Exhibit 10.1

 

FUELCELL ENERGY, INC.

 

Common Stock

(par value $0.0001 per share)

 

At Market Issuance Sales Agreement

 

June 13, 2018

 

B. Riley FBR, Inc.

299 Park Avenue

New York, NY 10171

 

Oppenheimer & Co. Inc.

85 Broad Street, 23rd Floor

New York, NY 10004

 

Ladies and Gentlemen:

 

FuelCell Energy, Inc., a Delaware corporation (the “Company”), confirms its
agreement (this “Agreement”) with B. Riley FBR, Inc. (“BRFBR”) and Oppenheimer &
Co. Inc. (“Oppenheimer”; each of BRFBR and Oppenheimer individually an “Agent”
and collectively, the “Agents”) as follows:

 

1.          Issuance and Sale of Shares. The Company agrees that, from time to
time during the term of this Agreement, on the terms and subject to the
conditions set forth herein, it may issue and sell through the Agents, shares
(the “Placement Shares”) of the Company’s common stock, par value $0.0001 per
share (the “Common Stock”); provided however, that in no event shall the Company
issue or sell through the Agents such number of Placement Shares that
(a) exceeds the number of shares or dollar amount of Common Stock registered on
the effective Registration Statement (as defined below) pursuant to which the
offering is being made, or (b) exceeds the number of shares or dollar amount
registered on the Prospectus Supplement (as defined below) (the lesser of (a) or
(b), the “Maximum Amount”). Notwithstanding anything to the contrary contained
herein, the parties hereto agree that compliance with the limitations set forth
in this Section 1 on the number or dollar amount of Placement Shares issued and
sold under this Agreement shall be the sole responsibility of the Company and
that the Agents shall have no obligation in connection with such compliance. The
issuance and sale of Placement Shares through the Agents will be effected
pursuant to the Registration Statement (as defined below), although nothing in
this Agreement shall be construed as requiring the Company to use the
Registration Statement to issue any Placement Shares.

 

 

 

 

The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (the “Securities
Act”), with the Securities and Exchange Commission (the “Commission”), a
registration statement on Form S-3 (File No. 333-215530), including a base
prospectus, relating to certain securities, including the Placement Shares, to
be issued from time to time by the Company, and which incorporates by reference
documents that the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the “Exchange Act”). The Company has prepared a
prospectus supplement to the base prospectus included as part of such
registration statement specifically relating to the Placement Shares (the
“Prospectus Supplement”). The Company will furnish to the Agents, for use by the
Agents, copies of the base prospectus included as part of such registration
statement, as supplemented by the Prospectus Supplement, relating to the
Placement Shares. Except where the context otherwise requires, such registration
statement, and any post-effective amendment thereto, including all documents
filed as part thereof or incorporated by reference therein, and including any
information contained in a Prospectus (as defined below) subsequently filed with
the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be
a part of such registration statement pursuant to Rule 430B of the Securities
Act, is herein called the “Registration Statement.” The base prospectus,
including all documents incorporated or deemed incorporated therein by reference
to the extent such information has not been superseded or modified in accordance
with Rule 412 under the Securities Act (as qualified by Rule 430B(g) of the
Securities Act), included in the Registration Statement, as it may be
supplemented by the Prospectus Supplement, in the form in which such base
prospectus and/or Prospectus Supplement have most recently been filed by the
Company with the Commission pursuant to Rule 424(b) under the Securities Act, is
herein called the “Prospectus.” Any reference herein to the Registration
Statement, the Prospectus or any amendment or supplement thereto shall be deemed
to refer to and include the documents incorporated or deemed incorporated by
reference therein, and any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include the filing after the execution hereof of any
document with the Commission incorporated or deemed to be incorporated by
reference therein (the “Incorporated Documents”).

 

For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or to any amendment or supplement thereto shall be deemed to
include the most recent copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System, or if applicable, the
Interactive Data Electronic Application system when used by the Commission
(collectively, “EDGAR”).

 

2.          Placements. Each time that the Company wishes to issue and sell
Placement Shares hereunder (each, a “Placement”), it will notify an Agent (the
“Designated Agent”) by email (or another method mutually agreed to in writing by
the parties) of the number of Placement Shares to be issued, the time period
during which sales are requested to be made, any limitation on the number of
Placement Shares that may be sold in any one day and any minimum price below
which sales may not be made (a “Placement Notice”), the form of which is
attached hereto as Schedule 1. The Placement Notice shall originate from any of
the individuals from the Company set forth on Schedule 3 (with a copy to each of
the other individuals from the Company listed on such schedule), and shall be
addressed to each of the individuals from the Agents set forth on Schedule 3, as
such Schedule 3 may be amended from time to time. The Placement Notice shall be
effective immediately upon receipt by the Designated Agent unless and until (i)
the Designated Agent declines to accept the terms contained therein for any
reason, in its sole discretion, (ii) the entire amount of the Placement Shares
thereunder has been sold, (iii) the Company suspends or terminates the Placement
Notice, which suspension and termination rights may be exercised by the Company
in its sole discretion, (iv) the Company issues a subsequent Placement Notice
with parameters superseding those included in the earlier dated Placement
Notice, or (v) this Agreement has been terminated under the provisions of
Section 13. The amount of any discount, commission or other compensation to be
paid by the Company to the Designated Agent in connection with the sale of the
Placement Shares shall be calculated in accordance with the terms set forth in
Schedule 2. It is expressly acknowledged and agreed that neither the Company nor
the Designated Agent will have any obligation whatsoever with respect to a
Placement or any Placement Shares unless and until the Company delivers a
Placement Notice to the Designated Agent and the Designated Agent does not
decline such Placement Notice pursuant to the terms set forth above, and then
only upon the terms specified therein and herein. In the event of a conflict
between the terms of Sections 2 or 3 of this Agreement and the terms of a
Placement Notice, the terms of the Placement Notice will control.

 

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3.          Sale of Placement Shares by the Agents. Subject to the terms and
conditions of this Agreement, for the period specified in a Placement Notice,
the Designated Agent will use its commercially reasonable efforts consistent
with its normal trading and sales practices and applicable state and federal
laws, rules and regulations and the rules of the NASDAQ Global Market (the
“Exchange”), to sell the Placement Shares up to the amount specified in, and
otherwise in accordance with the terms of, such Placement Notice. The Designated
Agent will provide written confirmation to the Company no later than the opening
of the Trading Day (as defined below) immediately following the Trading Day on
which it has made sales of Placement Shares hereunder setting forth the number
of Placement Shares sold on such day, the compensation payable by the Company to
the Designated Agent pursuant to Section 2 with respect to such sales, and the
Net Proceeds (as defined below) payable to the Company, with an itemization of
the deductions made by the Designated Agent (as set forth in Section 5(b)) from
the gross proceeds that it receives from such sales. Subject to the terms of a
Placement Notice, the Designated Agent may sell Placement Shares by any method
permitted by law deemed to be an “at the market offering” as defined in Rule 415
of the Securities Act. “Trading Day” means any day on which shares of Common
Stock are purchased and sold on the Exchange.

 

4.          Suspension of Sales. The Company or the Designated Agent may, upon
notice to the other parties in writing (including by email correspondence to
each of the individuals of the other parties set forth on Schedule 3, if receipt
of such correspondence is actually acknowledged by any of the individuals to
whom the notice is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or email correspondence to each
of the individuals of the other parties set forth on Schedule 3), suspend any
offering of Placement Shares (a “Suspension”); provided, however, that such
suspension shall not affect or impair any party’s obligations with respect to
any Placement Shares sold hereunder prior to the receipt of such notice. While a
Suspension is in effect, any obligation under Sections 7(l), 7(m), and 7(n) with
respect to the delivery of certificates, opinions, or comfort letters to the
Agents, shall be waived. Each of the parties agrees that no such notice under
this Section 4 shall be effective against any other party unless it is made to
one of the individuals named on Schedule 3 hereto, as such Schedule may be
amended from time to time.

 

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5.           Sale and Delivery to the Designated Agent; Settlement.

 

a.           Sale of Placement Shares. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, upon the Designated Agent’s acceptance of the terms of a Placement
Notice, and unless the sale of the Placement Shares described therein has been
declined, suspended, or otherwise terminated in accordance with the terms of
this Agreement, the Designated Agent, for the period specified in the Placement
Notice, will use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws, rules and
regulations and the rules of the Exchange to sell such Placement Shares up to
the amount specified in, and otherwise in accordance with the terms of, such
Placement Notice. The Company acknowledges and agrees that (i) there can be no
assurance that the Designated Agent will be successful in selling Placement
Shares, (ii) the Designated Agent will incur no liability or obligation to the
Company or any other person or entity if it does not sell Placement Shares for
any reason other than a failure by the Designated Agent to use its commercially
reasonable efforts consistent with its normal trading and sales practices and
applicable state and federal laws, rules and regulations and the rules of the
Exchange to sell such Placement Shares as required under this Agreement, and
(iii) the Designated Agent shall be under no obligation to purchase Placement
Shares on a principal basis pursuant to this Agreement, except as otherwise
agreed by the Designated Agent and the Company.

 

b.           Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the second (2nd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
“Settlement Date”). The Designated Agent shall notify the Company of each sale
of Placement Shares no later than the opening of the Trading Day immediately
following the Trading Day on which the Designated Agent sold such Placement
Shares. The amount of proceeds to be delivered to the Company on a Settlement
Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be
equal to the aggregate sales price received by the Designated Agent for the
Placement Shares, after deduction for (i) the Designated Agent’s commission,
discount or other compensation for such sales payable by the Company pursuant to
Section 2 hereof, and (ii) any transaction fees imposed by any governmental or
self-regulatory organization in respect of such sales.

 

c.           Delivery of Placement Shares. On or before each Settlement Date,
the Company will, or will cause its transfer agent to, electronically transfer
the Placement Shares being sold by crediting the Designated Agent’s or its
designee’s account (provided the Designated Agent shall have given the Company
written notice of such designee and such designee’s account information at least
one Trading Day prior to the Settlement Date) at The Depository Trust Company
through its Deposit and Withdrawal at Custodian System or by such other means of
delivery as may be mutually agreed upon by the parties hereto which in all cases
shall be freely tradable, transferable, registered shares in good deliverable
form. On each Settlement Date, the Designated Agent will deliver the related Net
Proceeds in same day funds to an account designated by the Company on, or prior
to, the Settlement Date. The Company agrees that, if the Company, or its
transfer agent (if applicable), defaults in its obligation to deliver Placement
Shares on a Settlement Date through no fault of the Designated Agent, then in
addition to and in no way limiting the rights and obligations set forth in
Section 11(a) hereto, it will (i) hold the Designated Agent harmless against any
loss, claim, damage, or reasonable, documented expense (including actual,
reasonable, and documented legal fees and expenses), as incurred, arising out of
or in connection with such default by the Company or its transfer agent (if
applicable) and (ii) pay to the Designated Agent (without duplication) any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.

 

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d.           Limitations on Offering Size. Under no circumstances shall the
Company cause or request the offer or sale of any Placement Shares if, after
giving effect to the sale of such Placement Shares, the aggregate number or
dollar amount of Placement Shares sold pursuant to this Agreement would exceed
the lesser of (i) together with all sales of Placement Shares under this
Agreement, the Maximum Amount, (ii) the amount available for offer and sale
under the currently effective Registration Statement, and (iii) the amount
authorized from time to time to be issued and sold under this Agreement by the
Company’s board of directors, a duly authorized committee thereof or a duly
authorized executive, and notified to the Designated Agent in writing. Under no
circumstances shall the Company cause or request the offer or sale of any
Placement Shares pursuant to this Agreement at a price lower than the minimum
price authorized from time to time by the Company’s board of directors, a duly
authorized committee thereof or a duly authorized executive, and notified to the
Designated Agent in writing.

 

e.           Sales Through Agents. The Company agrees that any offer to sell,
any solicitation of an offer to buy, or any sales of Placement Shares shall only
be effected by or through an Agent, and only a single Agent, on any single given
date, and in no event shall the Company request that more than one Agent sell
Placement Shares on the same day.

 

6.           Representations and Warranties of the Company. Except as disclosed
in the Registration Statement or Prospectus (including the Incorporated
Documents), the Company represents and warrants to, and agrees with each Agent
that as of the date of this Agreement and as of each Applicable Time (as defined
below), unless such representation, warranty or agreement specifies a different
date or time:

 

a.           Registration Statement and Prospectus. Assuming no act or omission
on the part of the Agents (or either of them) that would make such statement
untrue, the transactions contemplated by this Agreement meet the requirements
for and comply with the conditions for the use of Form S-3 under the Securities
Act. The Registration Statement has been filed with the Commission and has been
declared effective under the Securities Act. The Prospectus Supplement will name
BRFBR and Oppenheimer as the agents in the section entitled “Plan of
Distribution.” The Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of the Registration Statement,
or threatening or instituting proceedings for that purpose. The Registration
Statement and, assuming no act or omission on the part of the Agents (or either
of them) that would make such statement untrue, the offer and sale of Placement
Shares as contemplated hereby meet the requirements of Rule 415 under the
Securities Act and comply in all material respects with said Rule. Any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been so described or filed, as applicable. Copies of
the Registration Statement, the Prospectus, and any such amendments or
supplements and all documents incorporated by reference therein that were filed
with the Commission on or prior to the date of this Agreement have been
delivered, or are available through EDGAR, to the Agents and their counsel. The
Company has not distributed and, prior to the later to occur of each Settlement
Date and completion of the distribution of the Placement Shares, will not
distribute any offering material in connection with the offering or sale of the
Placement Shares other than the Registration Statement and the Prospectus and
any Issuer Free Writing Prospectus (as defined below) to which the Agents have
consented, which consent will not be unreasonably withheld, conditioned, or
delayed, or that is required by applicable law or the listing maintenance
requirements of the Exchange. The Common Stock is currently quoted on the
Exchange under the trading symbol “FCEL.” The Company has not, in the 12 months
preceding the date hereof, received notice from the Exchange to the effect that
the Company is not in compliance with the listing or maintenance requirements of
the Exchange. To the Company’s knowledge, it is in material compliance with all
such listing and maintenance requirements.

 

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b.           No Misstatement or Omission. At each Settlement Date, the
Registration Statement and the Prospectus, as of such date, will conform in all
material respects with the requirements of the Securities Act. The Registration
Statement, when it became or becomes effective, did not, and will not, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
The Prospectus and any amendment and supplement thereto, after giving effect to
each and every Issuer Free Writing Prospectus (as defined below), on the date of
the Prospectus and each amendment and supplement thereto, and at each Applicable
Time (defined below), did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The documents incorporated by reference in the Prospectus or any
Prospectus Supplement did not, and any further documents filed and incorporated
by reference therein will not, when filed with the Commission, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated in such document or necessary to make the statements in such document, in
light of the circumstances under which they were made, not misleading. The
foregoing shall not apply to statements in, or omissions from, any such document
made in reliance upon, and in conformity with, information furnished to the
Company by the Agents (or either of them) specifically for use in the
preparation thereof.

 

c.           Conformity with Securities Act and Exchange Act. The Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment
or supplement thereto, and the Incorporated Documents, when such documents were
or are filed with the Commission under the Securities Act or the Exchange Act or
became or become effective under the Securities Act, as the case may be,
conformed or will conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable.

 

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d.           Financial Information. The consolidated financial statements of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus, together with the related notes and schedules, present fairly,
in all material respects, the consolidated financial position of the Company and
the Subsidiaries (as defined below) as of the dates indicated and the
consolidated statements of operations, cash flows and changes in equity of the
Company and the Subsidiaries for the periods specified (subject, in the case of
unaudited statements, to normal year-end audit adjustments) and have been
prepared in compliance with the requirements of the Securities Act and Exchange
Act, as applicable, and in conformity with generally accepted accounting
principles in the United States (“GAAP”) as in effect as of the time of filing
applied on a consistent basis (except (i) for such adjustments to accounting
standards and practices as are noted therein and (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) during the periods involved; the other financial and
statistical data with respect to the Company and the Subsidiaries contained or
incorporated by reference in the Registration Statement and the Prospectus, are
accurately and fairly presented in all material respects and prepared on a basis
materially consistent with the financial statements and books and records of the
Company; there are no financial statements (historical or pro forma) that are
required to be included or incorporated by reference in the Registration
Statement or the Prospectus that are not included or incorporated by reference
as required; the Company and the Subsidiaries do not have any material
liabilities or obligations, direct or contingent (including any off balance
sheet obligations), not described in the Registration Statement and the
Prospectus which are required to be described in the Registration Statement or
Prospectus; and all disclosures contained or incorporated by reference in the
Registration Statement and the Prospectus, if any, regarding “non-GAAP financial
measures” (as such term is defined by the rules and regulations of the
Commission) comply in all material respects with Regulation G of the Exchange
Act and Item 10 of Regulation S-K under the Securities Act, to the extent
applicable.

 

e.           Conformity with EDGAR Filing. The Prospectus delivered to the
Agents for use in connection with the sale of the Placement Shares pursuant to
this Agreement will be identical to the versions of the Prospectus created to be
transmitted to the Commission for filing via EDGAR, except to the extent
permitted by Regulation S-T.

 

f.            Organization. The Company and any subsidiary that is a significant
subsidiary (as such term is defined in Rule 1-02 of Regulation S-X promulgated
by the Commission) (each, a “Subsidiary,” collectively, the “Subsidiaries”),
are, and will be, duly organized, validly existing, and in good standing (to the
extent applicable) under the laws of their respective jurisdictions of
organization. The Company and the Subsidiaries are duly qualified to transact
business and are in good standing under the laws of each other 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 necessary to own or hold their respective properties and to conduct
their respective businesses as currently conducted, except where the failure to
be so qualified or in good standing or have such power or authority would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the assets, business, operations, earnings, properties,
condition (financial or otherwise), prospects, stockholders’ equity or results
of operations of the Company and the Subsidiaries taken as a whole, or prevent
the consummation of the transactions contemplated hereby (a “Material Adverse
Effect”).

 

g.           Subsidiaries. As of the date hereof, the Company’s only
Subsidiaries are set forth on Schedule 6(g). The Company owns directly or
indirectly, all of the equity interests of the Subsidiaries free and clear of
any lien, charge, security interest, encumbrance, right of first refusal or
other restriction, and all the equity interests of the Subsidiaries are validly
issued and are fully paid, nonassessable and free of preemptive and similar
rights.

 

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h.           No Violation or Default. Neither the Company nor any Subsidiary is
(i) in violation of its charter or by-laws or similar organizational documents;
(ii) in default, and no event has occurred that, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other similar agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
is bound or to which any of the property or assets of the Company or any
Subsidiary is subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of each of clauses (ii) and (iii)
above, for any such violation or default that would not, individually or in the
aggregate, have a Material Adverse Effect. To the Company’s knowledge, no other
party under any material contract or other agreement to which it or any
Subsidiary is a party is in default in any respect thereunder where such default
would have a Material Adverse Effect.

 

i.            No Material Adverse Effect. Since the date of the most recent
financial statements of the Company included or incorporated by reference in the
Registration Statement and Prospectus, there has not been (i) any Material
Adverse Effect, (ii) any transaction which is material to the Company and the
Subsidiaries taken as a whole, (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company or the Subsidiaries, which is material to the Company and the
Subsidiaries taken as a whole, (iv) any material change in the capital stock
(other than (A) the grant of additional options or other equity awards under the
Company’s existing stock option or equity incentive plans, (B) changes in the
number of outstanding shares of Common Stock of the Company due to the issuance
of shares upon the exercise or conversion of securities exercisable for, or
convertible into, Common Stock outstanding on the date hereof, (C) as a result
of the issuance of Placement Shares, (D) any repurchases of capital stock of the
Company, (E) as described in a proxy statement filed on Schedule 14A or a
Registration Statement on Form S-4, or (F) otherwise publicly announced) or
outstanding long-term indebtedness of the Company or the Subsidiaries, or (v)
any dividend or distribution of any kind declared, paid or made on the capital
stock of the Company or any Subsidiary, other than in each case above in the
ordinary course of business or as otherwise disclosed in the Registration
Statement or Prospectus.

 

j.            Capitalization. The issued and outstanding shares of capital stock
of the Company have been validly issued, are fully paid and non-assessable and,
other than as disclosed in the Registration Statement or the Prospectus, are not
subject to any preemptive rights, rights of first refusal or similar rights. The
Company has an authorized, issued and outstanding capitalization as set forth in
the Registration Statement and the Prospectus as of the dates referred to
therein (other than (i) the grant of additional options or other equity awards
under the Company’s existing stock option or equity incentive plans, (ii)
changes in the number of outstanding shares of Common Stock of the Company due
to the issuance of shares upon the exercise or conversion of securities
exercisable for, or convertible into, Common Stock outstanding on the date
hereof, (iii) as a result of the issuance of Placement Shares, or (iv) any
repurchases of capital stock of the Company) and such authorized capital stock
conforms in all material respects to the description thereof set forth in the
Registration Statement and the Prospectus. The description of the Common Stock
in the Registration Statement and the Prospectus is complete and accurate in all
material respects. Except as disclosed in or contemplated by the Registration
Statement or the Prospectus, the Company did not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts or
commitments to issue or sell, any shares of capital stock or other securities.

 

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k.          S-3 Eligibility. (i) At the time of filing the Registration
Statement and (ii) at the time of the most recent amendment thereto for the
purposes of complying with Section 10(a)(3) of the Securities Act (whether such
amendment was by post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act or form of prospectus), the Company met
the then applicable requirements for use of Form S-3 under the Securities Act,
including compliance with General Instruction I.B.1 of Form S-3, as applicable.

 

l.            Authorization; Enforceability. The Company has full legal right,
power and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except to
the extent that (i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equitable principles and (ii) the indemnification and
contribution provisions of Section 11 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof.

 

m.          Authorization of Placement Shares. The Placement Shares, when issued
and delivered pursuant to the terms approved by the board of directors of the
Company or a duly authorized committee thereof, or a duly authorized executive,
against payment therefor as provided herein, will be duly authorized and validly
issued and fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim (other than any pledge, lien,
encumbrance, security interest or other claim arising from an act or omission of
the Agents (or either of them) or a purchaser), including any statutory or
contractual preemptive rights, resale rights, rights of first refusal or other
similar rights, and will be registered pursuant to Section 12 of the Exchange
Act. The Placement Shares, when issued, will conform in all material respects to
the description thereof set forth in or incorporated into the Prospectus.

 

n.          No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or any
governmental or regulatory authority is required for the execution, delivery and
performance by the Company of this Agreement, and the issuance and sale by the
Company of the Placement Shares as contemplated hereby, except for such
consents, approvals, authorizations, orders and registrations or qualifications
(i) as may be required under applicable state securities laws or by the by-laws
and rules of the Financial Industry Regulatory Authority (“FINRA”) or the
Exchange, including any notices that may be required by the Exchange, in
connection with the sale of the Placement Shares by the Agents, (ii) as may be
required under the Securities Act, and (iii) as have been previously obtained by
the Company.

 

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o.           No Preferential Rights. (i) No person, as such term is defined in
Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a
“Person”), has the right, contractual or otherwise, to cause the Company to
issue or sell to such Person any Common Stock or shares of any other capital
stock or other securities of the Company (other than upon the exercise of
options or warrants to purchase Common Stock, upon the exercise of options that
may be granted from time to time under the Company’s stock option or equity
incentive plans, or upon the conversion or redemption of securities convertible
into or redeemable for Common Stock), (ii) no Person has any preemptive rights,
rights of first refusal, or any other rights (whether pursuant to a “poison
pill” provision or otherwise) to purchase any Common Stock or shares of any
other capital stock or other securities of the Company from the Company which
have not been duly waived with respect to the offering contemplated hereby,
(iii) no Person has the right to act as an underwriter or as a financial advisor
to the Company in connection with the offer and sale of the Common Stock in an
“at the market” transaction, and (iv) no Person has the right, contractual or
otherwise, to require the Company to register under the Securities Act any
Common Stock or shares of any other capital stock or other securities of the
Company, or to include any such shares or other securities in the Registration
Statement or the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale of the
Placement Shares as contemplated thereby or otherwise, except in each case for
such rights as have been waived on or prior to the date hereof.

 

p.           Independent Public Accountant. KPMG LLP (the “Accountant”), whose
report on the consolidated financial statements of the Company is filed with the
Commission as part of the Company’s most recent Annual Report on Form 10-K filed
with the Commission and incorporated into the Registration Statement, are and,
during the periods covered by their report, were independent public accountants
within the meaning of the Securities Act and the Public Company Accounting
Oversight Board (United States) (the “PCAOB”). To the Company’s knowledge, the
Accountant is not in violation of the auditor independence requirements of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the
Company.

 

q.           Enforceability of Agreements. All agreements between the Company
and third parties expressly referenced in the Prospectus, other than such
agreements that have expired by their terms or whose termination is disclosed in
documents filed by the Company on EDGAR, are legal, valid and binding
obligations of the Company and, to the Company’s knowledge, enforceable in
accordance with their respective terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles and (ii) the indemnification provisions of certain
agreements may be limited by federal or state securities laws or public policy
considerations in respect thereof, and except for any unenforceability that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

 

r.            No Litigation. There are no legal, governmental or regulatory
actions, suits or proceedings pending, nor, to the Company’s knowledge, any
legal, governmental or regulatory investigations, to which the Company or a
Subsidiary is a party or to which any property of the Company or any Subsidiary
is the subject that, individually or in the aggregate, if determined adversely
to the Company or any Subsidiary, would reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the ability of the
Company to perform its obligations under this Agreement; to the Company’s
knowledge, no such actions, suits or proceedings are threatened or contemplated
by any governmental or regulatory authority or threatened by others that,
individually or in the aggregate, if determined adversely to the Company or any
Subsidiary, would reasonably be expected to have a Material Adverse Effect; and
there are no current or pending legal, governmental or regulatory actions,
suits, proceedings or, to the Company’s knowledge, investigations that are
required under the Securities Act to be described in the Prospectus that are not
described in the Prospectus (including any Incorporated Document).

 

 10 

 

 

s.           Licenses and Permits. The Company and the Subsidiaries possess or
have obtained, all licenses, certificates, consents, orders, approvals, permits
and other authorizations issued by, and have made all declarations and filings
with, the appropriate federal, state, local or foreign governmental or
regulatory authorities that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses, as
described in the Registration Statement and the Prospectus (the “Permits”),
except where the failure to possess, obtain or make the same would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received written
notice of any proceeding relating to revocation or modification of any such
Permit or has any reason to believe that such Permit will not be renewed in the
ordinary course, except where the revocation, modification or failure to obtain
any such renewal would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

t.           No Material Defaults. Neither the Company nor any Subsidiary has
defaulted on any installment on indebtedness for borrowed money or on any rental
on one or more long-term leases, which defaults, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect. The
Company has not filed a report pursuant to Section 13(a) or 15(d) of the
Exchange Act since the filing of its last Annual Report on Form 10-K, indicating
that it (i) has failed to pay any dividend or sinking fund installment on
preferred stock or (ii) has defaulted on any installment on indebtedness for
borrowed money or on any rental on one or more long-term leases, which defaults,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.

 

u.          Certain Market Activities. Neither the Company, nor any Subsidiary,
nor, to the knowledge of the Company, any of their respective directors,
officers or controlling persons has taken, directly or indirectly, any action
designed, or that has constituted or would reasonably be expected to cause or
result in, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Placement Shares.

 

v.          Broker/Dealer Relationships. Neither the Company nor any Subsidiary
or any affiliate (i) is required to register as a “broker” or “dealer” in
accordance with the provisions of the Exchange Act or (ii) directly or
indirectly through one or more intermediaries, controls or is a “person
associated with a member” or “associated person of a member” (within the meaning
set forth in the FINRA Manual).

 

w.         No Reliance. The Company has not relied upon either of the Agents or
legal counsel for the Agents for any legal, tax or accounting advice in
connection with the offering and sale of the Placement Shares.

 

x.          Taxes. The Company and the Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be filed and
paid all taxes shown thereon through the date hereof, to the extent that such
taxes have become due and are not being contested in good faith, except where
the failure to so file or pay would not reasonably be expected to have a
Material Adverse Effect. Except as otherwise disclosed in or contemplated by the
Registration Statement or the Prospectus, no tax deficiency has been determined
adversely to the Company or any Subsidiary which has had, or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
The Company has no knowledge of any federal, state or other governmental tax
deficiency, penalty or assessment which has been or might be asserted or
threatened against it which would have a Material Adverse Effect.

 

 11 

 

 

y.         Title to Real and Personal Property. The Company and the Subsidiaries
have good and valid title in fee simple to all items of real property and good
and valid title to all personal property (excluding intellectual property, which
is addressed below) described in the Registration Statement or Prospectus as
being owned by them that are material to the businesses of the Company or such
Subsidiary, in each case free and clear of all liens, encumbrances and claims,
except those that (i) do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries or (ii) would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. Any real property described in the Registration Statement or
Prospectus as being leased by the Company and the Subsidiaries is held by them
under valid, existing and enforceable leases, except those that (A) do not
materially interfere with the use made or proposed to be made of such property
by the Company or the Subsidiaries or (B) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

 

z.         Intellectual Property. The Company and the Subsidiaries own or
possess adequate enforceable rights to use all patents, patent applications,
trademarks (both registered and unregistered), service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) (collectively,
the “Intellectual Property”) necessary for the conduct of their respective
businesses as conducted as of the date hereof, except to the extent that the
failure to own or possess adequate rights to use such Intellectual Property
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; the Company and the Subsidiaries have not received any
written notice of any claim of infringement or conflict which asserted
Intellectual Property rights of others, which infringement or conflict, if the
subject of an unfavorable decision, would result in a Material Adverse Effect;
there are no pending, or to the Company’s knowledge, threatened judicial
proceedings or interference proceedings against the Company or its Subsidiaries
challenging the Company’s or any of its Subsidiaries’ rights in or to or the
validity of the scope of any of the Company’s or any of its Subsidiaries’
patents, patent applications or proprietary information, except for such
proceedings that would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; no other entity or individual
has any right or claim in any of the Company’s or any of its Subsidiaries’
patents, patent applications or any patent to be issued therefrom by virtue of
any contract, license or other agreement entered into between such entity or
individual and the Company or any Subsidiary or by any non-contractual
obligation, other than by written licenses granted by the Company or any
Subsidiary, except for such right or claim that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; the
Company and the Subsidiaries have not received any written notice of any claim
challenging the rights of the Company or its Subsidiaries in or to any
Intellectual Property owned, licensed or optioned by the Company or any
Subsidiary which claim, if the subject of an unfavorable decision would
reasonably be expected to result in a Material Adverse Effect.

 

 12 

 

 

aa.         Environmental Laws. The Company and the Subsidiaries (i) are in
compliance with any and all applicable federal, state, local and foreign laws,
rules, regulations, decisions and orders relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental Laws”); (ii) have
received and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses as described in the Registration Statement and the Prospectus; and
(iii) have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except, in the case of any of
clauses (i), (ii) or (iii) above, for any such failure to comply or failure to
receive required permits, licenses, other approvals or liability as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

bb.         Disclosure Controls. The Company maintains a system of internal
accounting controls designed to provide reasonable assurance 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
asset accountability; (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company is not aware of any material weaknesses in its internal control over
financial reporting (other than as set forth in the Registration Statement or
the Prospectus). Since the date of the latest audited financial statements of
the Company included (or incorporated by reference) in the Prospectus, there has
been 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 (other than as set forth in
the Registration Statement or the Prospectus). The Company has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and
15d-15) that comply with the requirements of the Exchange Act. The Company’s
certifying officers have evaluated the effectiveness of the Company’s controls
and procedures as of a date within 90 days prior to the filing date of the Form
10-K for the fiscal year most recently ended (such date, the “Evaluation Date”).
The Company presented in its Form 10-K for the fiscal year most recently ended
the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the most
recent Evaluation Date, and the “disclosure controls and procedures” are
effective.

 

cc.         Sarbanes-Oxley Act. There is and has been no failure on the part of
the Company or, to the knowledge of the Company, any of the Company’s directors
or officers, in their capacities as such, to comply in all material respects
with any applicable provisions of the Sarbanes-Oxley Act and the rules and
regulations promulgated thereunder. Each of the principal executive officer and
the principal financial officer of the Company (or 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 it or furnished by it to
the Commission during the past 12 months. For purposes of the preceding
sentence, “principal executive officer” and “principal financial officer” shall
have the meanings given to such terms in the Exchange Act Rules 13a-15 and
15d-15.

 

 13 

 

 

dd.        Finder’s Fees. Neither the Company nor any Subsidiary has incurred
any liability for any finder’s fees, brokerage commissions or similar payments
in connection with the transactions herein contemplated, except as may otherwise
exist with respect to the Agents pursuant to this Agreement.

 

ee.         Labor Disputes. No labor disturbance by or dispute with employees of
the Company or any Subsidiary exists or, to the knowledge of the Company, is
threatened which would reasonably be expected to result in a Material Adverse
Effect.

 

ff.          Investment Company Act. Neither the Company nor any Subsidiary is
or, after giving effect to the offering and sale of the Placement Shares, will
be an “investment company” or an entity “controlled” by an “investment company,”
as such terms are defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”).

 

gg.        Operations. The operations of the Company and the Subsidiaries are
and have been conducted at all times in compliance with applicable financial
record keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions to which the Company or the Subsidiaries are subject, the
rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any governmental agency
having jurisdiction over the Company (collectively, the “Money Laundering
Laws”), except where the failure to be in such compliance would not reasonably
be expected to result in a Material Adverse Effect; 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 Subsidiary with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

hh.        Off-Balance Sheet Arrangements. There are no transactions,
arrangements or other relationships between and/or among the Company, and, to
the knowledge of the Company, any of its affiliates or any unconsolidated
entity, including, but not limited to, any structured finance, special purpose
or limited purpose entity (each, an “Off Balance Sheet Transaction”) that would
reasonably be expected to affect materially the Company’s liquidity or the
availability of or requirements for its capital resources, including those Off
Balance Sheet Transactions described in the Commission’s Statement about
Management’s Discussion and Analysis of Financial Conditions and Results of
Operations (Release Nos. 33-8056; 34-45321; FR-61), required to be described in
the Registration Statement or the Prospectus which have not been described as
required.

 

ii.          Underwriter Agreements. The Company is not a party to any agreement
with an agent or underwriter for any other “at the market” transaction.

 14 

 

 

jj.          ERISA. To the knowledge of the Company, (i) each material employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) that is maintained,
administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company and the Subsidiaries has been
maintained in material compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred which would result in a material liability to the
Company with respect to any such plan excluding transactions effected pursuant
to a statutory or administrative exemption; and (iii) for each such plan that is
subject to the funding rules of Section 412 of the Code or Section 302 of ERISA,
no “accumulated funding deficiency” as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of the assets of
each such plan (excluding for these purposes accrued but unpaid contributions)
equals or exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions, other than, in the case of
(i), (ii) and (iii) above, as would not have a Material Adverse Effect.

 

kk.        Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) (a “Forward-Looking Statement”) contained in the Registration Statement and
the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.

 

ll.          Margin Rules. Neither the issuance, sale and delivery of the
Placement Shares nor the application of the proceeds thereof by the Company as
described in the Registration Statement and the Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

mm.      Insurance. The Company and the Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company and the
Subsidiaries reasonably believe are adequate for the conduct of their business.

 

nn.       No Improper Practices. (i) Neither the Company nor, to the Company’s
knowledge, any of the Subsidiaries, nor to the Company’s knowledge, any of their
respective executive officers has, in the past five years, made any unlawful
contributions to any candidate for any political office (or failed fully to
disclose any contribution in violation of law) or made any contribution or other
payment to any official of, or candidate for, any federal, state, municipal, or
foreign office or other person charged with similar public or quasi-public duty
in violation of any law or of the character required to be disclosed in the
Prospectus; (ii) no relationship, direct or indirect, exists between or among
the Company or, to the Company’s knowledge, any of the Subsidiaries or any
affiliate of any of them, on the one hand, and the directors, officers or
stockholders of the Company or, to the Company’s knowledge, the Subsidiaries, on
the other hand, that is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described; (iii) no
relationship, direct or indirect, exists between or among the Company or any of
the Subsidiaries or any affiliate of any of them, on the one hand, and the
directors, officers, or stockholders of the Company or, to the Company’s
knowledge, any of the Subsidiaries, on the other hand, that is required by the
rules of FINRA to be described in the Registration Statement and the Prospectus
that is not so described; (iv) there are no material outstanding loans or
advances or material guarantees of indebtedness by the Company or, to the
Company’s knowledge, any of the Subsidiaries to or for the benefit of any of
their respective officers or directors or any of the members of the families of
any of them; (v) the Company has not offered, or caused any placement agent to
offer, Common Stock to any person with the intent to influence unlawfully (A) a
customer or supplier of the Company or any of the Subsidiaries to alter the
customer’s or supplier’s level or type of business with the Company or the
Subsidiaries or (B) a trade journalist or publication to write or publish
favorable information about the Company or the Subsidiaries or any of their
respective products or services; and (vi) neither the Company nor any of the
Subsidiaries nor, to the Company’s knowledge, any employee or agent of the
Company or any of the Subsidiaries has made any payment of funds of the Company
or any of the Subsidiaries or received or retained any funds in violation of any
law, rule or regulation (including, without limitation, the Foreign Corrupt
Practices Act of 1977), which payment, receipt or retention of funds is of a
character required to be disclosed in the Registration Statement or the
Prospectus.

 

 15 

 

 

oo.        Status Under the Securities Act. The Company was not and is not an
ineligible issuer as defined in Rule 405 at the times specified in Rules 164 and
433 under the Securities Act in connection with the offering of the Placement
Shares.

 

pp.        No Misstatement or Omission in an Issuer Free Writing Prospectus.
Each Issuer Free Writing Prospectus, if any, as of its issue date and as of each
Applicable Time (as defined in Section 25 below), did not, does not and will
not, through the completion of the Placement or Placements for which such Issuer
Free Writing Prospectus is issued, include any information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement or the Prospectus, including any Incorporated Document that has not
been superseded or modified. The foregoing sentence does not apply to statements
in or omissions from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by the Agents
specifically for use therein.

 

qq.        No Conflicts. Neither the execution of this Agreement, nor the
issuance, offering or sale of the Placement Shares, nor the consummation of any
of the transactions contemplated herein, nor the compliance by the Company with
the terms and provisions hereof will conflict with, or will result in a breach
of, any of the terms and provisions of, or has constituted or will constitute a
default under, or has resulted in or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
pursuant to the terms of any contract or other agreement to which the Company
may be bound or to which any of the property or assets of the Company is
subject, except (i) such conflicts, breaches or defaults as may have been waived
and (ii) such conflicts, breaches and defaults that would not reasonably be
expected to have a Material Adverse Effect; nor will such actions result (x) in
any violation of the provisions of the organizational or governing documents of
the Company, or (y) in any material violation of the provisions of any statute
or any order, rule or regulation applicable to the Company or of any court or of
any federal, state or other regulatory authority or other government body having
jurisdiction over the Company, except where such violation would not reasonably
be expected to have a Material Adverse Effect.

 

rr.          OFAC.

 

(i)          Neither the Company nor any Subsidiary (collectively, the “Entity”)
nor, to the Company’s knowledge, any director, officer, employee, agent,
affiliate or representative of the Entity, is a government, individual, or
entity (in this paragraph (rr), “Person”) that is, or is owned or controlled by
a Person that is:

 

(a)          the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United
Nations Security Council, the European Union, Her Majesty’s Treasury, or other
relevant sanctions authority (collectively, “Sanctions”), or

 

 16 

 

 

(b)          located, organized or resident in a country or territory that is
the subject of Sanctions.

 

(ii)        The Entity will not, directly or indirectly, knowingly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other Person:

 

(a)          to fund or facilitate any activities or business of or with any
Person or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or

 

(b)          in any other manner that will result in a violation of Sanctions by
any Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).

 

(iii)       The Entity represents and covenants that, except as detailed in the
Registration Statement and the Prospectus, for the past 5 years, it has not
knowingly engaged in and is not now knowingly engaged in any dealing or
transactions with any Person, or in any country or territory, that at the time
of the dealing or transaction is or was the subject of Sanctions.

 

ss.        Stock Transfer Taxes. On each Settlement Date, all material stock
transfer or other similar transfer taxes (other than income taxes) which are
required to be paid in connection with the sale and transfer of the Placement
Shares to be sold hereunder will be, or will have been, fully paid or provided
for by the Company and all laws imposing such taxes will be or will have been
fully complied with by the Company, except in each case for any taxes or
non-compliance that would not reasonably be expected to have a Material Adverse
Effect.

 

tt.         FINRA Exemption. To enable the Agents to rely on Rule
5110(b)(7)(C)(i) of FINRA, the Company represents that the Company (i) has a
non-affiliate, public common equity float of at least $150 million or a
non-affiliate, public common equity float of at least $100 million and annual
trading volume of at least three million shares and (ii) has been subject to the
Exchange Act reporting requirements for a period of at least 36 months.

 

Any certificate signed by an officer of the Company and delivered to the Agents
or to counsel for the Agents pursuant to or in connection with this Agreement
shall be deemed to be a representation and warranty by the Company, as
applicable, to the Agents as to the matters set forth therein.

 

7.          Covenants of the Company. The Company covenants and agrees with each
Agent that:

 

 17 

 

 

a.           Registration Statement Amendments. After the date of this Agreement
and during any period in which a prospectus relating to any Placement Shares is
required to be delivered by the Agents under the Securities Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act) (the “Prospectus Delivery Period”), (i) the Company will
notify the Agents promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by reference or
amendments not related to any Placement, has been filed with the Commission
and/or has become effective or any subsequent supplement to the Prospectus,
other than documents incorporated by reference, has been filed and of any
request by the Commission for any amendment or supplement to the Registration
Statement or Prospectus related to the Placement or for additional information
related to the Placement; (ii) the Company will prepare and file with the
Commission, promptly upon the Agents’ request, any amendments or supplements to
the Registration Statement or Prospectus that, upon the advice of the Company’s
legal counsel, may be necessary or advisable in connection with the distribution
of the Placement Shares by the Agents (provided, however, that the failure of
the Agents to make such request shall not relieve the Company of any obligation
or liability hereunder, or affect the Agents’ right to rely on the
representations and warranties made by the Company in this Agreement and
provided, further, that the only remedy the Agents shall have with respect to
the failure to make such filing shall be to cease making sales under this
Agreement until such amendment or supplement is filed); (iii) the Company will
not file any amendment or supplement to the Registration Statement or Prospectus
relating to the Placement Shares or a security convertible into the Placement
Shares (other than an Incorporated Document) unless a copy thereof has been
submitted to the Agents within a reasonable period of time before the filing and
the Agents have not reasonably objected thereto (provided, however, that (A) the
failure of the Agents to make such objection shall not relieve the Company of
any obligation or liability hereunder, or affect the Agents’ right to rely on
the representations and warranties made by the Company in this Agreement and (B)
the Company has no obligation to provide the Agents any advance copy of such
filing or to provide the Agents an opportunity to object to such filing if the
filing does not name the Agents or does not relate to the transaction herein
provided; and provided, further, that the only remedy the Agents shall have with
respect to the failure by the Company to obtain such consent shall be to cease
making sales under this Agreement) and the Company will furnish to the Agents at
the time of filing thereof a copy of any document that upon filing is deemed to
be incorporated by reference into the Registration Statement or Prospectus,
except for those documents available via EDGAR; and (iv) the Company will cause
each amendment or supplement to the Prospectus to be filed with the Commission
as required pursuant to the applicable paragraph of Rule 424(b) of the
Securities Act or, in the case of any document to be incorporated therein by
reference, to be filed with the Commission as required pursuant to the Exchange
Act, within the time period prescribed (the determination to file or not file
any amendment or supplement with the Commission under this Section 7(a), based
on the Company’s reasonable opinion or reasonable objections, shall be made
exclusively by the Company).

 

b.           Notice of Commission Stop Orders. The Company will advise the
Agents, promptly after it receives notice or obtains knowledge thereof, of the
issuance or threatened issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement, of the suspension of the
qualification of the Placement Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceeding for any such purpose; and
it will use its commercially reasonable efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such a stop order should be issued.
The Company will advise the Agents promptly after it receives any request by the
Commission for any amendments to the Registration Statement or any amendment or
supplements to the Prospectus or any Issuer Free Writing Prospectus or for
additional information related to the offering of the Placement Shares or for
additional information related to the Registration Statement, the Prospectus or
any Issuer Free Writing Prospectus.

 

 18 

 

 

c.           Delivery of Prospectus; Subsequent Changes. During the Prospectus
Delivery Period, the Company will use its commercially reasonable efforts to
comply in all material respects with all requirements imposed upon it by the
Securities Act, as from time to time in force, and to file on or before their
respective due dates 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, 15(d) or any other provision of or under the Exchange
Act. If the Company has omitted any information from the Registration Statement
pursuant to Rule 430A under the Securities Act, it will use its commercially
reasonable efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to said Rule 430A and to notify the Agents
promptly of all such filings. If during the Prospectus Delivery Period any event
occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such Prospectus Delivery Period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Securities Act, the Company will promptly notify the Agents to
suspend the offering of Placement Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the
expense of the Company) so as to correct such statement or omission or effect
such compliance; provided, however, that the Company may delay the filing of any
amendment or supplement, if in the judgment of the Company, it is in the best
interest of the Company.

 

d.           Listing of Placement Shares. During the Prospectus Delivery Period,
the Company will use its commercially reasonable efforts to cause the Placement
Shares to be listed on the Exchange and to qualify the Placement Shares for sale
under the securities laws of such jurisdictions in the United States as the
Agents reasonably designate and to continue such qualifications in effect so
long as required for the distribution of the Placement Shares; provided,
however, that the Company shall not be required in connection therewith to
qualify as a foreign corporation or dealer in securities, file a general consent
to service of process, or subject itself to taxation in any jurisdiction if it
is not otherwise so subject.

 

e.           Delivery of Registration Statement and Prospectus. The Company will
furnish to the Agents and their counsel (at the reasonable expense of the
Company) copies of the Registration Statement, the Prospectus (including all
documents incorporated by reference therein) and all amendments and supplements
to the Registration Statement or Prospectus that are filed with the Commission
during the Prospectus Delivery Period (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference
therein), in each case as soon as reasonably practicable and in such quantities
as the Agents may from time to time reasonably request and, at the Agents’
request, will also furnish copies of the Prospectus to each exchange or market
on which sales of the Placement Shares may be made; provided, however, that the
Company shall not be required to furnish any document (other than the
Prospectus) to the Agents to the extent such document is available on EDGAR.

 

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f.           Earnings Statement. The Company will make generally available to
its security holders as soon as practicable, but in any event not later than 15
months after the end of the Company’s current fiscal quarter, an earnings
statement covering a 12-month period that satisfies the provisions of Section
11(a) and Rule 158 of the Securities Act. The Agents and the Company acknowledge
and agree that the Company’s ordinary, timely-filed periodic filings with the
Commission pursuant to the Exchange Act may be used to satisfy this obligation
to the extent consistent with the requirements set forth herein.

 

g.           Use of Proceeds. The Company will use the Net Proceeds as described
in the Prospectus in the section entitled “Use of Proceeds.”

 

h.           Notice of Other Sales. Without the prior written consent of the
Agents, the Company will not, directly or indirectly, offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any Common
Stock (other than the Placement Shares offered pursuant to this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock during the period beginning on the
date on which any Placement Notice is delivered to an Agent hereunder and ending
on the third (3rd) Trading Day immediately following the final Settlement Date
with respect to Placement Shares sold pursuant to such Placement Notice (or, if
the Placement Notice has been terminated or suspended prior to the sale of all
Placement Shares covered by a Placement Notice, the date of such suspension or
termination); and will not directly or indirectly in any other “at the market”
or continuous equity transaction offer to sell, sell, contract to sell, grant
any option to sell or otherwise dispose of any Common Stock (other than the
Placement Shares offered pursuant to this Agreement) or securities convertible
into or exchangeable for Common Stock, warrants or any rights to purchase or
acquire, Common Stock prior to the termination of this Agreement; provided,
however, that such restrictions will not apply in connection with the Company’s
issuance or sale of (i) Common Stock (including restricted stock), options to
purchase Common Stock, restricted stock units or phantom equity awards, or
Common Stock issuable upon the exercise of options or upon conversion of
restricted stock units or phantom equity awards, in each case, pursuant to any
stock option, equity incentive or other employee benefits plan, employee stock
purchase plan, stock ownership plan or dividend reinvestment plan (but not
Common Stock subject to a waiver to exceed plan limits in its dividend
reinvestment plan) of the Company whether now in effect or hereafter
implemented; (ii) Common Stock issuable upon conversion of securities or the
exercise of warrants, options or other rights in effect or outstanding, and
disclosed in filings by the Company available on EDGAR or otherwise in writing
to the Agents, (iii) Common Stock issuable upon the exercise of participation
rights disclosed in the Prospectus (including the Incorporated Documents),
(iv) Common Stock, or securities convertible into or exercisable for Common
Stock, offered and sold in a privately negotiated transaction to vendors,
customers, strategic partners or potential strategic partners or other investors
conducted in a manner so as not to be integrated with the offering of Common
Stock hereby; and (v) Common Stock in connection with any acquisition, strategic
investment or other similar transaction (including any joint venture, strategic
alliance or partnership).

 

i.            Change of Circumstances. The Company will, at any time during the
pendency of a Placement Notice, advise the Agents promptly after it shall have
received notice or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document required to be provided to the Agents pursuant to this
Agreement.

 

 20 

 

 

j.            Due Diligence Cooperation. During the term of this Agreement, the
Company will cooperate with any reasonable due diligence review conducted by the
Agents or their representatives in connection with the transactions contemplated
hereby, including, without limitation, providing information and making
available documents and senior corporate officers, during regular business hours
and at the Company’s principal offices, as the Agents may reasonably request.

 

k.           Required Filings Relating to Placement of Placement Shares. The
Company agrees that on such dates as the Securities Act shall require, the
Company will (i) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) under the Securities Act, which prospectus
supplement will set forth, within the relevant period, the amount of Placement
Shares sold through the Agents, the Net Proceeds to the Company and the
compensation payable by the Company to the Agents with respect to such Placement
Shares (provided that the Company may satisfy its obligations under this Section
7(k)(i) by making a filing in accordance with the Exchange Act including such
information), and (ii) deliver such number of copies of each such prospectus
supplement to each exchange or market on which such sales were effected as may
be required by the rules or regulations of such exchange or market.

 

l.            Representation Dates; Certificate. Each time during the term of
this Agreement that the Company:

 

(i)          amends or supplements (other than a prospectus supplement relating
solely to an offering of securities other than the Placement Shares) the
Registration Statement or the Prospectus relating to the Placement Shares by
means of a post-effective amendment, sticker, or supplement but not by means of
incorporation of documents by reference into the Registration Statement or the
Prospectus relating to the Placement Shares;

 

(ii)         files an annual report on Form 10-K under the Exchange Act
(including any Form 10-K/A containing amended audited financial information or a
material amendment to the previously filed Form 10-K);

 

(iii)        files its quarterly reports on Form 10-Q under the Exchange Act; or

 

(iv)        files a current report on Form 8-K containing amended financial
information (other than information “furnished” pursuant to Items 2.02 or 7.01
of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating
to the reclassification of certain properties as discontinued operations in
accordance with Statement of Financial Accounting Standards No. 144) under the
Exchange Act;

 

(Each date of filing of one or more of the documents referred to in clauses (i)
through (iv) shall be a “Representation Date.”)

 

 21 

 

 

the Company shall furnish the Agents (but in the case of clause (iv) above only
if the Agents reasonably determine that the information contained in such Form
8-K is material) with a certificate, in the form attached hereto as Exhibit
7(l). The requirement to provide a certificate under this Section 7(l) shall be
waived for any Representation Date occurring at a time at which no Placement
Notice is pending, which waiver shall continue until the earlier to occur of the
date the Company delivers a Placement Notice hereunder (which for such calendar
quarter shall be considered a Representation Date) and the next occurring
Representation Date on which the Company files its annual report on Form 10-K.
Notwithstanding the foregoing, (i) upon the delivery of the first Placement
Notice hereunder and (ii) if the Company subsequently decides to sell Placement
Shares following a Representation Date when the Company relied on such waiver
and did not provide the Agents with a certificate under this Section 7(l), then
before the Agents sell any Placement Shares, the Company shall provide the
Agents with a certificate, in the form attached hereto as Exhibit 7(l), dated
the date of the Placement Notice.

 

m.           Legal Opinion. On or prior to the date of the first Placement
Notice given hereunder the Company shall cause to be furnished to the Agents a
written opinion and a negative assurance letter of Foley & Lardner LLP (“Company
Counsel”), or other counsel reasonably satisfactory to the Agents, each in form
and substance reasonably satisfactory to the Agents. Thereafter, within five (5)
Trading Days of each Representation Date with respect to which the Company is
obligated to deliver a certificate in the form attached hereto as Exhibit 7(l)
for which no waiver is applicable, the Company shall cause to be furnished to
the Agents a negative assurance letter of Company Counsel in form and substance
reasonably satisfactory to the Agents; provided that, in lieu of such negative
assurance for subsequent periodic filings under the Exchange Act, counsel may
furnish the Agents with a letter (a “Reliance Letter”) to the effect that the
Agents may rely on the negative assurance letter previously delivered under this
Section 7(m) to the same extent as if it were dated the date of such Reliance
Letter (except that statements in such prior letter shall be deemed to relate to
the Registration Statement and the Prospectus as amended or supplemented as of
the date of the Reliance Letter).

 

n.           Comfort Letter. On or prior to the date of the first Placement
Notice given hereunder and within five (5) Trading Days after each subsequent
Representation Date, other than pursuant to Section 7(l)(iii), the Company shall
cause its independent accountants to furnish the Agents letters (the “Comfort
Letters”), dated the date the Comfort Letter is delivered, which shall meet the
requirements set forth in this Section 7(n). The Comfort Letter from the
Company’s independent accountants shall be in a form and substance reasonably
satisfactory to the Agents, (i) confirming that they are an independent public
accounting firm within the meaning of the Securities Act and the PCAOB, (ii)
stating, as of such date, the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered by
accountants’ “comfort letters” to underwriters in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”), and
(iii) updating the Initial Comfort Letter with any information that would have
been included in the Initial Comfort Letter had it been given on such date and
modified as necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such Comfort Letter.

 

o.           Market Activities. The Company will not, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or would
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of Common
Stock or (ii) sell, bid for, or purchase Common Stock in violation of Regulation
M, or pay anyone any compensation for soliciting purchases of the Placement
Shares other than the Agents.

 

 22 

 

 

p.           Investment Company Act. The Company will conduct its affairs in
such a manner so as to reasonably ensure that neither it nor the Subsidiaries
will be or become, at any time prior to the termination of this Agreement, an
“investment company,” as such term is defined in the Investment Company Act.

 

q.           No Offer to Sell. Other than an Issuer Free Writing Prospectus
approved in advance by the Company and the Agents in their capacity as agents
hereunder pursuant to Section 23, neither the Agents nor the Company (including
its agents and representatives, other than the Agents in their capacity as such)
will make, use, prepare, authorize, approve or refer to any written
communication (as defined in Rule 405), required to be filed with the
Commission, that constitutes an offer to sell or solicitation of an offer to buy
Placement Shares hereunder.

 

r.            Sarbanes-Oxley Act. The Company will use commercially reasonable
efforts to maintain and keep accurate books and records reflecting its assets
and maintain internal accounting controls in a manner designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
GAAP and including those policies and procedures that (i) pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the assets of the Company, (ii) provide
reasonable assurance that transactions are recorded as necessary to permit the
preparation of the Company’s consolidated financial statements in accordance
with GAAP, (iii) provide reasonable assurance that receipts and expenditures of
the Company are being made only in accordance with management’s and the
Company’s directors’ authorization, and (iv) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on its
financial statements. The Company will maintain disclosure controls and
procedures that comply with the requirements of the Exchange Act.

 

8.          Representations and Covenants of the Agents. Each Agent represents
and warrants that it is duly registered as a broker-dealer under FINRA, the
Exchange Act and the applicable statutes and regulations of each state in which
the Placement Shares will be offered and sold, except such states in which such
Agent is exempt from registration or such registration is not otherwise
required. Each Agent shall continue, for the term of this Agreement, to be duly
registered as a broker-dealer under FINRA, the Exchange Act and the applicable
statutes and regulations of each state in which the Placement Shares will be
offered and sold, except such states in which it is exempt from registration or
such registration is not otherwise required during the term of this Agreement.
Each Agent shall comply with all applicable laws and regulations in connection
with the transactions contemplated by this Agreement, including the issuance and
sale through such Agent of the Placement Shares. Other than an Issuer Free
Writing Prospectus approved in advance by the Company and the Agents in their
capacity as agents hereunder pursuant to Section 23, the Agents (including their
respective agents and representatives) will not make, use, prepare, authorize,
approve or refer to any written communication (as defined in Rule 405), required
to be filed with the Commission, that constitutes an offer to sell or
solicitation of an offer to buy Placement Shares hereunder.

 

 23 

 

 

9.           Payment of Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, filing, including any fees required by the Commission, and printing
of the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment and supplement thereto and each Issuer
Free Writing Prospectus, in such number as the Agents shall deem reasonably
necessary, (ii) the printing and delivery to the Agents of this Agreement and
such other documents as may be reasonably required in connection with the
offering, purchase, sale, issuance or delivery of the Placement Shares, (iii)
the preparation, issuance and delivery of the certificates, if any, for the
Placement Shares to the Agents, including any stock or other transfer taxes and
any capital duties, stamp duties or other duties or taxes payable upon the sale,
issuance or delivery of the Placement Shares to the Agents, (iv) the fees and
disbursements of the counsel, accountants and other advisors to the Company, (v)
the actual, reasonable, and documented out-of-pocket fees and disbursements of
counsel to the Agents up to $50,000, (vi) the fees and expenses of the transfer
agent and registrar for the Common Stock, (vii) the filing fees incident to any
review by FINRA of the terms of the sale of the Placement Shares, and (viii) the
fees and expenses incurred in connection with the listing of the Placement
Shares on the Exchange.

 

10.         Conditions to the Agents’ Obligations. The obligations of the Agents
hereunder with respect to a Placement will be subject to the continuing accuracy
and completeness of the representations and warranties made by the Company
herein (other than those representations and warranties made as of a specified
date or time), to the due performance in all material respects by the Company of
its obligations hereunder, to the completion by each Agent of a due diligence
review satisfactory to such Agent in its reasonable judgment, and to the
continuing reasonable satisfaction (or waiver by the Agents in their sole
discretion) of the following additional conditions:

 

a.           Registration Statement Effective. The Registration Statement shall
remain effective and shall be available for the sale of all Placement Shares
contemplated to be issued by any Placement Notice.

 

b.           No Material Notices. None of the following events shall have
occurred and be continuing: (i) receipt by the Company of any request for
additional information from the Commission or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective amendments or
supplements to the Registration Statement or the Prospectus (other than
immaterial amendments or supplements to documents incorporated by reference
therein) if such post-effective amendments or supplements have not been made and
become effective; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or receipt by the Company of notification of the
initiation of any proceedings for that purpose; (iii) receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Shares for sale in any
jurisdiction or receipt by the Company of notification of the initiation of, or
a threat to initiate, any proceeding for such purpose; or (iv) the occurrence of
any event that makes any material statement made in the Registration Statement
or the Prospectus or any material Incorporated Document untrue in any material
respect or that requires the making of any changes in the Registration
Statement, the Prospectus or any material Incorporated Document so that, in the
case of the Registration Statement, it will not contain any materially 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 and,
that in the case of the Prospectus or any material Incorporated Document, it
will not contain any materially 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 the light of the circumstances under which they were
made, not misleading.

 24 

 

 

c.           No Misstatement or Material Omission. The Agents shall not have
advised the Company that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact that in
the Agents’ reasonable opinion is material, or omits to state a fact that in the
Agents’ reasonable opinion is material and is required to be stated therein or
is necessary to make the statements therein not misleading.

 

d.           Material Changes. Except as contemplated in the Prospectus, or
disclosed in the Company’s reports filed with the Commission, there shall not
have been any Material Adverse Effect, or any development that would cause a
Material Adverse Effect, or a downgrading in or withdrawal of the rating
assigned to any of the Company’s securities (other than asset backed securities)
by any “nationally recognized statistical rating organization,” as such term is
defined by the Commission for purposes of Rule 436(g)(2) under the Securities
Act (a “Rating Organization”), or a public announcement by any Rating
Organization that it has under surveillance or review its rating of any of the
Company’s securities (other than asset backed securities), the effect of which,
in the case of any such action by a Rating Organization described above, in the
reasonable judgment of the Agents (without relieving the Company of any
obligation or liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the Placement
Shares on the terms and in the manner contemplated in the Prospectus.

 

e.           Legal Opinion. The Agents shall have received the opinion and
negative assurance letter of Company Counsel required to be delivered pursuant
to Section 7(m) on or before the date on which such delivery of such opinion and
negative assurance letter are required pursuant to Section 7(m).

 

f.            Comfort Letter. The Agents shall have received the Comfort Letter
required to be delivered pursuant to Section 7(n) on or before the date on which
such delivery of such letter is required pursuant to Section 7(n).

 

g.           Representation Certificate. The Agents shall have received the
certificate required to be delivered pursuant to Section 7(l) on or before the
date on which delivery of such certificate is required pursuant to Section 7(l).

 

h.           Secretary’s Certificate. On or prior to the first Representation
Date, the Agents shall have received a certificate, signed on behalf of the
Company by its corporate Secretary, in form and substance reasonably
satisfactory to the Agents and their counsel.

 

i.            No Suspension. Trading in the Common Stock shall not have been
suspended on the Exchange and the Common Stock shall not have been delisted from
the Exchange.

 

 25 

 

 

j.            Other Materials. On each date on which the Company is required to
deliver a certificate pursuant to Section 7(l), the Company shall have furnished
to the Agents such appropriate further information, certificates and documents
as the Agents may reasonably request and which are usually and customarily
furnished by an issuer of securities in connection with a securities offering of
the type contemplated hereby. All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof.

 

k.          Securities Act Filings Made. All filings with the Commission with
respect to the Placement Shares required by Rule 424 under the Securities Act to
have been filed prior to the issuance of any Placement Notice hereunder shall
have been made within the applicable time period prescribed for such filing by
Rule 424.

 

l.            Approval for Listing. The Placement Shares shall either have been
approved for listing on the Exchange, subject only to notice of issuance, or the
Company shall have filed an application for listing of the Placement Shares on
the Exchange at, or prior to, the issuance of any Placement Notice.

 

m.           No Termination Event. There shall not have occurred any event that
would permit the Agents to terminate this Agreement pursuant to Section 13(a).

 

11.         Indemnification and Contribution.

 

(a)          Company Indemnification. The Company agrees to indemnify and hold
harmless each Agent, its partners, members, directors, officers, employees and
agents and each person, if any, who controls such Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:

 

(i)          against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

(ii)         against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 11(d) below) any such
settlement is effected with the written consent of the Company, which consent
shall not unreasonably be delayed or withheld; and

 

(iii)        against any and all expense whatsoever, as incurred (including the
actual, reasonable, and documented out-of-pocket fees and disbursements of
counsel), reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;

 

 26 

 

 

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made solely in
reliance upon and in conformity with written information furnished to the
Company by such Agent expressly for use in the Registration Statement (or any
amendment thereto), or in any related Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto).

 

(b)          Indemnification by the Agents. Each Agent agrees to indemnify and
hold harmless the Company and its directors and officers, and each person, if
any, who (i) controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is
under common control with the Company against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 11(a),
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or in any related Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information relating to such Agent and furnished to the
Company by such Agent expressly for use therein.

 

(c)          Procedure. Any party that proposes to assert the right to be
indemnified under this Section 11 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 11, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 11 and (ii) any
liability that it may have to any indemnified party under the foregoing
provisions of this Section 11 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on written advice of counsel) that there are legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on written advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party), or (4) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the actual, reasonable, and documented out-of-pocket fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the actual, reasonable, and documented
out-of-pocket fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such actual, reasonable, and documented
out-of-pocket fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly after the indemnifying party receives a written
invoice relating to fees, disbursements and other charges in reasonable detail.
An indemnifying party will not, in any event, be liable for any settlement of
any action or claim effected without its written consent. No indemnifying party
shall, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
11 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent (1) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (2) 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.

 

 27 

 

 

(d)          Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 11 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or an Agent,
the Company and each such Agent will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Agents, such as persons who control the Company within the meaning of the
Securities Act or the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable for
contribution) to which the Company and the Agents may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the Agents on the other hand. The relative
benefits received by the Company on the one hand and the Agents on the other
hand shall be deemed to be in the same proportion as the total Net Proceeds from
the sale of the Placement Shares (before deducting expenses) received by the
Company bear to the total compensation received by the Agents (before deducting
expenses) from the sale of Placement Shares on behalf of the Company. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and such Agent, on the other hand, with respect to the statements or omission
that resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or such Agent, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Agents agree that it
would not be just and equitable if contributions pursuant to this Section 11(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, liability, expense, or damage, or action in respect thereof,
referred to above in this Section 11(d) shall be deemed to include, for the
purpose of this Section 11(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim to the extent consistent with Section 11(c) hereof.
Notwithstanding the foregoing provisions of this Section 11(d), except in the
case of gross negligence or willful misconduct, the Agents shall not be required
to contribute any amount in excess of the commissions received by them under
this Agreement and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 11(d), any person who controls a
party to this Agreement within the meaning of the Securities Act or the Exchange
Act, and any officers, directors, partners, employees or agents of the Agents,
will have the same rights to contribution as that party, and each officer who
signed the Registration Statement and director of the Company will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 11(d), will notify any such party or
parties from whom contribution may be sought, but the omission to so notify will
not relieve that party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 11(d) except to the
extent that the failure to so notify such other party materially prejudiced the
substantive rights or defenses of the party from whom contribution is sought.
Except for a settlement entered into pursuant to the last sentence of Section
11(c) hereof, no party will be liable for contribution with respect to any
action or claim settled without its written consent if such consent is required
pursuant to Section 11(c) hereof.

 

12.         Representations and Agreements to Survive Delivery. The indemnity
and contribution agreements contained in Section 11 of this Agreement and all
representations and warranties of the Company and the Agents herein or in
certificates delivered pursuant hereto shall survive, as of their respective
dates, regardless of (i) any investigation made by or on behalf of the Agents,
any controlling persons, or the Company (or any of their respective officers,
directors or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor, or (iii) any termination of this Agreement.

 

 28 

 

 

13.         Termination.

 

a.           Each Agent may terminate this Agreement as to such Agent, by notice
to the Company, as hereinafter specified at any time (1) if there has been,
since the time of execution of this Agreement or since the date as of which
information is given in the Prospectus, any Material Adverse Effect, or any
development that would have a Material Adverse Effect that, in the reasonable
judgment of such Agent, is material and adverse and makes it impractical or
inadvisable to market the Placement Shares or to enforce contracts for the sale
of the Placement Shares, (2) if there has occurred any material adverse change
in the financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the reasonable judgment of such Agent,
impracticable or inadvisable to market the Placement Shares or to enforce
contracts for the sale of the Placement Shares, (3) if trading in the Common
Stock has been suspended or limited by the Commission or the Exchange, or if
trading generally on the Exchange has been suspended or limited, or minimum
prices for trading have been fixed on the Exchange, (4) if any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market shall have occurred and be continuing, (5) if a major
disruption of securities settlements or clearance services in the United States
shall have occurred and be continuing, or (6) if a banking moratorium has been
declared by either U.S. Federal or New York authorities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section 12 (Representations and Agreements to Survive Delivery),
Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19
(Consent to Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination. If an Agent elects to terminate this Agreement
as provided in this Section 13(a), such Agent shall provide the required written
notice as specified in Section 14 (Notices).

 

b.          The Company shall have the right, by giving five (5) Business Days’
notice as hereinafter specified, to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section 12 (Representations and Agreements to Survive Delivery),
Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19
(Consent to Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.

 

c.           Each Agent shall have the right, by giving five (5) Business Days’
notice as hereinafter specified, to terminate this Agreement as to such Agent in
its sole discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 9 (Payment of Expenses), Section 11
(Indemnification and Contribution), Section 12 (Representations and Agreements
to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial)
and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and
effect notwithstanding such termination.

 

d.           Unless earlier terminated pursuant to this Section 13, this
Agreement shall automatically terminate upon the issuance and sale of all of the
Placement Shares through the Agents on the terms and subject to the conditions
set forth herein except that the provisions of Section 9 (Payment of Expenses),
Section 11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of
Jury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full
force and effect notwithstanding such termination.

 

 29 

 

 

e.           This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 13(a), (b), (c), or (d) above or otherwise by
mutual agreement of the parties; provided, however, that any such termination by
mutual agreement shall in all cases be deemed to provide that Section 9 (Payment
of Expenses), Section 11 (Indemnification and Contribution), Section 12
(Representations and Agreements to Survive Delivery), Section 18 (Governing Law
and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) shall
remain in full force and effect. Upon termination of this Agreement, the Company
shall not have any liability to the Agents for any discount, commission or other
compensation with respect to any Placement Shares not otherwise sold by the
Agents under this Agreement.

 

f.            Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided, however, that such
termination shall not be effective until the close of business on the date of
receipt of such notice by the Agents or the Company, as the case may be. If such
termination shall occur prior to the Settlement Date for any sale of Placement
Shares, such Placement Shares shall settle in accordance with the provisions of
this Agreement.

 

14.         Notices. All notices or other communications required or permitted
to be given by any party to any other party pursuant to the terms of this
Agreement shall be in writing, unless otherwise specified, and if sent to the
Agents, shall be delivered to:

 

B. Riley FBR, Inc.

299 Park Avenue

New York, NY 10171

Attention:General Counsel

Telephone:(212) 457-9947

Email:atmdesk@brileyfbr.com

 

and

 

Oppenheimer & Co. Inc.

85 Broad Street, 25th Floor

New York, NY 10004

Attention:Peter Vogelsang, OGC

Telephone:(212) 667-8195

Email:peter.vogelsang@opco.com

 

with a copy to:

 

Duane Morris LLP

One Riverfront Plaza
1037 Raymond Boulevard, Suite 1800
Newark, New Jersey 07102-5429

Attention:James T. Seery

Telephone:(973) 424-2088

Email:jtseery@duanemorris.com

 

 30 

 

 

and if to the Company, shall be delivered to:

 

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, Connecticut 06813

Attention:Michael Bishop

Telephone:(203) 825-6049

Email:mbishop@fce.com

 

with a copy to:

 

Foley & Lardner LLP

111 Huntington Avenue, Suite 2500

Boston, Massachusetts 02199-7610

Attention:Paul D. Broude

Telephone:(617) 342-4027

Email:PBroude@foley.com

 

Each party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.
Each such notice or other communication shall be deemed given (i) when delivered
personally, by email, or by verifiable facsimile transmission (with an original
to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if
such day is not a Business Day, on the next succeeding Business Day, (ii) on the
next Business Day after timely delivery to a nationally-recognized overnight
courier and (iii) on the Business Day actually received if deposited in the U.S.
mail (certified or registered mail, return receipt requested, postage prepaid).
For purposes of this Agreement, “Business Day” shall mean any day on which the
Exchange and commercial banks in the City of New York are open for business.

 

An email communication (“Electronic Notice”) shall be deemed written notice for
purposes of this Section 14 if sent to the email address specified by the
receiving party under separate cover. Electronic Notice shall be deemed received
at the time the party sending Electronic Notice receives confirmation of receipt
by the receiving party. Any party receiving Electronic Notice may request and
shall be entitled to receive the notice on paper, in a non-electronic form
(“Non-electronic Notice”), which shall be sent to the requesting party within
ten (10) days of receipt of the written request for Non-electronic Notice.

 

15.         Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and the Agents and their respective successors
and the affiliates, controlling persons, officers and directors referred to in
Section 11 hereof. References to any of the parties contained in this Agreement
shall be deemed to include the successors and permitted assigns of such party.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Neither the
Company nor either of the Agents may assign its rights or obligations under this
Agreement without the prior written consent of the other parties.

 

 31 

 

 

16.         Adjustments for Stock Splits. The parties acknowledge and agree that
all share-related numbers contained in this Agreement shall be adjusted to take
into account any share consolidation, stock split, stock dividend, corporate
domestication or similar event effected with respect to the Placement Shares.

 

17.       Entire Agreement; Amendment; Severability. This Agreement (including
all schedules and exhibits attached hereto and Placement Notices issued pursuant
hereto) constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument
executed by the Company and the Agents. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable as written by a court of competent
jurisdiction, then such provision shall be given full force and effect to the
fullest possible extent that it is valid, legal and enforceable, and the
remainder of the terms and provisions herein shall be construed as if such
invalid, illegal or unenforceable term or provision was not contained herein,
but only to the extent that giving effect to such provision and the remainder of
the terms and provisions hereof shall be in accordance with the intent of the
parties as reflected in this Agreement.

 

18.         GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF
DAY REFER TO NEW YORK CITY TIME. THE COMPANY AND EACH AGENT EACH HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

19.         CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE
CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY
IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM
OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
(CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

 32 

 

 

20.         Use of Information. The Agents may not use any information gained in
connection with this Agreement and the transactions contemplated by this
Agreement, including due diligence, to advise any party with respect to
transactions not expressly approved by the Company.

 

21.         Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile or email of a .pdf
attachment.

 

22.         Effect of Headings. The section, Schedule and Exhibit headings
herein are for convenience only and shall not affect the construction hereof.

 

23.         Permitted Free Writing Prospectuses. The Company represents,
warrants and agrees that, unless it obtains the prior consent of the Agents,
which consent shall not be unreasonably withheld, conditioned or delayed, and
each of the Agents represents, warrants and agrees that, unless it obtains the
prior consent of the Company, which consent shall not be unreasonably withheld,
conditioned, or delayed, it has not made and will not make any offer relating to
the Placement Shares that would constitute an Issuer Free Writing Prospectus, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule
405, required to be filed with the Commission. Any such free writing prospectus
consented to by the Agents or by the Company, as the case may be, is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company represents and
warrants that it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule
433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing
with the Commission where required, legending and record keeping. For the
purposes of clarity, the parties hereto agree that all free writing
prospectuses, if any, listed in Exhibit 23 hereto are Permitted Free Writing
Prospectuses.

 

24.         Absence of Fiduciary Relationship. The Company acknowledges and
agrees that:

 

a.           each Agent is acting solely as agent in connection with the public
offering of the Placement Shares and in connection with each transaction
contemplated by this Agreement and the process leading to such transactions, and
no fiduciary or advisory relationship between the Company or any of its
respective affiliates, stockholders (or other equity holders), creditors or
employees or any other party, on the one hand, and the Agents, on the other
hand, has been or will be created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether or not the Agents have
advised or are advising the Company on other matters, and the Agents have no
obligation to the Company with respect to the transactions contemplated by this
Agreement except the obligations expressly set forth in this Agreement;

 

b.           it is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;

 

 33 

 

 

c.           the Agents have not provided any legal, accounting, regulatory or
tax advice with respect to the transactions contemplated by this Agreement and
the Company has consulted its own legal, accounting, regulatory and tax advisors
to the extent it has deemed appropriate;

 

d.           it is aware that each Agent and its affiliates are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and neither Agent has any obligation to disclose such interests
and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship or otherwise; and

 

e.           it waives, to the fullest extent permitted by law, any claims it
may have against the Agents for breach of fiduciary duty or alleged breach of
fiduciary duty in connection with the sale of Placement Shares under this
Agreement and agrees that the Agents shall not have any liability (whether
direct or indirect, in contract, tort or otherwise) to it in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on its
behalf or in right of it or the Company, employees or creditors of Company,
other than in respect of the Agents’ obligations under this Agreement and to
keep information provided by the Company to the Agents and their counsel
confidential to the extent not otherwise publicly-available.

 

25.         Definitions. As used in this Agreement, the following terms have the
respective meanings set forth below:

 

“Applicable Time” means (i) each Representation Date and (ii) the time of each
sale of any Placement Shares pursuant to this Agreement.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Placement Shares that (1) is required to be
filed with the Commission by the Company, (2) is a “road show” that is a
“written communication” within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission, or (3) is exempt from filing pursuant
to Rule 433(d)(5)(i) because it contains a description of the Placement Shares
or of the offering that does not reflect the final terms, in each case 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)
under the Securities Act.

 

“Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and
“Rule 433” refer to such rules under the Securities Act.

 

All references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that is incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.

 

All references in this Agreement to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to EDGAR; all references in
this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free
Writing Prospectuses that, pursuant to Rule 433, are not required to be filed
with the Commission) shall be deemed to include the copy thereof filed with the
Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any
supplements, “wrappers” or similar materials prepared in connection with any
offering, sale or private placement of any Placement Shares by the Agents
outside of the United States.

 

 34 

 

 

26.         No Partnership, Joint Venture, etc. Each of the Agents is engaged
hereunder severally and not as the partner, joint-venturer or joint participant
of any other Agent. No Agent undertakes to monitor, audit, investigate, question
or review the actions or performance of any other Agent. No Agent shall have
liability hereunder for the actions or omissions of any other Agent.

 

[Remainder of the page intentionally left blank]

 

 35 

 

 

If the foregoing correctly sets forth the understanding between the Company and
each of the Agents, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and each of the Agents.

 

  Very truly yours,             FUELCELL ENERGY, INC.             By: /s/
Michael S. Bishop       Name: Michael S. Bishop       Title:  Sr. Vice
President, CFO and Treasurer

 

  ACCEPTED as of the date first-above written:             B. RILEY FBR, INC.  
          By: /s/ Patrice McNicoll       Name:  Patrice McNicoll      
Title:  Co-Head of Investment Banking             OPPENHEIMER & CO. INC.        
    By: /s/ John R. Book       Name: John R. Book       Title: Managing Director

 

 36 

 

 

SCHEDULE 1

 

 

 

FORM OF PLACEMENT NOTICE

 

 

 

From: FuelCell Energy, Inc.     To: [B. Riley FBR, Inc.][Oppenheimer & Co. Inc.]
    Attention: [•]     Subject: At Market Issuance – Placement Notice

 

Ladies and Gentlemen:

 

Pursuant to the terms and subject to the conditions contained in the At Market
Issuance Sales Agreement between FuelCell Energy, Inc., a Delaware corporation
(the “Company”), and B. Riley FBR, Inc. (“BRFBR”) and Oppenheimer & Co. Inc.
(“Oppenheimer”; each of BRFBR and Oppenheimer individually an “Agent” and
collectively, the “Agents”), dated June 13, 2018, the Company hereby requests
that [identify Designated Agent] sell up to [___________] of the Company’s
Common Stock, par value $0.0001 per share, at a minimum market price of
$[______] per share, during the time period beginning on [month, day, time] and
ending on [month, day, time].

 

 37 

 

 

SCHEDULE 2

 

 

 

Compensation

 

 

 

The Company shall pay to the Designated Agent in cash, upon each sale of
Placement Shares pursuant to this Agreement, an amount equal to 3.0% of the
gross proceeds from each sale of Placement Shares.

 

 38 

 

 

SCHEDULE 3

 

 

 

Notice Parties

 

 

 

The Company:       Michael Bishop mbishop@fce.com     Daniel Case dcase@fce.com
    Jennifer Arasimowicz jarasimowicz@fce.com     BRFBR:       Matthew Feinberg
mfeinberg@brileyfbr.com       Ryan Loforte rloforte@brileyfbr.com     Patrice
McNicoll pmcnicoll@brileyfbr.com     Keith Pompliano kpompliano@brileyfbr.com  
  with a copy to atmdesk@brileyfbr.com     Oppenheimer:       John Book
john.book@opco.com     Michael Ashe michael.ashe@opco.com     Tiffani Lau
tiffani.lau@opco.com   Doug Cameron douglas.cameron@opco.com     Stephanie Cruz
stephanie.cruz@opco.com     Doron Barness doron.barness@opco.com     Matt Weitz
matthew.weitz@opco.com

 

with a copy to ecmexecution@opco.com and controlroom@opco.com

 

 39 

 

 

SCHEDULE 6(g)

 

 

 

Subsidiaries

 

 

 

Entity Name   State of Incorporation FuelCell Energy Finance, LLC   Connecticut

 

 40 

 

 

EXHIBIT 7(l)
Form of Representation Date Certificate

___________, 20___

 

This Representation Date Certificate (this “Certificate”) is executed and
delivered in connection with Section 7(l) of the At Market Issuance Sales
Agreement (the “Agreement”), dated June 13, 2018, between FuelCell Energy, Inc.,
a Delaware corporation (the “Company”), and B. Riley FBR, Inc. (“BRFBR”) and
Oppenheimer & Co. Inc. (“Oppenheimer”; each of BRFBR and Oppenheimer
individually an “Agent” and collectively, the “Agents”). All capitalized terms
used but not defined herein shall have the meanings given to such terms in the
Agreement.

 

The Company hereby certifies as follows:

 

1.          As of the date of this Certificate, (i) the Registration Statement
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, (ii) neither the Registration Statement nor
the Prospectus contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (iii) no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading for this paragraph 1 to be true.

 

2.          Each of the representations and warranties of the Company contained
in the Agreement were, when originally made, and are, as of the date of this
Certificate, true and correct in all material respects.

 

3.          Except as waived by the Agents in writing, each of the covenants
required to be performed by the Company in the Agreement on or prior to the date
of the Agreement, this Representation Date, and each such other date prior to
the date hereof as set forth in the Agreement, has been duly, timely and fully
performed in all material respects and each condition required to be complied
with by the Company on or prior to the date of the Agreement, this
Representation Date, and each such other date prior to the date hereof as set
forth in the Agreement has been duly, timely and fully complied with in all
material respects.

 

4.          Subsequent to the date of the most recent financial statements in
the Prospectus, and except as described in the Prospectus, including the
Incorporated Documents, there has been no Material Adverse Effect.

 

5.          No stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued, and, to the Company’s
knowledge, no proceedings for that purpose have been instituted or are pending
or threatened by any securities or other governmental authority (including,
without limitation, the Commission).

 

6.          No order suspending the effectiveness of the Registration Statement
or the qualification or registration of the Placement Shares under the
securities or Blue Sky laws of any jurisdiction are in effect and no proceeding
for such purpose is pending before, or threatened, to the Company’s knowledge or
in writing by, any securities or other governmental authority (including,
without limitation, the Commission).

 

 41 

 

 

The undersigned has executed this Representation Date Certificate as of the date
first written above.

 

  FUELCELL ENERGY, INC.         By:     Name:     Title:  

 

 

 

 

EXHIBIT 23

 

Permitted Issuer Free Writing Prospectuses

 

None.