Exhibit 1.1
December 15, 2006
CONFIDENTIAL
Steven Fischer
Executive Chairman
Mechanical Technology Incorporated
431 New Karner Road
Albany, NY 12205
Dear Mr. Fischer:
This letter (the " Agreement ") constitutes the agreement
between Rodman & Renshaw, LLC (" R&R " or the "
Placement Agent ") and Mechanical Technology Incorporated
(the " Company "), that R&R shall serve as the exclusive
placement agent for the Company, on a "reasonable best efforts"
basis, in connection with the proposed placement (the "
Placement ") of registered securities (the "
Securities ") of the Company, including shares (the "
Shares ") of the Company's common stock, par value $0.01 per
share (the " Common Stock ") and warrants (the "
Warrants ") to purchase shares of Common Stock. The terms of
such Placement and the Securities shall be mutually agreed upon by
the Company and the purchasers (each, a " Purchaser " and
collectively, the " Purchasers ") and nothing herein
constitutes that R&R would have the power or authority to bind
the Company or any Purchaser or an obligation for the Company to
issue any Securities or complete the Placement. This Agreement and
the subscription agreements to be executed and delivered by the
Company and the Purchasers in connection with the Placement shall
be collectively referred to herein as the " Transaction
Documents ." The date of the closing of the Placement shall
be referred to herein as the " Closing Date ." The Company
expressly acknowledges and agrees that R&R's obligations
hereunder are on a reasonable best efforts basis only and that the
execution of this Agreement does not constitute a commitment by
R&R to purchase the Securities and does not ensure the
successful placement of the Securities or any portion thereof or
the success of R&R with respect to securing any other financing
on behalf of the Company.
SECTION 1.
Compensation and other Fees. As compensation for the
services provided by R&R hereunder, the Company agrees to pay
to R&R a cash fee payable immediately upon the closing of the
Placement and equal to 5% of the aggregate gross proceeds raised in
the Placement. The Company also agrees to reimburse R&R for its
expenses (with supporting invoices/receipts) up to a maximum of
$25,000. Such reimbursement shall be payable immediately upon (but
only in the event of) the closing of the Placement.
SECTION 2.
REGISTRATION STATEMENT.
The Company represents and warrants to, and agrees with, the
Placement Agent that:
(A) The
Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration
File No.333-134002) under the Securities Act of 1933, as amended
(the "Securities Act"), which became effective on May 18, 2006, for
the registration under the Securities Act of the Shares. At the
time of such filing, the Company met the requirements of Form S-3
under the Securities Act. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities
Act and complies with said Rule. The Company will file with the
Commission pursuant to Rule 424(b) under the Securities Act, and
the rules and regulations (the "Rules and Regulations") of the
Commission promulgated thereunder, a supplement to the form of
prospectus included in such registration statement relating to the
placement of the Securities and the plan of distribution thereof
and will include in such supplement all further information
(financial and other) with respect to the Company required to be
set forth therein. Such registration statement, including the
exhibits thereto, as amended at the date of this Agreement, is
hereinafter called the "Registration Statement"; such prospectus in
the form in which it appears in the Registration Statement is
hereinafter called the "Base Prospectus"; and the supplemented form
of prospectus, in the form in which it will be filed with the
Commission pursuant to Rule 424(b) (including the Base Prospectus
as so supplemented) is hereinafter called the "Prospectus
Supplement." Any reference in this Agreement to the Registration
Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the documents incorporated by
reference therein (the "Incorporated Documents") pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on or before the date of
this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be; and any reference in
this Agreement to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Base Prospectus or
the Prospectus Supplement shall be deemed to refer to and include
the filing of any document under the Exchange Act after the date of
this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference. All references in this Agreement
to financial statements and schedules and other information which
is "contained," "included," "described," "referenced," "set forth"
or "stated" in the Registration Statement, the Base Prospectus or
the Prospectus Supplement (and all other references of like import)
shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be
incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No
stop order suspending the effectiveness of the Registration
Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose
is pending or has been initiated or, to the Company's knowledge, is
threatened by the Commission. For purposes of this Agreement, "free
writing prospectus" has the meaning set forth in Rule 405 under the
Securities Act and the "Time of Sale Prospectus" means the
preliminary prospectus, if any, or the Prospectus Supplement (if
used prior to or at the time of sale), each together with the free
writing prospectuses, if any, used in connection with the
Placement, including any documents incorporated by reference
therein.
(B) The
Registration Statement (and any further documents to be filed with
the Commission) contains all exhibits and schedules as required by
the Securities Act. Each of the Registration Statement and any
post-effective amendment thereto, at the time it became effective,
complied in all material respects with the Securities Act and the
Exchange Act and the applicable Rules and Regulations and did not
and, as amended or supplemented, if applicable, will not, contain
any 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. The Base Prospectus, the Time of
Sale Prospectus, if any, and the Prospectus Supplement, each as of
its respective date, comply in all material respects with the
Securities Act and the Exchange Act and the applicable Rules and
Regulations. Each of the Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, as amended or
supplemented, did not and will not contain as of the date thereof
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, and none of
such documents, when they were filed with the Commission, and when
read together with the other information in the Registration
Statement, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein (with respect to Incorporated Documents incorporated by
reference in the Base Prospectus or Prospectus Supplement), in
light of the circumstances under which they were made not
misleading; and any further documents so filed and incorporated by
reference in the Base Prospectus, the Time of Sale Prospectus, if
any, or Prospectus Supplement, when such documents are filed with
the Commission, will conform in all material respects to the
requirements of the Exchange Act and the applicable Rules and
Regulations, as applicable, and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. No
post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent,
individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby
that (x) have not been filed as required pursuant to the Securities
Act or (y) will not be filed within the requisite time period.
There are no contracts or other documents required to be described
in the Base Prospectus, the Time of Sale Prospectus, if any, or
Prospectus Supplement, or to be filed as exhibits or schedules to
the Registration Statement, which have not been, or will not be,
described or filed as required.
(C) The
Company is eligible to use free writing prospectuses in connection
with the Placement pursuant to Rules 164 and 433 under the
Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with
the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing
prospectus that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act or that was
prepared by or behalf of or used by the Company complies or will
comply in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder. The Company will not, without the prior
consent of the Placement Agent, prepare, use or refer to, any free
writing prospectus and the Placement Agent will not, without the
prior consent of the Company, prepare, use or refer to, any free
writing prospectus.
(D) The
Company has delivered, or will as promptly as practicable deliver,
to the Placement Agent complete conformed copies of the
Registration Statement and of each consent and certificate of
experts, as applicable, filed as a part thereof, and conformed
copies of the Registration Statement (without exhibits), the Base
Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement, as amended or supplemented, in such quantities and at
such places as the Placement Agent reasonably requests. Neither the
Company nor any of its directors and officers has distributed and
none of them will distribute, prior to the Closing Date, any
offering material in connection with the offering and sale of the
Shares other than the Base Prospectus, the Time of Sale Prospectus,
if any, the Prospectus Supplement, the Registration Statement,
copies of the documents incorporated by reference therein and any
other materials permitted by the Securities Act.
SECTION 3 . REPRESENTATIONS AND
WARRANTIES. Except as set forth under the corresponding section
of the Disclosure Schedules which Disclosure Schedules shall be
deemed a part hereof, the Company hereby makes the representations
and warranties set forth below to the Placement Agent.
(A)
Organization and Qualification . All of the direct and
indirect subsidiaries (individually, a " Subsidiary ") of
the Company are set forth on Schedule 3(A). The Company owns,
directly or indirectly the capital stock or other equity interests
of each Subsidiary free and clear of any " Liens " (which
for purposes of this Agreement shall mean a lien, charge, security
interest, encumbrance, right of first refusal, preemptive right or
other restriction), and all the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable),
with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation
or default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have
or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business or financial condition of the
Company and the Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company's ability to perform in any material
respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a " Material Adverse
Effect ") and no " Proceeding " (which for purposes of
this Agreement shall mean any action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or
partial proceeding, such as a deposition), whether commenced or
threatened) has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.
(B)
Authorization; Enforcement . The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of the Transaction Documents by
the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required
by the Company, its board of directors or its stockholders in
connection therewith other than in connection with the "
Required Approvals " (as defined in subsection 3(D) below).
Each Transaction Document has been (or upon delivery will have
been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors' rights generally and (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or
other equitable remedies.
(C) No
Conflicts . Except as set forth on Schedule 3(C), the
execution, delivery and performance of the Transaction Documents by
the Company, the issuance and sale of the Securities and the
consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate
any provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become
a default) under, result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.
(D)
Filings, Consents and Approvals . Except as set forth on
Schedule 3(D), the Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state,
local or other governmental authority or other " Person "
(defined as an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind, including,
without limitation, any " Trading Market" ( which, for
purposes of this Agreement shall mean the following markets or
exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the Nasdaq Global Market) in connection
with the execution, delivery and performance by the Company of the
Transaction Documents, other than such filings as are required to
be made under applicable Federal and state securities laws
(collectively, the " Required Approvals ").
(E)
Issuance of the Securities; Registration . The Securities
are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents. Prior to the Closing Date, the
Company will have reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to
the Transaction Documents. The Securities are being issued pursuant
to the Registration Statement and the issuance of the Securities
has been registered by the Company under the Securities Act. The
Registration Statement is effective and available for the issuance
of the Securities thereunder and the Company has not received any
notice that the Commission has issued or intends to issue a
stop-order with respect to the Registration Statement or that the
Commission otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently,
or intends or has threatened in writing to do so. The "Plan of
Distribution" section under the Registration Statement permits the
issuance and sale of the Securities hereunder. Upon receipt of the
Securities, the Purchasers will have good and marketable title to
such Securities and the Shares, and shares underlying the Warrants
upon exercise, will be freely tradable on the Trading Market.
(F)
Capitalization . The capitalization of the Company is as set
forth on Schedule 3(F)(i). The Company has not issued any capital
stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock
options under the Company's stock option plans, the issuance of
shares of Common Stock to employees pursuant to the Company's
employee stock purchase plan and pursuant to the conversion or
exercise of securities exercisable, exchangeable or convertible
into Common Stock (" Common Stock Equivalents "). Except as
set forth on Schedule 3(F)(ii), no Person has any right of first
refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the
Transaction Documents. Except as set forth on Schedule 3(F)(ii) and
as a result of the purchase and sale of the Securities, there are
no outstanding options, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents. Except as set forth on
Schedule 3(F)(ii), the issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not
result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such
securities. All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is
required for the issuance and sale of the Securities. There are no
stockholders agreements, voting agreements or other similar
agreements with respect to the Company's capital stock to which the
Company is a party or, to the knowledge of the Company, between or
among any of the Company's stockholders.
(G)
SEC Reports; Financial Statements . The Company has complied
in all material respects with requirements to file all reports,
schedules, forms, statements and other documents required to be
filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to
herein as the " SEC Reports ") on a timely basis or has
received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted 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 under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent
basis during the periods involved (" GAAP "), except as may
be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(H)
Material Changes; Undisclosed Events, Liabilities or
Developments . Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event,
occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or " Affiliate " (defined as any Person that,
directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as
such terms are used in and construed under Rule 144 under the
Securities Act), except pursuant to existing Company stock option
plans. Except as set forth on Schedule 3(H), the Company does not
have pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Securities
contemplated by this Agreement or as set forth on Schedule 3(H), no
event, liability or development has occurred or exists with respect
to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition, that would be
required to be disclosed by the Company under applicable securities
laws at the time this representation is made that has not been
publicly disclosed one Trading Day prior to the date that this
representation is made.
(I)
Litigation . There is no action, suit, inquiry, notice of
violation, Proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign)
(collectively, an " Action ") which (i) adversely affects or
challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there
were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect except as set forth on Schedule
3(I). Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the E
