Exhibit 10.2
MODIFICATION, TERMINATION AND
RELEASE
OF LEASE
This Modification, Termination and
Release of Lease (the “Agreement”) is dated December
22, 2006 (the “Effective Date”) by and between SatCon
Technology Corporation (“SatCon”) and Paul E. Hanlon,
Trustee of C&M Realty Trust (“C&M”). All
terms not otherwise defined herein shall have the meaning ascribed
to them in the Lease (defined below).
WHEREAS, C&M entered into a
lease with Folio Acquisition Corp. (“FAC”) dated March
3, 1998 for the premises at 7 Coppage Drive, Worcester, MA which
was amended on March 31, 2001 to identify Folio Group, Inc., a
successor in interest to FAC (“Folio”), as the lessee
(collectively, the “Major Lease”), and on March 31,
2001, Folio sublet the premises to SatCon under a sublease (the
“Sublease”) to which C&M consented (the
“Consent”);
WHEREAS, on June 21, 2002, Folio
defaulted on the Major Lease and SatCon exercised its right to
enter into a direct lease with the Lessor upon all the terms and
conditions contained in the Major Lease, as modified by the
Sublease and the Consent;
WHEREAS, on March 20, 2005, SatCon
and C&M entered into a Confirmation of Exercise of Option,
Establishment of Direct Lease and Modification of Direct Lease (the
“Option Exercise”); and
WHEREAS, SatCon desires to terminate
the Major Lease, as modified by the Sublease, the Consent and the
Option Exercise (collectively, the “Lease”), prior to
the termination date included therein of March 31, 2010 and C&M
agrees to such early termination subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of
the foregoing premises, and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereby
agree as follows:
1.
Expiration of Lease . The parties agree that subject
to the terms and conditions of this Agreement, the Term of the
Lease shall expire on the later of (a) February 15, 2007 or (b) the
date on which the Registration Statement (as defined in Section
4.1(a) below) becomes effective at 11:59 p.m. (the
“Termination Date”) and that such early expiration
shall not constitute a default by SatCon under the
Lease.
2.
Return of Premises . SatCon agrees that on or prior to
the Termination Date, it shall remove its property from the
Premises in accordance with Section 13.1 of the Major Lease, as
modified by the Sublease, the Consent and this Agreement. The
parties agree that SatCon shall take the following actions as part
of this Agreement:
(i)
Demolish the machine shop,
compressor room and small test room down to the floor
surface;
(ii)
Remove the two (2) crane systems
down to the floor surfaces;
(iii)
Remove outside mufflers and repair
any damages to the building caused by such removal;
(iv)
Remove the outside
trailers;
(v)
Remove the inventory cage;
and
(vi)
Cut the power to the mini
uninterrupted power supply outside the building (the
“UPS”).
The parties agree that the electric,
compressed air drops, the cafeteria and UPS (including the
electrical room in the UPS area) may remain within the Premises and
need not be removed by SatCon. Consistent
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with the terms of the Lease and
except as set forth in this Section 2, SatCon shall yield up the
Premises to C&M in the same condition as existed on March 31,
2001, or as they may have been put thereafter, ordinary wear and
tear and damage by fire and casualty and damage resulting from any
failure of the C&M to perform its obligations only
excepted. Other than as specifically set forth in this
Section 2, SatCon shall have no further restoration obligation with
respect to the Premises upon expiration of the Lease. Other
than as specifically stated herein, nothing in Section 1 or this
Section 2 shall relieve SatCon of its obligations under the Lease
during the period up to and including the Termination
Date.
3.
Issuance of Shares .
3.1
The parties acknowledge and agree that absent this Agreement, or
any other permitted earlier termination of the Lease, the aggregate
base rent payable by SatCon for the Premises for the remaining
Lease term of three (3) years and three (3) months (from December
31, 2006 through March 31, 2010) is equal to One Million Two
Hundred Seventy-nine Thousand Three Hundred Twenty Dollars
($1,279,320.00). SatCon and C&M hereby agree that as
consideration for the earlier expiration of the Lease contemplated
in Section 1 and in lieu of any continuing payments or other
obligations of SatCon thereunder as a result of such early
expiration, SatCon shall issue to C&M Eight Hundred Fifty
Thousand (850,000) shares of the common stock of SatCon, $0.01 par
value, (the “Shares”) on January 2, 2007 (the
“Issuance Date”).
3.2
C&M understands that upon issuance, the Shares will not be
registered under the securities laws of the United States or any
other jurisdiction and may not be transferred or resold except as
permitted pursuant to a valid registration statement or an
applicable exemption from registration.
3.3
In connection with the private placement of the Shares to C&M,
C&M represents that:
(a)
C&M is acquiring the Shares for its own account and not with a
view to or for distributing or reselling such Shares or any part
thereof, without prejudice, however, to its right, subject to the
provisions of this Agreement, at all times to sell or otherwise
dispose of all or any part of such Shares pursuant to an effective
registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), or under an exemption from such
registration and in compliance with applicable federal and state
securities laws. Nothing contained herein shall be deemed a
representation or warranty by C&M to hold Shares for any period
of time.
(b)
C&M is an “accredited investor” as defined in Rule
501(a) under the Securities Act.
(c)
C&M, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment. C&M is
able to bear the economic risk of an investment in the
Shares.
4.
Registration of the Shares; Compliance with the Securities Act;
Sales of the Shares .
4.1
Registration Procedures and Other Matters . SatCon
shall:
(a)
subject to receipt of necessary information from C&M after
prompt request from SatCon to C&M to provide such information,
prepare and file with the SEC, within 30 days after the Issuance
Date, a “shelf” registration statement covering the
resale of all Shares for an offering to be made on a continuous
basis pursuant to Rule 415 (the “Registration
Statement”). The Registration
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Statement shall be on Form
S-3. In the event the Form S-3 is not available for the
registration of the resale of Shares hereunder, SatCon shall
register the resale of the Shares on another appropriate form in
accordance herewith;
(b)
subject to receipt of necessary information from C&M after
prompt request from SatCon to C&M to provide such information,
use its best efforts to cause the Registration Statement to become
effective within 90 days after the Issuance Date.
(c)
use best efforts to prepare and file with the SEC such amendments
and supplements to the Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep the
Registration Statement current, effective and free from any
material misstatement or omission to state a material fact for a
period not exceeding, with respect the Shares, the earlier of
(i) the first anniversary of the Issuance Date, (ii) the
date on which C&M may sell all Shares then held by C&M
without restriction by the volume limitations of Rule 144(e)
of the Securities Act and the rules and regulations promulgated
thereunder, or (iii) such time as all Shares have been sold
pursuant to the Registration Statement;
(d)
comply with any prospectus publication requirement then applicable
to it and furnish to C&M with respect to the Shares registered
under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses
in conformity with the requirements of the Securities Act and such
other documents as C&M may reasonably request, in order to
facilitate the public sale or other disposition of all or any of
the Shares by C&M; provided, however, that the obligation of
SatCon to deliver copies of Prospectuses or Preliminary
Prospectuses to C&M shall be subject to the receipt by SatCon
of reasonable assurances from C&M that C&M will comply with
the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with
any use of such Prospectuses or Preliminary
Prospectuses;
(e)
file documents required of SatCon for normal blue sky clearance in
states specified in writing by C&M and use its best efforts to
maintain such blue sky qualifications during the period SatCon is
required to maintain the effectiveness of the Registration
Statement pursuant to Section 4.1(c); provided, however, that
SatCon shall not be required to qualify to do business or consent
to service of process in any jurisdiction in which it is not now so
qualified or has not so consented;
(f)
bear all expenses in connection with the procedures in paragraph
(a) through (e) of this Section 4.1 (other than underwriting
discounts or commissions, brokers’ fees and similar selling
expenses, and any other fees or expenses incurred by C&M,
including attorneys’ fees of C&M) and the registration of
the Shares pursuant to the Registration Statement; and
(g)
advise C&M, promptly after it shall receive notice or obtain
knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of
the initiation or threat of any proceeding for that purpose; and it
will promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal at the earliest possible
moment if such stop order should be issued.
4.2
Transfer of Shares After Registration; Suspension
.
(a)
C&M agrees that it will not effect any disposition of the
Shares that would constitute a sale within the meaning of the
Securities Act except as contemplated in the Registration Statement
referred to in Section 4.1 and as described below or as
otherwise permitted by law, and that it will promptly notify SatCon
of any changes in the information set forth in the Registration
Statement regarding C&M or its plan of distribution.
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(b)
Except in the event that paragraph (c) below applies, SatCon shall
(i) if deemed necessary by SatCon, prepare and file from time
to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or
file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and so
that, as thereafter delivered to purchasers of the Shares being
sold thereunder, such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading; (ii) provide C&M copies of any documents
filed pursuant to Section 4.2(b)(i) as C&M may reasonably
request; and (iii) inform C&M that SatCon has complied
with its obligations in Section 4.2(b)(i) (or that, if SatCon
has filed a post-effective amendment to the Registration Statement
which has not yet been declared effective, SatCon will notify
C&M to that effect, will use its best efforts to secure the
effectiveness of such post-effective amendment as promptly as
possible and will promptly notify C&M pursuant to
Section 4.2(b)(i) hereof when the amendment has become
effective).
(c)
Subject to paragraph (d) below, in the event (i) of any
request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the Registration
Statement or related Prospectus or for additional information;
(ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) of the receipt by
SatCon of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Shares
for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; or (iv) of any event or
circumstance which, upon the advice of its counsel, necessitates
the making of any changes in the Registration Statement or
Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the
Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, then SatCon shall
deliver a certificate in writing to C&M (the “Suspension
Notice”) to the effect of the foregoing and, upon receipt of
such Suspension Notice, C&M will refrain from selling any
Shares pursuant to the Registration Statement (a
“Suspension”) until C&M’s receipt of copies
of a supplemented or amended Prospectus prepared and filed by
SatCon, or until it is advised in writing by SatCon that the
current Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the
event of any Suspension, SatCon will use its best efforts to cause
the use of the Prospectus so suspended to be resumed as soon as
reasonably practicable within 20 business days after the delivery
of a Suspension Notice to C&M. In addition to and without
limiting any other remedies (including, without limitation, at law
or at equity) available to C&M, C&M shall be entitled to
specific performance in the event that SatCon fails to comply with
the provisions of this Section 4.2(c).
(d)
Notwithstanding the foregoing paragraphs of this Section 4.2,
C&M shall not be prohibited from selling Shares under the
Registration Statement as a result of Suspensions for more than 60
days in any twelve month period, unless, in the good faith judgment
of SatCon’s Board of Directors, upon the written opinion of
counsel of SatCon, the sale of Shares under the Registration
Statement in reliance on this paragraph 4.2(d) would be reasonably
likely to cause a violation of the Securities Act or the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the “Exchange Act”), and result
in liability to SatCon.
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