Exhibit 10.1

Execution Copy

8.0% Convertible Senior Unsecured Notes

FUELCELL ENERGY, INC.

UNDERWRITING AGREEMENT

June 19, 2013

Lazard Capital Markets LLC

As Representative of the several Underwriters set forth in Schedule C

c/o Lazard Capital Markets LLC

30 Rockefeller Plaza

New York, New York 10020

Dear Sirs:

1. INTRODUCTION. FuelCell Energy, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the several Underwriters set forth in Schedule C
hereto), pursuant to the terms and conditions of this Underwriting Agreement
(this “Agreement”), an aggregate of $38,000,000 principal amount of the
Company’s 8.0% Convertible Senior Unsecured Notes (the “Notes”). The Notes will
be issued pursuant to an Indenture dated as of the Closing Date (the
“Indenture”) between the Company and U.S. Bank National Association, as trustee
(the “Trustee”), as supplemented by the supplemental indenture to be dated the
Closing Date, in the form of Exhibit A attached hereto. Securities issued via
Deposit/Withdrawal At Custodian will be issued to Cede & Co., as nominee of The
Depository Trust Company (“DTC”) pursuant to a letter of representations (the
“DTC Agreement”), between the Company and DTC. The Notes (as hereinafter
defined) are convertible into shares (the “Underlying Common Stock”) of the
common stock, $0.0001 par value per share (the “Common Stock”), of the Company,
in accordance with the terms of the Notes and the Indenture, at the initial
conversion rate specified in the final term sheet, under the circumstances and
subject to adjustment as set forth in the Indenture. The Notes and the
Underlying Common Stock are collectively referred to herein as the “Securities.”

The Company hereby confirms that Lazard Capital Markets LLC (“LCM”) and Stifel,
Nicolaus & Company, Incorporated (“SNC”, and together with LCM, the
“Underwriters”) acted as the Underwriters in accordance with the terms and
conditions hereof. LCM is acting as the representative of the Underwriters and
in such capacity is hereinafter referred to as the “Representative.” The
offering and sale of the Notes is hereinafter referred to as the “Offering.”

 

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2. 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:

2.1 The Company agrees to issue and sell and the Underwriters, severally and not
jointly, agree to purchase from the Company Notes at a purchase price of 94.5%
of the Public Offering Price as set forth in Schedule C hereto (the “Purchase
Price”) on the Closing Date (as defined below). The Company has been advised by
you that you propose to make a public offering of the Notes as soon after this
Agreement has become effective as in your judgment is advisable. The Company is
further advised by you that the Notes are to be offered to the public initially
at 100% of the aggregate principal amount of the Notes (“Public Offering
Price”).

2.2 Payment for the Notes shall be made at the time and date of closing and
delivery of the documents required to be delivered to the Underwriters pursuant
to Sections 4 and 6 hereof shall be made to the Company in Federal or other
funds immediately available in New York City against delivery of such Notes at
10:00 A.M., New York time, on June 25, 2013 (the “Closing Date”) at the office
of Patterson Belknap Webb & Tyler LLP, 1133 Avenue of the Americas, New York, NY
10036 or at such other time and date as the Representative and the Company
determine pursuant to Rule 15c6-1(a) under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”).

2.3 Delivery of the Notes shall be made through the facilities of The Depository
Trust Company and shall be in global form unless the Representative shall
otherwise instruct.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Underwriters, as of the date hereof and as of the closing date,
and agrees with the Underwriters that:

(a) The Company has prepared and filed in conformity with the requirements of
the Securities Act of 1933, as amended (the “Securities Act”), and published
rules and regulations thereunder (the “Rules and Regulations”) adopted by the
Securities and Exchange Commission (the “Commission”) a “shelf” Registration
Statement (as hereinafter defined) on Form S-3 (File No. 333-164412), which
became effective as of September 21, 2010 (the “Effective Date”), including a
base prospectus relating to the Notes (the “Base Prospectus”), and such
amendments and supplements thereto as may have been required up to the date of
this Agreement. The term “Registration Statement” as used in this Agreement
means the registration statement (including all exhibits, financial schedules
and all documents and information deemed to be a part of the Registration
Statement pursuant to Rule 430B of the Rules and Regulations), as amended and/or
supplemented to the date of this Agreement, including the Base Prospectus. The
Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted or, to the
Company’s knowledge, are threatened by the Commission. The Company, if required
by the Rules and Regulations of the Commission, will file the Prospectus (as
defined below), with the Commission pursuant to Rule 424(b) of the Rules and
Regulations. The term “Prospectus” as used in this Agreement means the
Prospectus, in the form in which it is

 

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to be filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, or, if the Prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the Prospectus in the form included as part of the
Registration Statement as of the Effective Date, except that if any revised
prospectus or prospectus supplement shall be provided to the Underwriters by the
Company for use in connection with the Offering which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations), the term “Prospectus” shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use (or in the form first made available
to the Underwriters by the Company to meet requests of prospective purchasers
pursuant to Rule 173 under the Securities Act) . Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed
with the Commission pursuant to Rule 424 of the Rules and Regulations is
hereafter called a “Preliminary Prospectus.” Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
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 last to occur of
the Effective Date, the date of the Preliminary Prospectus, or the date of the
Prospectus, and any reference herein to the terms “amend,” “amendment,” or
“supplement” with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include (i) the
filing of any document under the Exchange Act after the Effective Date, the date
of such Preliminary Prospectus or the date of the Prospectus, as the case may
be, which is incorporated by reference and (ii) any such document so filed. If
the Company has filed an abbreviated registration statement to register
additional securities pursuant to Rule 462(b) under the Rules and Regulations
(the “462(b) Registration Statement”), then any reference herein to the
Registration Statement shall also be deemed to include such 462(b) Registration
Statement.

(b) The conditions to the use of Form S-3 in connection with the offering and
sale of the Notes as contemplated hereby have been satisfied. The Registration
Statement meets, and the offering and sale of the Notes 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).

(c) As of the Applicable Time (as defined below) and as of the Closing Date,
neither (i) any General Use Free Writing Prospectus (as defined below) issued at
or prior to the Applicable Time, and the Pricing Prospectus (as defined below)
and the information included on Schedule A hereto, all considered together
(collectively, the “General Disclosure Package”), (ii) any individual Limited
Use Free Writing Prospectus (as defined below), nor (iii) the bona fide
electronic road show (as defined in Rule 433(h)(5) of the Rules and
Regulations), if any, that has been made available without restriction to any
person, when considered together with the General Disclosure Package, included
or will include, any untrue statement of a material fact or omitted or as of the
Closing Date will omit, to state a material fact necessary in order to make the
statements

 

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therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from any Issuer Free
Writing Prospectus, in reliance upon, and in conformity with, written
information furnished to the Company by the Representative by or on behalf of
the Underwriters specifically for inclusion therein, which information the
parties hereto agree is limited to the Underwriters’ Information (as defined in
Section 16). As used in this paragraph (b) and elsewhere in this Agreement:

“Applicable Time” means 8:00 A.M., New York time, on the date of this Agreement.

“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is identified on Schedule A to this Agreement.

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 of the Rules and Regulations relating to the Securities 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.

“Limited Use Free Writing Prospectuses” means any Issuer Free Writing Prospectus
that is not a General Use Free Writing Prospectus.

“Pricing Prospectus” means the Preliminary Prospectus, if any, and the Base
Prospectus, each as amended and supplemented immediately prior to the Applicable
Time, including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof.

(d) No order preventing or suspending the use of any Preliminary Prospectus, any
Issuer Free Writing Prospectus or the Prospectus relating to the Offering has
been issued by the Commission, and no proceeding for that purpose or pursuant to
Section 8A of the Securities Act has been instituted or threatened by the
Commission, and each Preliminary Prospectus (if any), at the time of filing
thereof, conformed in all material respects to the requirements of the
Securities Act and the Rules and Regulations, and did 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 the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to information
contained in or omitted from any Preliminary Prospectus, in reliance upon, and
in conformity with, written information furnished to the Company by the
Representative by or on behalf of the Underwriters specifically for inclusion
therein, which information the parties hereto agree is limited to the
Underwriters’ Information (as defined in Section 16).

 

 

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(e) At the time the Registration Statement became effective, as of the date of
this Agreement and on the Closing Date, the Registration Statement conformed and
will conform in all material respects to the requirements of the Securities Act
and the Rules and Regulations and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; the
Prospectus, at the time the Prospectus was issued and on the Closing Date,
conformed and will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and did not and will not contain an
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; provided, however, that the foregoing
representations and warranties in this paragraph (d) shall not apply to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by the Representative by or on behalf of the
Underwriters specifically for inclusion therein, which information the parties
hereto agree is limited to the Underwriters’ Information (as defined in
Section 16).

(f) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Notes or until any earlier date that the Company notified or notifies the
Representative as described in Section 4(e), did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, Pricing 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 under
which they were made, not misleading. The foregoing sentence does not apply 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 Representative by or on behalf of the Underwriters specifically for
inclusion therein, which information the parties hereto agree is limited to the
Underwriters’ Information (as defined in Section 16).

(g) The documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in
all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission thereunder
and none of such documents contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

 

 

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(h) (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 Notes 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. The Company has not, directly or
indirectly, distributed and will not distribute any offering material in
connection with the Offering other than any Preliminary Prospectus, the
Prospectus and other materials, if any, permitted under the Securities Act and
consistent with Section 4(b) below. The Company will file with the Commission
all Issuer Free Writing Prospectuses (other than (i) a term sheet pursuant to
Rule 433(d)(5) of the Rules and Regulations and (ii) a “road show,” as defined
in Rule 433(d)(8) of the Rules and Regulations), if any, in the time and manner
required under Rules 163(b)(2) and 433(d) of the Rules and Regulations.

(i) The Company and each of its subsidiaries (as defined in Section 15) have
been duly organized and are validly existing as corporations or other legal
entities in good standing (or the foreign equivalent thereof) under the laws of
their respective jurisdictions of organization. The Company and each of its
subsidiaries are duly qualified to do business and are in good standing as
foreign corporations or other legal entities in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification and have all power and authority
(corporate or other) necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not (i) have, singly or in the
aggregate, a material adverse effect on the condition (financial or otherwise),
results of operations, assets, properties, business or prospects of the Company
and its subsidiaries taken as a whole, or (ii) impair in any material respect
the ability of the Company to perform its obligations under this Agreement or to
consummate any transactions contemplated by this Agreement, the General
Disclosure Package or the Prospectus (any such effect as described in clauses
(i) or (ii), a “Material Adverse Effect”). The Company owns or controls,
directly or indirectly, only the following corporations, partnerships, limited
liability partnerships, limited liability companies, associations or other
entities: (i) FCE FuelCell Energy, Ltd., a Canadian company, (ii) Alliance Star
Energy, LLC, a California limited liability company, (iii) Bridgeport Fuel Cell
Park, LLC, a Connecticut limited liability company, (iv) ERG Milford, LLC, a
Connecticut limited liability company, (v) ERG Connecticut, LLC, a Connecticut
limited liability company, (vi) Star Energy East, LLC, a Connecticut limited
liability company, (vii) Long Beach Clean Energy, LLC, a New York limited
liability company, (viii) FuelCell Energy Solutions GmbH, a German company,
(ix) FCE Korea, Ltd., a South Korean company (x) Versa Power Systems, Inc., a
Delaware corporation, (xi) Versa Power Systems, Ltd., a Canadian Company and
(xii) Waterbury Renewable Energy, LLC, a Delaware limited liability company.

(j) The Company has the full right, power and authority to enter into this
Agreement, the Indenture and the Notes and to perform and to discharge its
obligations hereunder and thereunder; including, without limitation, the full
right, power and authority to issue, sell and deliver the Notes and the
Underlying Common Stock; and each of this Agreement, the Indenture and the Notes
has been duly authorized, and when executed and delivered by the Company, and
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as rights to indemnify
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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(k) The Notes to be issued and sold by the Company to the Underwriters hereunder
have been duly and validly authorized and, when authenticated, issued and
delivered by the Company in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as provided herein will
conform to the description thereof contained in the General Disclosure Package
and the Prospectus. There are no preemptive rights or other rights to subscribe
for or to purchase any notes, 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 notes, 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 (other
than rights which have been waived in writing in connection with the issuance
and sale of the Notes and the other transactions contemplated by this Agreement
or otherwise satisfied). In connection with this Offering, the Company has
received a written waiver from POSCO Power (“POSCO”) of its investor rights
under that certain Securities Purchase Agreement between POSCO and the Company,
dated April 30, 2012 (“Posco Securities Purchase Agreement”) and any other
agreement that may be in effect with POSCO.

(l) The Underlying Common Stock conforms to all statements relating thereto
contained or incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus. Upon issuance and delivery of the
Notes in accordance with this Agreement and the Indenture, the Notes will be
convertible at the option of the holder thereof for shares of the Underlying
Common Stock in accordance with the terms of the Notes and the Indenture; the
shares of the Underlying Common Stock issuable upon conversion of the Notes have
been duly authorized and reserved for issuance upon such conversion by all
necessary corporate action and such shares, when issued upon such conversion,
will be validly issued and will be fully paid and non-assessable; no holder of
such shares will be subject to personal liability by reason of being such a
holder; and the issuance of such shares upon such conversion will not be subject
to the pre-emptive or other similar rights of any security-holder of the
Company.

 

 

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(m) The Company has an authorized capitalization as set forth in the Pricing
Prospectus, and all of the issued shares of the Company have been duly and
validly authorized and issued, are fully paid and nonassessable, have been
issued in compliance with federal and state securities laws, and conform to the
description thereof contained in the General Disclosure Package and the
Prospectus. As of May 31, 2013, there were 192,062,499 shares of Common Stock,
par value $0.0001, issued and outstanding, 64,020 Series B preferred shares
issued and outstanding, convertible into 5,448,512 shares of common stock and
the Company’s Series 1 preferred shares, issued and outstanding, which is
currently convertible into 11,997,669 share of common stock and 3,231,539 shares
of Common Stock were issuable upon the exercise of all options, warrants and
convertible securities outstanding as of such date. Since such date, the Company
has not issued any securities, other than Common Stock of the Company issued
pursuant to the exercise of stock options previously outstanding under the
Company’s stock plans or the issuance of options or restricted Common Stock
under the Company’s stock plans. All of the stock options, warrants and other
rights to purchase or exchange any securities for shares of the Company’s
capital stock have been duly authorized and validly issued, and were issued in
compliance with US 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 securities
of the Company. 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 or
exercisable for, any capital stock of the Company or any of its subsidiaries
other than those described above or accurately described in the General
Disclosure Package. The description of the Company’s stock option, stock bonus
and other stock plans or arrangements, and the stock options or other rights
granted thereunder, as described in the General Disclosure Package and the
Prospectus, accurately and fairly present the information required to be shown
with respect to such plans, arrangements, stock options and rights.

(n) All the outstanding shares of capital stock or other equity interests of
each 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 General
Disclosure Package or the Prospectus, are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or transfer
or any other claim of any third party.

(o) The Indenture has been duly authorized by the Company and duly qualified
under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”),
and, when duly executed and delivered by the Company and the Trustee, will
constitute a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors’ rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).

(p) The Notes and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the Registration Statement,
the General Disclosure Package and the Prospectus and will be in substantially
the respective forms filed or incorporated by reference, as the case may be, as
exhibits to the Registration Statement.

 

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(q) The execution, delivery and performance of this Agreement, the Indenture and
the Notes by the Company, the issuance and sale of the Notes and the Underlying
Common Stock by the Company and the consummation of the transactions
contemplated hereby and thereby will not (with or without notice or lapse of
time or both) (i) conflict with or result in a breach or violation of any of the
terms or provisions of, constitute a default or Debt Repayment Triggering Event
(as defined below) 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 any subsidiary pursuant to, 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 the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or by-laws (or analogous governing instruments, as
applicable) 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 subsidiaries or any of their
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. A “Debt Repayment Triggering Event” means
any event or condition that gives, or with the giving of notice or lapse of time
would give the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.

(r) No consent, approval, authorization 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 for the execution, delivery and performance of this
Agreement, the Notes, the Indenture and the DTC Agreement by the Company, the
offer or sale of the Notes and Underlying Common Stock or the consummation of
the transactions contemplated hereby or thereby, except for the registration of
the Notes and the Underlying Common Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act, the Trust Indenture Act and applicable state
securities laws, the Financial Industry Regulatory Authority (“FINRA”) and the
NASDAQ Global Market (the “NASDAQ GM”) in connection with the Offering by the
Company, and the listing of the Underlying Common Stock on the NASDAQ GM.

(s) KPMG, LLP, who have certified certain financial statements and related
schedules included or incorporated by reference in the Registration Statement,
the General Disclosure Package and the Prospectus, and have audited the
Company’s internal control over financial reporting and management’s assessment
thereof, is an independent registered public accounting firm as required by the
Securities Act and the Rules and Regulations and the Public Company Accounting
Oversight Board (United States) (the “PCAOB”). Except 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).

 

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(t) The financial statements, together with the related notes and schedules,
included or incorporated by reference in the General Disclosure Package, the
Prospectus and in the Registration Statement fairly present the financial
position and the results of operations and changes in stockholders’ equity and
cash flows of the Company and its consolidated subsidiaries and other
consolidated entities at the respective dates or for the respective periods
therein specified. Such statements and related notes and schedules have been
prepared in accordance with generally accepted accounting principles in the
United States (“GAAP”) applied on a consistent basis throughout the periods
involved except as may be set forth in the related notes included or
incorporated by reference in the General Disclosure Package. The financial
statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package and the Prospectus
comply in all material respects with the Securities Act, the Exchange Act, and
the Rules and Regulations and the rules and regulations under the Exchange Act.
No other financial statements or supporting schedules or exhibits are required
by the Securities Act or the Rules and Regulations to be described, or included
or incorporated by reference in the Registration Statement, the General
Disclosure Package or the Prospectus. There is no pro forma or as adjusted
financial information which is required to be included in the Registration
Statement, the General Disclosure Package, or and the Prospectus or a document
incorporated by reference therein in accordance with the Securities Act and the
Rules and Regulations which has not been included or incorporated as so
required.

(u) Neither the Company nor any of its subsidiaries has sustained, since the
date of the latest audited financial statements included or incorporated by
reference in the General Disclosure Package, any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the General
Disclosure Package; and, since such date, there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any
material adverse changes, or any development involving a prospective material
adverse change, in or affecting the business, assets, general affairs,
management, financial position, prospects, stockholders’ equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise than
as set forth or contemplated in the General Disclosure Package.

(v) 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 General
Disclosure Package or the Prospectus or a document incorporated by reference
therein and are not so described therein, or which, singly 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.

 

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(w) Neither the Company nor any of its subsidiaries is in (i) violation of its
charter or by-laws (or analogous governing instrument, as applicable),
(ii) default in any respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant, obligation, agreement or condition
contained in any indenture, mortgage, deed of trust, bank loan or credit
agreement, other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which it is a party or by which the Company or
its subsidiaries are is bound or to which any of its property or assets is
subject or (iii) violation in any respect of any statute, law, ordinance,
governmental rule, regulation, ordinance, or court order, decree or judgment to
which it or its property or assets may be subject except, in the case of clauses
(ii) and (iii) of this paragraph (s), for any violations or defaults which would
not, singly or in the aggregate, have a Material Adverse Effect.

(x) The Company and each of its subsidiaries have made all material filings,
applications and submissions required by, and owns or possess all material
approvals, licenses, certificates, certifications, clearances, consents,
exemptions, marks, notifications, orders, authorizations and permits issued by,
and have made all material declarations and filings with, the appropriate local,
state, federal or foreign regulatory agencies or bodies that are necessary or
desirable for the ownership of their respective properties or the conduct of
their respective businesses as described in the General Disclosure Package and
the Prospectus (collectively, the “Governmental Permits”) and is in compliance
in all material respects with the terms and conditions of all such Governmental
Permits, except where any failures to possess or make the same would not, singly
or in the aggregate, have a Material Adverse Effect. All such Governmental
Permits are valid and in full force and effect. All such Governmental Permits
are free and clear of any restriction or condition that are in addition to, or
materially different from those normally applicable to similar licenses,
certificates, authorizations and permits. 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
Governmental 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 Notes
to be issued and sold by the Company hereunder and to issue the Underlying
Common Stock upon conversion of the Notes in accordance with the terms thereof.

 

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(y) Neither the Company nor any of its subsidiaries is or, after giving effect
to the offering of the Securities and the application of the proceeds thereof as
described in the General Disclosure Package and the Prospectus, will 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) Neither the Company, its subsidiaries nor, to the Company’s knowledge, any
of the Company’s or its subsidiaries’ officers, directors or affiliates has
taken or will take, directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the Company, or which
caused or resulted in, or which could in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company.

(aa) 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 their respective businesses as currently
conducted, and as proposed to be conducted and described in the General
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 and 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 General Disclosure Package and
the Prospectus are 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 knowledge of any breach or anticipated
breach by any other person to any Intellectual Property license. The Company’s
and each of its subsidiaries’ businesses as now conducted and as proposed to be
conducted do not and will not infringe or conflict with any valid and
enforceable 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 at all times
complied in all material respects with all applicable laws relating to privacy,
data protection, and the collection and use of personal information collected,
used, or held for use by the Company and any of its subsidiaries in the conduct
of the Company’s and its subsidiaries businesses. No claims have been asserted
or threatened against the Company or any of its subsidiaries alleging a
violation of any person’s privacy or personal information or data rights and, to
the knowledge of the Company, the consummation of the transactions contemplated
hereby will not breach or otherwise cause any violation of any law related to
privacy, data protection, or the collection and use of personal information
collected, used, or held for use by the Company or any of its subsidiaries in
the conduct of the Company’s or any of its subsidiaries’ businesses. The Company
and each of its subsidiaries takes reasonable measures to ensure that such
information is protected against unauthorized access, use, modification, or
other misuse.

 

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(bb) The Company and each of its subsidiaries have good, valid and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real or personal property which are material to the business of the
Company and its subsidiaries taken as a whole, in each case free and clear of
all liens, encumbrances, security interests, claims and defects that do not,
singly or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases material
to the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the General Disclosure Package and the Prospectus, are
in full force and effect, and neither the Company nor any subsidiary has
received any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any of the
leases or subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.

(cc) No labor disturbance or dispute with the employees of the Company or any of
the Company’s subsidiaries exists, or, to the best of 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 of any existing or imminent
labor disturbance by the employees of any of its or its subsidiaries’ principal
suppliers, manufacturers, customers or contractors, that singly or in the
aggregate, might be expected to have 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, singly 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
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, no union organizing activities are currently
taking place concerning the employees of the Company or any of its subsidiaries.

 

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(dd) No “prohibited transaction” (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”), or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time (the “Code”)) has
occurred or could reasonably be expected to occur with respect to any employee
benefit plan of the Company or any of its subsidiaries which could, singly or in
the aggregate, have a Material Adverse Effect. Each employee benefit plan of the
Company or any of its subsidiaries is in compliance in all material respects
with applicable law, including ERISA and the Code. For purposes of this section,
an “employee benefit plan” and an “employee pension benefit plan” are as defined
in ERISA section 3(2), and an employee welfare benefit plan as defined in ERISA
section 3(1). The Company and its subsidiaries have not incurred and could not
reasonably be expected to incur liability under Title IV of ERISA with respect
to the termination of, or withdrawal from, any pension plan (as defined in
ERISA). 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, and, to the knowledge of the Company, nothing has
occurred, whether by action or by failure to act, which could, singly or in the
aggregate, cause the loss of such qualification.

(ee) The Company and its subsidiaries are and have been in compliance with all
foreign, federal, state and local statute, law (including the common law),
ordinance, rule, regulation, order, judgment, decree or Governmental Permit,
relating to the use, treatment, storage and disposal of hazardous or toxic
substances, materials or wastes or the protection of health and safety or the
environment which are applicable to their businesses (“Environmental Laws”),
except where the failure to comply would not, singly or in the aggregate, have a
Material Adverse Effect. There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind
of hazardous or toxic substances, materials or wastes by, due to, or caused by
the Company or any of its subsidiaries (or, to the Company’s knowledge, any
other entity for whose acts or omissions the Company or any of its subsidiaries
is or may otherwise be liable) upon any of the property now or previously owned,
leased or operated by the Company or any of its subsidiaries, or upon any other
property, in violation of, or which would give rise to any liability under, any
Environmental Law, except for any violation or liability which would not have,
singly or in the aggregate with all such violations and liabilities, a Material
Adverse Effect; and there has been no disposal, discharge, emission or other
release of any kind onto such property or into the environment surrounding such
property of any hazardous or toxic substances, materials or wastes with respect
to which the Company has knowledge, except for any such disposal, discharge,
emission, or other release of any kind which would not have, singly or in the
aggregate with all such discharges and other releases, a Material Adverse
Effect. In the ordinary course of business, the Company and its subsidiaries
conduct reviews of the effect of Environmental Laws on their businesses and
assets, as part of which they identify and evaluate associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws and Governmental Permits issued thereunder, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such reviews, the Company and its subsidiaries have
reasonably concluded that such associated costs and liabilities would not have,
singly or in the aggregate, a Material Adverse Effect.

 

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(ff) The Company and its subsidiaries are in compliance in all respects with all
applicable provisions of the Occupational Safety and Health Act of 1970, as
amended, including all applicable regulations thereunder, except for such
noncompliance as would not, singly or in the aggregate, have a Material Adverse
Effect.

(gg) The Company and its subsidiaries, each (i) has timely filed all necessary
federal, state, local and foreign tax returns (or timely filed applicable
extensions therefor) that have been required to be filed, and all such returns
were true, complete and correct, (ii) has paid all federal, state, local and
foreign taxes, assessments, governmental or other charges that are due and
payable for which it is liable, including, without limitation, all sales and use
taxes and all taxes which the Company or any of its subsidiaries is obligated to
withhold from amounts owing to employees, creditors and third parties, and
(iii) does not have any tax deficiency or claims outstanding or assessed or, to
the best of its knowledge, proposed against any of them, except those, in each
of the cases described in clauses (i), (ii) and (iii) of this paragraph (cc),
that would not, singly or in the aggregate, have a Material Adverse Effect. The
Company and its subsidiaries, each has not engaged in any transaction which is a
corporate tax shelter or which could be characterized as such by the Internal
Revenue Service or any other taxing authority. The accruals and reserves on the
books and records of the Company and its subsidiaries in respect of tax
liabilities for any taxable period not yet finally determined are adequate to
meet any assessments and related liabilities for any such period, and since
October 31, 2012 the Company and its subsidiaries each has not incurred any
liability for taxes other than in the ordinary course.

(hh) The Company and each of its subsidiaries maintain 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 existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect. Neither the Company nor any of its subsidiaries has
been denied any material insurance policy or coverage for which it has applied.
Neither the Company nor any of its subsidiaries insures risk of loss through any
captive insurance, risk retention group, reciprocal group or by means of any
fund or pool of assets specifically set aside for contingent liabilities other
than as described in the General Disclosure Package.

 

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(ii) The Company and its subsidiaries each maintains a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets;

(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. Except as described in the General
Disclosure Package, since the end of the Company’s most recent audited fiscal
year, there has been (A) no material weakness in the Company’s internal control
over financial reporting (whether or not remediated) and (B) no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.

(jj) The Company has established, maintains and evaluates “disclosure controls
and procedures” (as such term is defined in Rule 13a-15(e) and 15d-15(e) under
the Exchange Act), which (i) are designed to ensure that material information
relating to the Company and its subsidiaries is made known to the Company’s
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have been evaluated for
effectiveness as of the end of the last fiscal period covered by the
Registration Statement; and (iii) such disclosure controls and procedures are
effective to perform the functions for which they were established. There are no
significant deficiencies or material weaknesses in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, or report financial data to management and the Board of
Directors of the Company. The Company is not aware of any fraud, whether or not
material, that involves management or other employees who have a role in the
Company’s internal controls; and since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses. Except as set forth in the General
Disclosure Package, the Audit Committee of the Board of Directors of the Company
(the “Audit Committee”) is not reviewing or investigating, and neither the
Company’s independent auditors nor its internal auditors have recommended that
the Audit Committee review or investigate, (iv) adding to, deleting, changing
the application of or changing the Company’s disclosure with respect to, any of
the Company’s material accounting policies, (v) any manner which could result in
a restatement of the Company’s financial statements for any annual or interim
period during the current or prior three fiscal years, or (iii) a significant
deficiency, material weakness, change in internal control over financial
reporting or fraud involving management or other employees who have a
significant role in the internal control over financial reporting.

 

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(kk) Except as described in the General Disclosure Package and the Prospectus,
there are no material off-balance sheet transactions (including, without
limitation, transactions related to, and the existence of, “variable interest
entities” within the meaning of Financial Accounting Standards Board
Interpretation No. 46), arrangements, obligations (including contingent
obligations), or any other relationships with unconsolidated entities or other
persons, that may have a material current or future effect on the Company’s
financial condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant components of
revenues or expenses.

(ll) The Company’s Board of Directors has validly appointed an audit committee
whose composition satisfies the requirements of Rule 4350(d)(2) of the Rules of
NASDAQ and Section 10A-3 of the Exchange Act and the Board of Directors and/or
the audit committee has adopted a charter that satisfies the requirements of
Rule 4350(d)(1) of the Rules of NASDAQ and Section 10A-3 of the Exchange Act.
The audit committee has reviewed the adequacy of its charter within the past
twelve months. Neither the Board of Directors nor the audit committee has been
informed, nor is any director of the Company aware, of (i) any significant
deficiencies in the design or operation of the Company’s internal controls that
could adversely affect the Company’s ability to record, process, summarize and
report financial data or any material weakness in the Company’s internal
controls; or (ii) any fraud, whether or not material, that involves management
or other employees of the Company who have a significant role in the Company’s
internal controls.

(mm) The minute books of the Company and each of its subsidiaries that would be
a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X
under the Exchange Act (such a significant subsidiary of the Company, a
“Significant Subsidiary”) have been made available to the Underwriters and
counsel for the Underwriters, and such books (i) contain a complete summary of
all meetings and actions of the board of directors (including each board
committee) and stockholders of the Company (or analogous governing bodies and
interest holders, as applicable), and each of its Significant Subsidiaries since
the time of its respective incorporation or organization through the date of the
latest meeting and action, and (ii) accurately in all material respects reflect
all transactions referred to in such minutes.

(nn) There is no franchise, lease, contract, agreement or document required by
the Securities Act or by the Rules and Regulations to be described in the
General Disclosure Package and in the Prospectus or a document incorporated by
reference therein or to be filed as an exhibit to the Registration Statement or
a document incorporated by reference therein which is not described or filed
therein as required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration Statement or in
a document incorporated by reference therein are accurate and complete
descriptions of such documents in all material respects. Other than as described
in the General Disclosure Package, no such franchise, lease, contract or
agreement has been suspended or terminated for convenience or default by the
Company or any of its subsidiaries or any of the other parties thereto, and
neither the Company nor any of its subsidiaries has received notice nor does the
Company have any other knowledge of any such pending or threatened suspension or
termination, except for such pending or threatened suspensions or terminations
that would not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

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(oo) No relationship, direct or indirect, exists between or among the Company
and any of its subsidiaries on the one hand, and the directors, officers,
stockholders (or analogous interest holders), customers or suppliers of the
Company or any of its subsidiaries or any of their affiliates on the other hand,
which is required to be described in the General Disclosure Package and the
Prospectus or a document incorporated by reference therein and which is not so
described.

(pp) No person or entity has the right to require registration of shares of
Common Stock or other securities of the Company or any of its subsidiaries
because of the filing or effectiveness of the Registration Statement or
otherwise, except for persons and entities who have expressly waived such right
in writing or who have been given timely and proper written notice and have
failed to exercise such right within the time or times required under the terms
and conditions of such right. 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 under the Posco Securities Purchase Agreement, which have been satisfied
to date, 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.

(qq) Neither the Company nor any of its subsidiaries owns any “margin
securities” as that term is defined in Regulation U of the Board of Governors of
the Federal Reserve System (the “Federal Reserve Board”), and none of the
proceeds of the sale of any of the Securities will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Securities to be considered a “purpose credit” within the
meanings of Regulation T, U or X of the Federal Reserve Board.

(rr) At the Applicable Time there were, and as of the Closing Date there will
be, no securities of or guaranteed by the Company that are rated by a
“nationally recognized statistical rating organization,” as that term is defined
in Rule 436(g)(2) promulgated under the Act.

(ss) Neither the Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against the Company or the Underwriters for a
brokerage commission, finder’s fee or like payment in connection with the
offering and sale of any of the Notes or any transaction contemplated by this
Agreement, the Registration Statement, the General Disclosure Package or the
Prospectus.

 

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(tt) No forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) contained in either the
General Disclosure Package or the Prospectus has been made or reaffirmed without
a reasonable basis or has been disclosed other than in good faith.

(uu) The Company is subject to and in compliance in all material respects with
the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
The Common Stock is registered pursuant to Section 12(b) or 12(g) of the
Exchange Act and is listed on the NASDAQ GM, and the Company has taken no action
designed to, or reasonably likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the NASDAQ GM, nor has the Company received any notification that the
Commission, FINRA or the NASDAQ Stock Market LLC is currently contemplating
terminating such registration or listing. The Company has complied in all
material respects with the applicable requirements of the NASDAQ GM for
maintenance of inclusion of the Common Stock thereon. No consent, approval,
authorization or order of, or filing, notification or registration with, the
NASDAQ GM is required for the listing and trading of the Underlying Common Stock
on the NASDAQ GM, except for (i) a Notification Form: Listing of Additional
Shares; and (ii) a Notification Form: Change in the Number of Shares
Outstanding.

(vv) The Company has filed in a timely manner all reports required to be filed
pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the
preceding 12 months (except to the extent that Section 15(d) requires reports to
be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall
be governed by the next clause of this sentence); and the Company has filed in a
timely manner all reports required to be filed pursuant to Sections 13(d) and
13(g) of the Exchange Act since January 1, 2004, except where the failure to
timely file would not reasonably be expected singly or in the aggregate to have
a Material Adverse Effect.

(ww) The Company, and to its knowledge, each of the Company’s directors or
officers, in their capacities as such, is, and after giving effect to the
Offering will be, in compliance in all material respects with all applicable
effective provisions of the Sarbanes-Oxley Act of 2002 and any related rules and
regulations promulgated by the Commission thereunder (the “Sarbanes-Oxley Act”).
Each of the principal executive officer and the principal financial officer of
the Company (and each former principal executive officer of the Company and each
former principal financial officer of the Company as applicable) has made all
certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with
respect to all reports, schedules, forms, statements and other documents
required to be filed by him or her with the Commission. For purposes of the
preceding sentence, “principal executive officer” and “principal financial
officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

 

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(xx) The Company is, and after giving effect to the Offering will be, in
compliance with all applicable corporate governance requirements set forth in
the NASDAQ Marketplace Rules.

(yy) Neither the Company nor any of its subsidiaries nor, to the Company’s
knowledge, any other person associated with or acting on behalf of the Company,
including without limitation any director, officer, agent or employee of the
Company or any of its subsidiaries has, directly or indirectly, while acting on
behalf of the Company or any of its subsidiaries (i) used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity or failed to disclose fully any contribution in
violation of law, (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof, (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended or
(iv) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.

(zz) Any statistical, industry-related or market-related data included or
incorporated by reference in the Registration Statement, the Prospectus or the
General Disclosure Package, are based on or derived from sources that the
Company reasonably and in good faith believes to be reliable and accurate, and
such data agree with the sources from which they are derived.

(aaa) Neither the Company nor any subsidiary nor any of their affiliates (within
the meaning of FINRA’s Conduct Rule 5121(f)(1)) directly or indirectly controls,
is controlled by, or is under common control with, or is an associated person
(within the meaning of Article I, Section 1(ee) of the By-laws of FINRA) of, any
member firm of FINRA.

(bbb) The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the USA PATRIOT Act, applicable
money laundering statutes of all jurisdictions and the applicable rules, related
rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending, or to the
best knowledge of the Company, threatened against the Company or any of its
subsidiaries.

(ccc) Neither the Company nor any of its subsidiaries nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of the Company or
any of its subsidiaries is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such proceeds to
any subsidiary, joint venture partner or other person or entity, which, to the
Company’s knowledge, will use such proceeds for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.

 

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(ddd) No approval of the shareholders of the Company under the rules and
regulations of Nasdaq (including Rule 5635 of the Nasdaq Global Marketplace
Rules) is required for the Company to issue and deliver to the Underwriters the
Notes. Any certificate signed by or on behalf of the Company and delivered to
the Underwriters or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.

(eee) Neither the Company nor its subsidiaries are subject to regulation as a
“public utility”, “public service company”, “holding company” or similar
designation by any governmental or regulatory authority, including under the
Federal Power Act, as amended or any applicable state utility laws; and the
Company and its subsidiaries are not required to file with any applicable state
or local commissions, governmental authorities or regulatory bodies that
regulate utilities any forms, statements, reports, registrations or documents
required to be filed by the Company or its subsidiaries under such applicable
state or local laws to which the Company or its subsidiaries are subject.

Any certificate signed by or on behalf of the Company and delivered to the
Representative or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.

4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Underwriters:

(a) Subject to the Rules and Regulations, to prepare the Rule 462(b)
Registration Statement, if necessary, in a form approved by the Representative
and file such Rule 462(b) Registration Statement with the Commission on the date
hereof; to prepare the Prospectus in a form approved by the Representative
containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rules 430A, 430B and 430C of the Rules and
Regulations and to file such Prospectus pursuant to Rule 424(b) of the Rules and
Regulations not later than the second (2nd) business day following the execution
and delivery of this Agreement or, if applicable, such earlier time as may be
required by Rule 430A of the Rules and Regulations; to notify the Representative
immediately of the Company’s intention to file or prepare any supplement or
amendment to the Registration Statement or to the Prospectus in connection with
this Offering and to make no amendment or supplement to the Registration
Statement, the General Disclosure Package or to the Prospectus to which the
Representative shall reasonably object by notice to the Company after a
reasonable period to review; to advise the Representative, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the General
Disclosure Package or the Prospectus or any amended Prospectus has been filed
and to furnish the Representative copies thereof; to file promptly all material
required to be filed by the Company with the Commission pursuant to Rule 433(d)
or 163(b)(2), as the case may be, of the Rules and Regulations; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus (or in lieu thereof, the notice referred to
in Rule 173(a) of the Rules and Regulations) is required or sale of the Notes;
to advise the Representative, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement, the
General Disclosure Package or the Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus or suspending any such qualification, and promptly
to use its best efforts to obtain the withdrawal of such order.

 

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(b) The Company represents and agrees that, it has not made, and unless it
obtains the prior consent of the Representative, it will not, make any offer
relating to the Securities that would constitute a “free writing prospectus” as
defined in Rule 405 of the Rules and Regulations (each, a “Permitted Free
Writing Prospectus”); provided that the prior written consent of the
Representative hereto shall be deemed to have been given in respect of the
Issuer Free Writing Prospectus(es) included in Schedule A hereto. The Company
represents that it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus, comply with the
requirements of Rules 164 and 433 of the Rules and Regulations applicable to any
Issuer Free Writing Prospectus, including the requirements relating to timely
filing with the Commission, legending and record keeping and will not take any
action that would result in the Underwriters or the Company being required to
file with the Commission pursuant to Rule 433(d) of the Rules and Regulations a
free writing prospectus prepared by or on behalf of such Underwriter that such
Underwriter otherwise would not have been required to file thereunder.

(c) If at any time when a Prospectus relating to the Notes or the Underlying
Common Stock is required to be delivered under the Securities Act, any event
occurs or condition exists as a result of which the Prospectus, as then amended
or supplemented, would include 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, or the
Registration Statement, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading, or if for any other reason it is
necessary at any time to amend or supplement any Registration Statement or the
Prospectus to comply with the Securities Act or the Exchange Act, the Company
will promptly notify the Representative, and upon the Representative’s request,
the Company will promptly prepare and file with the Commission, at the Company’s
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects
such compliance and will deliver to the Underwriters, without charge, such
number of copies thereof as the Underwriters may reasonably request. The Company
consents to the use of the Prospectus or any amendment or supplement thereto by
the Underwriters.

 

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(d) If the General Disclosure Package is being used to solicit offers to buy the
Notes or the Underlying Common Stock at a time when the Prospectus is not yet
available to prospective purchasers and any event shall occur as a result of
which, in the judgment of the Company or in the reasonable opinion of the
Representative, it becomes necessary to amend or supplement the General
Disclosure Package in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to make the
statements therein not conflict with the information contained or incorporated
by reference in the Registration Statement then on file and not superseded or
modified, or if it is necessary at any time to amend or supplement the General
Disclosure Package to comply with any law, the Company promptly will either
(i) prepare, file with the Commission (if required) and furnish to the
Underwriters and any dealers an appropriate amendment or supplement to the
General Disclosure Package or (ii) prepare and file with the Commission an
appropriate filing under the Exchange Act which shall be incorporated by
reference in the General Disclosure Package so that the General Disclosure
Package as so amended or supplemented will not, in the light of the
circumstances under which they were made, be misleading or conflict with the
Registration Statement then on file, or so that the General Disclosure Package
will comply with law.

(e) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free
Writing Prospectus conflicted or will conflict with the information contained in
the Registration Statement, Pricing Prospectus or Prospectus, including any
document incorporated by reference therein and any prospectus supplement deemed
to be a part thereof and not superseded or modified or included or would include
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 under which they were
made, not misleading, the Company has promptly notified or will promptly notify
the Representative so that any use of the Issuer Free Writing Prospectus may
cease until it is amended or supplemented and has promptly amended or will
promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
The foregoing sentence does not apply 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 Representative by or on behalf of
the Underwriters specifically for inclusion therein, which information the
parties hereto agree is limited to the Underwriters’ Information (as defined in
Section 16).

(f) To the extent not available on the Commission’s EDGAR system or any
successor system, to furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.

 

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(g) To the extent not available on the Commission’s EDGAR system or any
successor system, to deliver promptly to the Representative in New York City
such number of the following documents as the Representative shall reasonably
request: (i) conformed copies of the Registration Statement as originally filed
with the Commission (in each case excluding exhibits), (ii) each Preliminary
Prospectus (if any), (iii) any Issuer Free Writing Prospectus, (iv) the
Prospectus (the delivery of the documents referred to in clauses (i), (ii),
(iii) and (iv) of this paragraph (g) to be made not later than 10:00 A.M., New
York time, on the business day following the execution and delivery of this
Agreement), (v) conformed copies of any amendment to the Registration Statement
(excluding exhibits), (vi) any amendment or supplement to the General Disclosure
Package or the Prospectus (the delivery of the documents referred to in clauses
(v) and (vi) of this paragraph (g) to be made not later than 10:00 A.M., New
York City time, on the business day following the date of such amendment or
supplement) and (vii) any document incorporated by reference in the General
Disclosure Package or the Prospectus (excluding exhibits thereto) (the delivery
of the documents referred to in clause (vi) of this paragraph (g) to be made not
later than 10:00 A.M., New York City time, on the business day following the
date of such document).

(h) To make generally available to its stockholders as soon as practicable, but
in any event not later than eighteen (18) months after the effective date of
each Registration Statement (as defined in Rule 158(c) of the Rules and
Regulations), an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158); and,
if not available on the Commission’s EDGAR System or any successor system, to
furnish to its stockholders after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders’ equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and after each of the first three fiscal
quarters of each fiscal year (beginning with the first fiscal quarter after the
effective date of such Registration Statement), consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable
detail.

(i) To take promptly from time to time such actions as the Representative may
reasonably request to qualify the Notes or Underlying Common Stock for offering
and sale under the securities or blue sky laws of such jurisdictions (domestic
or foreign) as the Representative may designate and to continue such
qualifications in effect, and to comply with such laws, for so long as required
to permit the offer and sale of the Notes and the Underlying Common Stock in
such jurisdictions; provided that the Company and its subsidiaries shall not be
obligated to qualify as foreign corporations in any jurisdiction in which they
are not so qualified or to file a general consent to service of process in any
jurisdiction.

 

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(j) During the period of five (5) years from the date hereof, to the extent not
available on the Commission’s EDGAR system or any successor system, to deliver
to the Underwriters, (i) upon request, copies of all reports or other
communications furnished generally to stockholders, and (ii) upon request,
copies of any reports and financial statements furnished or filed with the
Commission or any national securities exchange or automatic quotation system on
which the Common Stock is listed or quoted.

(k) That the Company will not, for a period of ninety (90) days from the date of
the Prospectus, (the “Lock-Up Period”) without the prior written consent of LCM,
directly or indirectly offer, sell, assign, transfer, pledge, contract to sell,
or otherwise dispose of, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, other than
(i) the Company’s sale of the Notes hereunder (ii) the issuance of restricted
Common Stock or options to acquire Common Stock pursuant to the Company’s
employee benefit plans, qualified stock option plans or other employee
compensation plans as such plans are in existence on the date hereof and
described in the Prospectus and the issuance of Common Stock pursuant to the
valid exercises of options, warrants or rights outstanding on the date hereof,
(iii) shares issued for the sole purpose of funding any cash dividends payable
in respect of the Series B Preferred Shares and the Series 1 Preferred Shares
during the Lock-Up Period, (iv) shares issued to Enbridge, Inc. (or its
affiliates) or shares issued to fund any cash payments to Enbridge, Inc. (or its
affiliates), in each case for the sole purpose of paying or settling any
obligation in respect of the Series 1 Preferred Shares that is payable during
the Lock-Up Period, (v) pursuant to warrants to purchase common stock that are
outstanding on the date hereof and which have been publicly disclosed and
(vi) the issuance of warrants to purchase Common Stock issued to unaffiliated
strategic partners on an arm’s length basis in connection with a transaction
approved by the board of directors of the Company; provided, however, that such
issuance of warrants pursuant to this Section 4(k)(vi) shall not exceed 5% (on
an as exercised basis) of the outstanding shares of Common Stock of the Company
as of the date of this Agreement. The Company will cause each executive officer
and director listed in Schedule B to furnish to the Underwriters, prior to the
Closing Date, a letter, substantially in the form of Exhibit B hereto. The
Company also agrees that during such period (other than for the sale of the
Notes hereunder), the Company will not file any registration statement,
preliminary prospectus or prospectus, or any amendment or supplement thereto,
under the Securities Act for any such transaction or which registers, or offers
for sale, Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, except for a registration statement on Form S-8
relating to employee benefit plans. The Company hereby agrees that (i) if it
issues an earnings release or material news, or if a material event relating to
the Company occurs, during the last seventeen (17) days of the Lock-Up Period,
(ii) if prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the sixteen (16)-day period
beginning on the last day of the Lock-Up Period, the restrictions imposed by
this paragraph (k) or the letter shall continue to apply until the expiration of
the eighteen (18)-day period beginning on the issuance of the earnings release
or the occurrence of the material news or material event; provided, however that
such extension will not apply if, (i) within three business days prior to the
15th calendar day before the last day of the Lock-Up Period, the Company
delivers a certificate, signed by the Chief Financial Officer or Chief Executive
Officer of the Company, certifying on behalf of the Company that (A) the Notes
are “actively traded securities” (as defined in Regulation M), (B) the Company
meets the applicable requirements of paragraph (a)(1) of Rule 139 under the
Securities Act in the manner contemplated by FINRA’s NASD Conduct Rule
2711(f)(4), and (C) the provisions of FINRA Conduct Rule 2711(f)(4) are not
applicable to any research reports relating to the Company published or
distributed by any of the Underwriters during the 15 days before or after the
last day of the Lock-Up Period (before giving effect to such extension); or
(D) FINRA Rule 2711 is amended to permit any of the Underwriters to publish or
otherwise distribute research reports during the 15 days before or after the
last day of the Lock-Up Period (before giving effect to such extension). The
Company will provide the Underwriters with prior notice of any such announcement
that gives rise to an extension of the Lock-Up Period.

 

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(l) To supply the Representative with copies of all correspondence to and from,
and all documents issued to and by, the Commission in connection with the
registration of the Securities under the Securities Act or the Registration
Statement, any Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto or document incorporated by reference therein.

(m) The Company will reserve and keep available at all times, free of
pre-emptive or other similar rights, a sufficient number of shares of Common
Stock, for the purposes of enabling the Company to satisfy any obligations to
issue Underlying Common Stock upon conversion of the Notes.

(n) Prior to the Closing Date to furnish to the Representative, as soon as they
have been prepared, copies of any unaudited interim consolidated financial
statements of the Company for any periods subsequent to the periods covered by
the financial statements appearing in the Registration Statement and the
Prospectus.

(o) Prior to the Closing Date not to issue any press release or other
communication directly or indirectly or hold any press conference with respect
to the Company, its condition, financial or otherwise, or earnings, business
affairs or business prospects (except for routine oral marketing communications
in the ordinary course of business and consistent with the past practices of the
Company and of which the Representative is notified), without the prior written
consent of the Representative, unless in the judgment of the Company and its
counsel, and after notification to the Representative, such press release or
communication is required by law or applicable stock exchange rules.

(p) Until the Representative shall have notified the Company of the completion
of the offering of the Notes, that the Company will not, and will cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act) not
to, either alone or with one or more other persons, bid for or purchase, for any
account in which it or any of its affiliated purchasers has a beneficial
interest, any shares of Common Stock or Notes, or attempt to induce any person
to purchase any shares of Common Stock or Notes; and not to, and to cause its
affiliated purchasers not to, make bids or purchases for the purpose of creating
actual, or apparent, active trading in or of raising the price of the Common
Stock or Notes.

 

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(q) Not to take any action prior to the Closing Date, which would require the
Prospectus to be amended or supplemented pursuant to Section 4.

(r) To at all times comply with all applicable provisions of the Sarbanes-Oxley
Act in effect from time to time.

(s) To apply the net proceeds from the sale of the Notes as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus under
the heading “Use of Proceeds.”

(t) To use its commercially reasonable best efforts to list, subject to notice
of issuance, effect and maintain the quotation and listing of the Common Stock
on the NASDAQ GM.

(u) To use its commercially reasonable best efforts to assist the Representative
with any filings with FINRA and obtaining clearance from FINRA as to the amount
of compensation allowable or payable to the Underwriters.

(v) To use its commercially reasonable best efforts to do and perform all things
required to be done or performed under this Agreement by the Company prior to
the Closing Date, and to satisfy all conditions precedent to the delivery of the
Notes.

5. PAYMENT OF EXPENSES. The Company agrees to pay, or reimburse if paid by the
Underwriters, upon consummation of the transactions contemplated hereby: (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Notes to the Underwriters and any taxes payable in that connection; (b) the
costs incident to the registration of the Notes under the Securities Act;
(c) the costs incident to the preparation, printing and distribution of the
Registration Statement, the Base Prospectus, any Preliminary Prospectus, any
Issuer Free Writing Prospectus, the General Disclosure Package, the Prospectus,
any amendments, supplements and exhibits thereto or any document incorporated by
reference therein and the costs of printing, reproducing and distributing any
transaction document by mail or other means of communications; (d) the
reasonable fees and expenses (including related fees and expenses of counsel for
the Underwriters) incurred in connection with securing any required review by
FINRA of the terms of the sale of the Notes and any filings made with FINRA;
(e) any applicable listing, quotation or other fees; (f) the reasonable fees and
expenses (including related fees and expenses of counsel to the Underwriters) of
qualifying the Notes and Underlying Common Stock under the securities laws of
the several jurisdictions as provided in Section 4(i) and of preparing, printing
and distributing wrappers, “Blue Sky Memoranda” and “Legal Investment Surveys”;
(g) the cost of preparing and printing stock certificates; (h) all fees and
expenses of the Trustee for the Notes and the registrar and transfer agent of
the Underlying Common Stock; (i) the reasonable fees, disbursements and expenses
of counsel to the Underwriters; and (j) all other reasonable costs and expenses
incident to the offering of the Securities or the performance of the obligations
of the Company under this Agreement (including, without limitation, the fees and
expenses of the Company’s counsel and the Company’s independent accountants and
the travel and other expenses incurred by Company’s and Underwriters’ personnel
in connection with any “road show” including, without limitation, any expenses
advanced by the Underwriters on the Company’s behalf (which will be promptly
reimbursed)).

 

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6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS, AND THE SALE OF THE NOTES
. The respective obligations of the Underwriters hereunder, and the closing of
the sale of the Notes, are subject to the accuracy, when made and as of the
Applicable Time and on the Closing Date, of the representations and warranties
of the Company contained herein, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:

(a) No stop order suspending the effectiveness of the Registration Statement or
any part thereof, preventing or suspending the use of any Base Prospectus, any
Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus
or any part thereof shall have been issued and no proceedings for that purpose
or pursuant to Section 8A under the Securities Act shall have been initiated or
threatened by the Commission, and all requests for additional information on the
part of the Commission (to be included or incorporated by reference in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the reasonable satisfaction of the Representative; the Rule 462(b)
Registration Statement, if any, each Issuer Free Writing Prospectus, if any, and
the Prospectus shall have been filed with the Commission within the applicable
time period prescribed for such filing by, and in compliance with, the Rules and
Regulations and in accordance with Section 4(a), and the Rule 462(b)
Registration Statement, if any, shall have become effective immediately upon its
filing with the Commission; and FINRA shall have raised no objection to the
fairness and reasonableness of the terms of this Agreement or the transactions
contemplated hereby.

(b) The Representative shall not have discovered and disclosed to the Company on
or prior to the Closing Date that the Registration Statement or any amendment or
supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Underwriters, is material or omits to state any fact which,
in the opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading, or that the
General Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus
or any amendment or supplement thereto contains an untrue statement of fact
which, in the opinion of such counsel, is material or omits to state any fact
which, in the opinion of such counsel, is material and is necessary in order to
make the statements, in the light of the circumstances in which they were made,
not misleading.

(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Indenture, the
DTC Agreement, the Notes, the Underlying Common Stock, the Registration
Statement, the General Disclosure Package, each Issuer Free Writing Prospectus,
if any, and the Prospectus and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.

 

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(d) Robinson & Cole LLP shall have furnished to the Representative such
counsel’s written opinion and negative assurances statement, as counsel to the
Company, addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Representative.

(e) The Underwriters shall have received from Proskauer Rose LLP, counsel for
the Underwriters, such opinion or opinions and negative assurances statement,
dated the Closing Date, with respect to such matters as the Representative may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for enabling them to pass upon such matters.

(f) At the time of the execution of this Agreement, the Representative shall
have received from KPMG LLP a letter, addressed to the Underwriters, executed
and dated such date, in form and substance satisfactory to the Representative
(A) confirming that they are an independent registered accounting firm with
respect to the Company and its subsidiaries within the meaning of the Securities
Act and the Rules and Regulations and PCAOB and (B) stating the conclusions and
findings of such firm, of the type ordinarily included in accountants’ “comfort
letters” to underwriters, with respect to the financial statements and certain
financial information contained or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus.

(g) On the effective date of any post-effective amendment to any Registration
Statement and on the Closing Date, the Representative shall have received a
letter (the “Bring-Down Letter”) from KPMG LLP addressed to the Underwriters and
dated the Closing Date confirming, as of the date of the Bring-Down Letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the General
Disclosure Package and the Prospectus, as the case may be, as of a date not more
than three (3) business days prior to the date of the Bring-Down Letter), the
conclusions and findings of such firm, of the type ordinarily included in
accountants’ “comfort letters” to underwriters, with respect to the financial
information and other matters covered by its letter delivered to the
Representative concurrently with the execution of this Agreement pursuant to
paragraph (g) of this Section 6.

 

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(h) The Company shall have furnished to the Representative a certificate, dated
the Closing Date, of its Chairman of the Board, Chief Executive Officer or its
President and its Chief Financial Officer or a Vice President of Finance, each
in his capacity as an officer of the Company, stating that (i) such officers
have carefully examined the Registration Statement, the General Disclosure
Package, any Permitted Free Writing Prospectus and the Prospectus and, in their
opinion, the Registration Statement and each amendment thereto, at the
Applicable Time and as of the date of this Agreement and as of the Closing Date
did not include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the General Disclosure Package, as of the
Applicable Time and as of the Closing Date, any Permitted Free Writing
Prospectus as of its date and as of the Closing Date, the Prospectus and each
amendment or supplement thereto, as of the respective date thereof and as of the
Closing Date, did not include any untrue statement of a material fact and did
not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not
misleading, (ii) since the effective date of the Registration Statement, no
event has occurred which should have been set forth in a supplement or amendment
to the Registration Statement, the General Disclosure Package or the Prospectus
that has not been so set forth therein, (iii) to the best of their knowledge
after reasonable investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct, and the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date, and
(iv) there has not been, subsequent to the date of the most recent audited
financial statements included or incorporated by reference in the General
Disclosure Package, any material adverse change in the financial position or
results of operations of the Company and its subsidiaries or any change or
development that, singly or in the aggregate, would involve a material adverse
change or a prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets or prospects
of the Company and its subsidiaries taken as a whole, except as set forth in the
Prospectus.

(i) Since the date of the latest audited financial statements included in the
General Disclosure Package or incorporated by reference in the General
Disclosure Package as of the date hereof, (i) neither the Company nor any of its
subsidiaries shall have sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in the General Disclosure Package, and
(ii) there shall not have been 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 short-term or long-term debt of the Company or
any of its subsidiaries, or any change, or any development involving a
prospective change, in or affecting the business, general affairs, management,
financial position, stockholders’ equity or results of operations of the Company
and its subsidiaries otherwise than as set forth in the General Disclosure
Package, the effect of which, in any such case described in clause (i) or
(ii) of this paragraph (i), is, in the judgment of the Representative, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Notes on the terms and in the manner contemplated in
the General Disclosure Package.

 

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(j) No action shall have been taken and no law, statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency or
body which would prevent the issuance or sale of the Notes or materially and
adversely affect or potentially materially and adversely affect the business or
operations of the Company or its subsidiaries and no injunction, restraining
order or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued which would prevent the issuance or sale of
the Notes or materially and adversely affect or potentially materially and
adversely affect the business or operations of the Company or its subsidiaries.

(k) Subsequent to the execution and delivery of this Agreement there shall not
have occurred any of the following: (i) trading in securities generally on the
New York Stock Exchange or the NASDAQ GM or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or materially limited, or
minimum or maximum prices or maximum range for prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or market or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States,
(iii) the United States shall have become engaged in hostilities, or the subject
of an act of terrorism, or there shall have been an outbreak of or escalation in
hostilities involving the United States, or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Representative, impracticable or inadvisable to proceed with the sale or
delivery of the Notes on the terms and in the manner contemplated in the General
Disclosure Package and the Prospectus.

(l) The Company shall have filed a Notification: Listing of Additional Shares
with the NASDAQ GM and shall have received no objection thereto from the NASDAQ
GM.

(m) The Underwriters shall have not have received any unresolved objection from
the FINRA as to the fairness and reasonableness of the amount of compensation
allowable or payable to the Underwriters in connection with the issuance and
sale of the Notes.

(n) The Representative shall have received the written agreements, substantially
in the form of Exhibit B hereto, of the executive officers and directors of the
Company listed in Schedule B to this Agreement.

(o) The Representative shall have received the written waiver from POSCO Power
(“POSCO”) relating to its notice and participation rights arising under and
pursuant to the terms of that certain Securities Purchase Agreement, dated
April 30, 2012 between POSCO and the Company.

 

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(p) Each of the Company and the Trustee shall have executed and delivered the
Indenture and the Indenture shall be in full force and effect.

(q) The Company shall have executed and delivered the Notes, which shall be in
full force and effect.

(r) The Company shall have entered into the DTC Agreement and shall have
obtained a cusip number for the Notes; and the Company shall have arranged for
the Notes to be issued at closing via the Depository Trust Company’s
Deposit/Withdrawal At Custodian system.

(s) Prior to the Closing Date, the Company shall have furnished to the
Representative such further information, opinions, certificates (including a
Secretary’s Certificate), letters or such other documents as the Representative
shall have reasonably requested.

All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriters.

7. INDEMNIFICATION AND CONTRIBUTION.

(a) The Company shall indemnify and hold harmless each Underwriter, each of its
affiliates and each of its and their respective directors, officers, members,
employees, representatives and agents (including, without limitation Lazard
Frères & Co. LLC (which will provide services to LCM) and its affiliates, and
each of its and their respective directors, officers, members, employees,
representatives and agents and each person, if any, who controls Lazard Frères &
Co. LLC within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) and each person, if any, who controls such Underwriter within
the meaning of Section 15 of the Securities Act of or Section 20 of the Exchange
Act (collectively, the “Underwriter Indemnified Parties,” and each a
“Underwriter Indemnified Party”) against any loss, claim, damage, expense or
liability whatsoever (or any action, investigation or proceeding in respect
thereof), joint or several, to which such Underwriter Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, expense, liability, action, investigation or proceeding arises
out of or is based upon (A) any untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any “issuer information” filed or required to be filed pursuant to
Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto or document incorporated
by reference therein, (B) the omission or alleged omission to state in any
Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer
information” filed or required to be filed pursuant to Rule 433(d) of the Rules
and Regulations, any Registration Statement or the Prospectus, or in any
amendment or supplement thereto or document incorporated by reference therein, a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (C) any breach of the representations and warranties
of the Company contained herein, or the failure of the Company to perform its
obligations hereunder, under the Indenture or the Notes or pursuant to any law,
and which is included as part of or referred to in any loss, claim, damage,
expense, liability, action, investigation or proceeding arising out of or based
upon matters covered by subclause (A), (B) or (C) above of this Section 7(a),
and shall reimburse the Underwriter Indemnified Party for any legal fees or
other expenses reasonably incurred by that Underwriter Indemnified Party in
connection with investigating, or preparing to defend, or defending against,
settling, compromising, or appearing as a third party witness in respect of, or
otherwise incurred in connection with, any such loss, claim, damage, expense,
liability, action, investigation or proceeding, as such fees and expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, expense or liability
arises out of or is based upon an untrue statement or alleged untrue statement
in, or omission or alleged omission from any Preliminary Prospectus, any
Registration Statement or the Prospectus, or any such amendment or supplement
thereto, or any Issuer Free Writing Prospectus made in reliance upon and in
conformity with written information furnished to the Company by the
Representative by or on behalf of the Underwriters specifically for use therein,
which information the parties hereto agree is limited to the Underwriters’
Information (as defined in Section 16). This indemnity agreement is not
exclusive and will be in addition to any liability which the Company might
otherwise have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Underwriter Indemnified Party.

 

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(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company and its directors, its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the “Company Indemnified Parties,” and each a “Company
Indemnified Party”) against any loss, claim, damage, expense or liability
whatsoever (or any action, investigation or proceeding in respect thereof),
joint or several, to which such Company Indemnified Party may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
expense, liability, action, investigation or proceeding arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any “issuer information” filed or required to be filed pursuant to
Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any “issuer information” filed or required to be filed pursuant to
Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, a material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by the
Representative by or on behalf of any Underwriter specifically for use therein,
which information the parties hereto agree is limited to the Underwriters’
Information as defined in Section 16, and shall reimburse the Company
Indemnified Party for any legal or other expenses reasonably incurred by such
party in connection with investigating or preparing to defend or defending
against or appearing as third party witness in connection with any such loss,
claim, damage, liability, action, investigation or proceeding, as such fees and
expenses are incurred. Notwithstanding the provisions of this Section 7(b), in
no event shall any indemnity by any Underwriter under this Section 7(b) exceed
the total discount and commission received by such Underwriter in connection
with the Offering.

 

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(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 7, notify such indemnifying party in writing of the commencement of that
action; provided, however, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have under this Section 7
except to the extent it has been materially prejudiced by such failure; and,
provided, further, that the failure to notify an indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 7. If any such action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense of such action with counsel reasonably satisfactory to the
indemnified party (which counsel shall not, except with the written consent of
the indemnified party, be counsel to the indemnifying party). After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such action, except as provided herein, the indemnifying party shall
not be liable to the indemnified party under Section 7 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense of such action other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense of such action but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized in writing by the Company in
the case of a claim for indemnification under Section 7(a) or LCM in the case of
a claim for indemnification under Section 7(b), (ii) such indemnified party
shall have been advised by its counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party, or (iii) the indemnifying party has failed
to assume the defense of such action and employ counsel reasonably satisfactory
to the indemnified party within a reasonable period of time after notice of the
commencement of the action or the indemnifying party does not diligently defend
the action after assumption of the defense, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the

 

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indemnifying party shall not have the right to assume the defense of (or, in the
case of a failure to diligently defend the action after assumption of the
defense, to continue to defend) such action on behalf of such indemnified party
and the indemnifying party shall be responsible for legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
of such action; provided, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties (in addition to any local counsel), which firm shall be designated in
writing by the Representative if the indemnified parties under this Section 7
consist of any Underwriter Indemnified Party or by the Company if the
indemnified parties under this Section 7 consist of any Company Indemnified
Parties. Subject to this Section 7(c), the amount payable by an indemnifying
party under Section 7 shall include, but not be limited to, (x) reasonable legal
fees and expenses of counsel to the indemnified party and any other expenses in
investigating, or preparing to defend or defending against, or appearing as a
third party witness in respect of, or otherwise incurred in connection with, any
action, investigation, proceeding or claim, and (y) all amounts paid in
settlement of any of the foregoing. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of judgment with respect to any pending or threatened
action or any claim whatsoever, in respect of which indemnification or
contribution could be sought under this Section 7 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party in form and substance reasonably satisfactory to such
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party. Subject to the
provisions of the following sentence, no indemnifying party shall be liable for
settlement of any pending or threatened action or any claim whatsoever that is
effected without its written consent (which consent shall not be unreasonably
withheld or delayed), but if settled with its written consent, if its consent
has been unreasonably withheld or delayed or if there be a judgment for the
plaintiff in any such matter, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. In addition, if at any time an
indemnified party shall have requested that an indemnifying party reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated
herein effected without its written consent if (i) such settlement is entered
into more than forty-five (45) days after receipt by such indemnifying party of
the request for reimbursement, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least thirty (30) days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.

 

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(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under Section 7(a) or
Section 7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid, payable or otherwise incurred
by such indemnified party as a result of such loss, claim, damage, expense or
liability (or any action, investigation or proceeding in respect thereof), as
incurred, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and each of the Underwriters on
the other hand from the offering of the Securities, or (ii) if the allocation
provided by clause (i) of this Section 7(d) is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) of this Section 7(d) but also the relative fault of
the Company on the one hand and the Underwriters on the other with respect to
the statements, omissions, acts or failures to act which resulted in such loss,
claim, damage, expense or liability (or any action, investigation or proceeding
in respect thereof) as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by the
Company bear to the total underwriting discount and commission received by the
Underwriters in connection with the Offering, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company on
the one hand and the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement, omission, act or failure to act; provided that the parties
hereto agree that the written information furnished to the Company by the
Representative by or on behalf of any Underwriter for use in any Preliminary
Prospectus, any Registration Statement or the Prospectus, or in any amendment or
supplement thereto, consists solely of the Underwriters’ Information as defined
in Section 16. The Company and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 7(d) were to be
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage, expense, liability, action, investigation or proceeding referred to
above in this Section 7(d) shall be deemed to include, for purposes of this
Section 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, preparing to defend or
defending against or appearing as a third party witness in respect of, or
otherwise incurred in connection with, any such loss, claim, damage, expense,
liability, action, investigation or proceeding. Notwithstanding the provisions
of this Section 7(d), no Underwriter shall be required to contribute any amount
in excess of the total discount and commission received by such Underwriter in
connection with the Offering, less the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement, omission or alleged omission, act or alleged act or
failure to act or alleged failure to act. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

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8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by the Representative, in its absolute discretion by notice given to the Company
prior to delivery of and payment for the Notes if, prior to that time, any of
the events described in Sections 6(j), 6(k), or 6(l) have occurred or if the
Underwriters shall decline to purchase the Notes for any reason permitted under
this Agreement.

9. REIMBURSEMENT OF UNDERWRITERS’ EXPENSES. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated
pursuant to Section 8, (b) the Company shall fail to tender the Notes for
delivery to the Underwriters for any reason not permitted under this Agreement,
(c) the Underwriters shall decline to purchase the Notes for any reason
permitted under this Agreement or (d) the sale of the Notes is not consummated
because any condition to the obligations of the Underwriters set forth herein is
not satisfied or because of the refusal, inability or failure on the part of the
Company to perform any agreement herein or to satisfy any condition or to comply
with the provisions hereof, then, in addition to the payment of out-of-pocket
expenses in accordance with Section 5, the Company shall reimburse the
Underwriters for the fees and expenses of the Underwriters’ counsel and for such
other accountable out-of-pocket expenses as shall have been reasonably incurred
by them in connection with this Agreement and the proposed purchase of the
Notes, and upon demand the Company shall pay the full amount thereof to the
Representative on behalf of the Underwriters.

10. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees that:

(a) Each Underwriter’s responsibility to the Company is solely contractual in
nature, each Underwriter has been retained solely to act as an underwriter in
connection with the Offering and no fiduciary, advisory or agency relationship
between the Company and such Underwriter has been created in respect of any of
the transactions contemplated by this Agreement, irrespective of whether LCM,
SNC or Lazard Frères & Co. LLC has advised or is advising the Company on other
matters;

(b) the price of the Notes set forth in this Agreement was established by the
Company following discussions and arms-length negotiations with the
Representative, and the Company is capable of evaluating and understanding, and
understands and accepts, the terms, risks and conditions of the transactions
contemplated by this Agreement;

(c) it has been advised that LCM, SNC and Lazard Frères & Co. LLC and each of
their affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the Underwriters have
no obligation to disclose such interests and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship; and

 

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(d) it waives, to the fullest extent permitted by law, any claims it may have
against the Underwriters for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that the Underwriters shall have no liability (whether
direct or indirect) to the Company in respect of such a fiduciary duty claim or
to any person asserting a fiduciary duty claim on behalf of or in right of the
Company, including stockholders, employees or creditors of the Company.

11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company, and their respective successors and assigns. This Agreement shall also
inure to the benefit of Lazard Frères & Co. LLC, and each of its successors and
assigns, which shall be third party beneficiaries hereof. Notwithstanding the
foregoing, the determination as to whether any condition in Section 6 hereof
shall have been satisfied, and the waiver of any condition in Section 6 hereof,
may be made by the Representative in its sole discretion, and any such
determination or waiver shall be binding on each of the Underwriters and shall
not require the consent of any Underwriter. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, other than
the persons mentioned in the preceding sentences, any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties and the
several indemnities of the Underwriters shall be for the benefit of the Company
Indemnified Parties. It is understood that each Underwriter’s responsibility to
the Company is solely contractual in nature and the Underwriters do not owe the
Company, or any other party, any fiduciary duty as a result of this Agreement.

12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, the Company or any person controlling any of them and shall
survive delivery of and payment for the Notes. Notwithstanding any termination
of this Agreement, including without limitation any termination pursuant to
Section 8, the indemnity and contribution and reimbursement agreements contained
in Sections 7 and 9 and the representations and warranties set forth in this
Agreement shall not terminate and shall remain in full force and effect at all
times.

13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:

(a) if to the Representative, shall be delivered or sent by mail, facsimile
transmission or email to Lazard Capital Markets LLC, 30 Rockefeller Plaza, New
York, New York 10020, Attention: General Counsel, Fax: 212-830-3615; and

 

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(b) if to the Company, shall be delivered or sent by mail, facsimile
transmission or email to: FuelCell Energy, Inc., 3 Great Pastures Road, Danbury,
CT 06813, Attention: Ross Levine, Esq., Corporate Legal, Fax: (203) 825-6069;
with copies to (i) Patterson Belknap Webb & Tyler LLP, 1133 Avenue of the
Americas, New York, NY 10036, Attention: Peter Schaeffer, Esq., Fax:
212-336-1244, and (ii) Robinson & Cole LLP, 1055 Washington Boulevard, Stamford,
CT 06901, Attention: Richard A. Krantz, Facsimile No.: (203) 462-7599;

provided, however, that any notice to the Underwriters pursuant to Section 7
shall be delivered or sent by mail or facsimile transmission to the
Representative at its address set forth in its acceptance communication to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof, except that any
such statement, request, notice or agreement delivered or sent by email shall
take effect at the time of confirmation of receipt thereof by the recipient
thereof.

14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) “business
day” means any day on which the New York Stock Exchange, Inc. is open for
trading, (b) “knowledge” means the knowledge of the directors and officers of
the Company after reasonable inquiry and (c) “subsidiary” has the meaning set
forth in Rule 405 of the Rules and Regulations.

15. GOVERNING LAW, AGENT FOR SERVICE AND JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
including without limitation Section 5-1401 of the New York General Obligations
Law. No legal proceeding may be commenced, prosecuted or continued in any court
other than the courts of the State of New York located in the City and County of
New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such
matters, and the Company and the Underwriters each hereby consent to the
jurisdiction of such courts and personal service with respect thereto. The
Company and the Underwriters each hereby waive all right to trial by jury in any
legal proceeding (whether based upon contract, tort or otherwise) in any way
arising out of or relating to this Agreement. The Company agrees that a final
judgment in any such legal proceeding brought in any such court shall be
conclusive and binding upon the Company and the Underwriters and may be enforced
in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.

16. UNDERWRITERS’ INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the “Underwriters’ Information” consists
solely of the following information in the Prospectus: (i) the last paragraph on
the front cover page concerning the terms of the offering; and (ii) the
statements concerning the Underwriters contained in the first paragraph,
concerning the Underwriters and Lazard Frères & Co. LLC in the seventh paragraph
and concerning stabilization by the Underwriters in the tenth paragraph, in each
case under the heading “Underwriting.”

 

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17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any section,
paragraph, clause or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph, clause or provision hereof.
If any section, paragraph, clause or provision of this Agreement is for any
reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make
it valid and enforceable.

18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representative.

19. RESEARCH ANALYST INDEPENDENCE. The Company acknowledges that each
Underwriter’s research analysts and research departments are required to be
independent from its investment banking division and are subject to certain
regulations and internal policies, and that such Underwriter’s research analysts
may hold views and make statements or investment recommendations and/or publish
research reports with respect to the Company and/or the offering that differ
from the views of their investment banking division. The Company hereby waives
and releases, to the fullest extent permitted by law, any claims that the
Company may have against either Underwriter with respect to any conflict of
interest that may arise from the fact that the views expressed by its
independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company by such
Underwriter’s investment banking division. The Company acknowledges that each
Underwriter is a full service securities firm and as such from time to time,
subject to applicable securities laws, rules and regulations, may effect
transactions for its own account or the account of its customers and hold long
or short positions in debt or equity securities of the Company; provided,
however, that nothing in this Section 20 shall relieve either Underwriter of any
responsibility or liability it may otherwise bear in connection with activities
in violation of applicable securities laws, rules or regulations.

 

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20. DEFAULTING UNDERWRITERS.

If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase the Notes that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of such Notes which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of such
Notes to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the principal amount of Notes set forth
opposite their respective names in Schedule C bears to the aggregate principal
amount of Notes set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Notes which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the aggregate
principal amount of such Notes that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 20 by an amount
in excess of one-ninth of such principal amount of Notes without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Notes and the aggregate principal
amount of Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of Notes to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such Notes
are not made within thirty-six (36) hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either you or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven (7) days, in
order that the required changes, if any, in the Registration Statement, in the
Pricing Prospectus, in the Prospectus or in any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.

21. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument and such signatures may be
delivered by facsimile.

 

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If the foregoing is in accordance with your understanding of the agreement
between the Company and the Underwriters, kindly indicate your acceptance in the
space provided for that purpose below.

 

Very truly yours, FUELCELL ENERGY, INC. By:   /s/ Michael S. Bishop   Name:
Michael S. Bishop   Title: Senior Vice President, Chief Financial Officer

Confirmed as of the date

first above written, on

behalf of itself and the

Underwriters set forth in

Schedule C hereto:

 

LAZARD CAPITAL MARKETS LLC By:   /s/ William B. Buchanan, Jr.   Name: William B.
Buchanan, Jr.   Title: Managing Director

[Signature Page to FuelCell Energy Underwriting Agreement – June 19, 2013]

 

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