PLACEMENT AGENCY
AGREEMENT
Canaccord Adams
Inc.
99 High Street
Boston, Massachusetts 02110
Lazard Capital
Markets LLC
30 Rockefeller Plaza
New York, New York 10020
FuelCell Energy, Inc., a Delaware corporation
(the “ Company ”), proposes, subject to the
terms and conditions stated in this Placement Agency Agreement
(this “ Agreement ”) and the Subscription
Agreements in the form of Exhibit A attached hereto
(the “ Subscription Agreements ”) entered into
with the investors identified therein (each, an “
Investor ” and collectively, the “
Investors ”), to issue and sell up to an aggregate of
6,737,166 shares (the “ Shares ”) of the
Company’s common stock, par value $0.0001 per share (the
“ Common Stock ”). The Company hereby confirms
its several agreement with Canaccord Adams Inc. (“
Canaccord ”) and Lazard Capital Markets LLC (“
LCM ”) as set forth below. Canaccord and LCM are each
individually referred to herein as a “ Placement Agent
” and collectively as the “ Placement Agents
.” The Shares are more fully described in the Prospectus (as
defined below).
1. Agreement to Act as Placement
Agents; Delivery and Payment . On the basis of the
representations, warranties and agreements of the Company herein
contained, and subject to the terms and conditions set forth in
this Agreement:
(a) The Company hereby engages the
Placement Agents, as the exclusive agents of the Company, to, on
commercially reasonable efforts basis, solicit offers to purchase
Shares from the Company (other than with respect to Posco Power) on
the terms and subject to the conditions set forth in the
Subscription Agreements and Prospectus (as defined below). Each
Placement Agent shall use commercially reasonable efforts to assist
the Company in obtaining performance by each Investor whose offer
to purchase the Shares was solicited by such Placement Agent and
accepted by the Company, but such Placement Agent shall not, except
as otherwise provided in this Agreement, have any liability to the
Company in the event any such purchase is not
consummated for
any reason. Under no circumstances will any Placement Agent or any
of its affiliates be obligated to underwrite or purchase any of the
Shares for its own account or otherwise provide any financing. Each
Placement Agent shall act solely as the Company’s agent and
not as principal. Neither Placement Agent shall have any authority
to bind the Company with respect to any prospective offer to
purchase Shares and the Company shall have the sole right to accept
offers to purchase Shares and may reject any such offer, in whole
or in part. Each Placement Agent has the right, in its discretion,
without notice to the Company, to reject any offer to purchase
Shares received by it, in whole or in part, and any such rejection
shall not be deemed a breach of this Agreement. LCM may utilize the
expertise of Lazard Frères & Co. LLC in connection with
LCM’s placement agent activities.
(b) As compensation for services rendered
by the Placement Agents hereunder, on the Closing Date (as defined
below), the Company shall pay or cause to be paid to the Placement
Agents by wire transfer of immediately available funds to an
account or accounts designated by the Placement Agents, an
aggregate amount equal to six percent (6.0%) of the gross proceeds
received by the Company from the sale of the Shares to Investors
other than Posco Power or its affiliates pursuant to the Posco
Securities Purchase Agreement (as defined below) on such Closing
Date (the “ Agency Fee ”). Such amount may be
deducted from the payment made by the Investor(s) to the Company
and paid directly to the Placement Agents on the Closing Date and
the Placement Agents shall be responsible for allocating the Agency
Fee between them. Each Placement Agent agrees that the foregoing
compensation, together with any expense reimbursement payable
hereunder, constitutes all of the compensation that the Placement
Agents shall be entitled to receive in connection with the Offering
contemplated hereby.
(c) The Shares are being sold to the
Investors at a price of $3.59 per share (the “ Purchase
Price ”) as set forth on the cover page of the Prospectus
(as defined below). The purchases of Shares by the Investors shall
be evidenced by the execution of the Subscription Agreements by
each of the parties thereto in the form attached hereto as
Exhibit A .
(d) Prior to the earlier of (i) the
date on which this Agreement is terminated and (ii) the
Closing Date, the Company shall not, without the prior written
consent of Canaccord and LCM, solicit or accept offers to purchase
shares of the Common Stock (other than pursuant to the exercise of
options or warrants to purchase shares of Common Stock that are
outstanding at the date hereof) otherwise than (i) through the
Placement Agents in accordance herewith, or (ii) pursuant to a
Securities Purchase Agreement, dated June 9, 2009, by and
between the Company and Posco Power (the “ Posco
Securities Purchase Agreement ”) and Posco Power’s
rights to participate in offerings by the Company as set forth in
the Posco Securities Purchase Agreement.
(e) No Shares which the Company has agreed
to sell pursuant to this Agreement and the Subscription Agreements
shall be deemed to have been purchased and paid for, or sold by the
Company, until such Shares shall have been delivered to the
Investor purchasing such Shares against payment therefor by such
Investor. If the Company shall default in its obligations to
deliver Shares to an Investor whose offer it has accepted, the
Company shall indemnify and hold the Placement Agents harmless
against any loss, claim, damage or liability directly or indirectly
arising from or as a result of the default by the Company in
accordance with the procedures set forth in
Section 6(c) hereof.
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(f) Payment of the purchase price for, and
delivery of the Shares shall be made at a closing (the “
Closing ”) at the offices of Patterson Belknap Webb
& Tyler LLP, counsel for the Company, located at 1133 Avenue of
the Americas, New York, NY 10036, at 10:00 a.m., local time,
on June 19, 2009 or at such other time and date as the
Placement Agents and the Company determine pursuant to Rule
15c6-1(a) under the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”) (such date of payment and
delivery being herein referred to as the “ Closing
Date ”). Unless otherwise specified in the applicable
Subscription Agreement, the Shares will be settled through the
facilities of The Depository Trust Company’s DWAC system.
Concurrently with the execution and delivery of this Agreement, the
Company, the Placement Agents and JPMorgan Chase Bank, N.A., as
escrow agent (the “ Escrow Agent ”), shall enter
into an escrow agreement (the “ Escrow Agreement
”), pursuant to which an escrow account (the “
Escrow Account ”) will be established for the benefit
of the Company and the Investors. Subject to the terms hereof and
of the Escrow Agreement, payment of the purchase price for the
Shares shall be made to the Company in the manner set forth below
by Federal Funds wire transfer, against delivery of the Shares to
such persons and shall be registered in the name or names and shall
be in such denominations as the Placement Agents may request at
least one business day before the Closing Date. Payment of the
purchase price for the Shares to be purchased by Investors shall be
made by such Investors directly to the Escrow Agent and the Escrow
Agent agrees to hold such purchase price in escrow in accordance
herewith. Prior to the Closing, each such Investor shall deposit
into the Escrow Account an amount (the “ Purchase
Amount ”) equal to the product of (x) the number of
Shares such Investor has agreed to purchase and (y) the
Purchase Price. The aggregate of all such Purchase Amounts is
herein referred to as the “Escrow Funds.” Subject to
the terms and conditions hereof and of the Subscription Agreements
and the Escrow Agreement, the Escrow Agent shall, on the Closing
Date, deliver to the Company, by Federal Funds wire transfer, the
Escrow Funds so held by such person in escrow, reduced by an amount
equal to the sum of the aggregate Agency Fee payable to each
Placement Agent and each Placement Agent’s bona fide estimate
of the amount, if any, of expenses for which such Placement Agent
is entitled to reimbursement pursuant hereto. Each of the Company
and each Placement Agent hereby agree to deliver to the Escrow
Agent a Closing Notice in the form attached as
Exhibit C to the Escrow Agreement at least one day
prior to the Closing Date. At least one day prior to the Closing
Date, each Placement Agent shall submit to the Company its bona
fide estimate of the amount, if any, of expenses for which such
Placement Agent is entitled to reimbursement pursuant hereto. As
soon as reasonably practicable after the Closing Date, each
Placement Agent shall submit to the Company its expense
reimbursement invoice and the Company or such Placement Agent, as
applicable, shall make any necessary reconciling payment(s) within
thirty days of receipt of such invoices.
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2. Representations and Warranties of
the Company . The Company represents and warrants to the
Placement Agents as of the date hereof, and as of the Closing Date
and agrees with the Placement Agents, as follows:
(a) Filing of Registration
Statement . The Company has prepared and filed, in conformity
with the requirements of the Securities Act of 1933, as amended
(the “ Securities Act ”), and the published
rules and regulations thereunder (the “ Rules and
Regulations ”) adopted by the Securities and Exchange
Commission (the “ Commission ”), a registration
statement, including a prospectus, on Form S-3 (File
No. 333-128088), which became effective as of February 6,
2007, relating to the Shares and the offering thereof (the “
Offering ”) from time to time in accordance with
Rule 415(a)(1)(x) of the Rules and Regulations, and such
amendments thereof as may have been required to the date of this
Agreement. The term “ Registration Statement ”
as used in this Agreement means the aforementioned registration
statement, as amended at the time of such registration
statement’s effectiveness for purposes of Section 11 of
the Securities Act, (the “ Effective Time ”),
including (i) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein and
(ii) any information in the corresponding Base Prospectus (as
defined below) or a prospectus supplement filed with the Commission
pursuant to Rule 424(b) under the Securities Act, to the extent
such information is deemed pursuant to Rule 430A (“
Rule 430A ”), 430B (“ Rule 430B
”) or 430C (“ Rule 430C ”) under the
Securities Act to be a part thereof at the Effective Time. If the
Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the
Rules and Regulations (the “ Rule 462(b) Registration
Statement ”), then any reference herein to the term
“ Registration Statement ” shall also be deemed
to include such Rule 462(b) Registration Statement. For purposes of
this Agreement, all references to the Registration Statement, the
Base Prospectus, any Preliminary Prospectus (as defined below), the
Prospectus (as defined in below) or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with
the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval System (“ EDGAR ”). All references
in this Agreement to amendments or supplements to the Registration
Statement, the Base Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to mean and include the subsequent
filing of any document under the Exchange Act and which is deemed
to be incorporated therein by reference therein or otherwise deemed
to be a part thereof.
(b) Effectiveness of Registration
Statement; Certain Defined Terms . The Company and the
transactions contemplated by this Agreement meet the requirements
and comply with the conditions for the use of Form S-3 under the
Securities Act. The Registration Statement meets, and the offering
and sale of the Shares as contemplated hereby complies with, the
requirements of Rule 415 under the Securities Act (including,
without limitation, Rule 415(a)(4) and (a)(5) of the Rules and
Regulations). The Company has complied, to the Commission’s
satisfaction, with all requests of the Commission for additional or
supplemental information. No stop order preventing or suspending
use of the Registration Statement, any Preliminary Prospectus or
the Prospectus or the effectiveness of the Registration Statement
has been issued by the Commission, and no proceedings for such
purpose pursuant to Section 8A of the Securities Act against
the Company or related to the Offering have been instituted or are
pending or, to the Company’s knowledge, are contemplated or
threatened by the Commission, and any request received by the
Company on the part of the Commission for additional information
has been complied with. As used in this Agreement:
(1) “ Base Prospectus ” means
the prospectus included in the Registration Statement at the
Effective Time.
(2) “ Disclosure Package ”
means (i) the Statutory Prospectus, (ii) each Issuer Free
Writing Prospectus, if any, filed or used by the Company on or
before the Effective Time and listed on Schedule I
hereto (other than a roadshow that is an Issuer Free Writing
Prospectus but is not required to be filed under Rule 433 of
the Rules and Regulations) and (iii) the pricing and other
information as set forth on Exhibit B hereto, all
considered together.
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(3) “ Issuer Free Writing
Prospectus ” means any “issuer free writing
prospectus,” as defined in Rule 433 of the Rules and
Regulations relating to the Shares in the form filed or required to
be filed with the Commission or, if not required to be filed, in
the form retained in the Company’s records pursuant to Rule
433(g) of the Rules and Regulations.
(4) “ Preliminary Prospectus
” means any preliminary prospectus supplement, subject to
completion, relating to the Shares, filed by the Company with the
Commission pursuant to Rule 424(b) under the Securities Act for use
in connection with the offering and sale of the Shares, together
with the Base Prospectus attached to or used with such preliminary
prospectus supplement.
(5) “ Prospectus ” means the
final prospectus supplement, relating to the Shares, filed by the
Company with the Commission pursuant to Rule 424(b) under the
Securities Act on or before the second business day after the date
hereof (or such earlier time as may be required under the
Securities Act), in the form furnished by the Company to the
Placement Agents, for use in connection with the offering and sale
of the Shares that discloses the public offering price and other
final terms of the Shares, together with the Base Prospectus
attached to or used with such final prospectus
supplement.
(6) “ Statutory Prospectus ”
means the Preliminary Prospectus, if any, and the Base Prospectus,
each as amended and supplemented immediately prior to the Time of
Sale, including any document incorporated by reference therein and
any prospectus supplement.
(7) “Time of Sale” means 3:55
p.m., New York City time, on the date of this Agreement.
(c) Contents of Registration
Statement . The Registration Statement complied when it became
effective, complies as of the date hereof and, as amended or
supplemented, at the Time of Sale and at all times during which a
prospectus is required by the Securities Act to be delivered
(whether physically or through compliance with Rule 172 under
the Securities Act or any similar rule) in connection with any sale
of Shares (the “ Prospectus Delivery Period ”),
will comply, in all material respects, with the requirements of the
Securities Act and the Rules and Regulations; the Registration
Statement did not, as of the Effective Time, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, provided , that the
Company makes no representation or warranty in this subsection
(c) with respect to statements in or omissions from the
Registration Statement in reliance upon, and in conformity with,
written information furnished to the Company by the Placement
Agents specifically for inclusion therein, which information the
parties hereto agree is limited to the Placement Agents’
Information (as defined in Section 7 hereof).
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(d) Contents of Prospectus . The
Prospectus will comply, as of the date that it is filed with the
Commission, the date of its delivery to Investors and at all times
during the Prospectus Delivery Period, in all material respects,
with the requirements of the Securities Act; at no time during the
period that begins on the date the Prospectus is filed with the
Commission and ends at the end of the Prospectus Delivery Period
will the Prospectus, as then amended or supplemented, include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, provided , that the Company makes no
representation or warranty with respect to statements in or
omissions from the Prospectus in reliance upon, and in conformity
with, written information furnished to the Company by the Placement
Agents specifically for inclusion therein, which information the
parties hereto agree is limited to the Placement Agents’
Information. The Prospectus contains all required information under
the Securities Act with respect to the Shares and the distribution
of the Shares.
(e) Incorporated Documents . Each
of the documents incorporated or deemed to be incorporated by
reference in the Registration Statement, at the time such document
was filed with the Commission or at the time such document became
effective, as applicable, complied, in all material respects, with
the requirements of the Exchange Act, was filed on a timely basis
with the Commission and did not include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(f) Disclosure Package . The
Disclosure Package, as of the Time of Sale, did not, and at the
Closing Date will not, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided , that the Company makes no
representations or warranties in this subsection (f) with
respect to statements in or omissions from the Disclosure Package
in reliance upon, and in conformity with, written information
furnished to the Company by the Placement Agents specifically for
inclusion therein, which information the parties hereto agree is
limited to the Placement Agents’ Information.
(g) Distributed Materials; Conflict
with Registration Statement . Other than the Base Prospectus,
any Preliminary Prospectus and the Prospectus, the Company has not
made, used, prepared, authorized, approved or referred to and will
not make, use, prepare, authorize, approve or refer to any
“written communication” (as defined in Rule 405
under the Securities Act) that constitutes an offer to sell or a
solicitation of an offer to buy the Shares other than (i) any
document not constituting a prospectus pursuant to
Section 2(a)(10)(a) of the Securities Act or Rule 134
under the Securities Act or (ii) the documents listed on
Schedule I hereto and other written communications
approved in advance by Canaccord and LCM.
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(h) Issuer Free Writing
Prospectuses . Each Issuer Free Writing Prospectus, if any,
conformed or will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations on
the date of first use, and the Company has complied or will comply
with any filing requirements applicable to such Issuer Free Writing
Prospectus pursuant to the Rules and Regulations. Each Issuer Free
Writing Prospectus, if any, when considered together with the
Disclosure Package, as of its issue date and at all subsequent
times through the completion of the Prospectus Delivery Period did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement, the Statutory Prospectus or the Prospectus,
including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof that has not been
superseded or modified, or includes an untrue statement of a
material fact or omitted or would omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances prevailing at
the subsequent time, not misleading; provided , that the
Company makes no representation or warranty with respect to
statements in or omissions from any Issuer Free Writing Prospectus
in reliance upon, and in conformity with, written information
furnished to the Company by the Placement Agents specifically for
inclusion therein, which information the parties hereto agree is
limited to the Placement Agents’ Information.
(i) Not an Ineligible Issuer .
(i) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a
bona fide offer (within the meaning of Rule 164(h)(2) under
the Securities Act) of the Shares and (ii) at the date hereof,
the Company was not and is not an “ineligible issuer,”
as defined in Rule 405 under the Securities Act (“
Rule 405 ”).
(j) Due Incorporation . The Company
has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with the
corporate power and authority to own its properties and to conduct
its business as it is currently being conducted and as described in
the Registration Statement, the Prospectus and the Disclosure
Package. The Company is duly qualified to transact business and is
in good standing as a foreign corporation or other legal entity in
each other jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such
qualification, except where the failure to be so qualified or in
good standing or have such power or authority (i) would not
have, individually or in the aggregate, a material adverse effect
upon, the general affairs, business, operations, prospects,
properties, financial condition, or results of operations of the
Company and its subsidiaries, taken as a whole, or (ii) impair
in any material respect the power or ability of the Company to
perform its obligations under this Agreement or to consummate any
transactions contemplated by the Agreement and the Subscription
Agreements, including the issuance and sale of the Shares (any such
effect as described in clauses (i) or (ii), a “
Material Adverse Effect ”).
(k) Subsidiaries . Except as
otherwise described in the Registration Statement, the Prospectus
and the Disclosure Package, the Company has no subsidiaries and
does not own any beneficial interest, directly or indirectly, in
any corporation, partnership, joint venture or other business
entity.
(l) Due Authorization and
Enforceability . The Company has the full right, power and
authority to enter into this Agreement, the Escrow Agreement and
the Subscription Agreements, and to perform and discharge its
obligations hereunder and thereunder; and each of this Agreement,
the Escrow Agreement and the Subscription Agreements has been duly
authorized, executed and delivered by the Company, and constitutes
a valid, legal and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as rights
to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity.
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(m) The Shares . The issuance of
the Shares has been duly and validly authorized by the Company and,
when issued, delivered and paid for in accordance with the terms of
this Agreement and the Subscription Agreements, will have been duly
and validly issued and will be fully paid and nonassessable, will
not be subject to any statutory or contractual preemptive rights or
other rights to subscribe for or purchase or acquire any shares of
Common Stock of the Company that have not been waived or complied
with, and will conform in all material respects to the description
thereof contained in the Disclosure Package and the Prospectus and
such description conforms in all material respects to the rights
set forth in the instruments defining the same.
(n) Capitalization . The
information set forth under the caption
“Capitalization” in the Statutory Prospectus (and any
similar sections or information, if any, contained in the
Disclosure Package) is fairly presented on a basis consistent with
the Company’s financial statements. The certificates
evidencing the Shares of Common Stock are in due and proper legal
form and have been duly authorized for issuance by the Company. The
authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus
under the caption “Description of Capital Stock” (and
any similar sections or information, if any, contained in the
Disclosure Package). The issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued,
are fully paid and nonassessable, and have been issued in
compliance with all federal and state securities laws. None of the
outstanding shares of Common Stock was issued in violation of any
preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase or acquire any securities of the
Company or any of its subsidiaries. There are no authorized or
outstanding shares of capital stock, options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable for, any
capital stock of the Company or any of its subsidiaries other than
those described in the Prospectus and the Disclosure Package. The
description of the Company’s stock option, stock bonus and
other stock plans or arrangements, and the options or other rights
granted thereunder, as described in the Prospectus and the
Disclosure Package, accurately and fairly present the information
required to be shown with respect to such plans, arrangements,
options and rights. The issued and outstanding shares of capital
stock of each of the Company’s subsidiaries 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 are owned directly by the Company or by
another wholly-owned subsidiary of the Company free and clear of
any lien, encumbrance, security interest, claim or charge, other
than those described in, or incorporated by reference into the
Registration Statement and the Prospectus. All the outstanding
shares of capital stock of each “significant
subsidiary” within the meaning of Rule 1-02(w) of
Regulation S-X (such a significant subsidiary of the Company,
a “ Significant Subsidiary ”) of the Company
have been duly authorized and validly issued, are fully paid and
nonassessable and except to the extent set forth in the Disclosure
Package and the Prospectus, are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, free and
clear of any lien, encumbrance, security interest, claim or charge,
restriction upon voting or transfer or any other claim of any third
party.
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(o) No Conflict . The execution,
delivery and performance by the Company of this Agreement and the
Subscription Agreements, and the consummation of the transactions
contemplated hereby and thereby, including the issuance and sale of
the Shares by the Company, will not conflict with or result in a
breach or violation of, or constitute a default under (nor
constitute any event which with or without notice, lapse of time or
both would result in any breach or violation of or constitute a
default under), give rise to any right of termination or other
right or the cancellation or acceleration of any right or
obligation or loss of a benefit under, or give rise to the creation
or imposition of any lien, encumbrance, security interest, claim or
charge upon any property or assets of the Company or its
subsidiaries pursuant to (i) any indenture, mortgage, deed of
trust, loan agreement 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 their properties may be
bound or to which any of their property or assets is subject,
(ii) result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries, or
(iii) result in any violation of any law, statute, rule,
regulation, judgment, order or decree of any court or governmental
agency or body, domestic or foreign, having jurisdiction over the
Company or any of its properties or assets, except with respect to
clauses (i) and (iii) above, to the extent any such
conflict, breach or violation has been waived or would not result
in a Material Adverse Effect.
(p) No Consents Required . No
approval, authorization, consent or order of or filing,
qualification or registration with, any court or governmental
agency or body, foreign or domestic, which has not been made,
obtained or taken and is not in full force and effect, is required
in connection with the Company’s execution, delivery and
performance of this Agreement or the Subscription Agreements, the
consummation by the Company of the transactions contemplated hereby
or thereby or the issuance and sale of the Shares other than
(i) as may be required under the Securities Act, (ii) any
necessary qualification of the Shares under the securities or blue
sky laws of the various jurisdictions in which the Shares are being
offered by any Placement Agent, (iii) under the rules and
regulations of the Financial Industry Regulatory Authority (“
FINRA ”) (other than any approval required with
respect to the Base Prospectus) or (iv) the NASDAQ Global
Market. The Company has obtained any approval required under the
rules and regulations of FINRA with respect to the Base
Prospectus.
(q) Preemptive Rights . There are
no preemptive rights or other rights (other than rights which have
been waived in writing in connection with the transactions
contemplated by this Agreement or otherwise satisfied) to subscribe
for or to purchase any shares of Common Stock or shares of any
other capital stock or other equity interests of the Company or any
of its subsidiaries, or any agreement or arrangement between the
Company and any of the Company’s stockholders or between any
of the Company’s subsidiaries and any of such
subsidiary’s stockholders, or to the Company’s
knowledge, between or among any of the Company’s stockholders
or any of its subsidiaries’ stockholders, which grant special
rights with respect to any shares of the Company’s or any of
its subsidiaries’ capital stock or which in any way affect
any stockholder’s ability or right to alienate freely or vote
such shares.
(r) Registration Rights . There are
no contracts, agreements or understandings between the Company or
any of its subsidiaries and any person granting such person the
right (other than (i) registration rights granted to Posco Power
under the Posco Securities Purchase Agreement and (ii) rights which
have been waived in writing in connection with the transactions
contemplated by this Agreement or otherwise satisfied) to require
the Company or any of its subsidiaries to register any securities
with the Commission.
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(s) Independent Accountants . KPMG,
LLP, whose reports on the consolidated financial statements of the
Company are incorporated by reference in the Registration
Statement, the Prospectus and the Disclosure Package, is
(i) an independent public accounting firm within the meaning
of the Securities Act, (ii) a registered public accounting
firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act
of 2002 (the “ Sarbanes-Oxley Act ”)), and
(iii) to the Company’s knowledge, not in violation of
the auditor independence requirements of the Sarbanes-Oxley Act.
Except as disclosed in the Registration Statement and as
pre-approved in accordance with the requirements set forth in
Section 10A of the Exchange Act, KPMG LLP has not been engaged
by the Company to perform any “prohibited activities”
(as defined in Section 10A of the Exchange Act).
(t) Financial Statements . The
consolidated financial statements of the Company, together with the
related schedules and notes thereto, set forth or incorporated by
reference in the Registration Statement, the Prospectus and the
Disclosure Package comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act,
as applicable, and present fairly in all material respects
(i) the financial condition of the Company and its
consolidated subsidiaries as of the dates indicated and
(ii) the consolidated results of operations,
stockholders’ equity and changes in cash flows of the Company
and its consolidated subsidiaries for the periods therein
specified; and such financial statements and related schedules and
notes thereto have been prepared in conformity with United States
generally accepted accounting principles, consistently applied
throughout the periods involved (except as otherwise stated therein
and subject, in the case of unaudited financial statements, to the
absence of footnotes and normal year-end adjustments). There are no
other financial statements (historical or pro forma) that are
required to be included or incorporated by reference in the
Registration Statement, the Prospectus or the Disclosure Package;
and the Company does not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations), not disclosed in the Registration Statement, the
Disclosure Package and the Prospectus; and all disclosures
contained in the Registration Statement, the Disclosure Package and
the Prospectus regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the
Commission) comply with Regulation G of the Exchange Act and
Item 10(e) of Regulation S-K under the Securities Act, to the
extent applicable, and present fairly the information shown therein
and the Company’s basis for using such measures.
(u) Absence of Material Changes .
Subsequent to the respective dates as of which information is given
in the Registration Statement, the Prospectus and the Disclosure
Package, and except as may be otherwise stated or incorporated by
reference in the Registration Statement, the Prospectus and the
Disclosure Package, there has not been (i) any Material
Adverse Effect, (ii) any transaction which is material to the
Company or any of its subsidiaries taken as a whole, (iii) any
obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or any of its subsidiaries,
which is material to the Company or any of its subsidiaries taken
as a whole, (iv) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company,
(v) any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the
issuance of shares upon the exercise of outstanding options or
warrants or the conversion of convertible indebtedness), or
material change in the short-term debt or long-term debt of the
Company or any of its subsidiaries taken as a whole (other than
upon conversion of convertible indebtedness) or any issuance of
options, warrants, convertible securities or other rights to
purchase the capital stock (other than grants of stock options
under the Company’s stock option plans existing on the date
hereof) of the Company or any of its subsidiaries.
10
(v) Legal Proceedings . There are
no legal or governmental actions, suits, claims or proceedings
pending or, to the Company’s knowledge, threatened or
contemplated to which the Company or any of its subsidiaries is or
would be a party or of which any of their respective properties is
or would be subject at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission,
board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory
authority which are required to be described in the Registration
Statement, the Disclosure Package or the Prospectus or a document
incorporated by reference therein and are not so described therein,
or which, singularly or in the aggregate, if resolved adversely to
the Company or such subsidiary, would reasonably be likely to
result in a Material Adverse Effect or prevent or materially and
adversely affect the ability of the Company to consummate the
transactions contemplated hereby. To the Company’s knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by other third parties.
(w) No Violation . Neither the
Company nor any of its subsidiaries is in breach or violation of or
in default (nor has any event occurred which with notice, lapse of
time or both would result in any breach or violation of, or
constitute a default) (i) under the provisions of its charter
or bylaws (or analogous governing instrument, as applicable) or
(ii) in the performance or observance of any term, covenant,
obligation, agreement or condition contained in any indenture,
mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or such subsidiary is
a party or by which any of its properties may be bound or affected,
or (iii) in the performance or observance of any statute, law,
rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company
or such subsidiary or any of its properties, as applicable, except,
with respect to clauses (ii) and (iii) above, to the
extent any such contravention has been waived or would not result
in a Material Adverse Effect.
(x) Permits . The Company and each
of its subsidiaries have made all filings, applications and
submissions required by, and owns or possesses all material
approvals, licenses, certificates, certifications, clearances,
consents, exemptions, marks, notifications, orders, permits and
other authorizations issued by, the appropriate federal, state or
foreign regulatory authorities necessary to conduct its business as
described in the Disclosure Package (collectively, “
Permits ”), and is in compliance in all material
respects with the terms and conditions of all such Permits. All
such Permits are valid and in full force and effect. Neither the
Company nor any of its subsidiaries has received any notice of any
proceedings relating to revocation or modification of, any such
Permit, which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a Material
Adverse Effect. Except as may be required under the Securities Act
and state and foreign Blue Sky laws and the rules and regulations
of FINRA, no other Permits are required for the Company or any of
its subsidiaries to enter into, deliver and perform this Agreement
and to issue and sell the Shares to be issued and sold by the
Company hereunder.
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(y) Not an Investment Company . The
Company is not or, after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described
in the Disclosure Package and the Prospectus, will not be
(i) required to register as an “investment
company” as defined in the Investment Company Act of 1940, as
amended (the “ Investment Company Act” ), and
the rules and regulations of the Commission thereunder or
(ii) a “business development company” (as defined
in Section 2(a)(48) of the Investment Company Act).
(z) No Price Stabilization .
Neither the Company nor any of its subsidiaries nor, to the
Company’s knowledge, any of their respective officers,
directors, affiliates or controlling persons, has taken or will
take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(aa) Good Title to Property . The
Company and each of its subsidiaries has good and valid title to
all property (whether real or personal) described in the
Registration Statement, the Disclosure Package and the Prospectus
as being owned by it, in each case free and clear of all liens,
claims, security interests, other encumbrances or defects
(collectively, “ Liens ”), except such as are
described in the Registration Statement, the Disclosure Package and
the Prospectus and those that would not, individually or in the
aggregate materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries. All of the
property described in the Registration Statement, Disclosure
Package and the Prospectus as being held under lease by the Company
or any of its subsidiaries is held thereby under valid, subsisting
and enforceable leases, without any liens, restrictions,
encumbrances or claims, except those that, individually or in the
aggregate, are not material and do not materially interfere with
the use made and proposed to be made of such property by the
Company or such subsidiary.
(bb) Intellectual Property Rights .
The Company and each of its subsidiaries owns or possesses the
right to use all patents, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights,
licenses, inventions, software, databases, know-how, Internet
domain names, trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures, and other intellectual property (collectively, “
Intellectual Property ”) necessary to carry on its
businesses as currently conducted, and as proposed to be conducted
as described in the Disclosure Package and the Prospectus, and the
Company is not aware of any claim to the contrary or any challenge
by any other person to the rights of the Company or any of its
subsidiaries with respect to the foregoing except for those that
would not reasonably be expected to have a Material Adverse Effect.
The Intellectual Property licenses described in the Disclosure
Package and the Prospectus are, to the knowledge of the Company,
valid, binding upon, and enforceable by or against the parties
thereto in accordance with their terms. The Company and each of its
subsidiaries has complied in all material respects with, and is not
in breach nor has received any asserted or threatened claim of
breach of, any Intellectual Property license, and the Company has
no
12
knowledge of
any breach or anticipated breach by any other person of any
Intellectual Property license. The Company’s and each of its
subsidiaries’ business as now conducted and as proposed to be
conducted, to the knowledge of the Company, does not and will not
infringe or conflict with any patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses or other
Intellectual Property or franchise right of any person. Neither the
Company nor any of its subsidiaries has received notice of any
claim against the Company or any of its subsidiaries alleging the
infringement by the Company or any of its subsidiaries of any
patent, trademark, service mark, trade name, copyright, trade
secret, license in or other intellectual property right or
franchise right of any person. The Company and each of its
subsidiaries has taken all reasonable steps to protect, maintain
and safeguard its rights in all Intellectual Property, including
the execution of appropriate nondisclosure and confidentiality
agreements. The consummation of the transactions contemplated by
this Agreement will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the
consent of any other person in respect of, the Company’s or
any of its subsidiaries’ right to own, use, or hold for use
any of the Intellectual Property as owned, used or held for use in
the conduct of the businesses as currently conducted. The Company
and each of its subsidiaries has duly and properly filed or caused
to be filed with the United States Patent and Trademark Office (the
“ PTO ”) and applicable foreign and
international patent authorities all patent applications owned by
the Company and its subsidiaries (the “ Company Patent
Applications ”). To the knowledge of the Company, the
Company and each of its subsidiaries has complied with the
PTO’s duty of candor and disclosure for the Company Patent
Applications and has made no material misrepresentation in the
Company Patent Applications. The Company is not aware of any
information material to a determination of patentability regarding
the Company Patent Applications not called to the attention of the
PTO or similar foreign authority. The Company is not aware of any
information not called to the attention of the PTO or similar
foreign authority that it believes would preclude the grant of a
patent for the Company Patent Applications. The Company has no
knowledge of any information that it believes would preclude the
Company or any of its subsidiaries from having clear title to the
Company Patent Applications. To the Company’s knowledge, no
employee of the Company or any of its subsidiaries is the subject
of any claim or proceeding involving a violation of any term of any
employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to
or with a former employer where the basis of such violation relates
to such employee’s employment with the Company or any of the
Company’s subsidiaries or actions undertaken by the employee
while employed with the Company or any of the Company’s
subsidiaries.
(cc) No Labor Disputes . No labor
problem or dispute with the employees of the Company or any of the
Company’s subsidiaries exists, or, to the Company’s
knowledge, is threatened or imminent, which would reasonably be
expected to result in a Material Adverse Effect. The Company is not
aware that any key employee or significant group of employees of
the Company or any of the Company’s subsidiaries plans to
terminate employment with the Company or any of the Company’s
subsidiaries. Neither the Company nor any of its subsidiaries has
engaged in any unfair labor practice; except for matters which
would not, individually or in the aggregate, result in a Material
Adverse Effect, (i) there is (A) no unfair labor practice
complaint pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries before the National
Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is pending
or to the
13
Company’s
knowledge, threatened, (B) no strike, labor dispute, slowdown
or stoppage pending or, to the Company’s knowledge,
threatened against the Company or any of its subsidiaries and (C)
no union representation dispute currently existing concerning the
employees of the Company or any of its subsidiaries and
(ii) to the Company’s knowledge, (A) no union
organizing activities are currently taking place concerning the
employees of the Company or any of its subsidiaries and (B) there
has been no violation of any federal, state, local or foreign law
relating to discrimination in the hiring, promotion or pay of
employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 (“
ERISA ”) or the rules and regulations promulgated
thereunder concerning the employees of the Company or any of its
subsidiaries.
(dd) Taxes . The Company and each
of its subsidiaries (i) has timely filed all necessary
federal, state, local and foreign income and franchise tax returns
(or timely filed applicable extensions therefor) that have been
required to be filed and (ii) is not in default in the payment
of any taxes which were payable pursuant to such returns or any
assessments with respect thereto, other than any which the Company
or any of its subsidiaries is contesting in good faith and for
which adequate reserves have been provided and reflected in the
Company’s financial statements included in the Registration
Statement, the Disclosure Package and the Prospectus. Neither the
Company nor any of its subsidiaries has any tax deficiency that has
been or, to the knowledge of the Company, is reasonably likely to
be asserted or threatened against it that would result in a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries has engaged in any transaction which is a corporate
tax shelter or which would reasonably be expected to be
characterized as such by the Internal Revenue Service or any other
taxing authority.
(ee) ERISA . The Company and each
of its subsidiaries is in compliance in all material respects with
all presently applicable provisions of ERISA; no “reportable
event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the
Company or any of its subsidiaries would have any liability;
neither the Company nor any of its subsidiaries has incurred and
does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any
“pension plan” or (ii) Sections 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the “
Code ”); and each “pension plan” for which
the Company or any of its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and, to the
Company’s knowledge, nothing has occurred, whether by action
or by failure to act, which would cause the loss of such
qualification.
(ff) Compliance with Environmental
Laws . The Company and each of its subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and
local laws, orders, rules, regulations, directives, decrees and
judgments relating to the use, treatment, storage and disposal of
hazardous or toxic substances or waste and protection of human
health and safety or the environment which are applicable to their
businesses (“ Environmental Laws ”);
(ii) has received and is in compliance with all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business; and (iii) is in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not,
individually or in the aggregate, result in a Material Adverse
Effect.
14
There are no
costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties) which would, individually or in the aggregate,
result in a Material Adverse Effect.
(gg) Insurance . The Company and
each of its subsidiaries maintains or is covered by insurance
provided by recognized, financially sound and reputable
institutions with insurance policies in such amounts and covering
such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged
in similar businesses in similar industries. All such insurance is
fully in force on the date hereof and will be fully in force as of
the Closing Date. The Company has no reason to believe that it and
its subsidiaries will not be able to renew their ex
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