-----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, K6Lo4a05p1bdrJMHArYMUXMAt4nul8OGIjvmzVoE3ChXVa6GvUa8bDUBBdEypT07 LFxjNNdbjPkrvguNpYvRgQ== 0000950142-03-000937.txt : 20030523 0000950142-03-000937.hdr.sgml : 20030523 20030523143019 ACCESSION NUMBER: 0000950142-03-000937 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030523 GROUP MEMBERS: FRANK H. PEARL GROUP MEMBERS: PERSEUS 2000 MANAGEMENT, L.L.C. GROUP MEMBERS: PERSEUS 2000, L.L.C. GROUP MEMBERS: PERSEUS EC, L.L.C. GROUP MEMBERS: PERSEUSPUR, L.L.C. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN SOLAR INC CENTRAL INDEX KEY: 0000947397 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 043242254 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-61503 FILM NUMBER: 03717980 BUSINESS ADDRESS: STREET 1: 259 CEDAR HILL STREET CITY: MARLBORO STATE: MA ZIP: 01752 BUSINESS PHONE: 508-357-2221 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PEARL FRANK H CENTRAL INDEX KEY: 0000927752 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2099 PENNSYLVANIA AVENUE NW STREET 2: SUITE 900 CITY: WASHINGTON STATE: DC ZIP: 20006 BUSINESS PHONE: 2024520101 MAIL ADDRESS: STREET 1: 2099 PENNSYLVANIA AVENUE NW STREET 2: SUITE 900 CITY: WASHINGTON STATE: DC ZIP: 20003 SC 13D 1 sc13d-evergreen.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (AMENDMENT NO. ___) EVERGREEN SOLAR, INC. (Name of Issuer) COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) 3033R 10 8 (CUSIP Number) KENNETH M. SOCHA, ESQ. PERSEUS 2000, L.L.C. 2099 PENNSYLVANIA AVENUE, SUITE 900 WASHINGTON, D.C. 20006 (212) 452-0101 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) with a copy to BRUCE A. GUTENPLAN, ESQ. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019-6064 MAY 15, 2003 (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 which is the subject to this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. *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 purposes 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.) Continued on following pages Page 1 of 15 pages Page 2 of 15 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus 2000, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,678,571 (1) NUMBER OF ------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,292,857 (2) OWNED BY ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 2,678,571 (1) PERSON ------------------------------------------------ WITH 10 SHARED DISPOSITIVE POWER 3,292,857 (2) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,971,428 (1)(2) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.35% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT - ------------------------ (1) Subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock. (2) Includes (a) 892,857 shares of Common Stock issuable upon conversion of 892,857 shares of Preferred Stock beneficially owned by Beacon Power Corporation ("Beacon") (subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock) and (b) 2,400,000 shares of Common Stock beneficially owned by Beacon that are issuable upon the exercise of a warrant issued to Beacon. Perseus 2000, L.L.C. is an affiliate of one of Beacon's stockholders, Perseus Capital, L.L.C., which is the beneficial owner of 16,014,994 shares of common stock of Beacon (as of March 31, 2003, representing approximately 33.8% of the common stock of Beacon). Furthermore, Mr. Philip J. Deutch and Mr. Kenneth M. Socha, members of the board of directors of Beacon, are Managing Director and Senior Managing Director, respectively, of Perseus, L.L.C. As a result, the Reporting Persons may be deemed to possess indirect beneficial ownership of the shares of Common Stock that are beneficially owned by Beacon. The Reporting Persons disclaim such beneficial ownership and are filing this Schedule 13D on behalf of themselves and not on behalf of any other entity. Page 3 of 15 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus 2000 Management, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,678,571 (1) NUMBER OF ------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,292,857 (2) OWNED BY ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 2,678,571 (1) PERSON ------------------------------------------------ WITH 10 SHARED DISPOSITIVE POWER 3,292,857 (2) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,971,428 (1)(2) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.35% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT - ------------------------ (1) Subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock. (2) Includes (a) 892,857 shares of Common Stock issuable upon conversion of 892,857 shares of Preferred Stock beneficially owned by Beacon (subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock) and (b) 2,400,000 shares of Common Stock beneficially owned by Beacon that are issuable upon the exercise of a warrant issued to Beacon. Perseus 2000, L.L.C. is an affiliate of one of Beacon's stockholders, Perseus Capital, L.L.C., which is the beneficial owner of 16,014,994 shares of common stock of Beacon (as of March 31, 2003, representing approximately 33.8% of the common stock of Beacon). Furthermore, Mr. Philip J. Deutch and Mr. Kenneth M. Socha, members of the board of directors of Beacon, are Managing Director and Senior Managing Director, respectively, of Perseus, L.L.C. As a result, the Reporting Persons may be deemed to possess indirect beneficial ownership of the shares of Common Stock that are beneficially owned by Beacon. The Reporting Persons disclaim such beneficial ownership and are filing this Schedule 13D on behalf of themselves and not on behalf of any other entity. Page 4 of 15 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseus EC, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,678,571 (1) NUMBER OF ------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,292,857 (2) OWNED BY ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 2,678,571 (1) PERSON ------------------------------------------------ WITH 10 SHARED DISPOSITIVE POWER 3,292,857 (2) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,971,428 (1)(2) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.35% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT - ------------------------ (1) Subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock. (2) Includes (a) 892,857 shares of Common Stock issuable upon conversion of 892,857 shares of Preferred Stock beneficially owned by Beacon (subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock) and (b) 2,400,000 shares of Common Stock beneficially owned by Beacon that are issuable upon the exercise of a warrant issued to Beacon. Perseus 2000, L.L.C. is an affiliate of one of Beacon's stockholders, Perseus Capital, L.L.C., which is the beneficial owner of 16,014,994 shares of common stock of Beacon (as of March 31, 2003, representing approximately 33.8% of the common stock of Beacon). Furthermore, Mr. Philip J. Deutch and Mr. Kenneth M. Socha, members of the board of directors of Beacon, are Managing Director and Senior Managing Director, respectively, of Perseus, L.L.C. As a result, the Reporting Persons may be deemed to possess indirect beneficial ownership of the shares of Common Stock that are beneficially owned by Beacon. The Reporting Persons disclaim such beneficial ownership and are filing this Schedule 13D on behalf of themselves and not on behalf of any other entity. Page 5 of 15 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Perseuspur, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,678,571 (1) NUMBER OF ------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,292,857 (2) OWNED BY ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 2,678,571 (1) PERSON ------------------------------------------------ WITH 10 SHARED DISPOSITIVE POWER 3,292,857 (2) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,971,428 (1)(2) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.35% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT - ------------------------ (1) Subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock. (2) Includes (a) 892,857 shares of Common Stock issuable upon conversion of 892,857 shares of Preferred Stock beneficially owned by Beacon (subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock) and (b) 2,400,000 shares of Common Stock beneficially owned by Beacon that are issuable upon the exercise of a warrant issued to Beacon. Perseus 2000, L.L.C. is an affiliate of one of Beacon's stockholders, Perseus Capital, L.L.C., which is the beneficial owner of 16,014,994 shares of common stock of Beacon (as of March 31, 2003, representing approximately 33.8% of the common stock of Beacon). Furthermore, Mr. Philip J. Deutch and Mr. Kenneth M. Socha, members of the board of directors of Beacon, are Managing Director and Senior Managing Director, respectively, of Perseus, L.L.C. As a result, the Reporting Persons may be deemed to possess indirect beneficial ownership of the shares of Common Stock that are beneficially owned by Beacon. The Reporting Persons disclaim such beneficial ownership and are filing this Schedule 13D on behalf of themselves and not on behalf of any other entity. Page 6 of 15 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Frank H. Pearl - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,678,571 (1) NUMBER OF ------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,292,857 (2) OWNED BY ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 2,678,571 (1) PERSON ------------------------------------------------ WITH 10 SHARED DISPOSITIVE POWER 3,292,857 (2) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,971,428 (1)(2) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.35% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT - ------------------------ (1) Subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock. (2) Includes (a) 892,857 shares of Common Stock issuable upon conversion of 892,857 shares of Preferred Stock beneficially owned by Beacon (subject to adjustment as set forth in the Certificate of Designations of the Issuer's Series A Convertible Preferred Stock) and (b) 2,400,000 shares of Common Stock beneficially owned by Beacon that are issuable upon the exercise of a warrant issued to Beacon. Perseus 2000, L.L.C. is an affiliate of one of Beacon's stockholders, Perseus Capital, L.L.C., which is the beneficial owner of 16,014,994 shares of common stock of Beacon (as of March 31, 2003, representing approximately 33.8% of the common stock of Beacon). Furthermore, Mr. Philip J. Deutch and Mr. Kenneth M. Socha, members of the board of directors of Beacon, are Managing Director and Senior Managing Director, respectively, of Perseus, L.L.C. As a result, the Reporting Persons may be deemed to possess indirect beneficial ownership of the shares of Common Stock that are beneficially owned by Beacon. The Reporting Persons disclaim such beneficial ownership and are filing this Schedule 13D on behalf of themselves and not on behalf of any other entity. Page 7 of 15 SCHEDULE 13D Item 1. SECURITY AND ISSUER. This Statement on Schedule 13D relates to the common stock, par value $.01 per share (the "Common Stock"), of Evergreen Solar, Inc. (the "Issuer"), having its principal office at 259 Cedar Hill Street, Marlboro, MA 01752. This Statement is being filed by the Reporting Persons (as defined below) to report the acquisition by Perseus 2000, L.L.C. of securities convertible into more than 5% of the Common Stock of the Issuer, and, as a result of such acquisition, each of the Reporting Persons may be deemed the beneficial owner of more than 5% of the Common Stock of the Issuer. Item 2. IDENTITY AND BACKGROUND. (a), (b), (c) and (f). This Statement on Schedule 13D is being filed on behalf of each of the following persons (each a "Reporting Person" and collectively, the "Reporting Persons"): (i) Perseus 2000, L.L.C., a Delaware limited liability company (the "Purchaser"); (ii) Perseus 2000 Management, L.L.C., a Delaware limited liability company ("Perseus Management"); (iii) Perseus EC, L.L.C., a Delaware limited liability company ("Perseus EC"); (iv) Perseuspur, L.L.C., a Delaware limited liability company ("Perseuspur"); and (v) Mr. Frank H. Pearl ("Mr. Pearl"). The Purchaser was formed to engage in the acquiring, holding and disposing of investments in various companies for investment purposes. Set forth on Annex A hereto and incorporated by reference in response to this Item 2 and elsewhere in this Schedule 13D as applicable is a list of executive officers of the Purchaser. Perseus Management is the managing member of the Purchaser and was formed to act as the manager of the Purchaser. Set forth on Annex B hereto and incorporated by reference in response to this Item 2 and elsewhere in this Schedule 13D as applicable is a list of executive officers of Perseus Management. Perseus EC is the managing member of Perseus Management and was formed in order to manage Perseus Management, to make investments through Perseus Management and to fulfill such other purposes as may be determined from time to time. Set forth on Annex C hereto and incorporated by reference in response to this Item 2 and elsewhere in this Schedule 13D as applicable is a list of executive officers of Perseus EC. Perseuspur is the majority owner of Perseus EC. Perseuspur was formed in order to engage in the acquiring, holding and disposing of investments in various companies for investment purposes. Set forth on Annex D hereto and incorporated by reference in response to this Item 2 and elsewhere in this Schedule 13D as applicable is a list of executive officers of Perseuspur. Mr. Pearl is the sole member of Perseuspur. Accordingly, pursuant to the regulations promulgated under Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Purchaser, Perseus Management, Perseus EC, Perseuspur and Mr. Pearl each may be deemed to be a beneficial owner of the Common Stock held for the account of the Purchaser. The address of the principal business and principal office of the Purchaser, Perseus Management, Perseus EC, Perseuspur and Mr. Pearl is 2099 Pennsylvania Avenue, Suite 9001, Washington, D.C. 20006-1813. The present principal occupation or employment of Mr. Pearl is as executive officer of Perseus, LLC and its related entities. Mr. Pearl is a United States citizen. Mr. Pearl has been included as a Reporting Person in this Statement solely because of his control of the Purchaser. (d) and (e). During the last five years, neither any Reporting Person nor, to the best knowledge of each Reporting Person, any individual otherwise identified in response to Item 2, has been convicted in a Page 8 of 15 SCHEDULE 13D criminal proceeding (excluding traffic violations and similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities law or finding any violations with respect to such laws. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The Purchaser entered into a Stock and Warrant Purchase Agreement, dated March 21, 2003 (the "Purchase Agreement," a copy of which is attached hereto as Exhibit 2 and incorporated by reference herein), with the Issuer and certain other investors whereby the Issuer agreed to sell (i) 26,227,668 shares of its Series A Convertible Preferred Stock, par value $0.01 per share (the "Preferred Stock") for an aggregate purchase price of $29,374,988.16 to certain investors, including the Purchaser, and (ii) and a warrant to purchase up to 2,400,000 shares of Common Stock at an exercise price equal to the purchase price of the Preferred Stock plus $2.25 per share (the "Warrant") to Beacon Power Corporation ("Beacon") for a price of $100,000. The sale of the Preferred Stock and the Warrant pursuant to the Purchase Agreement are referred to collectively as the "Financing." The Financing was subject to stockholder approval and certain other closing conditions. At the annual meeting of the stockholders of the Issuer on May 15, 2003, the stockholders voted in favor of the following four proposals: (1) to elect three directors to Class III of the Issuer's board of directors, each to serve for a term of three years and until their successors are elected and qualified, or until their earlier resignation or removal, (2) to approve the issuance of up to 43,200,000 shares of Preferred Stock, the issuance of the Warrant and the issuance of shares of Common Stock upon the conversion of the shares of Preferred Stock and the exercise of the Warrant pursuant to the Purchase Agreement, (3) to approve the amendment to Article Fourth of the Issuer's Third Amended and Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 30,000,000 to up to 95,000,000, to increase the number of authorized shares of preferred stock from 1,000,000 to up to 46,000,000, of which up to 45,000,000 shares shall be designated Series A Convertible Preferred Stock, and to increase the total number of authorized shares of the Issuer's capital stock from 31,000,000 to up to 141,000,000 and (4) to approve the increase in the number of shares available for grant under the Issuer's 2000 Stock Option and Incentive Plan from 1,650,000 to 7,650,000. Upon the receipt of shareholder approval and the satisfaction or waiver of the other closing conditions, the Issuer, the Purchaser and the other investors consummated the Financing. The Purchaser purchased 2,678,571 shares of Preferred Stock at a purchase price of $1.12 per share, for an aggregate purchase price of $2,999,999.52 (the "Financing Shares"). The source of the $2,999,999.52 purchase price for the Financing Shares was capital contributions from the members of the Purchaser. Item 4. PURPOSE OF TRANSACTION. Except as disclosed herein, the Reporting Persons have acquired the shares of Preferred Stock for investment purposes. A copy of the Certificate of the Powers, Designations, Preferences and Rights of the Series A Convertible Preferred Stock (the "Certificate of Designations") is attached hereto as Exhibit 3 and incorporated herein by reference and a copy of the Registration Rights Agreement (the "Registration Rights Agreement") is attached hereto as Exhibit 4 and incorporated herein by reference. Set forth below is a summary of the material terms of the Purchase Agreement, Certificate of Designations and the Registration Rights Agreement. The following summary is qualified in its entirety by reference to the Purchase Agreement, Certificate of Designations and the Registration Rights Agreement. TERMS OF THE PURCHASE AGREEMENT. BOARD REPRESENTATION. Pursuant to the terms of the Purchase Agreement, certain of the investors, including the Purchaser, each were granted the right to designate a representative to be nominated by the Issuer to serve as a director of the Company (collectively, the "Investor Designees"), as long as such Page 9 of 15 SCHEDULE 13D investor continues to beneficially own not less than 5% of the shares of Common Stock outstanding, including shares of Preferred Stock on an as-converted basis. The Investor Designee designated by the Purchaser is Philip J. Deutch. As a condition to closing of the Financing and subject to stockholder approval, Richard G. Chleboski and Mason Willrich resigned as directors of the Issuer and the Investor Designees were appointed as members of the Board of Directors of the Issuer. COMPENSATION COMMITTEE. Pursuant to the terms of the Purchase Agreement, the Purchaser and another investor were each granted the right to have the Investor Designee designated by such investor serve on the three-member compensation committee of the Board of Directors. The Purchaser and the other investor will each have this right for two years following the closing of the Financing on May 15, 2003, so long as the Purchaser or the other investor, as the case may be, continues to beneficially own in the aggregate not less than 5% of the shares of Common Stock outstanding, including shares of Preferred Stock on an as-converted basis. For two years following the closing of the Financing, the duties and powers of the compensation committee of the Board of Directors includes the sole authority to hire or fire the chief executive officer of the Issuer; provided, that the compensation committee in its sole discretion may elect to refer a decision on such matter to the Board of Directors. TERMS OF THE PREFERRED STOCK RANK. The Preferred Stock will rank senior to the Common Stock, the Issuer's shares of undesignated preferred stock and each other class or series of capital stock of the Issuer now or hereafter established that does not expressly rank on a parity with the Preferred Stock with respect to dividend rights and rights upon a change of control or liquidation. DIVIDEND RIGHTS. Shares of Preferred Stock will pay a compounding dividend of 10% per annum, to be paid quarterly, in cash, or, at the Issuer's election, to be added to the liquidation preference of the Preferred Stock on a quarterly basis, which would result in an increase in the number of shares of Common Stock issuable upon conversion of the Preferred Stock. The Issuer will be required to pay dividends on the Preferred Stock before any dividend is paid on any other class of the Issuer's equity securities. Additionally, each share of Preferred Stock will entitle the holder thereof to receive any and all dividends or distributions to be paid to holders of shares of Common Stock as if such share of Preferred Stock was converted into that number of shares of Common Stock into which it is convertible at such time. RIGHTS UPON LIQUIDATION. Upon the voluntary or involuntary liquidation of the Issuer under applicable bankruptcy or reorganization legislation, or the dissolution or winding up of the Issuer, the holders of shares of Preferred Stock will be paid in cash for each share of Preferred Stock held thereby, out of the Issuer's assets legally available for distribution to its stockholders, before any payment or distribution is made to the Common Stock or any other class or series of the Issuer's capital stock ranking junior to the Preferred Stock, an amount equal to the greater of (i) the sum of (x) the Accreted Value (as defined below) of such share of Preferred Stock as of such date, plus (y) all dividends accrued since the previous Compounding Date (as defined below), or (ii) the aggregate amount then payable with respect to the number of shares of Common Stock into which such share of Preferred Stock is convertible immediately prior to such liquidation event. If the assets available for distribution to the holders of shares of Preferred Stock are insufficient to permit payment in full to the holders thereof of the amount described above, then all of the assets available for distribution to holders of shares of Preferred Stock will be distributed among and paid to those holders ratably in proportion to the amounts that would be payable to those holders if such assets were sufficient to permit payment in full. "Accreted Value" means, as of any date, with respect to each share of Preferred Stock, $1.12, which is the purchase price per share paid by the investors for the Preferred Stock (subject to adjustment for any stock splits, stock dividends, combinations and other similar structural events), plus the amount of dividends that have accrued and compounded and have been added thereto to such date pursuant to the terms of the Certificate of Designations. "Compounding Date" means March 31, June 30, September 30 or December 31 of each year, each of which is a date upon which holders of shares of Preferred Stock are entitled to receive cumulative dividends quarterly in arrears. In the event of the merger, consolidation or sale of all or substantially all of the Issuer's assets or in the event of certain other change of control transactions, the holders of shares of Preferred Stock will be paid for each share of Preferred Stock held thereby, before any payment or distribution is made to the Page 10 of 15 SCHEDULE 13D Common Stock or any other class or series of the Issuer's capital stock ranking junior to the Preferred Stock, an amount equal to the greater of (i) the sum of the Accreted Value of such share of Preferred Stock as of such date, plus all dividends accrued since the previous Compounding Date, or (ii) the aggregate amount payable in the applicable change of control transaction with respect to the number of shares of Common Stock into which such share of Preferred Stock is convertible immediately prior to the consummation of the change of control transaction. If the assets available for distribution to the holders of shares of Preferred Stock are insufficient to permit payment in full to the holders thereof of the amount described above, then all of the assets available for distribution to holders of shares of Preferred Stock will be distributed among and paid to those holders ratably in proportion to the amounts that would be payable to those holders if such assets were sufficient to permit payment in full. Any payment due upon a change of control transaction will be paid in the form of consideration paid in such change of control transaction on the closing date of the transaction. After payment in full of the above described payments, the holders of Preferred Stock will not be entitled to any further participation in any distribution of the Issuer's assets and the Issuer's remaining assets will be distributed to the holders of the Issuer's other classes and series of capital stock. CONVERSION. The holders of shares of Preferred Stock are entitled to convert their shares into Common Stock at any time. The number of shares of Common Stock issuable upon the conversion of shares of Preferred Stock is equal to the product of (x) the number of shares of Preferred Stock to be converted and (y) the quotient obtained by dividing (i) the sum of the Accreted Value, plus all dividends accrued since the previous Compounding Date, by (ii) the conversion price per share of the Preferred Stock, which conversion price is $1.12, which is the purchase price per share paid by the investors for the Preferred Stock, subject to adjustment as described below. Initially, each share of Preferred Stock is convertible into one share of Common Stock. The applicable conversion price is subject to adjustment for stock splits, stock dividends, combinations, and other similar structural events. Additionally, the Preferred Stock contains anti-dilution protection subject to exceptions as set forth in the Certificate of Designations, with respect to the issuance of the Issuer's capital stock at a purchase price per share which is below the conversion price of the Preferred Stock then in effect, distributions by the Issuer to all holders of Common Stock or any similar dilutive actions for which the Issuer's Board of Directors has determined it would be equitable to reduce the conversion price. If, on any date after the second anniversary of the closing of the Financing, the average market price for a share of Common Stock for the trailing 180 consecutive trading days is at least $7.50 (subject to adjustment for stock splits, stock dividends, combinations, and other similar structural events), then the Issuer may elect, at its option, to convert all, but not less than all, of the outstanding shares of Preferred Stock into the number of shares of Common Stock as is equal to the product of (x) the number of shares of Preferred Stock to be converted and (y) the quotient obtained by dividing (i) the sum of the Accreted Value, plus all dividends accrued since the previous Compounding Date, by (ii) the then applicable conversion price. The conversion of shares of Preferred Stock into shares of Common Stock will result in substantial dilution to the interests of other holders of Common Stock. VOTING RIGHTS. Holders of Preferred Stock will have the right to vote on all matters that the holders of Common Stock vote on, voting together with the holders of Common Stock as a single class. Each share of Preferred Stock will be entitled to the number of votes as is equal to the number of shares of Common Stock into which it is convertible, without any adjustment for anti-dilution provisions applicable to the Preferred Stock other than adjustments for stock splits, stock dividends, combinations and other similar structural events, and subject to a maximum vote per share equal to 0.7417. The maximum vote per share was determined by dividing (i) $1.12, which is the purchase price per share paid by the investors for the Preferred Stock, by (ii) $1.51, which is the 5-trading day average closing price of Common Stock ending on the trading day prior to the closing of the Financing. For so long as 5,350,000 shares of Preferred Stock (subject to adjustment for stock splits, stock dividends, combinations and other similar structural events) remain outstanding, the approval of holders of Page 11 of 15 SCHEDULE 13D 66 2/3% of the outstanding Preferred Stock, voting as a separate class, will be required for the following events: (1) any authorization or issuance of any shares of preferred stock ranking senior to or on a parity with the Preferred Stock; (2) any increase or decrease in the total number of authorized shares of Preferred Stock; (3) any amendment or modification of the Issuer's certificate of incorporation (including the Certificate of Designations) or the Issuer's bylaws that would adversely affect the rights, preferences, powers (including, without limitation, voting powers) and privileges of the Preferred Stock; (4) any incurrence of any form of indebtedness in excess of $1,000,000 individually or $3,000,000 in the aggregate, except for the Issuer's establishment of a working capital line of credit of up to $5,000,000; (5) the redemption of any shares of the Issuer's capital stock which do not expressly rank on a parity with or senior to the Preferred Stock, other than the repurchase of unvested options or restricted stock from the Issuer's employees, officers, directors or consultants upon termination of service; (6) any declaration, distribution or payments of any dividend or other distribution on any shares of stock which does not expressly rank on a parity with or senior to the Preferred Stock; and (7) any modification of any of the above voting rights. PREEMPTIVE RIGHTS. For so long as 5,350,000 shares of Preferred Stock (subject to adjustment for stock splits, stock dividends, combinations and other similar structural events) remain outstanding, the Purchaser and the other investors will have preemptive rights for any private placement of equity by the Issuer. These preemptive rights will not apply with respect to: (1) the exercise of any options to purchase shares of Common Stock outstanding as of the closing of the Financing; (2) the issuance or exercise of any options approved by the Issuer's board of directors that are issued after the closing of the Financing to the Issuer's employees, consultants or strategic partners; (3) the issuance of any shares of the Issuer's capital stock issued in any acquisition or merger transaction approved by the Issuer's board of directors; (4) any merger, consolidation or other business combination (other than a change of control transaction) or capital reorganization or reclassification; and (5) shares of the Issuer's capital stock issued in a registered public offering. REGISTRATION RIGHTS AGREEMENT The Issuer entered into the Registration Rights Agreement with the Purchaser and the other investors at the closing of the Financing, pursuant to which the Issuer agreed to file a registration statement with the SEC covering the resale of shares of Common Stock issuable upon the conversion of the Preferred Stock not later than thirty (30) days after the closing of the Financing. The Issuer has agreed to use its reasonable best efforts to have the registration statement declared effective as soon as practicable thereafter, but not later than 75 days after the filing date of the registration statement and to keep the registration statement effective at all times until the earlier of (1) the second anniversary of its effective date, (2) the date on which the Purchaser and the other investors may sell all of the Common Stock covered by the registration statement without restriction pursuant to Rule 144(k) promulgated under the Securities Act of 1933, and (3) the date on which all shares of Common Stock covered by the registration statement have been sold. At any time the resale registration statement described in the preceding paragraph is not effective, any investor or group of investors holding at least 10% of the securities held by the investors in the aggregate that are subject to the registration rights agreement may require the Issuer to use its best efforts to register the shares of Common Stock issuable upon conversion of the Preferred Stock under the Securities Act, as long as the reasonably anticipated aggregate price to the public of the securities to be included in the offering is more than $4,000,000. The Issuer is obligated to effect no more than three such demand registrations for the investors. At any time the resale registration statement is not effective, any party to the registration rights agreement may request that the Issuer register all or a portion of the securities held by it under the Securities Act on Form S-3, provided that the Issuer is entitled to use Form S-3 and that the reasonably anticipated aggregate price to the public of the securities requested for inclusion in such S-3 registration statement shall equal or exceed $1,000,000. In the event that any registration so requested is made in connection with an underwritten public offering, the underwriters have the right, subject to certain conditions, to limit the number of shares included in the registration. Page 12 of 15 SCHEDULE 13D Additionally, at any time the resale registration statement is not effective, and the Issuer proposes to file any other registration statement, the investors who are parties to the Registration Rights Agreement will have the right to receive notice of and to join any proposed registration. If a proposed registration is made pursuant to an underwritten offering, the Issuer will not be required to include any securities in the offering unless the investor or investors requesting registration accept the terms of the offering as agreed upon between the Issuer, any other stockholders who are registering shares under the registration statement and the underwriters, and the underwriters have the right, subject to certain conditions, to limit the number of shares included in the registration. In general, all fees, costs and expenses of a registration will be borne by the Issuer. The Issuer has agreed to indemnify the holders of registration rights against, and provide contribution with respect to, certain liabilities relating to any registration in which any shares of these holders are sold under the Securities Act. ADDITIONAL DISCLOSURE The Reporting Persons may from time to time acquire additional shares of Preferred Stock, Common Stock or other securities of the Issuer in the open market or in privately negotiated transactions, subject to availability at prices deemed favorable, the Issuer's business or financial condition and other factors and conditions the Reporting Persons deem appropriate. Alternatively, the Reporting Persons may sell all or a portion of the Preferred Stock, Common Stock or other securities of the Issuer in privately negotiated transactions, in the open market pursuant to the exercise of certain registration rights granted pursuant to the Registration Rights Agreement as described above or through an exemption from registration in compliance with applicable law, in each case subject to the factors and conditions referred to above and to the terms of the Purchase Agreement, Certificate of Designations and the Registration Rights Agreement, as the case may be. In addition, the Reporting Persons may formulate other purposes, plans or proposals regarding the Issuer or any of its securities to the extent deemed advisable in light of general investment and trading policies, market conditions or other factors. Except as otherwise set forth in this Schedule 13D, no Reporting Person or any individual otherwise identified in Item 2 has any present plans or proposals which would relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to any of those enumerated above. Item 5. INTEREST IN SECURITIES OF THE ISSUER. (a) As described above, on May 15, 2003, the Issuer sold to the Purchaser, and the Purchaser purchased from the Issuer, 2,678,571 shares of Preferred Stock. Also on May 15, 2003, the Issuer sold to Beacon, and Beacon purchased from the Issuer, 892,857 shares of Preferred Stock and a warrant to purchase 2,400,000 shares of Common Stock. Perseus 2000, L.L.C. is an affiliate of one of Beacon's stockholders, Perseus Capital, L.L.C., which is the beneficial owner of 16,014,994 shares of common stock of Beacon (as of March 31, 2003, representing approximately 33.8% of the common stock of Beacon). Furthermore, Mr. Philip J. Deutch and Mr. Kenneth M. Socha, members of the board of directors of Beacon, are Managing Director and Senior Managing Director, respectively, of Perseus, L.L.C. As a result, the Reporting Persons may be deemed to possess indirect beneficial ownership of the shares of Common Stock that are beneficially owned by Beacon. The Reporting Persons disclaim such beneficial ownership and are filing this Schedule 13D on behalf of themselves and not on behalf of any other entity. Page 13 of 15 SCHEDULE 13D Shares of Preferred Stock are convertible into shares of Common Stock at any time, and the Warrant is exercisable for Common Stock at any time. Accordingly, as of the date hereof and giving effect to the conversion of the Preferred Stock and the exercise of the Warrant, each of the Reporting Persons may be deemed to own 5,971,428 shares of Common Stock, including 3,292,857 shares of Common Stock beneficially owned by Beacon (however, the Reporting Persons disclaim beneficial ownership of the shares of Common Stock beneficially owned by Beacon). Each of the Reporting Persons may be deemed to beneficially own 34.35% of the Common Stock of the Issuer (including the shares of Common Stock beneficially owned by Beacon that the Reporting Persons disclaim beneficial ownership of), which percentage is based upon 11,411,646 shares of Common Stock outstanding as of May 15, 2003, as adjusted pursuant to Rule 13d-3(d)(1) promulgated under the Act. (b) By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, each of the Reporting Persons may be deemed to have sole power to vote and to dispose or to direct the disposition of the 2,678,571 shares of Common Stock beneficially owned by the Purchaser. By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Statement on Schedule 13D, each of the Reporting Persons may be deemed to have shared power to vote and to dispose or to direct the disposition of the 3,292,857 shares of Common Stock beneficially owned by Beacon (however, the Reporting Persons disclaim beneficial ownership of the shares of Common Stock beneficially owned by Beacon). (c) Other than the transactions described herein, no Reporting Person nor, to the best knowledge of each Reporting Person, any person identified in Item 2 hereof, beneficially owns any shares of Common Stock or has effected any transaction in shares of Common Stock during the preceding 60 days. (d) Each of the Reporting Persons affirms that no person other than the Reporting Persons has the right to participate in the receipt of dividends from, or proceeds from the sale of, the Preferred Stock held for the account of the Purchaser. (e) Not applicable. Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. As described in Items 3 and 4 above, on March 21, 2003, the Issuer, the Purchasers and certain other investors entered into the Purchase Agreement pursuant to which the investors agreed to purchase an aggregate of 26,227,668 shares of Preferred Stock, having the rights, privileges and preferences set forth in the Certificate of Designations. The Issuer, the Purchaser and the other investors entered into the Registration Rights Agreement on May 15, 2003, pursuant to which the Issuer has an obligation to prepare and file with the Commission within 30 days following May 15, 2003 a registration statement on Form S-3 or successor form registering the shares of Common Stock issuable upon the conversion of the Preferred Stock and the exercise of the Warrant (subject to certain limitations). The Issuer is required to use its reasonable best efforts to cause such registration statement to become effective no later than 75 days after the filing date of such registration statement. Additionally, the Purchaser and the other investors have certain demand registration rights, "piggy-back" registration rights and Form S-3 registration rights that are described more fully in the Registration Rights Agreement. The foregoing summaries of the Purchase Agreement, the Certificate of Designations and the Registration Rights Agreement are qualified in their entirety by reference to Exhibits 2, 3 and 4. Item 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1: Joint Filing Agreement, dated May 23, 2003, among the Purchaser, Perseus Management, Perseus EC, Perseuspur and Mr. Pearl. Exhibit 2*: Stock and Warrant Purchase Agreement, dated March 21, 2003, among Evergreen Solar, Inc. and the purchasers named therein. * Set forth as Exhibit 10.1 on Evergreen Solar Inc.'s Form 8-K filed on March 21, 2003 and incorporated by reference herein. Page 14 of 15 SCHEDULE 13D Exhibit 3: Certificate of the Powers, Designations, Preferences and Rights of the Series A Convertible Preferred Stock, dated May 15, 2003. Exhibit 4: Registration Rights Agreement, dated May 15, 2003, among Evergreen Solar, Inc. and the parties named therein. Page 15 of 15 SCHEDULE 13D SIGNATURE After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: May 23, 2003 PERSEUS 2000, L.L.C. By: Perseus 2000 Management, L.L.C. Managing Member By: /s/ Rodd Macklin --------------------------------------- Name: Title: PERSEUS 2000 MANAGEMENT, L.L.C. By: Perseus EC, L.L.C. Managing Member By: /s/ Rodd Macklin --------------------------------------- Name: Title: PERSEUS EC, L.L.C. By: /s/ Rodd Macklin --------------------------------------- Name: Title: PERSEUSPUR, L.L.C. By: /s/ Rodd Macklin --------------------------------------- Name: Title: FRANK H. PEARL By: /s/ Frank H. Pearl --------------------------------------- EX-99 3 ex1_sc13d-evergreen.txt EXHIBIT 1 EXHIBIT 1 --------- JOINT FILING AGREEMENT Each of the undersigned hereby acknowledges and agrees, in compliance with the provisions of Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, that the Schedule 13D to which this Agreement is attached as an Exhibit (the "Schedule 13D"), and any amendments thereto, will be filed with the Securities and Exchange Commission jointly on behalf of the undersigned. This Agreement may be executed in one or more counterparts. Dated: May 23, 2003 PERSEUS 2000, L.L.C. By: Perseus 2000 Management, L.L.C. Managing Member By: /s/ Rodd Macklin --------------------------------------- Name: Title: PERSEUS 2000 MANAGEMENT, L.L.C. By: Perseus EC, L.L.C. Managing Member By: /s/ Rodd Macklin --------------------------------------- Name: Title: PERSEUS EC, L.L.C. By: /s/ Rodd Macklin --------------------------------------- Name: Title: PERSEUSPUR, L.L.C. By: /s/ Rodd Macklin --------------------------------------- Name: Title: FRANK H. PEARL By: /s/ Frank H. Pearl --------------------------------------- ANNEX A EXECUTIVE OFFICERS OF PERSEUS 2000, L.L.C.
NAME/TITLE/CITIZENSHIP PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---------------------- -------------------- ---------------- Frank H. Pearl Executive officer of Perseus, 2099 Pennsylvania Avenue Chairman, President and Chief LLC and its related entities Suite 900 Executive Officer Washington, D.C. 20006-1813 United States Kenneth M. Socha Executive officer of Perseus, 2099 Pennsylvania Avenue Executive Vice President LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813 Rodd Macklin Executive officer of Perseus, 2099 Pennsylvania Avenue Secretary and Treasurer LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813
Except as otherwise disclosed elsewhere in this Schedule 13D, to the best of the Reporting Persons' knowledge: (a) None of the above persons hold any Common Stock or securities derivative thereof. (b) None of the above persons has any contracts, arrangements, understandings or relationships with respect to the Common Stock or securities derivative thereof. ANNEX B EXECUTIVE OFFICERS OF PERSEUS 2000 MANAGEMENT, LLC
NAME/TITLE/CITIZENSHIP PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---------------------- --------------------- ---------------- Frank H. Pearl Executive officer of Perseus, 2099 Pennsylvania Avenue Chairman, President and Chief LLC and its related entities Suite 900 Executive Officer Washington, D.C. 20006-1813 United States Kenneth M. Socha Executive officer of Perseus, 2099 Pennsylvania Avenue Executive Vice President LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813 Rodd Macklin Executive officer of Perseus, 2099 Pennsylvania Avenue Secretary and Treasurer LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813
Except as otherwise disclosed elsewhere in this Schedule 13D, to the best of the Reporting Persons' knowledge: (a) None of the above persons hold any Common Stock or securities derivative thereof. (b) None of the above persons has any contracts, arrangements, understandings or relationships with respect to the Common Stock or securities derivative thereof. ANNEX C EXECUTIVE OFFICERS OF PERSEUS EC, L.L.C.
NAME/TITLE/CITIZENSHIP PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---------------------- --------------------- ---------------- Frank H. Pearl Executive officer of Perseus, 2099 Pennsylvania Avenue Chairman, President and Chief LLC and its related entities Suite 900 Executive Officer Washington, D.C. 20006-1813 United States Kenneth M. Socha Executive officer of Perseus, 2099 Pennsylvania Avenue Executive Vice President LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813 Rodd Macklin Executive officer of Perseus, 2099 Pennsylvania Avenue Secretary and Treasurer LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813
Except as otherwise disclosed elsewhere in this Schedule 13D, to the best of the Reporting Persons' knowledge: (a) None of the above persons hold any Common Stock or securities derivative thereof. (b) None of the above persons has any contracts, arrangements, understandings or relationships with respect to the Common Stock or securities derivative thereof. ANNEX D EXECUTIVE OFFICERS OF PERSEUSPUR, L.L.C.
NAME/TITLE/CITIZENSHIP PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---------------------- --------------------- ---------------- Frank H. Pearl Executive officer of Perseus, 2099 Pennsylvania Avenue Chairman, President and Chief LLC and its related entities Suite 900 Executive Officer Washington, D.C. 20006-1813 United States Kenneth M. Socha Executive officer of Perseus, 2099 Pennsylvania Avenue Executive Vice President LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813 Rodd Macklin Executive officer of Perseus, 2099 Pennsylvania Avenue Secretary and Treasurer LLC and its related entities Suite 900 United States Washington, D.C. 20006-1813
Except as otherwise disclosed elsewhere in this Schedule 13D, to the best of the Reporting Persons' knowledge: (a) None of the above persons hold any Common Stock or securities derivative thereof. (b) None of the above persons has any contracts, arrangements, understandings or relationships with respect to the Common Stock or securities derivative thereof. EX-99 4 ex3_sc13d-evergreen.txt EXHIBIT 3 EXHIBIT 3 --------- EVERGREEN SOLAR, INC. CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND RIGHTS OF THE SERIES A CONVERTIBLE PREFERRED STOCK, PAR VALUE $0.01 PER SHARE Pursuant to Section 151 of the Delaware General Corporation Law Evergreen Solar, Inc., a Delaware corporation (the "CORPORATION"), does hereby certify that the following resolution, creating a series of 26,227,668 shares of Preferred Stock, was duly adopted by the Board of Directors on May 15, 2003. RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors in accordance with the provisions of the Certificate of Incorporation of the Corporation, there shall be created a series of Preferred Stock, $0.01 par value, which series shall have the following designations and number thereof, powers, preferences, rights, qualifications, limitations and restrictions: 1. DESIGNATION AND NUMBER OF SHARES. There shall be hereby created and established a series of Preferred Stock designated as "Series A Convertible Preferred Stock" (the "SERIES A PREFERRED STOCK"). The authorized number of shares of Series A Preferred Stock shall be 26,227,668. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Section 10 below. 2. RANK. The Series A Preferred Stock shall with respect to (i) the payment of the Liquidation Payment in the event of Liquidation, (ii) the payment of the Sale Payment in the event of a Change of Control and (iii) the payment of dividends rank senior to (x) all classes of common stock of the Corporation (including, without limitation, the Common Stock, par value $0.01 per share, of the Corporation (the "COMMON STOCK")), (y) all classes of preferred stock of the Corporation and (z) each other class or series of Capital Stock of the Corporation hereafter created which does not expressly rank PARI PASSU with or senior to the Series A Preferred Stock (clauses (x), (y) and (z), together, the "JUNIOR STOCK"). 3. DIVIDENDS. (a) DIVIDEND RATE. The holders of shares of Series A Preferred Stock shall receive cumulative dividends in cash (except as set forth below) quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each such date, the "COMPOUNDING DATE") at an annual rate equal to ten percent (10%) of the Accreted Value per share of the Series A Preferred Stock, calculated on the basis of a 2 360-day year, consisting of twelve (12) thirty (30)-day months, which shall accrue on a daily basis from the date of issuance thereof, whether or not declared by the Board of Directors. Dividends payable on shares of Series A Preferred Stock shall be cumulative; therefore, if a full or partial dividend on the shares of Series A Preferred Stock with respect to any quarter is not declared by the Board of Directors, the Corporation shall remain obligated to pay a full dividend with respect to that quarter; PROVIDED, HOWEVER, that any unpaid dividends shall not bear interest. At the election of the Corporation, any accrued and unpaid dividends may be paid in cash at any time. At the election of the Corporation, each dividend on the Series A Preferred Stock may be added to the Accreted Value. (b) OTHER DIVIDENDS. The Corporation shall not declare or pay any dividends on, or make any other distributions with respect to, any other shares of Capital Stock unless and until all accrued dividends on the Series A Preferred Stock have been paid in full. (c) COMMON STOCK DIVIDENDS. If the Corporation declares and pays any dividends on the Common Stock, then, in that event, holders of shares of Series A Preferred Stock shall be entitled to share in such dividends on a pro rata basis, as if their shares have been converted into shares of Common Stock pursuant to Section 7(a) below immediately prior to the record date for determining the stockholders of the Corporation eligible to receive such dividends. 4. LIQUIDATION AND CHANGE OF CONTROL. (a) PRIORITY PAYMENT. Upon the occurrence of a Liquidation, the holders of shares of Series A Preferred Stock shall be paid in cash for each share of Series A Preferred Stock held thereby, out of, but only to the extent of, the assets of the Corporation legally available for distribution to its stockholders, before any payment or distribution is made to any Junior Stock, an amount equal to the greater of (i) the sum of (x) the Accreted Value of such share of Series A Preferred Stock on the date of such Liquidation PLUS (y) all dividends accrued at the rate and in the manner specified in Section 3(a) since the previous Compounding Date to the date of Liquidation or (ii) the aggregate amount payable in such Liquidation with respect to the number of shares of Common Stock into which such share of Series A Preferred Stock is convertible immediately prior to such Liquidation (the greater of clause (i) or clause (ii), the "LIQUIDATION PAYMENT"). If the assets of the Corporation available for distribution to the holders of shares of Series A Preferred Stock shall be insufficient to permit payment in full to such holders of the aggregate Liquidation Payment, then all of the assets available for distribution to holders of shares of Series A Preferred Stock shall be distributed among and paid to such holders ratably in proportion to the amounts that would be payable to such holders if such assets were sufficient to permit payment in full. (b) CHANGE OF CONTROL. In the event of a Change of Control, the holders of shares of Series A Preferred Stock shall be paid for each share of Series A Preferred Stock held thereby, before any payment or distribution is made to any Junior Stock, an amount equal to the greater of (i) the sum of (x) the Accreted Value of such 3 share of Series A Preferred Stock on the closing date of such Change of Control PLUS (y) all dividends accrued at the rate and in the manner specified in Section 3(a) since the previous Compounding Date to the closing date of such Change of Control or (ii) the aggregate amount payable in such Change of Control with respect to the number of shares of Common Stock into which such share of Series A Preferred Stock is convertible immediately prior to such Change of Control (the greater of clause (i) or clause (ii), the "SALE PAYMENT"). If the assets of the Corporation available for distribution to the holders of shares of Series A Preferred Stock shall be insufficient to permit payment in full to such holders of the aggregate Sale Payment, then all of the assets available for distribution to holders of shares of Series A Preferred Stock shall be distributed among and paid to such holders ratably in proportion to the amounts that would be payable to such holders if such assets were sufficient to permit payment in full. Such amount shall be paid in the form of consideration paid in such Change of Control on the closing date of such Change of Control. (c) NO ADDITIONAL PAYMENT. After the holders of all shares of Series A Preferred Stock shall have been paid in full the amounts to which they are entitled in Section 4(a) or Section 4(b), as the case may be, the holders of shares of Series A Preferred Stock shall not be entitled to any further participation in any distribution of assets of the Corporation and the remaining assets of the Corporation shall be distributed to the holders of Junior Stock. (d) VALUE OF SECURITIES. Any securities of the surviving Person to be delivered to the holders of shares of Series A Preferred Stock pursuant to Section 4(b) and Section 4(c) shall be valued as follows: (i) With respect to securities that do not constitute "restricted securities," as such term is defined in Rule 144(a)(3) promulgated under the Securities Act, the value shall be deemed to be the Market Price of such securities as of three (3) days prior to the date of payment. (ii) With respect to securities that constitute "restricted securities," as such term is defined in Rule 144(a)(3) promulgated under the Securities Act, and that are of the same class or series as securities that are publicly traded, the value shall be deemed to be the Market Price of such securities as of three (3) days prior to the date of payment, as adjusted to make an appropriate discount from such value to reflect the appropriate fair market value thereof, giving appropriate weight, if any, to such restriction as mutually determined by the Board of Directors and the holders of a majority of the shares of Series A Preferred Stock, or if the Board of Directors and the holders of a majority of the shares of Series A Preferred Stock shall fail to agree, at the Corporation's expense by an appraiser chosen by the Board of Directors and reasonably acceptable to the holders of a majority of the shares of Series A Preferred Stock. (iii) With respect to securities that constitute "restricted securities," as such term is defined in Rule 144(a)(3) promulgated under the Securities Act, for which there is no active public market the value shall be deemed to be the Market Price of such securities as of three (3) days prior to the date of payment, as 4 adjusted to make an appropriate discount from such value to reflect the appropriate fair market value thereof, giving appropriate weight, if any, to such restriction as mutually determined by the Board of Directors and the holders of a majority of the shares of Series A Preferred Stock, or if the Board of Directors and the holders of a majority of the shares of Series A Preferred Stock shall fail to agree, at the Corporation's expense by an appraiser chosen by the Board of Directors and reasonably acceptable to the holders of a majority of the shares of Series A Preferred Stock. (e) NOTICE. Written notice of a Liquidation or a Change of Control stating a payment or payments and the place where such payment or payments shall be payable, shall be delivered in person, mailed by certified mail, return receipt requested, mailed by overnight mail or sent by telecopier, not less than ten (10) days prior to the earliest payment date stated therein, to the holders of record of shares of Series A Preferred Stock, such notice to be addressed to each such holder at its address as shown by the records of the Corporation. 5. VOTING RIGHTS; ELECTION OF DIRECTORS. (a) GENERAL. In addition to the voting rights to which the holders of Series A Preferred Stock are entitled under or granted by Delaware law, the holders of Series A Preferred Stock shall be entitled to vote, in person or by proxy, at a special or annual meeting of stockholders on all matters entitled to be voted on by holders of shares of Common Stock voting together as a single class with the Common Stock (and with other shares entitled to vote thereon, if any). With respect to any such vote, each share of Series A Preferred Stock shall entitle the holder thereof to cast that number of votes as is equal to the number of votes that such holder would be entitled to cast had such holder converted its shares of Series A Preferred Stock into shares of Common Stock pursuant to Section 7(a) below on the record date for determining the stockholders of the Corporation eligible to vote on any such matters; PROVIDED, that the number of votes to which any such holder of Series A Preferred Stock is entitled, in its capacity as such, shall at no time exceed (i) the aggregate number of shares of Common Stock that such holder would be entitled to receive had such holder converted its shares of Series A Preferred Stock into shares of Common Stock pursuant to Section 7(a) below on the record date for determining the stockholders of the Corporation eligible to vote on any such matters, without giving effect to any adjustments to the Conversion Price occurring after the Closing Date other than any such adjustments resulting from the events described in Section 7(e)(i), MULTIPLIED BY (ii) the Vote Per Share, or such greater number of votes that is then permitted by the rules of The Nasdaq Stock Market, Inc. (or, if the Corporation's Common Stock is quoted or listed on a different exchange, such greater number of votes that is then permitted by the rules of such exchange). (b) MAJOR ACTIONS. Notwithstanding anything to the contrary set forth in the Certificate of Incorporation, the By-laws of the Corporation or otherwise, so long as 5,350,000 shares (subject to adjustment for the events described in Section 7(e)(i)) of Series A Preferred Stock remain outstanding, neither the Corporation, the Board of Directors nor the stockholders of the Corporation shall approve, consent to or 5 ratify any of the following options without the affirmative vote or written consent of the holders of sixty-six and two-thirds percent (66-2/3%) of the outstanding shares of Series A Preferred Stock, voting as a separate class: (i) any amendment, modification or restatement of the Certificate of Incorporation, including the Certificate of Designations of the Series A Preferred Stock, or the By-laws of the Corporation that would adversely affect the rights, preferences, powers (including, without limitation, voting powers) and privileges of the Series A Preferred Stock; (ii) the issuance, reservation for issuance or authorization of any Capital Stock of the Corporation or any right or option to acquire shares of Capital Stock ranking PARI PASSU with or senior to the shares of Series A Preferred Stock or any increase or decrease in the authorized number of shares of Series A Preferred Stock; (iii) the redemption of any Junior Stock other than the repurchase of unvested stock options or restricted stock from employees, officers, directors, or consultants of the Corporation upon termination of service; (iv) any declaration, distribution or payment of any dividend or other distribution to any Junior Stock; (v) the incurrence, assumption or guarantee by the Corporation or any Subsidiary of the Corporation of any form of Indebtedness in excess of $1,000,000 individually or $3,000,000 in the aggregate, other than a working capital line of credit in an aggregate amount not to exceed $5,000,000; and (vi) any amendment to this Section 5(c). 6. PREEMPTIVE RIGHTS. (a) So long as 5,350,000 shares (subject to adjustment for the events described in Section 7(e)(i)) of Series A Preferred Stock remain outstanding, the Corporation shall not issue or sell any shares of Capital Stock (the securities issued in such transactions being referred to as the "NEWLY ISSUED SECURITIES"), unless prior to the issuance or sale of such Newly Issued Securities each holder of Series A Preferred Stock shall have been given the opportunity (such opportunity being herein referred to as the "PREEMPTIVE RIGHT") to purchase (on the same terms as such Newly Issued Securities are proposed to be sold) the same proportion of such Newly Issued Securities being issued or offered for sale by the Corporation as (x) the number of shares of Common Stock (calculated solely on account of outstanding Series A Preferred Stock on an as converted basis) held by such holder on the day preceding the date of the Preemptive Notice (as defined below) bears to (y) the total number of shares of Common Stock (calculated on a fully diluted basis with respect to the Series A Preferred Stock and any other Common Stock Equivalents which are "in the money") outstanding on the day preceding the date of the Preemptive Notice. Each holder of Series A Preferred Stock shall have the right to 6 assign, in whole or in part, its Preemptive Right to purchase its pro rata share of such Newly Issued Securities to any one or more of its Affiliates. (b) At least thirty (30) days prior to the issuance by the Corporation of any Newly Issued Securities, the Corporation shall give written notice thereof (the "PREEMPTIVE NOTICE") to each holder of Series A Preferred Stock. The Preemptive Notice shall specify (i) the name and address of the bona fide investor to whom the Corporation proposes to issue or sell Newly Issued Securities, (ii) the total amount of capital to be raised by the Corporation pursuant to the issuance or sale of Newly Issued Securities, (iii) the number of such Newly Issued Securities proposed to be issued or sold, (iv) the price and other terms of their proposed issuance or sale, (v) the number of such Newly Issued Securities which such holder is entitled to purchase (determined as provided in subsection (a) above), and (vi) the period during which such holder may elect to purchase such Newly Issued Securities, which period shall extend for at least thirty (30) days following the receipt by such holder of the Preemptive Notice (the "PREEMPTIVE ACCEPTANCE PERIOD"). Each holder of Series A Preferred Stock who desires to purchase Newly Issued Securities shall notify the Corporation within the Preemptive Acceptance Period of the number of Newly Issued Securities such holder wishes to purchase, as well as the number, if any, of additional Newly Issued Securities such holder would be willing to purchase in the event that all of the Newly Issued Securities subject to the Preemptive Right are not subscribed for by the other holders of Series A Preferred Stock. (c) After the conclusion of the Preemptive Acceptance Period, any Newly Issued Securities which none of the holders elect to purchase in accordance with the provisions of this Section 6 may be sold by the Corporation, within a period of four (4) months after the expiration of the Preemptive Acceptance Period, to any other Person or Persons at not less than the price and upon other terms and conditions not less favorable to the Corporation than those set forth in the Preemptive Notice. (d) The term "Newly Issued Securities" shall not include: (i) Shares of Common Stock issued upon the conversion of shares of Series A Preferred Stock; (ii) Shares of Common Stock issued upon the exercise of the Beacon Warrant; (iii) Shares of Common Stock issued or issuable upon the exercise of any options that were outstanding under any of the Stock Option Plans as of the Closing Date; (iv) Options to purchase shares of Common Stock issued to employees, consultants or strategic partners of the Corporation and approved by the Board of Directors after the Closing Date; 7 (v) Shares of Common Stock issued or issuable upon the exercise of any options described in clause (iv) above; (vi) Shares of Common Stock issued or issuable pursuant to Section 7(h) hereof; (vii) Shares of Capital Stock issued in connection with acquisitions, mergers or business combination transactions approved by the Board of Directors; and (viii) Shares of Capital Stock issued by the Corporation in a public offering pursuant to a registration statement filed under the Securities Act. 7. CONVERSION AND REDEMPTION. (a) CONVERSION AT OPTION OF HOLDER. Any holder of shares of Series A Preferred Stock shall have the right, at its option, at any time and from time to time, to convert, subject to the terms and provisions of this Section 7, any or all of such holder's shares of Series A Preferred Stock into such number of fully paid and non-assessable shares of Common Stock as is equal to the product of (i) the number of shares of Series A Preferred Stock being so converted MULTIPLIED BY (ii) the quotient of (x) the sum of the Accreted Value PLUS all dividends accrued at the rate and in the manner specified in Section 3(a) since the previous Compounding Date DIVIDED BY (y) the conversion price of $1.12 per share, subject to adjustment as provided in Section 7(e) below (the "CONVERSION PRICE"). Such conversion right shall be exercised by the surrender of certificate(s) representing the shares of Series A Preferred Stock to be converted to the Corporation at any time during usual business hours at its principal place of business maintained by it (or such other office or agency of the Corporation as the Corporation may designate by notice in writing to the holders of shares of Series A Preferred Stock), accompanied by written notice that the holder elects to convert such shares of Series A Preferred Stock and specifying the name or names (with address) in which a certificate or certificates for shares of Common Stock are to be issued and (if so required by the Corporation) by a written instrument or instruments of transfer in form reasonably satisfactory to the Corporation duly executed by the holder or its duly authorized legal representative and transfer tax stamps or funds therefor, if required pursuant to Section 7(k) below. (b) CONVERSION AT OPTION OF THE CORPORATION. The Corporation shall not have any right to convert any shares of the Series A Preferred Stock on or prior to the second anniversary of the Closing Date. If, on any date after the second anniversary of the Closing Date, the average of the Market Price for a share of Common Stock for the trailing 180 consecutive trading days is at least $7.50 (subject to adjustment for the events described in Section 7(e)(i)), the Corporation shall have the right, at its option, to convert, subject to the terms and provisions of this Section 7, all, but not less than all, of the outstanding shares of Series A Preferred Stock into such number of fully paid and non-assessable shares of Common Stock as is equal to the product of (i) the number of shares of Series A Preferred Stock being so converted MULTIPLIED BY (ii) the 8 quotient of (x) the sum of the Accreted Value PLUS all dividends accrued at the rate and in the manner specified in Section 3(a) since the previous Compounding Date DIVIDED BY (y) the Conversion Price. Written notice by the Corporation that the Corporation elects to convert such shares of Series A Preferred Stock pursuant to this Section 7(b) shall be delivered in person, mailed by certified mail, return receipt requested, mailed by overnight mail or sent by telecopier to the holders of record of the shares of Series A Preferred Stock, such notice to be addressed to each such holder at its address as shown in the records of the Corporation. Upon receipt of such notice from the Corporation, each holder of shares of Series A Preferred Stock shall promptly surrender to the Corporation at any time during usual business hours at its principal place of business maintained by it (or such other office or agency of the Corporation as the Corporation may designate by notice in writing to the holders of shares of Series A Preferred Stock), specifying the name or names (with address) in which a certificate or certificates for shares of Common Stock are to be issued and (if so required by the Corporation) accompanied by a written instrument or instruments of transfer in form reasonably satisfactory to the Corporation duly executed by the holder or its duly authorized legal representative and transfer tax stamps or funds therefore, if required pursuant to Section 7(k) below. (c) SURRENDER OF CERTIFICATES; DELIVERY OF SHARES. All certificates representing shares of Series A Preferred Stock surrendered for conversion shall be delivered to the Corporation for cancellation and canceled by it. As promptly as practicable after the surrender of any shares of Series A Preferred Stock, but in any event within seven (7) days of the receipt of such certificates, the Corporation shall (subject to compliance with the applicable provisions of federal and state securities laws) deliver to the holder of such shares so surrendered certificate(s) representing the number of fully paid and nonassessable shares of Common Stock into which such shares are entitled to be converted. At the time of the surrender of such certificate(s), the Person in whose name any certificate(s) for shares of Common Stock shall be issuable upon such conversion shall be deemed to be the holder of record of such shares of Common Stock on such date, notwithstanding that the share register of the Corporation shall then be closed or that the certificates representing such Common Stock shall not then be actually delivered to such Person. (d) TERMINATION OF RIGHTS. On the date of conversion pursuant to Section 7(a) or Section 7(b) above, all rights with respect to the shares of Series A Preferred Stock so converted, including the rights, if any, to receive notices and vote, shall terminate, except only the rights of holders thereof to (i) receive certificates for the number of shares of Common Stock into which such shares of Series A Preferred Stock have been converted and (ii) exercise the rights to which they are entitled as holders of Common Stock. (e) (i) DIVIDEND, SUBDIVISION, COMBINATION OR RECLASSIFICATION OF COMMON STOCK. In the event that the Corporation shall, at any time or from time to time prior to conversion of shares of Series A Preferred Stock, (w) pay a dividend or make a distribution on the outstanding shares of Common Stock payable in Common Stock, (x) subdivide the outstanding shares of Common Stock into a larger 9 number of shares, (y) combine the outstanding shares of Common Stock into a smaller number of shares or (z) issue any shares of its Capital Stock in a reclassification of the Common Stock (other than any such event for which an adjustment is made pursuant to another clause of this Section 7(e)), then, and in each such case, the Conversion Price in effect immediately prior to such event shall be adjusted (and any other appropriate actions shall be taken by the Corporation) so that the holder of any share of Series A Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation that such holder would have owned or would have been entitled to receive upon or by reason of any of the events described above, had such share of Series A Preferred Stock been converted immediately prior to the occurrence of such event. An adjustment made pursuant to this Section 7(e)(i) shall become effective retroactively (x) in the case of any such dividend or distribution, to a date immediately following the close of business on the record date for the determination of holders of Common Stock entitled to receive such dividend or distribution or (y) in the case of any such subdivision, combination or reclassification, to the close of business on the day upon which such corporate action becomes effective. (ii) ISSUANCE OF COMMON STOCK OR COMMON STOCK EQUIVALENT BELOW CONVERSION PRICE. (A) If the Corporation shall, at any time or from time to time prior to conversion of shares of Series A Preferred Stock, issue or sell any shares of Common Stock or Common Stock Equivalents at a price per share of Common Stock (the "NEW ISSUE PRICE") that is less than the Conversion Price then in effect as of the record date or Issue Date (as defined below), as the case may be (the "RELEVANT DATE") (treating the price per share of Common Stock, in the case of the issuance of any Common Stock Equivalent, as equal to (i) the sum of the price for such Common Stock Equivalent plus any additional consideration payable (without regard to any anti-dilution adjustments) upon the conversion, exchange or exercise of such Common Stock Equivalent divided by (ii) the number of shares of Common Stock initially underlying such Common Stock Equivalent), other than (x) issuances or sales for which an adjustment is made pursuant to another clause of this Section 7(e) and (y) issuances in connection with an Excluded Transaction, THEN, and in each such case, the Conversion Price then in effect shall be adjusted to equal the New Issue Price. (B) Such adjustment shall be made whenever such shares of Common Stock or Common Stock Equivalents are issued, and shall become effective retroactively (x) in the case of an issuance to the stockholders of the Corporation, as such, to a date immediately following the close of business on the record date for the determination of stockholders entitled to receive such shares of Common Stock or Common Stock Equivalents and (y) in all other cases, on the date (the "ISSUE DATE") of such issuance; PROVIDED, HOWEVER, that the determination as to whether an adjustment is required to be made pursuant to this Section 7(e)(ii) shall be made upon the issuance of such shares of Common Stock or Common Stock Equivalents, and not upon 10 the issuance of any security into which the Common Stock Equivalents convert, exchange or may be exercised. (C) In case at any time any shares of Common Stock or Common Stock Equivalents or any rights or options to purchase any shares of Common Stock or Common Stock Equivalents shall be issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Corporation therefor, without deduction therefrom of any expenses incurred or any underwriting commissions or concessions or discounts paid or allowed by the Corporation in connection therewith. In case any shares of Common Stock or Common Stock Equivalents or any rights or options to purchase any Common Stock or Common Stock Equivalents shall be issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be deemed to be the fair market value of such consideration, without deduction therefrom of any expenses incurred or any underwriting commissions or concessions or discounts paid or allowed by the Corporation in connection therewith, as determined by the Board of Directors in good faith. (D) If any Common Stock Equivalents (or any portions thereof) which shall have given rise to an adjustment pursuant to this Section 7(e)(ii) shall have expired or terminated without the exercise thereof and/or if by reason of the terms of such Common Stock Equivalents there shall have been an increase or increases, with the passage of time or otherwise, in the price payable upon the exercise or conversion thereof, then the Conversion Price hereunder shall be readjusted (but to no greater extent than originally adjusted) in order to (A) eliminate from the computation any additional shares of Common Stock corresponding to such Common Stock Equivalents as shall have expired or terminated, (B) treat the additional shares of Common Stock, if any, actually issued or issuable pursuant to the previous exercise of such Common Stock Equivalents as having been issued for the consideration actually received and receivable therefor and (C) treat any of such Common Stock Equivalents which remain outstanding as being subject to exercise or conversion on the basis of such exercise or conversion price as shall be in effect at the time. (iii) CERTAIN DISTRIBUTIONS. In case the Corporation shall, at any time or from time to time prior to conversion of shares of Series A Preferred Stock, distribute to all holders of shares of the Common Stock (including any such distribution made in connection with a merger or consolidation in which the Corporation is the resulting or surviving Person and the Common Stock is not changed or exchanged) cash, evidences of Indebtedness of the Corporation or another issuer, securities of the Corporation or another issuer or other assets (excluding dividends payable in shares of Common Stock for which adjustment is made under another paragraph of this Section 7(e), any distribution that also is made to the holders of Series A Preferred Stock on an as-converted basis and any distribution in connection with an Excluded Transaction) or rights or warrants to subscribe for or purchase of any of the foregoing, THEN, and in each such case, the Conversion Price then in effect shall be adjusted (and any other appropriate actions shall be taken by the Corporation) by multiplying the 11 Conversion Price in effect immediately prior to the date of such distribution by a fraction (x) the numerator of which shall be the Current Market Price of the Common Stock immediately prior to the date of distribution less the then fair market value (as determined by the Board of Directors in the exercise of their fiduciary duties) of the portion of the cash, evidences of Indebtedness, securities or other assets so distributed or of such rights or warrants applicable to one share of Common Stock and (y) the denominator of which shall be the Current Market Price of the Common Stock immediately prior to the date of distribution (but such fraction shall not be greater than one); PROVIDED, however, that no adjustment shall be made with respect to any distribution of rights or warrants to subscribe for or purchase securities of the Corporation if the holder of shares of Series A Preferred Stock would otherwise be entitled to receive such rights or warrants upon conversion at any time of shares of Series A Preferred Stock into Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective retroactively to a date immediately following the close of business on the record date for the determination of stockholders entitled to receive such distribution. (iv) OTHER CHANGES. In case the Corporation, at any time or from time to time prior to the conversion of shares of Series A Preferred Stock, shall take any action affecting its Common Stock similar to or having an effect similar to any of the actions described in Sections 7(e)(i), (ii) or (iii) above or Section 7(h) below (but not including any action described in any such Section) and the Board of Directors in good faith determines that it would be equitable in the circumstances to reduce the Conversion Price as a result of such action, THEN, and in each such case, the Conversion Price shall be reduced in such manner and at such time as the Board of Directors in good faith determines would be equitable in the circumstances (such determination to be evidenced in a resolution, a certified copy of which shall be mailed to the holders of shares of Series A Preferred Stock). (f) ABANDONMENT. If the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, and shall thereafter and before the distribution to stockholders thereof legally abandon its plan to pay or deliver such dividend or distribution, then no adjustment in the Conversion Price shall be required by reason of the taking of such record. (g) CERTIFICATE AS TO ADJUSTMENTS. Upon any adjustment in the Conversion Price, the Corporation shall within a reasonable period (not to exceed ten (10) Business Days) following any of the foregoing transactions deliver to each registered holder of shares of Series A Preferred Stock a certificate, signed by (i) the Chief Executive Officer of the Corporation and (ii) the Chief Financial Officer of the Corporation, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the increased or decreased Conversion Price then in effect following such adjustment. (h) REORGANIZATION, RECLASSIFICATION. In case of any merger, consolidation or other business combination transaction of the Corporation (other than a 12 Change of Control) or any capital reorganization, reclassification or other change of outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value) (each, a "TRANSACTION"), the Corporation shall execute and deliver to each holder of shares of Series A Preferred Stock at least ten (10) Business Days prior to effecting such Transaction a certificate, signed by (i) the Chief Executive Officer of the Corporation and (ii) the Chief Financial Officer of the Corporation, stating that the holder of each share of Series A Preferred Stock shall have the right to receive in such Transaction, in exchange for each share of Series A Preferred Stock, a security identical to (and not less favorable than) the Series A Preferred Stock, and provision shall be made therefor in the agreement, if any, relating to such Transaction. Any certificate delivered pursuant to this Section 7(h) shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 7. The provisions of this Section 7(h) and any equivalent thereof in any such certificate similarly shall apply to successive Transactions. (i) NOTICES. In case at any time or from time to time: (w) the Corporation shall declare a dividend (or any other distribution) on its shares of Common Stock; (x) the Corporation shall authorize the granting to the holders of its Common Stock rights or warrants to subscribe for or purchase any shares of Capital Stock of any class or of any other rights or warrants; or (y) there shall be any Transaction, then the Corporation shall mail to each holder of shares of Series A Preferred Stock at such holder's address as it appears on the transfer books of the Corporation, as promptly as possible but in any event at least ten (10) days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or granting of rights or warrants are to be determined, or (B) the date on which such Transaction is expected to become effective and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for shares of stock or other securities or property or cash deliverable upon such Transaction. Notwithstanding the foregoing, in the case of any event to which Section 7(h) above is applicable, the Corporation shall also deliver the certificate described in Section 7(h) above to each holder of shares of Series A Preferred Stock at least ten (10) Business Days' prior to effecting such reorganization or reclassification as aforesaid. (j) RESERVATION OF COMMON STOCK. The Corporation shall at all times reserve and keep available for issuance upon the conversion of shares of Series A Preferred Stock, such number of its authorized but unissued shares of Common Stock as will from time to time be sufficient to permit the conversion of all outstanding shares of Series A Preferred Stock, and shall take all action to increase the authorized number of 13 shares of Common Stock if at any time there shall be insufficient authorized but unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series A Preferred Stock; PROVIDED, that the holders of shares of Series A Preferred Stock shall vote such shares in favor of any such action that requires a vote of stockholders. (k) NO CONVERSION TAX OR CHARGE. The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series A Preferred Stock shall be made without charge to the converting holder of shares of Series A Preferred Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or (subject to compliance with the applicable provisions of federal and state securities laws) in such names as may be directed by, the holders of the shares of Series A Preferred Stock so converted; PROVIDED, HOWEVER, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the holder of the shares of Series A Preferred Stock so converted, and the Corporation shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Corporation the amount of such tax or shall have established to the reasonable satisfaction of the Corporation that such tax has been paid. (l) LIMITATIONS ON CONVERSIONS. Each holder of the Series A Preferred Stock's right to convert its shares of Series A Preferred Stock into shares of Common Stock shall not be limited by any notice delivered by the Corporation of any Change of Control or other event that notwithstanding this subsection (l) shall purport to limit such conversion right. (m) REDEMPTION. The shares of Series A Preferred Stock shall not be redeemed or subject to redemption, whether at the option of the Corporation or any holder thereof, or otherwise. 8. CERTAIN REMEDIES. Any registered holder of shares of Series A Preferred Stock shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Certificate of Designations and to enforce specifically the terms and provisions of this Certificate of Designations in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which such holder may be entitled at law or in equity. 9. BUSINESS DAY. If any payment shall be required by the terms hereof to be made on a day that is not a Business Day, such payment shall be made on the immediately succeeding Business Day. 10. DEFINITIONS. As used in this Certificate of Designations, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and VICE VERSA), unless the context otherwise requires: 14 "ACCRETED VALUE" means, as of any date, with respect to each share of Series A Preferred Stock, $1.12 (subject to adjustment for the events described in Section 7(e)(i)), PLUS the amount of dividends that have accrued, compounded and been added thereto to such date pursuant to Section 3(a) hereof. "AFFILIATE" means any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "BOARD OF DIRECTORS" means the Board of Directors of the Corporation. "BUSINESS DAY" means any day except a Saturday, a Sunday, or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close. "BY-LAWS" means the by-laws of the Corporation in effect on the Closing Date, as the same may be amended from time to time. "CAPITAL STOCK" means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person's capital stock (including, without limitation, common stock and preferred stock) and any and all rights, warrants or options exchangeable for or convertible into such capital stock. "CERTIFICATE OF DESIGNATIONS" means this Certificate of Designations relating to the powers, designations, preferences and rights of the Series A Preferred Stock. "CERTIFICATE OF INCORPORATION" means the Fourth Amended and Restated Certificate of Incorporation of the Company in effect on the Closing Date, as the same may be amended from time to time. "CHANGE OF CONTROL" means (i) any merger, consolidation or other business combination transaction (or series of related transactions) in which the stockholders owning a majority of the voting securities of the Corporation prior to such transaction do not own a majority of the voting securities of the surviving entity, (ii) any tender offer, exchange offer or other transaction whereby any person or "group" other than the holders of shares of Series A Preferred Stock obtains a majority of the outstanding shares of Common Stock, (iii) a sale of all or substantially all of the assets of the Corporation, (iv) any proxy contest in which a majority of the Board of Directors of the Corporation (or persons appointed by the Board of Directors) prior to such contest do not constitute a majority of the Corporation's Board of Directors after such contest or (v) any other transaction described in any stockholder rights agreement or "poison pill," if any, to which the Corporation is party, which may permit the holders of any rights or similar certificates to exercise the rights evidenced thereby. "CLOSING DATE" means May 15, 2003. 15 "COMMISSION" means the United States Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act. "COMMON STOCK" shall have the meaning ascribed to it in Section 2 hereof. "COMMON STOCK EQUIVALENT" means any security or obligation which is by its terms, directly or indirectly, convertible into or exchangeable or exercisable for shares of Common Stock, including, without limitation, the Series A Preferred Stock, and any option, warrant or other subscription or purchase right with respect to Common Stock or any Common Stock Equivalent. "COMPOUNDING DATE" shall have the meaning ascribed to it in Section 3(a) hereof. "CONTINGENT OBLIGATION" means, as applied to any Person, any direct or indirect liability of that Person with respect to any Indebtedness, lease, dividend, guaranty, letter of credit or other obligation, contractual or otherwise (the "primary obligation") of another Person (the "primary obligor"), whether or not contingent, (a) to purchase, repurchase or otherwise acquire such primary obligations or any property constituting direct or indirect security therefor, (b) to advance or provide funds (i) for the payment or discharge of any such primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss or failure or inability to perform in respect thereof. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof. "CONVERSION PRICE" shall have the meaning ascribed to it in Section 7(a) hereof. "CORPORATION" shall have the meaning ascribed to it in the first paragraph of this Certificate of Designations. "CURRENT MARKET PRICE" per share of Capital Stock of any Person means, as of the date of determination, (a) the average of the daily Market Price under clause (a), (b) or (c) of the definition thereof of such Capital Stock during the immediately preceding thirty (30) trading days ending on such date, and (b) if such Capital Stock is not then listed or admitted to trading on any national securities exchange or quoted in the over-the-counter market, then the Market Price under clause (d) of the definition thereof on such date. 16 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. "EXCLUDED TRANSACTION" means (a) any issuance of Common Stock pursuant to the exercise of any options that were outstanding under any of the Stock Option Plans as of the Closing Date, (b) any issuance of options to employees, consultants or strategic partners of the Corporation approved by the Board of Directors after the Closing Date, or any issuance of Common Stock pursuant to the exercise of such options, (c) any issuance of Common Stock (i) upon the conversion of shares of Series A Preferred Stock, (ii) as a dividend on shares of Series A Preferred Stock, (iii) upon the exercise of the Beacon Warrant or (iv) upon conversion or exercise of any Common Stock Equivalents, and (d) any issuance of Common Stock in connection with any Liquidation Payment or any Sale Payment. "GAAP" means United States generally accepted accounting principles in effect from time to time. "GOVERNMENTAL AUTHORITY" means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. "INDEBTEDNESS" means, as to any Person, (a) all obligations of such Person for borrowed money (including, without limitation, reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers' acceptances, whether or not matured), (b) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable and accrued commercial or trade liabilities arising in the ordinary course of business, (c) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of such Person under leases which have been or should be, in accordance with GAAP, recorded as capital leases, (f) all indebtedness secured by any Lien (other than Liens in favor of lessors under leases other than leases included in clause (e)) on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is non-recourse to the credit of that Person, and (g) any Contingent Obligation of such Person. "ISSUE DATE" shall have the meaning ascribed to it in Section 7(e)(ii) hereof. "JUNIOR STOCK" shall have the meaning ascribed to it in Section 2 hereof. 17 "LIEN" means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or preference, priority, right or other security interest or preferential arrangement of any kind or nature whatsoever. "LIQUIDATION" means the voluntary or involuntary liquidation under applicable bankruptcy or reorganization legislation, or the dissolution or winding up of the Corporation. "LIQUIDATION PAYMENT" shall have the meaning ascribed to it in Section 4(a) hereof. "MARKET PRICE" means, with respect to the Capital Stock of any Person, as of the date of determination, (a) if such Capital Stock is listed on a national securities exchange, the closing price per share of such Capital Stock on such date published in THE WALL STREET JOURNAL (NATIONAL EDITION) or, if no such closing price on such date is published in THE WALL STREET JOURNAL (NATIONAL EDITION), the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange on which such Capital Stock is then listed or admitted to trading; or (b) if such Capital Stock is not then listed or admitted to trading on any national securities exchange but is designated as a national market system security by the National Association of Securities Dealers, Inc., the last trading price of such Capital Stock on such date; or (c) if there shall have been no trading on such date or if such Capital Stock is not designated as a national market system security by the National Association of Securities Dealers, Inc., the average of the reported closing bid and asked prices of such Capital Stock on such date as shown by the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System and reported by any member firm of the New York Stock Exchange selected by the Corporation; or (d) if none of (a), (b) or (c) is applicable, a market price per share determined mutually by the Board of Directors (acting in good faith pursuant to the exercise of its fiduciary duties) and the holders of a majority of the shares of Series A Preferred Stock or, if the Board of Directors and the holders of a majority of the shares of Series A Preferred Stock shall fail to agree, at the Corporation's expense by an appraiser chosen by the Board of Directors (acting in good faith pursuant to the exercise of its fiduciary duties) and reasonably acceptable to the holders of a majority of the shares of Series A Preferred Stock. Any determination of the Market Price by an appraiser shall be based on a valuation of the Corporation as an entirety without regard to any discount for minority interests or disparate voting rights among classes of Capital Stock. "NEW ISSUE PRICE" shall have the meaning ascribed to it in Section 7(e)(ii) hereof. "NEWLY ISSUED SECURITIES" shall have the meaning ascribed to it in Section 6(a) hereof. "PERSON" means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited 18 liability company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. "PREEMPTIVE ACCEPTANCE PERIOD" shall have the meaning ascribed to it in Section 6(b) hereof. "PREEMPTIVE NOTICE" shall have the meaning ascribed to it in Section 6(b) hereof. "PREEMPTIVE RIGHT" shall have the meaning ascribed to it in Section 6(a) hereof. "RELEVANT DATE" shall have the meaning ascribed to it in Section 7(e)(ii) hereof. "SALE PAYMENT" shall have the meaning ascribed to it in Section 4(b) hereof. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. "SERIES A PREFERRED STOCK" shall have the meaning ascribed to it in Section 1 hereof. "STOCK OPTION PLANS" means the Corporation's stock option plans and employee purchase plans approved by the Board of Directors, pursuant to which shares of restricted stock and options to purchase shares of Common Stock are reserved and available for grant to officers, directors, employees and consultants of the Corporation. "TRANSACTION" shall have the meaning ascribed to it in Section 7(h) hereof. "VOTE PER SHARE" means 0.7417. [Remainder of page intentionally left blank] 19 IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designations as of May 15, 2003. EVERGREEN SOLAR, INC. By: /s/ Mark A. Farber --------------------------------------- Name: Mark A. Farber Title: Chief Executive Officer EX-99 5 ex4_sc13d-evergreen.txt EXHIBIT 4 EXHIBIT 4 --------- EXECUTION COPY REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT, dated May 15, 2003 (this "AGREEMENT"), among Evergreen Solar, Inc., a Delaware corporation (the "COMPANY"), Perseus 2000, L.L.C. ("PERSEUS"), Nth Power Technologies Fund II, LP ("NTH POWER II"), Nth Power Technologies Fund II-A, LP ("NTH POWER II-A" and together with Nth Power II, "NTH POWER"), RockPort Capital Partners, L.P. ("ROCKPORT"), RP Co-Investment Fund I, L.P. ("RP CO-INVESTMENT"), Micro-Generation Technology Fund, LLC ("Micro-Generation"), UVCC Fund II ("UVCC II"), UVCC II Parallel Fund, L.P. ("UVCC II PARALLEL" and together with Micro-Generation and UVCC II, "ARETE FUNDS"), Caisse de depot et placement du Quebec ("CDP"), CDP Capital - Technology Ventures U.S. Fund 2002 L.P. ("CDP CAPITAL"), Beacon Power Corporation ("BEACON"), Massachusetts Technology Park Corporation ("MTPC"), Zero Stage Capital VII, L.P. ("ZERO Stage"), Zero Stage Capital (Cayman) VII, L.P. ("ZERO STAGE CAYMAN"), Zero Stage Capital SBIC VII, L.P. ("ZERO STAGE SBIC"), IMPAX Environmental Markets plc ("IMPAX"), Merrill Lynch New Energy Technology plc ("MERRILL LYNCH NEW ENERGY FUND"), MLIIF New Energy Fund ("MLIIF"), PNE Invest Limited ("PNE"), Odyssey Fund ("ODYSSEY"), SAM Private Equity Energy Fund LP ("SAM ENERGY FUND"), SAM Sustainability Private Equity LP ("SAM PRIVATE EQUITY") and SAM Smart Energy ("SAM SMART ENERGY" and together with Perseus, Nth Power, Rockport, RP Co-Investment, Arete Funds, CDP, CDP Capital, Beacon, MTPC, Zero Stage, Zero Stage Cayman, Zero Stage SBIC, Impax, Merrill Lynch New Energy Fund, MLIIF, PNE, Odyssey, SAM Energy Fund, SAM Private Equity and SAM Smart Energy, the "INVESTORS"). Unless otherwise provided in this Agreement, capitalized terms used herein have the respective meanings given to them in Section 1.1 hereof. WHEREAS, pursuant to the Stock and Warrant Purchase Agreement, dated March 21, 2003 (the "PURCHASE AGREEMENT"), among the Company and the Investors, the Company has agreed to issue and sell (a) to the Investors, an aggregate of 26,227,668 shares of Series A Convertible Participating Preferred Stock, par value $0.01 per share, of the Company (the "SERIES A PREFERRED STOCK") and (b) to Beacon, the Beacon Warrant (as hereinafter defined); and WHEREAS, the Company has agreed to grant certain registration rights with respect to the Registrable Securities as set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS ----------- 2 1.1 DEFINITIONS. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated: "AFFILIATE" means any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "AGREEMENT" means this Agreement as the same may be amended, supplemented or modified in accordance with the terms hereof. "APPROVED UNDERWRITER" has the meaning set forth in Section 4.6. "BEACON WARRANT" has the meaning set forth in the Purchase Agreement. "BOARD OF DIRECTORS" means the Board of Directors of the Company. "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close. "CHARTER DOCUMENTS" means the Certificate of Incorporation and the By-laws of the Company. "CLOSING DATE" has the meaning set forth in the Purchase Agreement. "COMMISSION" means the United States Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act. "COMMON STOCK" means the Common Stock, par value $0.01 per share, of the Company and any other capital stock of the Company into which such stock is reclassified or reconstituted and any other common stock of the Company. "COMMON STOCK EQUIVALENTS" means any security or obligation which is by its terms, directly or indirectly, convertible into or exchangeable or exercisable into or for shares of Common Stock, including, without limitation, the Series A Preferred Stock and any option, warrant or other subscription or purchase right with respect to Common Stock or any Common Stock Equivalent. "COMPANY" has the meaning set forth in the preamble to this Agreement. "COMPANY UNDERWRITER" has the meaning set forth in Section 5.1. "DEMAND REGISTRATION" has the meaning set forth in Section 4.1. "DESIGNATED HOLDER" means the Investors and any transferee of the Investors to whom Registrable Securities have been transferred in accordance with Section 10.5 of this Agreement, other than a transferee to whom Registrable Securities have been transferred pursuant to a Registration Statement under the Securities Act or Rule 144 or Regulation S under the Securities Act (or any successor rule thereto), but in 3 each case solely for so long as such Investor or transferee continues to be a holder of Registrable Securities. "EFFECTIVENESS PERIOD" means the period commencing with the date of this Agreement and ending on the date that all Registrable Securities have ceased to be Registrable Securities. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. "HOLDERS' COUNSEL" has the meaning set forth in Section 7.1(a). "INCIDENTAL REGISTRATION" has the meaning set forth in Section 5.1. "INDEMNIFIED PARTY" has the meaning set forth in Section 8.3. "INDEMNIFYING PARTY" has the meaning set forth in Section 8.3. "INITIATING HOLDERS" has the meaning set forth in Section 4.1. "INSPECTOR" has the meaning set forth in Section 7.1(h). "INVESTORS" has the meaning set forth in the preamble to this Agreement and shall also include any transferee thereof. "KNOWLEDGE" has the meaning set forth in the Purchase Agreement. "LIABILITY" has the meaning set forth in Section 8.1. "NASD" means the National Association of Securities Dealers, Inc. "PERSON" means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, government (or an agency or political subdivision thereof) or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. "PURCHASE AGREEMENT" has the meaning set forth in the recitals to this Agreement. "RECORDS" has the meaning set forth in Section 7.1(h). "REGISTRABLE SECURITIES" means, subject to Section 2.2 below, the shares of Common Stock to be issued upon (a) the conversion of the Series A Preferred Stock and (b) the exercise of the Beacon Warrant. "REGISTRABLE SHARES" has the meaning set forth in the Series D Purchase Agreement 4 "REGISTRATION EXPENSES" has the meaning set forth in Section 7.4. "REGISTRATION STATEMENT" means a Registration Statement filed pursuant to the Securities Act. "S-3 INITIATING HOLDERS" has the meaning set forth in Section 6.1. "S-3 REGISTRATION" has the meaning set forth in Section 6.1. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "SERIES A PREFERRED STOCK" has the meaning set forth in the recitals to this Agreement. "SERIES D PURCHASE AGREEMENT" means that certain Series D Preferred Stock Purchase Agreement, dated as of December 28, 1999, by and among the Company and the parties thereto. "SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 3.1. "STOCKHOLDERS" has the meaning set forth in the Series D Purchase Agreement. "VALID BUSINESS REASON" has the meaning set forth in Section 4.1. ARTICLE II GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT --------------------------------------------- 2.1 GRANT OF RIGHTS. The Company hereby grants registration rights to the Designated Holders upon the terms and conditions set forth in this Agreement. 2.2 REGISTRABLE SECURITIES. For the purposes of this Agreement, Registrable Securities will cease to be Registrable Securities, when (i) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the Commission and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (ii) the entire amount of the Registrable Securities owned by a Designated Holder may be sold in a single sale, in the opinion of counsel satisfactory to the Company and such Designated Holder, each in their reasonable judgment (it being agreed that Testa, Hurwitz & Thibeault, LLP shall be satisfactory), without any limitation as to volume pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act or (iii) such Registrable Securities have been sold to the public pursuant to Rule 144 under the Securities Act. 2.3 HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a holder of Registrable Securities whenever such Person owns of record Registrable Securities, or holds an option to purchase, or a security convertible into or exercisable or 5 exchangeable for, Registrable Securities whether or not such acquisition or conversion has actually been effected. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company may act upon the basis of the instructions, notice or election received from the registered owner of such Registrable Securities. Registrable Securities issuable upon exercise of an option or upon conversion of another security shall be deemed outstanding for the purposes of this Agreement. ARTICLE III SHELF REGISTRATION STATEMENT ---------------------------- 3.1 SHELF REGISTRATION STATEMENT. Not later than thirty (30) days after the date hereof, the Company shall file with the Commission a shelf registration statement pursuant to Rule 415 of the Securities Act (the "SHELF REGISTRATION STATEMENT") on Form S-3 (or any successor form thereto), with respect to the resale, from time to time, of all of the Registrable Securities held by Designated Holders. 3.2 EFFECTIVE SHELF REGISTRATION STATEMENT. The Company shall use its reasonable best efforts to cause the Shelf Registration Statement to become effective as soon as practicable after the date hereof (but not later than seventy-five (75) days after the filing date of the Shelf Registration Statement), and shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective under the Securities Act, subject to the provisions of Section 7.3, until the earlier of (i) the second anniversary of the effective date of the Shelf Registration Statement or (ii) such time as the Company delivers an opinion of counsel that each Designated Holder may sell in the open market in a single transaction all Registrable Securities then held by each such Designated Holder pursuant to Rule 144(k) of the Securities Act (or any similar provision then in force) without being subject to the volume limitations thereof or otherwise under an applicable exemption from the registration requirements of the Securities Act, as amended, and all other applicable securities and blue sky laws, or (iii) all Registrable Securities covered by such Shelf Registration Statement have been sold. ARTICLE IV DEMAND REGISTRATION ------------------- 4.1 REQUEST FOR DEMAND REGISTRATION. At any time after the date hereof that the Shelf Registration Statement is not effective, any Investor or group of Investors holding at least 10% of the Registrable Securities held by all of the Investors (the "INITIATING HOLDERS") may make a written request to the Company to register, and the Company shall use its best efforts to register, under the Securities Act (other than pursuant to a Registration Statement on Form S-4 or S-8 or any successor thereto) (a "DEMAND REGISTRATION"), the number of Registrable Securities stated in such request; provided, HOWEVER, that (i) the reasonably anticipated aggregate price to the public of all Registrable Securities required to be included in such public offering shall exceed $4,000,000 and (ii) the Company shall not be obligated to effect more than three such 6 Demand Registrations for the Investors. For purposes of the preceding sentence, two or more Registration Statements filed in response to one demand shall be counted as one Demand Registration. If the Board of Directors, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would materially interfere with any material financing, acquisition, corporate reorganization or merger or other material transaction involving the Company (a "VALID BUSINESS REASON"), the Company may (x) postpone filing a Registration Statement relating to a Demand Registration until such Valid Business Reason no longer exists, but in no event for more than ninety (90) days, and (y) in case a Registration Statement has been filed relating to a Demand Registration, the Company, upon the approval of a majority of the Board of Directors, may cause such Registration Statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such Registration Statement. The Company shall give written notice of its determination to postpone or withdraw a Registration Statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof. Notwithstanding anything to the contrary contained herein, the Company may not postpone or withdraw a filing due to a Valid Business Reason under this Section 4.1 or Section 6.3 more than once in any twelve (12) month period. Each request for a Demand Registration by the Initiating Holders shall state the amount of the Registrable Securities proposed to be sold and the intended method of disposition thereof. 4.2 INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO A DEMAND REGISTRATION. Each of the Designated Holders (other than Initiating Holders which have requested a registration under Section 4.1) may offer its or his Registrable Securities under any Demand Registration pursuant to this Section 4.2. Within five (5) Business Days after the receipt of a request for a Demand Registration from an Initiating Holder, the Company shall (i) give written notice thereof to all of the Designated Holders (other than Initiating Holders which have requested a registration under Section 4.1) and (ii) subject to Section 4.5, include in such registration all of the Registrable Securities held by such Designated Holders from whom the Company has received a written request for inclusion therein within ten (10) Business Days of the receipt by such Designated Holders of such written notice referred to in clause (i) above. Each such request by such Designated Holders shall specify the number of Registrable Securities proposed to be registered. The failure of any Designated Holder to respond within such 10-Business Day period referred to in clause (ii) above shall be deemed to be a waiver of such Designated Holder's rights under this Article IV with respect to such Demand Registration. Any Designated Holder may waive its rights under this Article IV prior to the expiration of such 10-Business Day period by giving written notice to the Company, with a copy to the Initiating Holders. 4.3 EFFECTIVE DEMAND REGISTRATION. The Company shall use its reasonable best efforts to cause any such Demand Registration to become and remain effective not later than seventy-five (75) days after it receives a request under Section 4.1 hereof. A registration shall not constitute a Demand Registration until it has become effective and remains continuously effective for the lesser of (i) the period during which all Registrable Securities registered in the Demand Registration are sold and 7 (ii) 180 days; PROVIDED, HOWEVER, that a registration shall not constitute a Demand Registration if (x) after such Demand Registration has become effective, such registration or the related offer, sale or distribution of Registrable Securities thereunder is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to the Initiating Holders and such interference is not thereafter eliminated or (y) the conditions specified in the underwriting agreement, if any, entered into in connection with such Demand Registration are not satisfied or waived, other than by reason of a failure by the Initiating Holder. 4.4 EXPENSES. The Company shall pay all Registration Expenses in connection with a Demand Registration, whether or not such Demand Registration becomes effective. 4.5 UNDERWRITING PROCEDURES. If the Initiating Holders holding a majority of the Registrable Securities held by all of the Initiating Holders so elect, the Company shall use its reasonable best efforts to cause such Demand Registration to be in the form of a firm commitment underwritten offering and the managing underwriter or underwriters selected for such offering shall be the Approved Underwriter selected in accordance with Section 4.6. In connection with any Demand Registration under this Article IV involving an underwritten offering, none of the Registrable Securities held by any Designated Holder making a request for inclusion of such Registrable Securities pursuant to Section 4.2 hereof shall be included in such underwritten offering unless such Designated Holder accepts the terms of the offering as agreed upon by the Company, the Initiating Holders and the Approved Underwriter, and then only in such quantity as will not, in the opinion of the Approved Underwriter, jeopardize the success of such offering by the Initiating Holders. If the Approved Underwriter advises the Company that the aggregate amount of such Registrable Securities requested to be included in such offering is sufficiently large to have a material adverse effect on the success of such offering, then the Company shall include in such registration, to the extent of the amount that the Approved Underwriter believes may be sold without causing such material adverse effect, FIRST, such number of Registrable Securities of the Initiating Holders and any Designated Holder participating in the offering pursuant to this Article IV, which Registrable Securities shall be allocated PRO RATA among such Initiating Holders and Designated Holders, based on the number of Registrable Securities requested to be included in such offering by each such Initiating Holder and Designated Holder, SECOND, any other securities of the Company requested by holders thereof to be included in such registration, which such securities shall be allocated PRO RATA among such stockholders, based on the number of the Company's securities requested to be included in such offering by each such stockholder, and THIRD, securities offered by the Company for its own account. In addition, the Company shall not be required to file any registration statement pursuant to this Article IV within ninety (90) days after the effective date of any other Registration Statement of the Company if (i) the Registration Statement was not for the account of the Designated Holders but the Designated Holders had the opportunity to include all of the Registrable Securities they requested to include in such registration pursuant to Article V or (ii) the Registration Statement was filed pursuant to Article VI or this Article IV. 8 4.6 SELECTION OF UNDERWRITERS. If any Demand Registration or S-3 Registration, as the case may be, of Registrable Securities is in the form of an underwritten offering, the Initiating Holders or S-3 Initiating Holders, as the case may be, holding a majority of the Registrable Securities held by all of the Initiating Holders or S-3 Initiating Holders, as the case may be, shall select and obtain an investment banking firm of national reputation to act as the managing underwriter of the offering (the "APPROVED UNDERWRITER"); PROVIDED, HOWEVER, that the Approved Underwriter shall, in any case, also be approved by the Company. ARTICLE V INCIDENTAL OR "PIGGY-BACK" REGISTRATION --------------------------------------- 5.1 REQUEST FOR INCIDENTAL REGISTRATION. At any time after the date hereof, if the Shelf Registration Statement is not effective and the Company proposes to file a Registration Statement under the Securities Act with respect to an offering by the Company for its own account (other than a Registration Statement on Form S-4 or S-8 or any successor thereto, or any Registration Statement filed pursuant to subsection 8(c) of the Series D Purchase Agreement) or for the account of any stockholder of the Company other than any Designated Holders, then the Company shall give written notice of such proposed filing to each of the Designated Holders at least twenty (20) days before the anticipated filing date, and such notice shall describe the proposed registration and distribution and offer such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request (an "INCIDENTAL REGISTRATION"). The Company shall use its reasonable best efforts (within twenty (20) days of the notice by the Designated Holders provided for below in this sentence) to cause the managing underwriter or underwriters in the case of a proposed underwritten offering (the "COMPANY UNDERWRITER") to permit each of the Designated Holders who have requested the Company in writing within ten (10) Business Days of the giving of the notice by the Company to participate in the Incidental Registration to include its, his or her Registrable Securities in such offering on the same terms and conditions as the securities of the Company or the account of such other stockholder, as the case may be, included therein. In connection with any Incidental Registration under this Section 5.1 involving an underwritten offering, the Company shall not be required to include any Registrable Securities in such underwritten offering unless the Designated Holders thereof accept the terms of the underwritten offering as agreed upon between the Company, such other stockholders, if any, and the Company Underwriter. If the Company Underwriter determines that the registration of all or part of the Registrable Securities which the Designated Holders have requested to be included would materially adversely affect the success of such offering, then the Company shall be required to include in such Incidental Registration, to the extent of the amount that the Company Underwriter believes may be sold without causing such adverse effect, FIRST, all of the securities to be offered for the account of the Company, SECOND, the Registrable Securities to be offered for the account of the Designated Holders pursuant to this Article V and the Registrable Shares to be offered for the account of the Stockholders pursuant to Section 8(d) of the Series D Purchase Agreement, as a group, which Registrable Securities and Registrable Shares shall be allocated PRO RATA among such Designated 9 Holders and Stockholders based on the number of Registrable Securities or Registrable Shares, as the case may be, requested to be included in such offering by each such Designated Holder or Stockholder, and THIRD, other securities requested to be included in such offering. 5.2 RIGHT TO TERMINATE REGISTRATION. The Company shall have the right to terminate or withdraw any registration initiated by it under Section 5.1 prior to the effectiveness of such registration whether or not any Designated Holder has elected to include Registrable Securities in such registration. 5.3 EXPENSES. The Company shall bear all Registration Expenses in connection with any Incidental Registration pursuant to this Article V, whether or not such Incidental Registration becomes effective. ARTICLE VI FORM S-3 REGISTRATION --------------------- 6.1 REQUEST FOR A FORM S-3 REGISTRATION. At any time after the date hereof that the Shelf Registration Statement is not effective, in the event that the Company shall receive from one or more Investors (the "S-3 INITIATING HOLDERS") a written request that the Company register, under the Securities Act on Form S-3 (or any successor form then in effect) (an "S-3 REGISTRATION"), all or a portion of the Registrable Securities owned by such S-3 Initiating Holders, the Company shall give written notice of such request to all of the Designated Holders (other than the S-3 Initiating Holders who have requested an S-3 Registration under this Section 6.1) as far in advance as practicable (but not less than ten (10) Business Days) before the anticipated filing date of such Form S-3, and such notice shall describe the proposed registration and offer such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request in writing to the Company, given within ten (10) days after their receipt from the Company of the written notice of such registration. If requested by the S-3 Initiating Holders such S-3 Registration shall be for an offering on a continuous basis pursuant to Rule 415, under the Securities Act. With respect to each S-3 Registration, the Company shall, subject to Section 6.2, (i) include in such offering the Registrable Securities of the S-3 Initiating Holders and the Designated Holders who have requested in writing to participate in such registration on the same terms and conditions as the Registrable Securities of the S-3 Initiating Holders included therein and (ii) use its reasonable best efforts to cause such registration pursuant to this Section 6.1 to become and remain effective as soon as practicable, but in any event not later than forty-five (45) days after it receives a request therefor. The Company's obligations in this Article VI with respect to each requested S-3 Registration are subject to the conditions that (i) the reasonably anticipated aggregate price to the public of the Registrable Securities requested for inclusion in such S-3 Registration shall equal or exceed $1,000,000 and (ii) the Company is a registrant entitled to use Form S-3 or a successor thereto to register the securities. 10 6.2 FORM S-3 UNDERWRITING PROCEDURES. If the S-3 Initiating Holders holding a majority of the Registrable Securities held by all of the S-3 Initiating Holders so elect, the Company shall use its reasonable best efforts to cause such S-3 Registration pursuant to this Article VI to be in the form of a firm commitment underwritten offering and the managing underwriter or underwriters selected for such offering shall be the Approved Underwriter selected in accordance with Section 4.6. In connection with any S-3 Registration under Section 6.1 involving an underwritten offering, the Company shall not be required to include any Registrable Securities in such underwritten offering unless the Designated Holders thereof accept the terms of the underwritten offering as agreed upon between the Company, the Approved Underwriter and the S-3 Initiating Holders, and then only in such quantity as such underwriter believes will not jeopardize the success of such offering by the S-3 Initiating Holders. If the Approved Underwriter believes that the registration of all or part of the Registrable Securities which the S-3 Initiating Holders and the other Designated Holders have requested to be included would materially adversely affect the success of such public offering, then the Company shall be required to include in the underwritten offering, to the extent of the amount that the Approved Underwriter believes may be sold without causing such adverse effect, FIRST, such number of Registrable Securities of the S-3 Initiating Holders and any other Designated Holders participating in the offering pursuant to this Article VI, which Registrable Securities shall be allocated PRO RATA among such S-3 Initiating Holders and such other Designated Holders, based on the number of Registrable Securities requested to be included in such offering by each such S-3 Initiating Holder and Designated Holder, SECOND, securities offered by the Company for its own account, and THIRD, any other securities of the Company requested by holders thereof to be included in such registration, which such securities shall be allocated PRO RATA among such stockholders, based on the number of the Company's securities requested to be included in such offering by each such stockholder. 6.3 LIMITATIONS ON FORM S-3 REGISTRATIONS. If the Board of Directors, has a Valid Business Reason, the Company may (x) postpone filing a Registration Statement relating to a S-3 Registration until such Valid Business Reason no longer exists, but in no event for more than ninety (90) days, and (y) in case a Registration Statement has been filed relating to a S-3 Registration, the Company, upon the approval of a majority of the Board of Directors, may cause such Registration Statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such Registration Statement (so long as the Designated Holders shall have the rights set forth in this Article VI within ninety (90) days of any such event). The Company shall give written notice of its determination to postpone or withdraw a Registration Statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof. Notwithstanding anything to the contrary contained herein, the Company may not postpone or withdraw a filing due to a Valid Business Reason under this Section 6.3 or Section 4.1 more than once in any twelve (12) month period. In addition, the Company shall not be required to effect any registration pursuant to Section 6.1 within ninety (90) days after the effective date of any other Registration Statement of the Company if (i) the Registration Statement was not for the account of the Designated Holders but the Designated Holders had the opportunity to include at least two-thirds of the Registrable Securities they requested to 11 include in such registration pursuant to Article V or (ii) the Registration Statement was filed pursuant to Article IV or this Article VI. 6.4 NO LIMITATION OF SHELF REGISTRATION RIGHT. No registration requested by any of the S-3 Initiating Holders pursuant to this Article VI shall be deemed to limit the rights of the Designated Holder set forth in Article III. 6.5 NO DEMAND REGISTRATION. No registration requested by any S-3 Initiating Holders pursuant to this Article VI shall be deemed a Demand Registration pursuant to Article IV. 6.6 EXPENSES. The Company shall bear all Registration Expenses in connection with any S-3 Registration pursuant to this Article VI, whether or not such S-3 Registration becomes effective. ARTICLE VII REGISTRATION PROCEDURES ----------------------- 7.1 OBLIGATIONS OF THE COMPANY. Whenever registration of Registrable Securities has been requested pursuant to Article III, Article IV, Article V or Article VI of this Agreement, the Company shall use its reasonable best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of distribution thereof as quickly as practicable, and in connection with any such request, the Company shall, as expeditiously as possible: (a) prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of such Registrable Securities in accordance with the intended method of distribution thereof, and use all reasonable best efforts to cause such Registration Statement to become effective; PROVIDED, HOWEVER, that (x) before filing a Registration Statement or prospectus or any amendments or supplements thereto, the Company shall provide a single counsel selected by the Designated Holders holding a majority of the Registrable Securities being registered in such registration ("HOLDERS' COUNSEL") with an adequate and appropriate opportunity to review and comment on such Registration Statement and each prospectus included therein (and each amendment or supplement thereto) to be filed with the Commission, subject to such documents being under the Company's control, and (y) the Company shall notify the Holders' Counsel and each seller of Registrable Securities of any stop order issued or threatened by the Commission and use all reasonable efforts to prevent the entry of such stop order or to remove it if entered; (b) prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be reasonably necessary to keep such Registration Statement effective for the period specified in such Article, or if not so specified, the lesser of (x) 180 days and (y) such shorter period which will terminate when all Registrable Securities covered 12 by such Registration Statement have been sold (PROVIDED, that if the S-3 Initiating Holders have requested that an S-3 Registration be for an offering on a continuous basis pursuant to Rule 415 under the Securities Act, then the Company shall keep such Registration Statement effective until the earliest of (i) the second anniversary of the effective date of such Registration Statement, (ii) such time as the Company delivers an opinion of counsel that each Designated Holder having Registrable Securities covered by such Registration Statement may sell in the open market in a single transaction all Registrable Securities then held by each such Designated Holder pursuant to Rule 144(k) of the Securities Act (or any similar provision then in force) without being subject to the volume limitations thereof or otherwise under an applicable exemption from the registration requirements of the Securities Act, as amended, and all other applicable securities and blue sky laws, or (iii) all Registrable Securities covered by such Registration Statement have been sold) and shall comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement; (c) furnish to each seller of Registrable Securities, prior to filing a Registration Statement, at least one copy of such Registration Statement as is proposed to be filed, and thereafter such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in such Registration Statement (including each preliminary prospectus) and any prospectus filed under Rule 424 under the Securities Act as each such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller; (d) register or qualify such Registrable Securities under such other securities or "blue sky" laws of such jurisdictions as any seller of Registrable Securities may reasonably request, and continue such registration or qualification in effect in such jurisdiction for as long as permissible pursuant to the laws of such jurisdiction, or for as long as any such seller reasonably requests or until all of such Registrable Securities are sold, whichever is shortest, and do any and all other acts and things which may be reasonably necessary or advisable to enable any such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; PROVIDED, HOWEVER, that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 7.1(d), (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction; (e) notify each seller of Registrable Securities: (i) when a prospectus, any prospectus supplement, a Registration Statement or a post-effective amendment to a Registration Statement has been filed with the Commission, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related prospectus or for additional information; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the 13 effectiveness of a Registration Statement or the initiation or threatening of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose; (v) of the existence of any fact or happening of any event of which the Company has Knowledge which makes any statement of a material fact in such Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue or which would require the making of any changes in the Registration Statement or prospectus in order that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of such prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (vi) determination by counsel of the Company that a post-effective amendment to a Registration Statement is advisable. (f) upon the occurrence of any event contemplated by Section 7.1(e)(v), as promptly as practicable, prepare a supplement or amendment to such Registration Statement or related prospectus and furnish to each seller of Registrable Securities a reasonable number of copies of such supplement to or an amendment of such Registration Statement or prospectus as may be necessary so that, after delivery to the purchasers of such Registrable Securities, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of such prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (g) enter into and perform customary agreements (including an underwriting agreement in customary form with the Approved Underwriter or Company Underwriter, if any, selected as provided in Article IV, Article V or Article VI, as the case may be) and take such other actions as are prudent and reasonably required in order to expedite or facilitate the disposition of such Registrable Securities, including causing its officers to participate in "road shows" and other information meetings organized by the Approved Underwriter or Company Underwriter, if applicable; (h) make available at reasonable times for inspection by any seller of Registrable Securities, any managing underwriter participating in any disposition of such Registrable Securities pursuant to a Registration Statement, Holders' Counsel and any attorney, accountant or other agent retained by any such seller or any managing underwriter (each, an "INSPECTOR" and collectively, the "INSPECTORS"), all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (collectively, the "RECORDS") as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's and its 14 subsidiaries' officers, directors and employees, and the independent public accountants of the Company, to supply all information reasonably requested by any such Inspector in connection with such Registration Statement. Notwithstanding the foregoing, Records and other information that the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors or used for any purpose other than as necessary or appropriate for the purpose of such inspection (and the Inspectors shall confirm their agreement in writing in advance to the Company if the Company shall so request) unless (x) the disclosure of such Records is necessary, in the Company's judgment, to avoid or correct a misstatement or omission in the Registration Statement, (y) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction after exhaustion of all appeals therefrom or (z) the information in such Records was known to the Inspectors on a non-confidential basis prior to its disclosure by the Company or has been made generally available to the public. Each seller of Registrable Securities agrees that it shall, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential; (i) if such sale is pursuant to an underwritten offering, obtain "comfort" letters dated the effective date of the Registration Statement and the date of the closing under the underwriting agreement from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by "comfort" letters as Holders' Counsel or the managing underwriter reasonably requests; (j) furnish, at the request of any seller of Registrable Securities on the date such securities are delivered to the underwriters for sale pursuant to such registration or, if such securities are not being sold through underwriters, on the date the Registration Statement with respect to such securities becomes effective, an opinion, dated such date, of counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and to the seller making such request, covering such legal matters with respect to the registration in respect of which such opinion is being given as the underwriters, if any, and such seller may reasonably request and are customarily included in such opinions; (k) comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as reasonably practicable but no later than fifteen (15) months after the effective date of the Registration Statement, an earnings statement covering a period of twelve (12) months beginning after the effective date of the Registration Statement, in a manner which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (l) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed; PROVIDED, that the applicable listing requirements are satisfied; 15 (m) keep Holders' Counsel advised in writing as to the initiation and progress of any registration under Article III, Article IV, Article V or Article VI hereunder; PROVIDED, that the Company shall provide Holders' Counsel with all correspondence with the Commission in connection with any Registration Statement filed hereunder to the extent that such Registration Statement has not been declared effective on or prior to the date required hereunder; (n) provide reasonable cooperation to each seller of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD; and (o) take all other steps reasonably necessary to effect the registration of the Registrable Securities contemplated hereby. 7.2 SELLER INFORMATION. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish, and such seller shall furnish, to the Company such information regarding the distribution of such securities as the Company may from time to time reasonably request in writing. The furnishing of such information shall be a condition to the inclusion of the seller's shares in such registration. 7.3 NOTICE TO DISCONTINUE. Each Designated Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 7.1(e)(v), such Designated Holder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Designated Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 7.1(f) and, if so directed by the Company, such Designated Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Designated Holder's possession, of the prospectus covering such Registrable Securities which is current at the time of receipt of such notice. If the Company shall give any such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement (including, without limitation, the period referred to in Section 7.1(b)) by the number of days during the period from and including the date of the giving of such notice pursuant to Section 7.1(e)(v) to and including the date when sellers of such Registrable Securities under such Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by, and meeting the requirements of, Section 7.1(f). 7.4 REGISTRATION EXPENSES. The Company shall pay all expenses arising from or incident to its performance of, or compliance with, this Agreement, including, without limitation, (i) Commission, stock exchange and NASD registration and filing fees, (ii) all fees and expenses incurred in complying with securities or "blue sky" laws (including reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with "blue sky" qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) all printing, 16 messenger and delivery expenses, (iv) the fees, charges and expenses of counsel to the Company and of its independent public accountants and any other accounting fees, charges and expenses incurred by the Company (including, without limitation, any expenses arising from any "cold comfort" letters or any special audits incident to or required by any registration or qualification) and any legal fees, charges and expenses incurred, in the case of a Demand Registration or an S-3 Registration, by the Initiating Holders or the S-3 Initiating Holders, as the case may be, but solely with respect to a single counsel for all such Initiating Holders and S-3 Initiating Holders and (v) any liability insurance or other premiums for insurance obtained in connection with any Demand Registration or piggy-back registration thereon, Incidental Registration or S-3 Registration pursuant to the terms of this Agreement, regardless of whether such Registration Statement is declared effective. All of the expenses described in the preceding sentence of this Section 7.4 are referred to herein as "REGISTRATION EXPENSES." The Designated Holders of Registrable Securities sold pursuant to a Registration Statement shall bear the expense of any broker's commission or underwriter's discount or commission relating to registration and sale of such Designated Holders' Registrable Securities and, subject to clause (iv) above, shall bear the fees and expenses of their own counsel. ARTICLE VIII INDEMNIFICATION; CONTRIBUTION ----------------------------- 8.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold harmless each Designated Holder, its general or limited partners, members, directors, officers, Affiliates and each Person who controls (within the meaning of Section 15 of the Securities Act) any of the foregoing from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) (each, a "LIABILITY" and collectively, "LIABILITIES"), (i) arising out of or based upon any untrue, or allegedly untrue, statement of a material fact contained in any Registration Statement, prospectus or preliminary, final or summary prospectus or notification or offering circular (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or (ii) arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which such statements were made, except insofar as such Liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission contained in such Registration Statement, preliminary prospectus or final prospectus in reliance and in conformity with information concerning such Designated Holder furnished in writing to the Company by such Designated Holder specifically for use therein; provided, however, that the foregoing indemnity with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Person from whom the person asserting such losses, claims, damages, liabilities, expenses and judgments purchased securities if such untrue statement or omission or alleged untrue statement or omission made in such preliminary prospectus is eliminated or remedied in the prospectus and a copy of the prospectus shall not have been furnished to such person in a timely manner due to the wrongful action or wrongful inaction of such Indemnified 17 Person, whether as a result of negligence or otherwise. The Company shall also provide customary indemnities to any underwriters of the Registrable Securities, their officers, directors and employees and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act) to the same extent as provided above with respect to the indemnification of the Designated Holders of Registrable Securities. 8.2 INDEMNIFICATION BY DESIGNATED HOLDERS. In connection with any Registration Statement in which a Designated Holder is participating pursuant to Article III, Article IV, Article V or Article VI hereof, each such Designated Holder shall promptly furnish to the Company in writing such information with respect to such Designated Holder as the Company may reasonably request or as may be required by law for use in connection with any such Registration Statement or prospectus and all information required to be disclosed in order to make the information previously furnished to the Company by such Designated Holder not materially misleading or necessary to cause such Registration Statement or prospectus not to omit a material fact with respect to such Designated Holder necessary in order to make the statements therein not misleading. Each Designated Holder agrees to indemnify and hold harmless the Company, its directors, officers, Affiliates, any underwriter retained by the Company and each Person who controls the Company or such underwriter (within the meaning of Section 15 of the Securities Act) to the same extent as the foregoing indemnity from the Company to the Designated Holders, but only if such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with information with respect to such Designated Holder furnished in writing to the Company by such Designated Holder specifically for use in such Registration Statement or preliminary, final or summary prospectus or amendment or supplement, or a document incorporated by reference into any of the foregoing; PROVIDED, HOWEVER, that the total amount to be indemnified by such Designated Holder pursuant to this Section 8.2 shall be limited to the net proceeds (after deducting the underwriters' discounts and commissions) received by such Designated Holder in the offering to which the Registration Statement or prospectus relates. 8.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to indemnification hereunder (the "INDEMNIFIED PARTY") agrees to give prompt written notice to the indemnifying party (the "INDEMNIFYING PARTY") after the receipt by the Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; PROVIDED, HOWEVER, that the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any Liability that it may have to the Indemnified Party hereunder (except to the extent that the Indemnifying Party is materially prejudiced or otherwise forfeits substantive rights or defenses by reason of such failure). If notice of commencement of any such action is given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such Indemnified Party. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel 18 shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel reasonably satisfactory to the Indemnified Party or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and such parties have been advised by such counsel that either (x) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (y) there may be one or more legal defenses available to the Indemnified Party which are different from or additional to those available to the Indemnifying Party. In any of such cases, the Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party, it being understood, however, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all Indemnified Parties. No Indemnifying Party shall be liable for any settlement entered into without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the consent of such Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Party is a party and indemnity has been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability for claims that are the subject matter of such proceeding. 8.4 CONTRIBUTION. (a) If the indemnification provided for in this Article VIII from the Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any Liabilities referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such Liabilities, as well as any other relevant equitable considerations. The relative faults of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 8.1 and 8.2, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding; PROVIDED, that the total amount to be contributed by such Designated Holder shall be limited to the net proceeds (after deducting the underwriters' discounts and commissions) received by such Designated Holder in the offering. (b) The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in Section 8.4(a). No Person guilty of fraudulent misrepresentation (within 19 the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. ARTICLE IX COVENANTS --------- 9.1 RULE 144. The Company covenants that from and after the date hereof it shall (a) file any reports required to be filed by it under the Exchange Act and (b) take such further action as each Designated Holder may reasonably request (including providing any information necessary to comply with Rule 144 under the Securities Act), all to the extent required from time to time to enable such Designated Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule may be amended from time to time, or Regulation S under the Securities Act or (ii) any similar rules or regulations hereafter adopted by the Commission. The Company shall, upon the request of any Designated Holder, deliver to such Designated Holder a written statement as to whether it has complied with such requirements. 9.2 LIMITATIONS ON REGISTRATION RIGHTS. No person (including holders of Registrable Shares) shall, without the prior written consent of Investors holding at least a majority of the Registrable Securities, be permitted to include securities of the Company in any registration filed under Article III, Article IV or Article VI hereto. ARTICLE X MISCELLANEOUS ------------- 10.1 RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this Agreement shall apply to the full extent set forth herein with respect to (i) the shares of Common Stock and the Common Stock Equivalents, (ii) any and all shares of voting common stock of the Company into which the shares of Common Stock or Common Stock Equivalents are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (iii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the shares of Common Stock or Common Stock Equivalents and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Designated Holders on terms substantially the same as this Agreement as a condition of any such transaction. 10.2 NO INCONSISTENT AGREEMENTS. The Company represents and warrants that it has not granted to any Person the right to request or require the Company to register any securities issued by the Company, other than the rights granted to the 20 Designated Holders herein. The Company shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Designated Holders in this Agreement or grant any additional registration rights to any Person or with respect to any securities which are not Registrable Securities which are prior in right to or inconsistent with the rights granted in this Agreement, except with the prior written consent of holders of a majority of the Registrable Securities. 10.3 REMEDIES. The Designated Holders, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled to specific performance of their rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate. 10.4 NOTICES. All notices, demands and other communications provided for or permitted hereunder shall be made in the manner provided for under the Purchase Agreement. 10.5 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto as hereinafter provided. The rights of the Designated Holders contained in this Agreement shall be automatically transferred to the transferee of any Registrable Security, PROVIDED, that such transferee agrees to become a party to this Agreement and be fully bound by, and subject to, all of the terms and conditions of the Agreement as though an original party hereto. All of the obligations of the Company hereunder shall survive any such transfer. Except as provided in Article VIII, no Person other than the parties hereto and their successors and permitted assigns are intended to be a beneficiary of this Agreement. 10.6 AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless consented to in writing by (i) the Company and (ii) the Investors holding a majority of the Registrable Securities held by all of the Investors; PROVIDED, that if any such amendment, modification, supplement, waiver, consent or departure would adversely affect the rights, preferences or privileges of any Investor disproportionately with respect to the rights, preferences and privileges of the other Investors, such Investor's consent in writing shall be required. 10.7 COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. The parties hereto confirm that any facsimile copy of another party's executed counterpart of this Agreement (or its signature page thereof) will be deemed to be an executed original thereof. 21 10.8 HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 10.9 GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. The parties hereto irrevocably submit to the non-exclusive jurisdiction of any state or federal court sitting in the County of New York, in the State of New York over any suit, action or proceeding arising out of or relating to this Agreement or the affairs of the Company. To the fullest extent they may effectively do so under applicable law, the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that they are not subject to the jurisdiction of any such court, any objection that they may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 10.10 SEVERABILITY. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. 10.11 RULES OF CONSTRUCTION. Unless the context otherwise requires, references to sections or subsections refer to sections or subsections of this Agreement. 10.12 ENTIRE AGREEMENT. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto with respect to the subject matter contained herein. There are no restrictions, promises, representations, warranties or undertakings with respect to the subject matter contained herein, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the parties with respect to such subject matter. 10.13 FURTHER ASSURANCES. Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations or other actions by, or giving any notices to, or making any filings with, any governmental authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement. 10.14 OTHER AGREEMENTS. Nothing contained in this Agreement shall be deemed to be a waiver of, or release from, any obligations any party hereto may have under, or any restrictions on the transfer of Registrable Securities or other securities of 22 the Company imposed by, any other agreement including, but not limited to, the Charter Documents and the Purchase Agreement. 10.15 TERMINATION. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for liabilities or obligations under Section 7.4 or Article VIII, all of which shall remain in effect in accordance with their terms. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Registration Rights Agreement on the date first written above. EVERGREEN SOLAR, INC. By: /s/ Mark A. Farber ----------------------------------------------- Name: Title: [Signature Page - Registration Rights Agreement] PERSEUS 2000, L.L.C. By: Perseus 2000 Management, L.L.C., its Manager By: /s/ Philip J. Deutch ----------------------------------------------- Name: Philip J. Deutch Title: Managing Director [Signature Page - Registration Rights Agreement] NTH POWER TECHNOLOGIES FUND II, LP By: Nth Power LLC, its General Partner By: /s/ Tim Woodward ----------------------------------------------- Name: Tim Woodward Title: Managing Director NTH POWER TECHNOLOGIES FUND II-A, LP By: Nth Power LLC, its General Partner By: /s/ Tim Woodward ----------------------------------------------- Name: Tim Woodward Title: Managing Director [Signature Page - Registration Rights Agreement] ROCKPORT CAPITAL PARTNERS, L.P. By: RockPort Capital I, LLC, its General Partner By: /s/ Charles J. McDermott ----------------------------------------------- Name: Charles J. McDermott Title: Managing Member RP Co-Investment Fund I, L.P. By: RP Co-Investment Fund I GP, LLC By: /s/ Charles J. McDermott ----------------------------------------------- Name: Charles J. McDermott Title: Managing Member [Signature Page - Registration Rights Agreement] MICRO-GENERATION TECHNOLOGY FUND, LLC By: Arete Corporation, Manager By: /s/ Robert W. Shaw, Jr. ----------------------------------------------- Name: Robert W. Shaw, Jr. Title: President UVCC FUND II By: Arete Venture Investors II, L.P. By: /s/ Robert W. Shaw, Jr. ----------------------------------------------- Name: Robert W. Shaw, Jr. Title: General Partner UVCC II PARALLEL FUND, L.P. By: Arete Ventures L.P. III By: /s/ Robert W. Shaw, Jr. ----------------------------------------------- Name: Robert W. Shaw, Jr. Title: General Partner [Signature Page - Registration Rights Agreement] CAISSE DE DEPOT ET PLACEMENT DU QUEBEC By: /s/ Luc Charron ----------------------------------------------- Name: Luc Charron Title: Partner By: /s/ Denis Dionne ----------------------------------------------- Name: Denis Dionne Title: President CDP CAPITAL - TECHNOLOGY VENTURES U.S. FUND 2002 L.P. By: Management U.S. Fund 2002 Inc., its General Partner By: /s/ Luc Charron ----------------------------------------------- Name: Luc Charron Title: Partner By: /s/ Denis Dionne ----------------------------------------------- Name: Denis Dionne Title: President [Signature Page - Registration Rights Agreement] BEACON POWER CORPORATION By: /s/ F. William Capp ----------------------------------------------- Name: F. William Capp Title: President and CEO [Signature Page - Registration Rights Agreement] MASSACHUSETTS TECHNOLOGY PARK CORPORATION By: /s/ Mitchell Adams ----------------------------------------------- Name: Mitchell Adams Title: Executive Director [Signature Page - Registration Rights Agreement] ZERO STAGE CAPITAL VII, L.P. By: Zero Stage Capital Associates VII, L.P., its General Partner By: Zero Stage Capital Associates GP VII, Inc., its General Partner By: /s/ Paul Kelley ----------------------------------------------- Name: Paul Kelley Title: Managing Director & CEO ZERO STAGE CAPITAL (CAYMAN) VII, L.P. By: Zero Stage Capital Associates VII, L.P., its General Partner By: Zero Stage Capital GP VII, Inc., its General Partner By: /s/ Paul Kelley ----------------------------------------------- Name: Paul Kelley Title: Managing Director & CEO ZERO STAGE CAPITAL SBIC VII, L.P. By: Zero Stage Capital SBIC VII Associates, L.P., its General Partner By: /s/ Paul Kelley ----------------------------------------------- Name: Paul Kelley Title: Managing Director & CEO [Signature Page - Registration Rights Agreement] IMPAX ENVIRONMENTAL MARKETS PLC By: /s/ Bruce Jenkyou-Jones ----------------------------------------------- Name: Bruce Jenkyou-Jones Title: Investment Manager [Signature Page - Registration Rights Agreement] MERRILL LYNCH NEW ENERGY TECHNOLOGY PLC By: /s/ Helena Harvey ----------------------------------------------- Name: Helena Harvey Title: Company Secretary By: /s/ Robin Batchelor ----------------------------------------------- Name: Robin Batchelor Title: Director MLIIF NEW ENERGY FUND By: /s/ Richard Davis ----------------------------------------------- Name: Richard Davis Title: Director By: /s/ Robin Batchelor ----------------------------------------------- Name: Robin Batchelor Title: Director [Signature Page - Registration Rights Agreement] PNE INVEST LIMITED By: /s/ David Mitchison ----------------------------------------------- Name: David Mitchison Title: Chairman of the Board of Directors By: /s/ Barbara Hemmi ----------------------------------------------- Name: Barbara Hemmi Title: Director [Signature Page - Registration Rights Agreement] ODYSSEY FUND By: Rockefeller & Co., Inc., its Investment Manager By: /s/ Jeffrey P. Davis ----------------------------------------------- Name: Jeffrey P. Davis Title: Chief Investment Officer [Signature Page - Registration Rights Agreement] SAM PRIVATE EQUITY ENERGY FUND LP By: SAM Equity Partners Limited, its General Partner By: /s/ Gina Domanig ----------------------------------------------- Name: Gina Domanig Title: Director SAM SUSTAINABILITY PRIVATE EQUITY LP By: SAM Equity Partners Limited, its General Partner By: /s/ Gina Domanig ----------------------------------------------- Name: Gina Domanig Title: Director SAM SMART ENERGY By: /s/ Declan Quilligan ----------------------------------------------- Name: Declan Quilligan Title: Director [Signature Page - Registration Rights Agreement] -----END PRIVACY-ENHANCED MESSAGE-----