Exhibit 10.1
SECURITIES PURCHASE
AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT
(this “ Agreement ”) is made effective as of
May 29, 2009, by and among Active Power, Inc. (the “
Company ”), a corporation organized under the laws of
the State of Delaware, with its principal offices at 2128 W. Braker
Lane, BK12, Austin, Texas 78758, and the purchasers whose names and
addresses are set forth on the signature pages hereof (each a
“ Purchaser ” and collectively the “
Purchasers ”).
IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and agreed by the parties hereto, the Company
and each of the Purchasers, intending to be legally bound, agree as
follows:
SECTION 1. Authorization of
Sale of the Shares . Subject to the terms and conditions of
this Agreement, the Company has authorized the issuance and sale of
up to 6,000,000 shares (the “ Shares ”) of
common stock, par value $0.001 per share (the “ Common
Stock ”), of the Company.
SECTION 2. Agreement to Sell
and Purchase the Shares . At the Closing (as defined in
Section 3), the Company will, subject to the terms and
conditions of this Agreement, issue and sell to the Purchasers and
the Purchasers will buy from the Company, upon the terms and
conditions hereinafter set forth, the number of Shares at the
purchase price per share and aggregate purchase prices set forth on
the signature pages hereto. The obligation of each Purchaser to buy
Shares shall be a several, and not joint, obligation.
SECTION 3. Delivery of the
Shares at the Closing . The completion of the purchase and sale
of the Shares (the “ Closing ”) shall occur at
the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, 900 South Capital of Texas Highway, Las
Cimas IV, Fifth Floor, Austin, TX 78746-5546, within three
(3) business days following the effective date of the
Agreement, or on such later date or at such different location as
the parties shall agree in writing, but not prior to the date that
the conditions for Closing set forth below have been satisfied or
waived by the appropriate party (the “ Closing Date
”).
At the Closing, each Purchaser shall
deliver, in immediately available funds, the full amount of the
purchase price for the Shares being purchased by such Purchaser
hereunder by wire transfer to an account designated by the Company
and the Company shall deliver to each Purchaser one or more stock
certificates registered in the name of such Purchaser, or in such
nominee name(s) as designated by such Purchaser in writing,
representing the number of Shares set forth on such
Purchaser’s signature page hereto and bearing an appropriate
legend referring to the fact that the Shares were sold in reliance
upon the exemption from registration under the Securities Act of
1933, as amended (the “ Securities Act ”),
provided by Section 4(2) thereof and Rule 506 thereunder.
The name(s) in which the stock certificates are to be registered
are set forth in the Stock Certificate Questionnaire attached
hereto as part of Appendix I .
The Company’s obligation to
complete the purchase and sale of the Shares and deliver such stock
certificate(s) to the Purchaser at the Closing shall be subject to
the following conditions, any one or more of which may be waived by
the Company: (x) receipt by the Company of same-day funds in
the full amount of the purchase price for the Shares being
purchased hereunder; (y) completion of the purchases and sales
under the Agreement with all Purchasers; and (z) the accuracy
in all material respects of the representations and warranties made
by the Purchasers and the fulfillment of those undertakings of the
Purchasers to be fulfilled prior to the Closing. Each
Purchaser’s obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby shall be
subject to the following conditions, any one or more of which may
be waived by such Purchaser: (a) each of the representations
and warranties of the Company in this Agreement (disregarding, for
this purpose, all exceptions in those representations and
warranties relating to materiality, Material Adverse Effect (as
defined below) or any similar standard or qualification) shall be
true and correct on and as of the date of this Agreement and as of
the Closing Date (except to the extent expressly made as of a
specified date, in which case as of such date), except where such
failure to be so true and correct on the date hereof and on the
Closing Date has not had or is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect;
(b) the delivery to the Purchaser by counsel to the Company of
a legal opinion in the form of Exhibit A hereto;
(c) receipt by the Purchaser of a certificate executed by the
chief executive officer and the chief financial or accounting
officer of the Company, dated as of the Closing Date, to the effect
of (a) above, and to the effect that the Company has complied
in all material respects with the Agreement and satisfied all the
conditions herein on its part to be performed or satisfied on or
prior to such Closing Date; and (d) the fulfillment in all
material respects of those undertakings of the Company to be
fulfilled prior to the Closing. Each Purchaser’s obligations
hereunder are expressly not conditioned on the purchase by any or
all of the other Purchasers of the Shares that they have agreed to
purchase from the Company. For the purposes of this Agreement the
term “ Material Adverse Effect ” shall mean a
material adverse effect on the condition, properties, business or
results of operations of the Company and its Subsidiaries, taken as
a whole; provided, however, in no event shall any of the
following be taken into account in determining whether there has
been or will be a Material Adverse Effect: (A) any effect
resulting from changes or effects in general worldwide or U.S.
economic, capital market or political conditions, which changes or
effects do not disproportionately affect the Company, (B) any
effect resulting from changes or effects generally affecting the
industries or markets in which the Company operates, which changes
or effects do not disproportionately affect the Company,
(C) any effect resulting from any act of war or terrorism (or,
in each case, any escalation thereof), which changes or effects do
not disproportionately affect the Company, (D) any changes in
applicable laws or regulations or accounting principles,
(E) any change in and of itself in the trading price or
trading volume of the Company’s Common Stock, or (F) any
failure, in and of itself, of the Company to meet any projections
or forecasts or revenue or earnings predictions.
SECTION 4. Representations,
Warranties and Covenants of the Company . The Company hereby
represents and warrants to, and covenants with, the Purchasers, as
of the date of this Agreement (except to the extent expressly made
as of a specified date, in which case as of such date), as
follows:
4.1 Organization and
Qualification . The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, and the
Company is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is
required, except where failure to so qualify would not have a
Material Adverse Effect. Each of the Company’s subsidiaries
(each a “ Subsidiary ” and collectively the
“ Subsidiaries ”) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is
required, except where failure to so qualify would not have a
Material Adverse Effect.
4.2 Reporting Company;
Form S-3 . As of the date of this Agreement, the Company
is not an “ineligible issuer” (as defined in
Rule 405 promulgated under the Securities Act) and is eligible
to register the Shares for resale by the Purchaser on a
registration statement on Form S-3 under the Securities Act.
The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), and has filed all reports required
thereby. To the Company’s knowledge, there exist no facts or
circumstances (including without limitation any required approvals
or waivers or any circumstances that may delay or prevent the
obtaining of accountant’s consents) that reasonably could be
expected to prohibit or delay the preparation and filing of a
registration statement on Form S-3 (or a prospectus supplement
to an effective shelf registration statement) under the Securities
Act registering the Shares for public resale as contemplated in
Section 7.1 (the “ Registration Statement
”) beyond the time for such Registration Statement to be
filed and to become effective, as specified therein.
4.3 Authorized Capital Stock
. The authorized capital stock of the Company consists of
(a) 150,000,000 shares of Common Stock, of which 60,458,311
shares were issued and outstanding as of the close of business on
May 28, 2009, and (b) 10,000,000 shares of preferred
stock, par value $0.001 per share, of which no shares were issued
and outstanding as of May 28, 2009. The issued and outstanding
shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and were not
issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities. Except as set forth
in the Commission Documents (as defined in Section 4.12), the
Company does not have outstanding any options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase,
any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any
such options, rights, convertible securities or obligations. With
respect to each of the Subsidiaries, except where failure of the
following representation would not have a Material Adverse Effect
(i) all the issued and outstanding shares of such
Subsidiary’s capital stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities, and
(ii) except as set forth in or contemplated by the Commission
Documents, there are no outstanding options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase,
any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of such Subsidiary’s
capital stock or any such options, rights, convertible securities
or obligations.
4.4 Issuance, Sale and Delivery
of the Shares . The Shares have been duly authorized and, when
issued, delivered and paid for in the manner set forth in this
Agreement, will be validly issued, fully paid and nonassessable. No
preemptive rights or other rights to subscribe for or
purchase any shares of Common Stock of the
Company exist with respect to the issuance and sale of the Shares
by the Company pursuant to this Agreement. No stockholder of the
Company has any right (which has not been waived or has not expired
by reason of lapse of time following notification of the
Company’s intention to file the Registration Statement) to
require the Company to register the sale of any capital stock owned
by such stockholder under the Registration Statement. No further
approval or authority of the stockholders or the Board of Directors
of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein.
4.5 Due Execution, Delivery and
Performance of the Agreement . The Company has full legal
right, corporate power and authority to enter into this Agreement
and perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by the Company.
This Agreement constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
and judicial decisions of general application relating to or
affecting the enforcement of creditors’ rights and the
application of equitable principles relating to the availability of
remedies, and except as rights to indemnity or contribution,
including but not limited to, indemnification provisions set forth
in Section 7.3 of this Agreement may be limited by federal or
state securities law or the public policy underlying such laws. The
execution and performance of this Agreement by the Company and the
consummation of the transactions herein contemplated will not
violate any provision of the certificate of incorporation or bylaws
of the Company or the organizational documents of any Subsidiary.
No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental agency
or body is required for the execution and delivery of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated by this Agreement, except for compliance
with the Blue Sky laws applicable to the offering of the
Shares.
4.6 No Defaults or Consents .
Except as would not cause a Material Adverse Effect, individually
or in the aggregate, neither the execution, delivery and
performance of this Agreement by the Company nor the consummation
of any of the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the Shares)
will give rise to a right to terminate or accelerate the due date
of any payment due under, or conflict with or result in the breach
of any term or provision of, or constitute a default (or an event
that with notice or lapse of time or both would constitute a
default) under, or require any consent or waiver under, or result
in the execution or imposition of any lien, charge or encumbrance
upon any properties or assets of the Company or its Subsidiaries
pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which either the Company or its
Subsidiaries or any of its or their properties or businesses is
bound, or any franchise, lease, license, permit, judgment, decree,
order, statute, rule or regulation of any court or any regulatory
body, administrative agency or other governmental agency or body
applicable to the Company or any Subsidiary or any of their
respective assets or properties, except for such consents or
waivers that have already been obtained and are in full force and
effect.
4.7 No Material Adverse
Change . Except as disclosed in the Commission Documents, since
December 31, 2008 (i) the Company and its Subsidiaries
have not paid or declared any dividends or other distributions with
respect to their capital stock and none of the Company
or
any Subsidiary is in default in the payment of
principal or interest on any material outstanding debt obligations;
(ii) there has not been any change in the capital stock of the
Company or its Subsidiaries other than the sale of the Shares
hereunder and shares or options issued pursuant to employee equity
incentive plans or purchase plans approved by the Company’s
Board of Directors, or indebtedness material to the Company or its
Subsidiaries (other than in the ordinary course of business and any
required scheduled payments); and (iii) there has not occurred
any event that has caused or could reasonably be expected to cause
a Material Adverse Effect.
4.8 Compliance . The Company
and its Subsidiaries conduct their business in compliance with all
applicable laws, rules and regulations of the jurisdictions in
which each is conducting business, including, without limitation,
all applicable local, state and federal environmental laws and
regulations, except where failure to be so in compliance would not
have a Material Adverse Effect.
4.9 Taxes . The Company and
each Subsidiary have filed all required federal, state and foreign
income and franchise tax returns and have paid or accrued all taxes
shown as due thereon, and none of the Company or any Subsidiary has
knowledge of a tax deficiency that has been or might be asserted or
threatened against it that could have a Material Adverse
Effect.
4.10 Transfer Taxes . On the
Closing Date, all stock transfer or other taxes (other than income
taxes) that are required to be paid in connection with the sale and
transfer of the Shares to be sold to the Purchaser hereunder will
have been fully paid or provided for by the Company.
4.11 Investment Company . The
Company is not an “investment company” or an
“affiliated person” of, or “promoter” or
“principal underwriter” for an investment company,
within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Securities and
Exchange Commission (the “ Commission ”)
promulgated thereunder.
4.12 Additional Information .
As of their respective filing dates, none of the Commission
Documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein in light of the
circumstances in which they were made not misleading. As of the
date hereof, the Company’s Annual Report for the fiscal year
ended December 31, 2007, together with all other documents
filed by the Company with the Commission since January 1,
2008, do 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 in
which they were made not misleading. The documents incorporated by
reference in the Commission Documents or attached as exhibits
thereto, at the time they became effective or were filed with the
Commission, as the case may be, complied in all material respects
with the requirements of the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder. In the past
twelve (12) calendar months, the Company has filed all
documents required to be filed by it prior to the date hereof with
the Commission pursuant to the reporting requirements of the
Exchange Act. All materials filed or furnished by the Company with
the Commission under the Exchange Act or the Securities Act for the
twelve (12) calendar months preceding the date hereof and all
amendments thereto, exhibits included therein, financial statements
and schedules thereto and documents incorporated by reference
therein, are referred to as the “ Commission Documents
.”
4.13 Price of Common Stock .
The Company has not taken, directly or indirectly, any action
designed to cause or result in, or that has constituted or that
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of the Common Stock to
facilitate the sale or resale of the Shares.
4.14 Listing Compliance .
Except as set forth in the Commission Documents, the Company is in
compliance with the requirements of the Nasdaq Global Market for
continued listing of the Common Stock thereon. The Company has
taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange
Act or the listing of the Common Stock on the Nasdaq Global Market,
nor has the Company received any notification that the Commission
or the Nasdaq Global Market is contemplating terminating such
registration or listing. The transactions contemplated by this
Agreement will not contravene the rules and regulations of the
Nasdaq Global Market. The Company will comply with all requirements
of the Nasdaq Global Market with respect to the issuance of the
Shares and shall cause the Shares to be listed on the Nasdaq Global
Market and listed on any other exchange on which the
Company’s Common Stock is listed on or before the Closing
Date.
4.15 Integration; Other Issuances
of Shares . Neither the Company nor the Subsidiaries or any
affiliates, nor any person or entity acting on its or their behalf,
has issued any shares of Common Stock or shares of any series of
preferred stock or other securities or instruments convertible
into, exchangeable for or otherwise entitling the holder thereof to
acquire shares of Common Stock that would be integrated with the
sale of the Shares to such Purchaser for purposes of the Securities
Act or of any applicable stockholder approval provisions,
including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the
securities of the Company are listed or designated, nor will the
Company or the Subsidiaries or affiliates take any action or steps
that would require registration of any of the Shares under the
Securities Act or cause the offering of the Shares to be integrated
with other offerings. Assuming the accuracy of the representations
and warranties of Purchasers set forth in this Agreement, the offer
and sale of the Shares by the Company to the Purchasers pursuant to
the Agreement will be exempt from the registration requirements of
the Securities Act.
SECTION 5. Representations,
Warranties and Covenants of the Purchaser . Each Purchaser
represents and warrants to, and covenants with, the Company, as of
the date of this Agreement (except to the extent expressly made as
of a specified date, in which case as of such date),
that:
5.1 Experience . (i) The
Purchaser is knowledgeable, sophisticated and experienced in
financial and business matters, in making, and is qualified to
make, decisions with respect to investments in shares representing
an investment decision like that involved in the purchase of the
Shares, including investments in securities issued by the Company
and comparable entities, has the ability to bear the economic risks
of an investment in the Shares and has requested, received,
reviewed and considered all information it deems relevant in making
an informed decision to purchase the Shares; (ii) the
Purchaser is acquiring the number of Shares set forth on the
signature page hereto in the ordinary course of its business and
for its own account and with no present intention of distributing
any of such Shares or any arrangement or understanding with any
other persons regarding the distribution of such Shares (this
representation and warranty not limiting the Purchaser’s
right to sell pursuant to the Registration Statement or in
compliance with the Securities
Act and the rules and regulations promulgated
thereunder (the “ 1933 Act Rules and Regulations
”), or, other than with respect to any claims arising out of
a breach of this representation and warranty, the Purchaser’s
right to indemnification under Section 7.3); (iii) the
Purchaser will comply with the prospectus delivery requirements of
the Securities Act as applicable to it in connection with sales of
the Shares pursuant to the Registration Statement or with the
applicable requirements of any exemption from the Securities Act;
(iv) the Purchaser has completed or caused to be completed the
Registration Statement Questionnaire in the form attached hereto as
part of Appendix I or another form reasonably acceptable to
the Company, for use in preparation of the Registration Statement,
and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the effective date of the
Registration Statement and the Purchaser will notify the Company
immediately of any material change in any such information provided
in the Registration Statement Questionnaire until such time as the
Purchaser has sold all of its Shares or until the Company is no
longer required to keep the Registration Statement effective;
(v) the Purchaser has, in connection with its decision to
purchase the number of Shares set forth on the signature page
hereto, relied solely upon the representations and warranties of
the Company contained herein; (vi) the Purchaser has had an
opportunity to discuss this investment with representatives of the
Company and ask questions of and receive answers from the
representatives; and (vii) the Purchaser is an
“accredited investor” within the meaning of Rule 501(a)
of Regulation D promulgated under the Securities Act.
5.2 Reliance on Exemptions .
The Purchaser understands that the Shares are being offered and
sold to it in reliance upon specific exemptions from the
registration requirements of the Securities Act, the 1933 Act Rules
and Regulations and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Purchaser’s
compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth
herein in order to determine the availability of such exemptions
and the eligibility of the Purchaser to acquire the
Shares.
5.3 Confidentiality . The
Purchaser agrees that it is prohibited from reproducing or
distributing this Agreement or any other offering materials or
other information provided by the Company in connection with the
Purchaser’s consideration of its investment in the Company,
in whole or in part, or divulging or discussing any of their
contents, except to its financial, investment or legal advisors in
connection with its proposed investment in the Shares. Further, the
Purchaser understands that the existence and nature of all
conversations and presentations, if any, regarding the Company and
this offering must be kept strictly confidential. The Purchaser
understands that the federal securities laws impose restrictions on
trading based on information regarding this offering. The Purchaser
further acknowledges that (i) the Purchaser has received
material, non-public information about the Company in connection
with this offering, (ii) the United States securities laws
prohibit any person who has received such information from
purchasing or selling securities of the subject issuer or from
communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such
person may purchase or sell such securities, and (iii) the
Purchaser shall not directly or indirectly, offer, sell, assign,
transfer, pledge, contract to sell or otherwise dispose of any
Common Stock or other securities of the Company while in possession
of such material, non-public information. In addition, the
Purchaser hereby acknowledges that unauthorized disclosure of
information regarding this offering may result in a violation of
Regulation FD. The Purchaser’s confidentiality obligation
hereunder will terminate upon the issuance by the Company of a
press release or press releases announcing the offering
contemplated
hereby as provided in Section 20. The
foregoing agreements shall not apply to any information that is or
becomes publicly available through no fault of the Purchaser, or
that the Purchaser is legally required to disclose; provided
, however , that if the Purchaser is requested or ordered to
disclose any such information pursuant to any court or other
government order or any other applicable legal or regulatory
procedure, it shall provide the Company with prompt notice of any
such request or order in time sufficient to enable the Company to
seek an appropriate protective order.
5.4 Investment Decision . The
Purchaser understands that nothing in the Agreement or any other
materials presented to the Purchaser in connection with the
purchase and sale of the Shares constitutes legal, tax or
investment advice. The Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the
Shares.
5.5 Risk of Loss . The
Purchaser understands that its investment in the Shares involves a
significant degree of risk, including a risk of total loss of the
Purchaser’s investment, and the Purchaser has full cognizance
of and understands all of the risk factors related to the
Purchaser’s purchase of the Shares. The Purchaser understands
that the market price of the Common Stock has been volatile and
that no representation is being made as to the future value of the
Common Stock.
5.6 Legend; Legend Removal;
Damages . The Purchaser understands that, until such time as
the Registration Statement has been declared effective or the
Shares may be sold pursuant to Rule 144 under the Securities
Act without any restriction as to the number of securities as of a
particular date that can then be immediately sold, the Shares will
bear a restrictive legend in substantially the following
form:
“THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ SECURITIES ACT ”), OR
THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SHARES
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWI
