the Piggy-Back Registration in addition to the securities being registered by ASTI or any other security holder would be greater than the total number of securities which can be sold in the offering without having a material adverse effect on the distribution of such securities or otherwise having a material adverse effect on the marketability thereof (the “Maximum Number of Securities”), then:
     (i) in the event ASTI initiated the Piggy-Back Registration, ASTI shall include in such Piggy-Back Registration first, the securities ASTI proposes to register and second, the securities of all other selling security holders, including Selling

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Shareholder, to be included in such Piggy-Back Registration in an amount that together with the securities ASTI proposes to register, shall not exceed the Maximum Number of Securities, such amount to be allocated among such selling security holders on a pro rata basis (based on the number of securities of ASTI held by each such selling security holder); and
     (ii) in the event any holder of securities of ASTI initiated the Piggy-Back Registration, ASTI shall include in such Piggy-Back Registration first, the securities such initiating security holder proposes to register, second, the securities of any other selling security holders (including Selling Shareholder), in an amount that together with the securities the initiating security holder proposes to register, shall not exceed the Maximum Number of Securities, such amount to be allocated among such other selling security holders on a pro rata basis (based on the number of securities of ASTI held by each such selling security holder) and third, any securities ASTI proposes to register, in an amount that together with the securities the initiating security holder and the other selling security holders propose to register, shall not exceed the Maximum Number of Securities.
          (d) ASTI shall not hereafter enter into any agreement that is inconsistent with the rights of priority provided in Section 3(c).
          (e) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration whether or not any Selling Shareholder has elected to include securities in such registration. The Registration Expenses of any such withdrawn registration shall be borne by the Company.
          4. Blackout Periods. ASTI shall have the right to delay the filing or effectiveness of a Registration Statement required pursuant to Section 2 or 3 hereof during no more than two (2) periods aggregating to not more than ninety (90) days in any twelve-month period (each, a “Blackout Period”), in the event that (i) ASTI would, in accordance with the advice of its counsel, be required to disclose in the prospectus material non-public information that ASTI has a bona fide business purpose for preserving as confidential and that is not otherwise then required by law to be publicly disclosed, (ii) ASTI determines that the prospectus requires amendment or supplement due to the happening of any event that comes to the attention of ASTI and as a result of which the prospectus would contain an 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 or (iii) in the good faith judgment of ASTI’s board of directors, there is a reasonable likelihood that disclosure of material non-public information, or any other action to be taken in connection with the prospectus, would materially and adversely affect or interfere with any financing, acquisition, merger, disposition of assets (not in the ordinary course of business), corporate reorganization or other material transaction or negotiations involving ASTI; provided, however, that (A) Selling Shareholder shall be entitled, at any time after receiving notice of such delay and before such Demand Registration Statement becomes effective, to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the permitted Demand Registrations and (B) ASTI shall delay during such Blackout Period the filing or effectiveness of any Registration Statement required pursuant to the registration rights of other holders of any

6

 

securities of ASTI. ASTI shall promptly give Selling Shareholder written notice of such determination containing a general statement of the reasons for such postponement and an approximation of the anticipated delay. After the expiration of any Blackout Period (including upon public disclosure of the material non-public information that was the reason for such Blackout Period) and without any further request from Selling Shareholder, ASTI shall promptly notify Selling Shareholder and shall use its reasonable best efforts to prepare and file with the SEC the requisite Registration Statement or such amendments or supplements to such Registration Statement or prospectus used in connection therewith as may be necessary to cause such Registration Statement to become effective as promptly as practicable thereafter.
          5. Registration Procedures. If ASTI is required by the provisions of Section 2 or 3 to use its reasonable best efforts to effect the registration of any of its securities under the Securities Act, ASTI shall, as soon as practicable, and in the case of a Demand Registration no later than sixty (60) days (excluding any days that fall during a permitted Blackout Period under Section 4) after receipt of a written request for a Demand Registration:
     (a) prepare and file with the SEC a Registration Statement with respect to such securities and use its reasonable best efforts to cause such Registration Statement to become effective as promptly as practicable and to remain effective for a period of time required for the disposition of such Registrable Securities by Selling Shareholder but not to exceed sixty (60) days excluding any days that fall during a permitted Blackout Period under Section 4; provided, however, that before filing such Registration Statement or any amendments or supplements thereto, ASTI shall furnish to counsel selected by Selling Shareholder copies of all documents proposed to be filed, which documents shall be subject to the review of and comment by such counsel;
     (b) prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such Registration Statement until the earlier of such time as all ASTI Shares held by Selling Shareholder cease to be Registered Securities and the expiration of sixty (60) days (excluding any days that fall during a permitted Blackout Period under Section 4);
     (c) furnish to Selling Shareholder and each underwriter, if any, of the Registrable Securities being sold by Selling Shareholder such number of conformed copies of the applicable Registration Statement and each such amendment and supplement thereto (including in each case all exhibits), such number of copies of the prospectus contained in such Registration Statement (including each preliminary prospectus and any summary prospectus) and any other prospectus, in conformity with the requirements of the Securities Act, and such other documents, as Selling Shareholder and such underwriter, if any, may reasonably request;
     (d) use its reasonable best efforts to register or qualify the Registrable Securities or other securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions within the United States and its territories

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and possessions as Selling Shareholder and any underwriter of the Registrable Securities being sold by Selling Shareholder shall reasonably request, to keep such registration or qualification in effect for so long as such Registration Statement remains in effect or until all of the Registrable Securities are sold, whichever is shorter, and to take any other action which may be reasonably necessary or advisable to enable Selling Shareholder and such underwriter to consummate the disposition in such jurisdictions of the securities owned by Selling Shareholder (provided, however, that ASTI shall not be required in connection therewith or as a condition thereto to qualify to do business as a foreign corporation, subject itself to taxation in or to file a general consent to service of process in any jurisdiction where it would not, but for the requirements of this paragraph (d), be obligated to do so) and do such other reasonable acts and things as may be required of it to enable Selling Shareholder and such underwriter to consummate the disposition in such jurisdiction of the securities covered by such Registration Statement;
          (e) (i) furnish, at the request of Selling Shareholder, a signed counterpart, addressed to Selling Shareholder and the underwriters, if any, of an opinion of counsel representing ASTI in connection with such registration, dated the effective date of such Registration Statement (or, if such registration includes an underwritten public offering, opinions dated the date of the closing(s) under the underwriting agreement) covering such matters as are customary in connection with such registered offering of securities by ASTI, reasonably satisfactory in form and substance to Selling Shareholder and (ii) use its reasonable best efforts to furnish, at the request of Selling Shareholder, a signed counterpart, addressed to Selling Shareholder and the underwriters, if any, of a “comfort” letter, dated the effective date of such Registration Statement (and, if such registration includes an underwritten public offering, letters of like kind dated the date the offering is priced and the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified ASTI’s financial statements included in such Registration Statement covering substantially the same matters with respect to such Registration Statement (and the prospects included therein) and, with respect to events subsequent to the date of such financial statements, as are customarily covered in accountants’ letters delivered to the underwriters in underwritten public offerings of securities, including that in the opinion of such accountants, the financial statements and other financial data of ASTI included in such Registration Statement, prospectus or any amendment or supplement thereto, comply as to form in all material respects with the applicable requirements of the Securities Act;
          (f) enter, only with respect to Demand Registrations relating to an underwritten public offering, into customary agreements (including an underwriting agreement containing representations, warranties and indemnities in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities;
     (g) otherwise use its reasonable best efforts to comply with all applicable rules and regulations promulgated by the SEC;

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     (h) use its reasonable best efforts to cause all such Registrable Securities to be listed on each securities exchange or quotation system on which ASTI Shares are listed or traded;
     (i) give written notice to Selling Shareholder:
     (i) when such Registration Statement, the prospectus or any amendment or supplement thereto has been filed with the SEC and when such Registration Statement or any post-effective amendment thereto has become effective;
     (ii) of any request by the SEC for amendments or supplements to such Registration Statement or the prospectus included therein or for additional information;
     (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose;
     (iv) of the receipt by ASTI or its legal counsel of any notification with respect to the suspension of the qualification of ASTI Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
     (v) of the happening of any event that requires ASTI to make changes in such Registration Statement or such prospectus in order to make the statements therein, in light of the circumstances in which they were made, not misleading (which notice shall be accompanied by an instruction to suspend the use of such prospectus until the requisite changes have been made);
     (j) use its reasonable best efforts to prevent the issuance or obtain the withdrawal of any order suspending the effectiveness of such Registration Statement at the earliest possible time;
     (k) upon the occurrence of any event contemplated by Section 5(i)(v) above, promptly prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to Selling Shareholder, the prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If ASTI notifies Selling Shareholder in accordance with Section 5(i)(v) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then Selling Shareholder shall suspend use of such prospectus and use its reasonable best efforts to return to ASTI all copies of such prospectus other than permanent file copies then in Selling Shareholder’s possession, and the period of effectiveness of such Registration Statement provided for above shall be extended by the number of days from and including the date of the giving of such notice to the date

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Selling Shareholder shall have received such amended or supplemented prospectus pursuant to this Section 5(k);
     (l) make reasonably available for inspection by representatives of Selling Shareholder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by such representative or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of ASTI and cause ASTI’s officers, directors and employees to supply all relevant information reasonably requested by such representative or any such underwriter, attorney, accountant or agent in connection with the registration;
     (m) in connection with any underwritten offering, make appropriate officers and senior executives of ASTI available to the selling security holders for meetings with prospective purchasers of Registrable Securities and prepare and present to potential investors customary “road show” material in each case in accordance with the recommendations of the underwriters and in all respects in a manner reasonably requested and consistent with other new issuances of securities in an offering of a similar size to such offering of the Registrable Securities; and
     (n) use reasonable best efforts to procure the cooperation of ASTI’s transfer agent in settling any offering or sale of Registrable Securities, including with respect to the transfer of physical stock certificates into book-entry form in accordance with any procedures reasonably requested by Selling Shareholder or the underwriters, if any.
          It shall be a condition precedent to the obligation of ASTI to take any action pursuant to this Agreement in respect of the Registrable Securities which are to be registered at the request of Selling Shareholder that Selling Shareholder shall furnish to ASTI such information regarding the Registrable Securities held by Selling Shareholder and the intended method of distribution thereof as ASTI shall reasonably request and as shall be required in connection with the action taken by ASTI.
          6. Expenses. All Registration Expenses shall be paid by ASTI, except that Selling Shareholder shall bear and pay any (a) brokerage commissions attributable to the sale of any of the Registrable Securities, (b) underwriting commissions and discounts applicable to securities offered for its account in connection with any registrations, filings and qualifications made pursuant to this Agreement, (c) fees and expenses incurred in respect of counsel or other advisors to Selling Shareholder and (d) any other out-of-pocket expenses of Selling Shareholder.
          7. Rule 144 Information. With a view to making available the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration, ASTI agrees to:
     (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;
     (b) use its best efforts to file with or furnish to the SEC in a timely manner all reports and other documents required of ASTI under the Securities Act and the Exchange Act; and

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     (c) furnish to Selling Shareholder forthwith upon request a written statement by ASTI as to its compliance with the reporting requirements of Rule 144 under the Exchange Act and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of ASTI, and such other reports and documents so filed or furnished by ASTI as Selling Shareholder may reasonably request in availing itself of any rule or regulation of the SEC allowing Selling Shareholder to sell any Registrable Securities without registration.
          8. Indemnification and Contribution.
          (a) ASTI shall indemnify and hold harmless Selling Shareholder, Selling Shareholder’s directors and officers, each agent and any underwriter for ASTI (within the meaning of the Securities Act), and each person, if any, who controls Selling Shareholder or such agent or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or proceedings in respect thereof) arise out of or are based on any untrue or alleged untrue statement of any material fact contained in a Registration Statement on the effective date thereof (including any prospectus filed under Rule 424 under the Securities Act or any amendments or supplements thereto), or any document incorporated by reference therein, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse each of Selling Shareholder, Selling Shareholder’s directors and officers, such agent or underwriter or such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, proceeding or action; provided, however, that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, proceeding or action if such settlement is effected without the consent of ASTI (which consent shall not be unreasonably withheld or delayed); provided further that ASTI shall not be liable to Selling Shareholder, such Selling Shareholder’s directors and officers, such agent or underwriter or such controlling person in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in connection with a Registration Statement, preliminary prospectus, final prospectus or amendments or supplements thereto, in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by Selling Shareholder, such Selling Shareholder’s directors or officers, such agent or underwriter or such controlling person or by such Selling Shareholder’s failure to furnish ASTI, upon request, with the information with respect to Selling Shareholder or any participating person that is the subject of the untrue statement or omission. ASTI shall not, without the consent of Selling Shareholder (which consent shall not be unreasonably withheld or delayed), effect any settlement of any pending or threatened proceeding or action in respect of which Selling Shareholder is a party and indemnity has been sought hereunder by Selling Shareholder, unless such settlement includes an unconditional release of Selling Shareholder from all liability for claims that are the subject matter of such proceeding or action. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Selling Shareholder, Selling Shareholder’s directors and officers, such agent or underwriter or such controlling person, and shall survive the transfer of such securities by Selling Shareholder.

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          (b) Selling Shareholder shall indemnify and hold harmless ASTI, each of its directors and officers, each person, if any, who controls ASTI within the meaning of the Securities Act, and each agent and any underwriter for ASTI (within the meaning of the Securities Act) against any losses, claims, damages or liabilities, joint or several, to which ASTI or any such director, officer, controlling person, agent or underwriter may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in a Registration Statement on the effective date thereof (including any prospectus filed under Rule 424 under the Securities Act or any amendments or supplements thereto) or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in such Registration Statement, preliminary or final prospectus, or amendments or supplements thereto, in reliance upon and in conformity with written information furnished by or on behalf of Selling Shareholder expressly for use in connection with such registration, preliminary prospectus, final prospectus or amendments or supplements thereto; and Selling Shareholder shall reimburse any legal or other expenses reasonably incurred by ASTI or any such director, officer, controlling person, agent or underwriter in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of Selling Shareholder (which consent shall not be unreasonably withheld or delayed), and provided further that the liability of Selling Shareholder hereunder shall be limited to the aggregate net proceeds received by Selling Shareholder in connection with any offering to which such registration under the Securities Act relates. Selling Shareholder shall not, without the consent of ASTI (which consent shall not be unreasonably withheld or delayed), effect any settlement of any pending or threatened proceeding or action in respect of which ASTI is a party and indemnity has been sought hereunder by ASTI, unless such settlement includes an unconditional release of ASTI from all liability for claims that are the subject matter of such proceeding or action.
          (c) If the indemnification provided for in this Section 8 from the indemnifying party (the “Indemnifying Party”) is unavailable to any person entitled to indemnification hereunder (the “Indemnified Party”) in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the Indemnifying Party, in lieu of indemnifying the Indemnified Party, shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified Party in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and the Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, the Indemnifying Party or the Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such

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party in connection with any investigation or proceeding. If the allocation provided in this paragraph (c) is not permitted by applicable law, the parties shall contribute based upon the relevant benefits received by ASTI from the offering of securities on the one hand and the net proceeds received by Selling Shareholder from the sale of securities on the other.
          The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
          (d) The Indemnified Party agrees to give prompt written notice to the Indemnifying Party after the receipt by the Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; provided, that the failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability that it may have to the Indemnified Party hereunder unless such failure is materially prejudicial to the Indemnifying Party. If notice of commencement of any such action is given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such Indemnified Party. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the reasonable fees and expenses of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action or (iii) the named parties to any such action (including any impleaded parties) have been advised by such counsel that either (A) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (B) there are one or more legal defenses available to it which are substantially different from or additional to those available to the Indemnifying Party. No Indemnifying Party shall be liable for any settlement entered into without its written consent, which consent shall not be unreasonably withheld or delayed.
          (e) The agreements contained in this Section 8 shall survive the transfer of the Registrable Securities by Selling Shareholder and sale of all the Registrable Securities pursuant to any Registration Statement and shall remain in full force and effect, regardless of any investigation made by or on behalf of Selling Shareholder, any of Selling Shareholder’s directors and officers, any person who participates in the offering of Registrable Securities, including underwriters (as defined in the Securities Act), and any person, if any, who controls Selling Shareholder or such participating person within the meaning of the Securities Act.
          9. Limitations on Registration of Other Securities; Representation. From and after the date of this Agreement, ASTI shall not, without the prior written consent of Norsk Hydro, enter into any agreement with any holder or prospective holder of any securities of ASTI giving such holder or prospective holder any registration rights the terms of which are more

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favorable taken as a whole than the registration rights granted to Selling Shareholder hereunder unless ASTI shall also give such rights to Selling Shareholder.
          10. No Inconsistent Agreements. ASTI shall not hereafter enter into any agreement with respect to its securities that is inconsistent in any material respects with the rights granted to Selling Shareholder in this Agreement.
          11. Selection of Managing Underwriters. In the event Selling Shareholder has requested an underwritten offering, the underwriter or underwriters shall be selected by Selling Shareholder and shall be approved by ASTI, which approval shall not be unreasonably withheld or delayed, ASTI and Selling Shareholder shall enter into an underwriting agreement with such underwriter or underwriters containing representations, warranties and indemnities in customary form, provided, (i) that all of the representations and warranties by, and the other agreements on the part of, ASTI to and for the benefit of such underwriters shall also be made to and for the benefit of Selling Shareholder, (ii) that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement shall be conditions precedent to the obligations of Selling Shareholder and (iii) that Selling Shareholder shall not be required to make any representations or warranties to or agreements with ASTI or the underwriters other than representations, warranties or agreements regarding Selling Shareholder and the Registrable Securities held by Selling Shareholder and any other representations required by law.
          12. Miscellaneous.
          (a) Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity.
          (b) Amendments and Waivers.
     (i) Any provision of this Agreement may be amended or waived only if such amendment or waiver is in writing and signed, in the case of an amendment, by ASTI and Selling Shareholder or, in the case of a waiver, by the party or parties against whom the waiver is to be effective.
     (ii) No failure or delay by any party hereto in exercising any right, power or privilege hereunder (other than a failure or delay beyond a period of time specified herein) shall operate as a waiver thereof and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
          (c) Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by telecopy, by a recognized overnight courier service or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12(c)):

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    (i)   if to ASTI:
 
            
        Ascent Solar Technologies, Inc.
        8120 Shaffer Parkway
        Littleton, Colorado 80127
        United States
 
      Facsimile:   +1 (303) 420-1551
 
      Attention:   Matthew B. Foster, President and Chief Executive Officer
 
            
        with a copy to:
 
            
        Holland & Knight LLP
        2300 U.S. Bancorp Tower
        111 S.W. Fifth Avenue
        Portland, Oregon 97204
        United States
 
      Facsimile:   +1 (503) 241-8014
 
      Attention:   Mark A. von Bergen
 
          David C. Wang
             
    (ii)   if to Norsk Hydro or Selling Shareholder:
 
            
        Norsk Hydro Produksjon AS
        Drammensveien 264
        N-0240 Oslo
        Norway
 
      Facsimile:   + 47 22 53 27 25
 
      Attention:   Richard G. Erskine
 
            
        with a copy to (which shall not constitute notice):
 
            
        Shearman & Sterling LLP
        Broadgate West
        9 Appold Street
        London EC2A 2AP
        United Kingdom
 
      Facsimile:   +44 (0)207 655-5265
 
      Attention:   George Karafotias
 
      Facsimile:   +44 (0)207 655-5216
 
      Attention:   Sean J. Skiffington
          (d) Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and, except as provided in Section 8 hereof, nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. This Agreement may not be assigned by any party hereto without the prior written consent of the other party hereto, except that the registration rights of Selling Shareholder with respect to any Registrable Securities shall be transferred to any affiliate of Selling

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Shareholder to which Registrable Securities have been transferred. All of the obligations of ASTI hereunder shall survive any such transfer.
          (e) Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle County. The parties hereto hereby (a) submit to the exclusive jurisdiction of any Delaware state or federal court, in each case sitting in the City of Wilmington, New Castle County, for the purpose of any action arising out of or relating to this Agreement brought by any party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the above-named courts.
          (f) Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby. Each of the parties hereto (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (ii) acknowledges that it and the other party hereto have been induced to enter into this Agreement and the transactions contemplated hereby, as applicable, by, among other things, the mutual waivers and certifications in this Section 12(f).
          (g) Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
          (h) Entire Agreement. This Agreement and the Securities Purchase Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof.
          (i) Cumulative Remedies. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party hereto shall not preclude or waive its right to use any or all other remedies. Such rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

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          (j) Construction. Each party hereto acknowledges and agrees it has had the opportunity to draft, review and edit the language of this Agreement and that no presumption for or against any party arising out of drafting all or any part of this Agreement will be applied in any dispute relating to, in connection with or involving this Agreement. Accordingly, the parties hereto hereby waive the benefit of any rule of law or any legal decision that would require, in cases of uncertainty, that the language of a contract should be interpreted most strongly against the party who drafted such language.
          (k) Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
         
  ASCENT SOLAR TECHNOLOGIES, INC.
 		  
  By:   /s/ Mohan S. Misra    
    Name:   Dr. Mohan S. Misra   
    Title:   Chairman   
 
  NORSK HYDRO PRODUKSJON AS
 		  
  By:   /s/ Richard G. Erskine    
    Name:   Richard G. Erskine   
    Title:   Authorized Representative   
 

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