Exhibit 10.1

 

OPEN MARKET SALE AGREEMENTSM

 

June 16, 2020

 

JEFFERIES LLC
520 Madison Avenue

New York, New York 10022

 

Ladies and Gentlemen:

 

FuelCell Energy, Inc., a Delaware corporation (the “Company”), proposes, subject
to the terms and conditions stated herein, to issue and sell from time to time
through Jefferies LLC, as sales agent and/or principal (the “Agent”), shares of
the Company’s common stock, par value $0.0001 per share (the “Common Shares”),
having an aggregate offering price of up to $75,000,000 on the terms set forth
in this agreement (this “Agreement”).

 

Section 1. DEFINITIONS

 

(a)               Certain Definitions. For purposes of this Agreement,
capitalized terms used herein and not otherwise defined shall have the following
respective meanings:

 

“Affiliate” of a Person means another Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first- mentioned Person. The term “control” (including
the terms “controlling,” “controlled by” and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Agency Period” means the period commencing on the date of this Agreement and
expiring on the earliest to occur of (x) the date on which the Agent shall have
placed the Maximum Program Amount pursuant to this Agreement and (y) the date
this Agreement is terminated pursuant to Section 7.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder.

 

“Floor Price” means the minimum price set by the Company in the Issuance Notice
below which the Agent shall not sell Shares during the applicable period set
forth in the Issuance Notice, which may be adjusted by the Company at any time
during the period set forth in the Issuance Notice by delivering written notice
of such change to the Agent.

 

 

 

SM“Open Market Sale Agreement” is a service mark of Jefferies LLC

 

 

 

 

“Issuance Amount” means the aggregate Sales Price of the Shares to be sold by
the Agent pursuant to any Issuance Notice.

 

“Issuance Notice” means a written notice delivered to the Agent by the Company
in accordance with this Agreement in the form attached hereto as Exhibit A that
is executed by its Chief Executive Officer, President or Chief Financial
Officer.

 

“Issuance Notice Date” means any Trading Day during the Agency Period that an
Issuance Notice is delivered pursuant to Section 3(b)(i).

 

“Issuance Price” means the Sales Price less the Selling Commission.

 

“Maximum Program Amount” means Common Shares with an aggregate Sales Price of
the lesser of (a) the number or dollar amount of Common Shares registered under
the effective Registration Statement (defined below) pursuant to which the
offering is being made, (b) the number of authorized but unissued Common Shares
(less Common Shares issuable upon exercise, conversion or exchange of any
outstanding securities of the Company or otherwise reserved from the Company’s
authorized capital stock), (c) the number or dollar amount of Common Shares
permitted to be sold under Form S-3 (including General Instruction I.B.6
thereof, if applicable), or (d) the number or dollar amount of Common Shares for
which the Company has filed a Prospectus (defined below).

 

“Person” means an individual or a corporation, partnership, limited liability
company, trust, incorporated or unincorporated association, joint venture, joint
stock company, governmental authority or other entity of any kind.

 

“Principal Market” means the Nasdaq Global Market or such other national
securities exchange on which the Common Shares, including any Shares, are then
listed.

 

“Sales Price” means the actual sale execution price of each Share placed by the
Agent pursuant to this Agreement.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.

 

“Selling Commission” means three percent (3%) of the gross proceeds of Shares
sold pursuant to this Agreement, or as otherwise agreed between the Company and
the Agent with respect to any Shares sold pursuant to this Agreement.

 

“Settlement Date” means the second business day following each Trading Day
during the period set forth in the Issuance Notice on which Shares are sold
pursuant to this Agreement, when the Company shall deliver to the Agent the
amount of Shares sold on such Trading Day and the Agent shall deliver to the
Company the Issuance Price received on such sales.

 

“Shares” shall mean the Company’s Common Shares issued or issuable pursuant to
this Agreement.

 

“Trading Day” means any day on which the Principal Market is open for trading.

 

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Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to, and agrees with, the Agent that as of
(1) the date of this Agreement, (2) each Issuance Notice Date, (3) each
Settlement Date, (4) each Triggering Event Date (defined below) with respect to
which the Company is obligated to deliver a certificate pursuant to Section 4(o)
for which no waiver is applicable and (5) as of each Time of Sale (each of the
times referenced above is referred to herein as a “Representation Date”), except
as may be disclosed in the Prospectus (including any documents either now or in
the future incorporated by reference therein and any supplements thereto) on or
before a Representation Date:

 

(a)               Registration Statement. The Company has prepared and filed
with the Commission a shelf registration statement on Form S-3 (File
No. 333-226792) that contains a base prospectus (the “Base Prospectus”). Such
registration statement registers the issuance and sale by the Company of the
Shares under the Securities Act. The Company may file one or more additional
registration statements from time to time that will contain a base prospectus
and related prospectus or prospectus supplement, if applicable, with respect to
the Shares. Except where the context otherwise requires, such registration
statement(s), including any information deemed to be a part thereof pursuant to
Rule 430B under the Securities Act, including all financial statements, exhibits
and schedules thereto and all documents incorporated or deemed to be
incorporated therein by reference pursuant to Item 12 of Form S-3 under the
Securities Act as from time to time amended or supplemented, is herein referred
to as the “Registration Statement,” and the base prospectus constituting a part
of such registration statement(s), together with any prospectus supplement filed
with the Commission pursuant to Rule 424(b) under the Securities Act relating to
a particular issuance of the Shares, including all documents incorporated or
deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3
under the Securities Act, in each case, as from time to time amended or
supplemented, is referred to herein as the “Prospectus,” except that if any
revised prospectus is provided to the Agent by the Company for use in connection
with the offering of the Shares that is not required to be filed by the Company
pursuant to Rule 424(b) under the Securities Act, the term “Prospectus” shall
refer to such revised prospectus from and after the time it is first provided to
the Agent for such use. The Registration Statement at the time it originally
became effective is herein called the “Original Registration Statement.” As used
in this Agreement, the terms “amendment” or “supplement” when applied to the
Registration Statement or the Prospectus shall be deemed to include the filing
by the Company with the Commission of any document under the Exchange Act after
the date hereof that is or is deemed to be incorporated therein by reference.

 

All references in this Agreement to financial statements and schedules and other
information which 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 which is or is deemed to be incorporated by reference in or
otherwise deemed under the Securities Act to be a part of or included in the
Registration Statement or the Prospectus, as the case may be, as of any
specified date; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include, without limitation, the filing of any document under the
Exchange Act which is or is deemed to be incorporated by reference in or
otherwise deemed under the Securities Act to be a part of or included in the
Registration Statement or the Prospectus, as the case may be, as of any
specified date. The Company’s obligations under this Agreement to furnish,
provide, deliver or make available (and all other references of like import)
copies of any report or statement shall be deemed satisfied if the same is filed
with the Commission through its Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”) (except that, upon the Agent’s request, the Company
shall provide a printed copy of the Registration Statement and of any amendment
or supplement thereto with signatures in PDF format).

 

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At the time the Registration Statement was or will be originally declared
effective and at the time the Company’s most recent annual report on Form 10-K
was filed with the Commission, if later, the Company met the then-applicable
requirements for use of Form S-3 under the Securities Act. During the Agency
Period, each time the Company files an annual report on Form 10-K the Company
will meet the then-applicable requirements for use of Form S-3 under the
Securities Act.

 

(b)               Compliance with Registration Requirements. The Original
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company has
complied to the Commission’s satisfaction with all requests of the Commission
for additional or supplemental information with respect thereto. No stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the knowledge of the Company, are
contemplated or threatened by the Commission.

 

The Prospectus when filed complied in all material respects with the Securities
Act and, if filed with the Commission through EDGAR (except as may be permitted
by Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Agent for use in connection with the issuance and sale of the
Shares. Each of the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto, at the time it became
effective and at each Representation Date, complied and will comply in all
material respects with the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading. As
of the date of this Agreement, the Prospectus and any Free Writing Prospectus
(as defined below) considered together (collectively, the “Time of Sale
Information”) did not contain any 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 under which they were made, not misleading. The Prospectus, as
amended or supplemented, as of its date and at each Representation Date, did not
and will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the three immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information relating to the Agent
furnished to the Company in writing by the Agent expressly for use therein, it
being understood and agreed that the only such information furnished by the
Agent to the Company consists of the information described in Section 6 below.
There are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which have
not been described or filed as required. The Registration Statement and the
offer and sale of the Shares as contemplated hereby meet the requirements of
Rule 415 under the Securities Act and comply in all material respects with said
rule.

 

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(c)               Ineligible Issuer Status. The Company is not an “ineligible
issuer” in connection with the offering of the Shares pursuant to Rules 164, 405
and 433 under the Securities Act. Any Free Writing Prospectus that the Company
is required to file pursuant to Rule 433(d) under the Securities Act has been,
or will be, filed with the Commission in accordance with the requirements of the
Securities Act. Each Free Writing Prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company complies or
will comply in all material respects with the requirements of Rule 433 under the
Securities Act including timely filing with the Commission or retention where
required and legending, and each such Free Writing Prospectus, as of its issue
date and at all subsequent times through the completion of the issuance and sale
of the Shares did not, does not and will not include any information that
conflicted, conflicts with or will conflict with the information contained in
the Registration Statement or the Prospectus, including any document
incorporated by reference therein. Except for the Free Writing Prospectuses, if
any, and electronic road shows, if any, furnished to you before first use, the
Company has not prepared, used or referred to, and will not, without your prior
consent, prepare, use or refer to, any Free Writing Prospectus.

 

(d)               Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were filed with the Commission, complied in all
material respects with the requirements of the Exchange Act, as applicable, and,
when read together with the other information in the Prospectus, do not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.

 

(e)               Exchange Act Compliance. The documents incorporated or deemed
to be incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, and any Free Writing Prospectus or
amendment or supplement thereto complied and will comply in all material
respects with the requirements of the Exchange Act, and, when read together with
the other information in the Prospectus, at the time the Registration Statement
and any amendments thereto become effective and at each Time of Sale (as defined
below), as the case may be, 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, in light of the circumstances under which they
were made, not misleading.

 

(f)                Statistical and Market-Related Data. All statistical,
demographic and market-related data included in the Registration Statement or
the Prospectus are based on or derived from sources that the Company believes to
be reliable and accurate.

 

(g)               Disclosure Controls and Procedures; Deficiencies in or Changes
to Internal Control Over Financial Reporting. The Company has established and
maintains disclosure controls and procedures (as defined in Rules 13a-15 and
15d-15 under the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries,
and required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is communicated to the Company’s principal
executive officer and its principal financial officer by others within those
entities, as appropriate to allow timely decisions regarding required
disclosure; (ii) have been evaluated by management of the Company for
effectiveness as of the end of the Company’s most recent fiscal quarter; and
(iii) except as otherwise disclosed in the Registration Statement and the
Prospectus, are effective in all material respects to perform the functions for
which they were established. Except as otherwise disclosed in the Registration
Statement and the Prospectus, since the end of the Company’s most recent audited
fiscal year, there have been no significant deficiencies or material weaknesses
in the Company’s internal control over financial reporting (whether or not
remediated) and 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. The Company is
not aware of any change in its internal control over financial reporting (other
than as may be otherwise disclosed in the Registration Statement or the
Prospectus) that has occurred during its most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.

 

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(h)                This Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.

 

(i)                 Authorization of the Shares. The Shares have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company against payment therefor pursuant to this Agreement,
will be validly issued, fully paid and nonassessable, and the issuance and sale
of the Shares is not subject to any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase the Shares.

 

(j)                 No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or included
in the offering contemplated by this Agreement, except for such rights as have
been duly waived.

 

(k)               No Material Adverse Change. Except as otherwise disclosed in
the Registration Statement and the Prospectus, since the date of the most recent
financial statements of the Company included or incorporated by reference in the
Registration Statement and the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to result
in a material adverse change, in (A) the condition, financial or otherwise, or
in the earnings, business, properties, operations, operating results, assets,
liabilities or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity or (B) the ability of the Company to consummate the transactions
contemplated by this Agreement or perform its obligations hereunder (any such
change being referred to herein as a “Material Adverse Change”); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, whether or not
covered by insurance, that is material, individually or in the aggregate, to the
Company and its subsidiaries, considered as one entity, and have not entered
into any transactions not in the ordinary course of business; and (iii) there
has not been any material decrease in the capital stock or any material increase
in any short-term or long-term indebtedness of the Company or its subsidiaries
and there has been no dividend or distribution of any kind declared, paid or
made by the Company or, except for dividends paid to the Company or other
subsidiaries, by any of the Company’s subsidiaries on any class of capital
stock, or any repurchase or redemption by the Company or any of its subsidiaries
of any class of capital stock.

 

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(l)                 Independent Accountants. KPMG LLP, who has certified certain
financial statements (which term as used in this Agreement includes the related
notes thereto) of the Company and its subsidiaries, is an independent registered
public accounting firm with respect to the Company and its subsidiaries within
the applicable rules and regulations adopted by the Commission and the Public
Company Accounting Oversight Board (United States) and as required by the
Securities Act.

 

(m)               Financial Statements. The financial statements 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 its subsidiaries as of the
dates indicated and the results of their operations, changes in stockholders’
equity and cash flows for the periods specified. Such financial statements and
supporting schedules have been prepared 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 throughout the periods involved, except
for (i) any adjustments as may be expressly stated in the related notes thereto
and (ii) in the case of unaudited statements, to the extent they may exclude
footnotes or may be condensed or summary statements. The interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the Registration Statement fairly presents the information called for in all
material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto. No other financial statements or
supporting schedules are required to be included in the Registration Statement
or the Prospectus. The financial data set forth in each of the Registration
Statement and the Prospectus under the caption “Selected Financial Data” fairly
present the information set forth therein on a basis consistent with that of the
audited financial statements contained in the Registration Statement and the
Prospectus. All disclosures contained in the Registration Statement and the
Prospectus that constitute non-GAAP financial measures (as defined by the rules
and regulations under the Securities Act and the Exchange Act) comply with
Regulation G under the Exchange Act and Item 10 of Regulation S-K under the
Securities Act, as applicable. To the Company’s knowledge, no person who has
been suspended or barred from being associated with a registered public
accounting firm, or who has failed to comply with any sanction pursuant to Rule
5300 promulgated by Public Company Accounting Oversight Board (“PCAOB”), has
participated in or otherwise aided the preparation of, or audited, the financial
statements, supporting schedules or other financial data filed with the
Commission as a part of the Registration Statement and the Prospectus.

 

(n)               Company’s Accounting System. The Company, for itself and its
consolidated subsidiaries, makes and keeps accurate books and records and
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences; and (v) the interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the Registration Statement and the Prospectus fairly presents the information
called for in all material respects and is prepared in accordance with the
Commission's rules and guidelines applicable thereto.

 

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(o)               Incorporation and Good Standing of the Company. The Company
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation and has the
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus and to enter into and perform its obligations under this Agreement.
The Company is duly qualified as a foreign corporation to transact business and
is in good standing in the State of Connecticut and each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to be
so qualified or in good standing, individually or in the aggregate, would not
result in a Material Adverse Change.

 

(p)               Subsidiaries. Each “significant subsidiary” (as such term is
defined in Rule 1-02 of Regulation S-X) of the Company (each a “Subsidiary” and,
collectively, the “Subsidiaries”) has been duly incorporated or organized, as
the case may be, and is validly existing as a corporation, partnership or
limited liability company, as applicable, in good standing under the laws of the
jurisdiction of its incorporation or organization and has the power and
authority (corporate or other) to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus. Each of the Company’s Subsidiaries is duly qualified as a foreign
corporation, partnership or limited liability company, as applicable, to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to be so qualified
or in good standing would not result in a Material Adverse Change. All of the
issued and outstanding capital stock or other equity or ownership interests of
each of the Company’s Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and are owned by the Company, directly or
through Subsidiaries, and, except as otherwise disclosed in the Registration
Statement and the Prospectus, is free and clear of any security interest,
mortgage, pledge, lien, encumbrance or adverse claim. None of the outstanding
capital stock or equity interest in any Subsidiary was issued in violation of
preemptive or similar rights of any security holder of such Subsidiary. The
constitutive or organizational documents of each of the Subsidiaries comply in
all material respects with the requirements of applicable laws of its
jurisdiction of incorporation or organization and are in full force and effect.
The Company does not own or control, directly or indirectly, any corporation,
association or other entity other than (a) the entities listed in Exhibit 21 to
the Company’s Annual Report on Form 10-K for the fiscal year ended October 31,
2019 and (b) certain other subsidiaries not listed on such Exhibit 21 which,
considered in the aggregate as a single entity, do not constitute a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X.

 

(q)                Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus (other than (i) subsequent grants of equity awards under the
stock option or equity incentive plans described in the Registration Statement
and the Prospectus, (ii) subsequent changes in the number of outstanding Common
Shares due to the issuance of Common Shares upon the exercise or conversion of
securities exercisable for, or convertible into, Common Shares described in the
Registration Statement and the Prospectus, (iii) as a result of the issuance of
Shares hereunder, (v) as a result of the issuance of Common Shares under the
employee stock purchase plan described in the Registration Statement and the
Prospectus, or (vi) any repurchases of capital stock of the Company). The Common
Shares (including the Shares) conform in all material respects to the
description thereof contained in the Prospectus. Except with respect to the
Company’s “at the market” program in place from August 2005 to April 2017, all
of the issued and outstanding Common Shares have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with all federal and state securities laws. None of the outstanding
Common Shares was issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its subsidiaries other than those described in
the Registration Statement and the Prospectus. The descriptions of the Company’s
stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in the Registration Statement and
the Prospectus accurately and fairly presents in all material respects the
information required to be shown with respect to such plans, arrangements,
options and rights.

 

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(r)                Stock Exchange Listing. The Common Shares are registered
pursuant to Section 12(b) or 12(g) of the Exchange Act and are listed on the
Principal Market, and the Company has taken no action intended to result in, or
likely to have the effect of, terminating the registration of the Common Shares
under the Exchange Act or delisting the Common Shares from the Principal Market,
nor has the Company received any written notification that the Commission or the
Principal Market is contemplating terminating such registration or listing. To
the Company’s knowledge, it is in compliance, in all material respects, with all
applicable listing requirements of the Principal Market.

 

(s)                 Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws, partnership agreement or
operating agreement or similar organizational documents, as applicable, or is in
default (or, with the giving of notice or lapse of time, would be in default)
(“Default”) under any indenture, loan, credit agreement, note, lease, license
agreement, contract, franchise or other instrument (including, without
limitation, any pledge agreement, security agreement, mortgage or other
instrument or agreement evidencing, guaranteeing, securing or relating to
indebtedness) to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of their respective
properties or assets are subject (each, an “Existing Instrument”), except for
such Defaults that, individually or in the aggregate, would not be reasonably
expected to result in a Material Adverse Change. The Company’s execution,
delivery and performance of this Agreement, consummation of the transactions
contemplated hereby and by the Registration Statement and the Prospectus and the
issuance and sale of the Shares (including the use of proceeds from the sale of
the Shares as described in the Prospectus under the caption “Use of Proceeds”)
(i) have been duly authorized by all necessary corporate action and will not
result in any violation of the provisions of the charter or by-laws, partnership
agreement or operating agreement or similar organizational documents, as
applicable, of the Company or any subsidiary, (ii) will not conflict with or
constitute a breach of, or Default or a Debt Repayment Triggering Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company or any of its subsidiaries, except in the cases of clauses (ii) and
(iii) above, where such conflicts, breaches, Defaults, violations, or other
occurrences, individually or in the aggregate, would not be reasonably expected
to result in a Material Adverse Change. No consent, approval, authorization or
other order of, or registration or filing with, any court or other governmental
or regulatory authority or agency, is required for the Company’s execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Registration Statement and the Prospectus, except
such (i) as have been obtained or made by the Company and are in full force and
effect under the Securities Act, (ii) such filings as have been made (and as of
the date of this Agreement are still under review) under, or are not yet
required to be made under, the rules and regulations of The Nasdaq Stock Market,
and (iii) such as may be required under applicable state securities or blue sky
laws or by FINRA (as defined below). As used herein, a “Debt Repayment
Triggering Event” means any event or condition which gives, or with the giving
of notice or lapse of time would give, the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries, but excluding
the requirement to prepay the Secondary Facility Loan Commitment (as defined in
the Prospectus) between the Company and Orion Energy Partners Investment Agent,
LLC and its affiliated lenders, as described in the Registration Statement and
the Prospectus.

 

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(t)                 No Material Actions or Proceedings. Except as otherwise
disclosed in the Prospectus, there is no (i) action, suit, proceeding, inquiry
or investigation brought by or before any legal or governmental entity now
pending or, to the knowledge of the Company, threatened, against or adversely
affecting the Company or any of its subsidiaries, or (ii) material labor dispute
with the employees of the Company or any of its subsidiaries, or with the
employees of any principal supplier, manufacturer, customer or contractor of the
Company, which exists or, to the knowledge of the Company, is threatened or
imminent, in each case which, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Change.

 

(u)                Intellectual Property Rights. Except as otherwise disclosed
in the Registration Statement or the Prospectus, the Company and its
subsidiaries own, or have obtained valid and enforceable licenses for, the
inventions, patent applications, patents, trademarks, trade names, service
names, copyrights, trade secrets and other intellectual property described in
the Registration Statement and the Prospectus as being owned or licensed by them
or which are necessary for the conduct of their respective businesses as
currently conducted or as currently proposed to be conducted (collectively,
“Intellectual Property”), except to the extent the failure to own or possess
adequate rights to such Intellectual Property, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Change. Neither
the Company nor any of its subsidiaries has received any written notice that the
conduct of their respective businesses infringes, misappropriates or otherwise
conflicts in any material respect with any such rights of others. The
Intellectual Property of the Company has not been adjudged by a court of
competent jurisdiction to be invalid or unenforceable, in whole or in part, and
the Company is unaware of any facts which would form a reasonable basis for any
such adjudication. To the Company's knowledge: (i) there are no third parties
who have rights to any Intellectual Property, except for customary reversionary
rights of third-party licensors with respect to Intellectual Property that is
disclosed in the Registration Statement and the Prospectus as licensed to the
Company or one or more of its subsidiaries, and (ii) except as set forth in the
Registration Statement and the Prospectus, there is no infringement by third
parties of any Intellectual Property. There is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others:
(A) challenging the Company’s rights in or to any Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such
action, suit, proceeding or claim; (B) challenging the validity, enforceability
or scope of any Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such action, suit, proceeding or
claim; or (C) asserting that the Company or any of its subsidiaries infringes or
otherwise violates, or would, upon the commercialization of any product or
service described in the Registration Statement or the Prospectus as under
development, infringe or violate, any patent, trademark, trade name, service
name, copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any facts which would form a reasonable basis for any such
action, suit, proceeding or claim, except, in each case, where such action,
suit, proceeding or claim would not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Change. The Company and its
subsidiaries have complied with the terms of each agreement pursuant to which
Intellectual Property has been licensed to the Company or any subsidiary, and
all such agreements are in full force and effect, except where the failure to
comply would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change. To the Company’s knowledge, there are no
material defects in any of the patents or patent applications included in the
Intellectual Property. The Company and its subsidiaries have taken all
reasonable steps to protect, maintain and safeguard their Intellectual Property,
including the execution of appropriate nondisclosure, confidentiality and
invention assignment agreements with their employees, and, to the Company’s
knowledge, no employee of the Company is in or has been in violation of any term
of any employment contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement, or any restrictive covenant to or with a former employer where the
basis of such violation relates to such employee’s employment with the Company.
The product candidates described in the Registration Statement and the
Prospectus as under development by the Company or any subsidiary fall within the
scope of the claims of one or more patents owned by, or exclusively licensed to,
the Company or any subsidiary.

 

  10 

 

 

(v)               All Necessary Permits, etc. Except as otherwise disclosed in
the Prospectus, (i) the Company and each subsidiary possess such valid and
current certificates, authorizations or permits required by state, federal or
foreign regulatory agencies or bodies to conduct their respective businesses as
currently conducted and as described in the Registration Statement or the
Prospectus (“Permits”), and (ii) neither the Company nor any of its subsidiaries
is in violation of, or in default under, any of the Permits or has received
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit, except where
the failure to have such certificates, authorizations or permits or such
violation, default, revocation, modification or non-compliance, individually or
in the aggregate, would not reasonably be expected to result in a Material
Adverse Change.

 

(w)             Title to Properties. Except as otherwise disclosed in the
Prospectus, the Company and its subsidiaries have good and marketable title to
all of the real and personal property and other assets reflected as owned in the
most recent financial statements of the Company incorporated by reference in the
Registration Statement and the Prospectus (other than property and/or assets
held by the Company pursuant to sale-leaseback transactions), in each case free
and clear of any security interests, mortgages, liens, encumbrances, equities,
adverse claims and other defects, except those that (i) do not materially
interfere with the use made and proposed to be made of such property and assets
by the Company and its subsidiaries or (ii) would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse Change.
The real property, improvements, equipment and personal property held under
lease by the Company or any of its subsidiaries are held under valid and
enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the Company or such
subsidiary.

 

(x)               Tax Law Compliance. The Company and its subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns
or have properly requested extensions thereof and have paid all taxes required
to be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them except as may be being
contested in good faith and by appropriate proceedings, except where such
failure would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 2(m) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company or
any of its subsidiaries has not been finally determined.

 

  11 

 

 

(y)               Company Not an “Investment Company.” The Company is not, and
will not be, either after receipt of payment for the Shares or after the
application of the proceeds therefrom as described under “Use of Proceeds” in
the Prospectus, required to register as an “investment company” under the
Investment Company Act of 1940, as amended (the “Investment Company Act”).

 

(z)                Insurance. The Company and its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as the Company and
its subsidiaries reasonably believe are adequate for the conduct of their
business, provided by recognized, financially sound and reputable institutions.
Neither the Company nor any of its subsidiaries has received written notice that
it will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not reasonably be expected to result in a
Material Adverse Change.

 

(aa)            No Price Stabilization or Manipulation; Compliance with
Regulation M. Neither the Company nor any of its subsidiaries has taken,
directly or indirectly, any action designed to or that might cause or result in
stabilization or manipulation of the price of the Common Shares or of any
“reference security” (as defined in Rule 100 of Regulation M under the Exchange
Act (“Regulation M”)) with respect to the Common Shares, whether to facilitate
the sale or resale of the Shares or otherwise, or has taken any action which
would directly or indirectly violate Regulation M.

 

(bb)           Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any of its subsidiaries
or any other person required to be described in the Registration Statement or
the Prospectus which have not been described as required.

 

(cc)            FINRA Matters. All of the information provided to the Agent or
to counsel for the Agent by the Company, its counsel, its officers and directors
and the holders of any securities (debt or equity) or options to acquire any
securities of the Company in connection with the offering of the Shares is true,
complete, correct and compliant with Financial Industry Regulatory Authority,
Inc.’s (“FINRA”) rules and any letters, filings or other supplemental
information provided to FINRA pursuant to FINRA Rules or NASD Conduct Rules is
true, complete and correct. The Company meets the requirements for use of Form
S-3 under the Securities Act specified in FINRA Rule 5110(b)(7)(C)(i).

 

(dd)           No Unlawful Contributions or Other Payments. Except as otherwise
disclosed in the Prospectus, neither the Company nor any of its subsidiaries
nor, to the Company’s knowledge, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official of, or
candidate for, any federal, state or foreign office in violation of any law or
of the character required to be disclosed in the Registration Statement and the
Prospectus.

 

  12 

 

 

(ee)            Compliance with Environmental Laws. Except as described in the
Prospectus or except as would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change: (i) neither the
Company nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance, in
all material respects, with their requirements, (iii) there are no pending, or
to the Company’s knowledge, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (iv) the Company has not
received written notice of any pending or potential order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

(ff)              ERISA Compliance. Except as otherwise disclosed in the
Prospectus or as would not, either individually or in the aggregate, reasonably
be expected to result in a Material Adverse Change, any “employee benefit plan”
(as defined under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, “ERISA”)) established or maintained by the Company, its
subsidiaries or their “ERISA Affiliates” (as defined below) (each a “Company
Benefit Plan”) are in compliance in all material respects with ERISA. “ERISA
Affiliate” means, with respect to the Company or any of its subsidiaries, any
member of any group of organizations described in Sections 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the “Code”) of which the Company or such
subsidiary is a member. No “reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any Company Benefit
Plan that is subject to Title IV of ERISA. No Company Benefit Plan that is
subject to Title IV of ERISA, if such plan were terminated, would have any
“amount of unfunded benefit liabilities” (as defined under ERISA) that would
reasonable be expected to result in a Material Adverse Change. Except as would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change, neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur any liability
with respect to any Company Benefit Plan under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, such plan or (ii) Sections 412,
4971, or 4975 of the Code. Each Company Benefit Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification.

 

(gg)           Brokers. Except as otherwise disclosed in the Prospectus, there
is no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.

 

  13 

 

 

(hh)           No Outstanding Loans or Other Extensions of Credit. The Company
does not have any outstanding extension of credit, in the form of a personal
loan, to or for any director or executive officer (or equivalent thereof) of the
Company, except for such extensions of credit as are expressly permitted by
Section 13(k) of the Exchange Act.

 

(ii)              Compliance with Laws. The Company and its subsidiaries have
been and are in compliance with all applicable laws, rules and regulations,
except where failure to be so in compliance would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change.

 

(jj)              Dividend Restrictions. Except as disclosed in the Prospectus,
and except with respect to subsidiaries subject to customary project finance
dividend restrictions and foreign subsidiaries, no subsidiary of the Company is
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such subsidiary’s
equity securities or from repaying to the Company or any other subsidiary of the
Company any amounts that may from time to time become due under any loans or
advances to such subsidiary from the Company or from transferring any property
or assets to the Company or to any other subsidiary.

 

(kk)           Anti-Corruption and Anti-Bribery Laws. Neither the Company nor
any of its subsidiaries nor, to the knowledge of the Company, any director,
officer, or employee of the Company or any of its subsidiaries or any agent,
affiliate or other person acting on behalf of the Company or any of its
subsidiaries has, in the course of its actions for, or on behalf of, the Company
or any of its subsidiaries: (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made or taken any act in furtherance of an offer,
promise, or authorization of any direct or indirect unlawful payment or benefit
to any foreign or domestic government official or employee, including of any
government-owned or controlled entity or public international organization, or
any political party, party official, or candidate for political office;
(iii) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended (the “FCPA”), or any other applicable
anti-bribery or anti-corruption law; or (iv) made, offered, authorized,
requested, or taken an act in furtherance of any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment or benefit. The Company
and its subsidiaries and, to the knowledge of the Company, the Company’s
affiliates have conducted their respective businesses in compliance with the
FCPA and have instituted and maintain policies and procedures designed to ensure
continued compliance therewith.

 

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

 

  14 

 

 

(mm)      Sanctions. Neither the Company nor any of its subsidiaries, nor, to
the knowledge of the Company, any of its directors, officers, employees, agents,
affiliates or other persons acting on behalf of the Company or any of its
subsidiaries is currently the subject or the target of any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Department of
the Treasury (“OFAC”) or the U.S. Department of State, the United Nations
Security Council, the European Union, Her Majesty’s Treasury of the United
Kingdom, or other relevant sanctions authority (collectively, “Sanctions”); nor
is the Company or any of its subsidiaries located, organized or resident in a
country or territory that is the subject or the target of Sanctions, including,
without limitation, Crimea, Cuba, Iran, North Korea, and Syria; and the Company
will not directly or indirectly, use the proceeds of this offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary, or any
joint venture partner or other person or entity (i) for the purpose of financing
the activities of or business with any person, or in any country or territory,
that at the time of such financing, is the subject or the target of Sanctions,
or (ii) in any other manner that will result in a violation by any person
(including any person participating in the transaction whether as underwriter,
advisor, investor or otherwise) of applicable Sanctions. For the past five
years, the Company and its subsidiaries have not knowingly engaged in and are
not now knowingly engaged in any dealings or transactions with any person that
at the time of the dealing or transaction is or was the subject or the target of
Sanctions or with any sanctioned country (including Cuba, Iran, North Korea,
Sudan, Syria and the Crimea Region of the Ukraine).

 

(nn)           Sarbanes-Oxley. The Company is in compliance, in all material
respects, with all applicable provisions of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated thereunder.

 

(oo)           Duties, Transfer Taxes, Etc. No stamp or other issuance or
transfer taxes or duties and no capital gains, income, withholding or other
taxes are payable by the Agent in the United States or any political subdivision
or taxing authority thereof or therein in connection with the execution,
delivery or performance of this Agreement by the Company or the sale and
delivery by the Company of the Shares.

 

(pp)           Cybersecurity. The Company and its subsidiaries’ information
technology assets and equipment, computers, systems, networks, hardware,
software, websites, applications, and databases (collectively, “IT Systems”) are
adequate for, and operate and perform in all material respects as required in
connection with the operation of the business of the Company and its
subsidiaries as currently conducted, and, to the Company’s knowledge, are free
and clear of all material bugs, errors, defects, Trojan horses, time bombs,
malware and other corruptants, except as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Change. The
Company and its subsidiaries have implemented and maintained commercially
reasonable physical, technical and administrative controls, policies,
procedures, and safeguards to maintain and protect their material confidential
information and the integrity, continuous operation, redundancy and security of
all IT Systems and data, including “Personal Data,” used in connection with
their businesses, except where the failure to so implement and maintain would
not reasonably be expected to result in a Material Adverse Change. “Personal
Data” means (i) a natural person’s name, street address, telephone number,
e-mail address, photograph, social security number or tax identification number,
driver’s license number, passport number, credit card number, bank information,
or customer or account number; (ii) any information which would qualify as
“personally identifying information” under the Federal Trade Commission Act, as
amended; (iii) “personal data” as defined by GDPR (as defined below); (iv) any
information which would qualify as “protected health information” under the
Health Insurance Portability and Accountability Act of 1996, as amended by the
Health Information Technology for Economic and Clinical Health Act
(collectively, “HIPAA”); and (v) any other piece of information that allows the
identification of such natural person, or his or her family, or permits the
collection or analysis of any data related to an identified person’s health or
sexual orientation. To the Company’s knowledge, there have been no breaches,
violations, outages or unauthorized uses of or accesses to same, except for
those that have been remedied without material cost or liability or the duty to
notify any other person, nor any incidents under internal review or
investigations relating to the same. The Company and its subsidiaries are
presently in material compliance with all applicable laws or statutes and all
judgments, orders, rules and regulations of any court or arbitrator or
governmental or regulatory authority, internal policies and contractual
obligations relating to the privacy and security of IT Systems and Personal Data
and to the protection of such IT Systems and Personal Data from unauthorized
use, access, misappropriation or modification, except as would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Change.

 

  15 

 

 

(qq)            Compliance with Data Privacy Laws. Except as would not,
individually or in the aggregate, reasonably be expected to result a Material
Adverse Change, (i) the Company and its subsidiaries are in material compliance
with all applicable state and federal data privacy and security laws and
regulations, including without limitation HIPAA, and (ii) the Company and its
subsidiaries have taken commercially reasonable actions to prepare to comply
with, and since May 25, 2018, have been and currently are in compliance with,
the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679)
(collectively, the “Privacy Laws”). To ensure compliance with the Privacy Laws,
the Company and its subsidiaries have in place, comply with, and take
appropriate steps reasonably designed to ensure compliance in all material
respects with their policies and procedures relating to data privacy and
security and the collection, storage, use, disclosure, handling, and analysis of
Personal Data (the “Policies”). The Company and its subsidiaries have made all
disclosures to users or customers required by applicable Privacy Laws and
regulatory rules or requirements, and none of such disclosures made or contained
in any Policy have, to the knowledge of the Company, been inaccurate or in
violation of any applicable laws and regulatory rules or requirements in any
material respect. The Company further certifies that neither it nor any
subsidiary: (i) has received written notice of any actual or potential liability
under or relating to, or actual or potential violation of, any of the Privacy
Laws and has no knowledge of any event or condition that would reasonably be
expected to result in any such notice; (ii) is currently conducting or paying
for, in whole or in part, any investigation, remediation, or other corrective
action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or
agreement that imposes any obligation or liability under any Privacy Law.

 

(rr)              Other Underwriting Agreements. The Company is not a party to
any agreement with an agent or underwriter for any other “at the market” or
continuous equity transaction.

 

Any certificate signed by any officer of the Company or any of its subsidiaries
and delivered to the Agent or counsel for the Agent in connection with an
issuance of Shares shall be deemed a representation and warranty by the Company
to the Agent as to the matters covered thereby on the date of such certificate.

 

The Company acknowledges that the Agent and, for purposes of the opinions to be
delivered pursuant to Section 4(o) hereof, counsel to the Company and counsel to
the Agent, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.

 

  16 

 

 

Section 3. ISSUANCE AND SALE OF COMMON SHARES

 

(a)               Sale of Securities. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company and the Agent agree that the Company
may from time to time seek to sell Shares through the Agent, acting as sales
agent, or directly to the Agent, acting as principal, as follows, with an
aggregate Sales Price of up to the Maximum Program Amount, based on and in
accordance with such Issuance Notices as the Company may deliver, during the
Agency Period.

 

(b)               Mechanics of Issuances.

 

(i)        Issuance Notice. Upon the terms and subject to the conditions set
forth herein, on any Trading Day during the Agency Period on which the
conditions set forth in Section 5(a) and Section 5(b) shall have been satisfied,
the Company may exercise its right to request an issuance of Shares by
delivering to the Agent an Issuance Notice; provided, however, that (A) in no
event may the Company deliver an Issuance Notice to the extent that the sum of
(x) the aggregate Sales Price of the requested Issuance Amount, plus (y) the
aggregate Sales Price of all Shares issued under all previous Issuance Notices
effected pursuant to this Agreement, would exceed the Maximum Program Amount;
and (B) prior to delivery of any Issuance Notice, the period set forth for any
previous Issuance Notice shall have expired or been terminated. An Issuance
Notice shall be considered delivered on the Trading Day on which it is received
by e-mail to the persons set forth in Schedule A hereto and confirmed by the
Company by telephone (including a voicemail message to the persons so
identified), with the understanding that, with adequate prior written notice,
the Agent may modify the list of such persons from time to time.

 

(ii)       Agent Efforts. Upon the terms and subject to the conditions set forth
in this Agreement, upon the receipt of an Issuance Notice, the Agent will use
its commercially reasonable efforts consistent with its normal sales and trading
practices to place the Shares with respect to which the Agent has agreed to act
as sales agent, subject to, and in accordance with the information specified in,
the Issuance Notice, unless the sale of the Shares described therein has been
suspended, cancelled or otherwise terminated in accordance with the terms of
this Agreement. For the avoidance of doubt, the parties to this Agreement may
modify an Issuance Notice at any time provided they both agree in writing to any
such modification.

 

(iii)       Method of Offer and Sale. The Shares may be offered and sold (A) in
privately negotiated transactions with the consent of the Company; (B) as block
transactions; or (C) by any other method permitted by law deemed to be an “at
the market offering” as defined in Rule 415(a)(4) under the Securities Act,
including sales made directly on the Principal Market or sales made into any
other existing trading market of the Common Shares. Nothing in this Agreement
shall be deemed to require either party to agree to the method of offer and sale
specified in the preceding sentence, and (except as specified in clauses (A) and
(B) above) the method of placement of any Shares by the Agent shall be at the
Agent’s discretion.

 

(iv)       Confirmation to the Company. If acting as sales agent hereunder, the
Agent will provide written confirmation to the Company no later than the opening
of the Trading Day next following the Trading Day on which it has placed Shares
hereunder setting forth the number of shares sold on such Trading Day, the
corresponding Sales Price and the Issuance Price payable to the Company in
respect thereof.

 

  17 

 

 

(v)       Settlement. Each issuance of Shares will be settled on the applicable
Settlement Date for such issuance of Shares and, subject to the provisions of
Section 5, on or before each Settlement Date, the Company will, or will cause
its transfer agent to, electronically transfer the Shares being sold by
crediting the Agent or its designee’s account at The Depository Trust Company
through its Deposit/Withdrawal At Custodian (DWAC) System, or by such other
means of delivery as may be mutually agreed upon by the parties hereto and, upon
receipt of such Shares, which in all cases shall be freely tradable,
transferable, registered shares in good deliverable form, the Agent will
deliver, by wire transfer of immediately available funds, the related Issuance
Price in same day funds delivered to an account designated by the Company prior
to the Settlement Date. The Company may sell Shares to the Agent as principal at
a price agreed upon at each relevant time Shares are sold pursuant to this
Agreement (each, a “Time of Sale”).

 

(vi)       Suspension or Termination of Sales. Consistent with standard market
settlement practices, the Company or the Agent may, upon notice to the other
party hereto in writing or by telephone (confirmed immediately by verifiable
email), suspend any sale of Shares, and the period set forth in an Issuance
Notice shall immediately terminate; provided, however, that (A) such suspension
and termination shall not affect or impair either party’s obligations with
respect to any Shares placed or sold hereunder prior to the receipt of such
notice; (B) if the Company suspends or terminates any sale of Shares after the
Agent confirms such sale to the Company, the Company shall still be obligated to
comply with Section 3(b)(v) with respect to such Shares; and (C) if the Company
defaults in its obligation to deliver Shares on a Settlement Date, the Company
agrees that it will hold the Agent harmless against any loss, claim, damage or
expense (including, without limitation, penalties, interest and reasonable legal
fees and expenses), as incurred, arising out of or in connection with such
default by the Company. The parties hereto acknowledge and agree that, in
performing its obligations under this Agreement, the Agent may borrow Common
Shares from stock lenders in the event that the Company has not delivered Shares
to settle sales as required by subsection (v) above, and may use the Shares to
settle or close out such borrowings. The Company agrees that no such notice
shall be effective against the Agent unless it is made to the persons identified
in writing by the Agent pursuant to Section 3(b)(i).

 

(vii)       No Guarantee of Placement, Etc. The Company acknowledges and agrees
that (A) there can be no assurance that the Agent will be successful in placing
Shares; (B) the Agent will incur no liability or obligation to the Company or
any other Person if it does not sell Shares; and (C) the Agent shall be under no
obligation to purchase Shares on a principal basis pursuant to this Agreement,
except as otherwise specifically agreed by the Agent and the Company.

 

(viii)       Material Non-Public Information. Notwithstanding any other
provision of this Agreement, the Company and the Agent agree that the Company
shall not deliver any Issuance Notice to the Agent, and the Agent shall not be
obligated to place any Shares, during any period in which the Company is in
possession of material non-public information.

 

  18 

 

 

(c)               Fees. As compensation for services rendered, the Company shall
pay to the Agent, on the applicable Settlement Date, the Selling Commission for
the applicable Issuance Amount (including with respect to any suspended or
terminated sale pursuant to Section 3(b)(vi)) by the Agent deducting the Selling
Commission from the applicable Issuance Amount.

 

(d)               Expenses. The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Shares (including all printing and engraving costs); (ii) all fees and expenses
of the registrar and transfer agent of the Shares; (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Shares; (iv) all fees and expenses of the Company’s counsel, independent public
or certified public accountants and other advisors; (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the Prospectus, any
Free Writing Prospectus (as defined below) prepared by or on behalf of, used by,
or referred to by the Company, and all amendments and supplements thereto, and
this Agreement; (vi) all filing fees, attorneys’ fees and expenses incurred by
the Company or the Agent in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Shares for offer and sale under the state securities or blue sky laws or
the provincial securities laws of Canada, and, if requested by the Agent,
preparing and printing a “Blue Sky Survey” or memorandum and a “Canadian
wrapper, and any supplements thereto, advising the Agent of such qualifications,
registrations, determinations and exemptions; (vii) the reasonable fees and
disbursements of the Agent’s counsel, including the reasonable fees and expenses
of counsel for the Agent in connection with, FINRA review, if any, and approval
of the Agent’s participation in the offering and distribution of the Shares;
(viii) the filing fees incident to FINRA review, if any; (ix) the costs and
expenses of the Company relating to investor presentations on any “road show”
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the preparation or
dissemination of any electronic road show, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives, employees and officers of the Company and of the Agent and any
such consultants with the prior approval of the Company, and the cost of any
aircraft chartered in connection with the road show with the prior approval of
the Company; and (x) the fees and expenses associated with listing the Shares on
the Principal Market. The fees and disbursements of Agent’s counsel pursuant to
subsections (vi) and (vii) above shall not exceed (A) $50,000 in connection with
the first Issuance Notice and (B) $15,000 in connection with each Triggering
Event Date (as defined below) on which the Company is required to provide a
certificate pursuant to Section 5(o).

 

  19 

 

 

Section 4. ADDITIONAL COVENANTS

 

The Company covenants and agrees with the Agent as follows, in addition to any
other covenants and agreements made elsewhere in this Agreement:

 

(a)               Exchange Act Compliance. During the Agency Period, the Company
shall (i) file, on a timely basis, with the Commission all reports and documents
required to be filed under Section 13, 14 or 15 of the Exchange Act in the
manner and within the time periods required by the Exchange Act; and (ii) either
(A) include in its quarterly reports on Form 10-Q and its annual reports on Form
10-K, a summary detailing, for the relevant reporting period, (1) the number of
Shares sold through the Agent pursuant to this Agreement and (2) the net
proceeds received by the Company from such sales or (B) prepare a prospectus
supplement containing, or include in such other filing permitted by the
Securities Act or Exchange Act (each an “Interim Prospectus Supplement”), such
summary information and, at least once a quarter and subject to this Section 4,
file such Interim Prospectus Supplement pursuant to Rule 424(b) under the
Securities Act (and within the time periods required by Rule 424(b) and Rule
430B under the Securities Act)).

 

(b)               Securities Act Compliance. After the date of this Agreement,
the Company shall promptly advise the Agent in writing (i) of the receipt of any
comments of, or requests for additional or supplemental information from, the
Commission; (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement, any Rule 462(b) Registration Statement,
any amendment or supplement to the Prospectus, or any Free Writing Prospectus;
(iii) of the time and date that any post-effective amendment to the Registration
Statement or any Rule 462(b) Registration Statement becomes effective; and (iv)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto, any Rule
462(b) Registration Statement or any amendment or supplement to the Prospectus
or of any order preventing or suspending the use of any Free Writing Prospectus
or the Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Shares from any securities exchange upon which
they are listed for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such purposes. If the
Commission shall enter any such stop order at any time, the Company will use its
commercially reasonable efforts to obtain the lifting of such order as soon as
reasonably practicable. Additionally, the Company agrees that it shall comply
with the provisions of Rule 424(b) and Rule 433, as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) or Rule 433 were received in a timely
manner by the Commission.

 

(c)               Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Prospectus so that the
Prospectus does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading, or if in the opinion of the Agent or counsel for the
Agent it is otherwise necessary to amend or supplement the Prospectus to comply
with applicable law, including the Securities Act, the Company agrees (subject
to Section 4(d) and Section 4(f)) to promptly prepare, file with the Commission
and furnish at its own expense to the Agent, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law including the Securities Act. Neither the
Agent’s consent to, or delivery of, any such amendment or supplement shall
constitute a waiver of any of the Company’s obligations under Section 4(d) and
Section 4(f). Notwithstanding the foregoing, the Company shall not be required
to file such amendment or supplement if there is no pending Issuance Notice and
the Company believes that it is in its best interest not to file such amendment
or supplement provided, however, that if the Company subsequently chooses to
deliver an Issuance Notice to the Agent, the Company agrees to file such
amendment or supplement prior to the delivery of such Issuance Notice.

 

  20 

 

 

(d)               Agent’s Review of Proposed Amendments and Supplements. Prior
to amending or supplementing the Registration Statement (including any
registration statement filed under Rule 462(b) under the Securities Act) or the
Prospectus (excluding any amendment or supplement through incorporation of any
report filed under the Exchange Act), the Company shall furnish to the Agent for
review, a reasonable amount of time prior to the proposed time of filing or use
thereof, a copy of each such proposed amendment or supplement, and the Company
shall not file or use any such proposed amendment or supplement without the
Agent’s prior consent, such consent not to be unreasonably withheld, conditioned
or delayed, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required to be
filed pursuant to such Rule.

 

(e)               Use of Free Writing Prospectus. Neither the Company nor the
Agent has prepared, used, referred to or distributed, or will prepare, use,
refer to or distribute, without the other party’s prior written consent, any
“written communication” that constitutes a “free writing prospectus” as such
terms are defined in Rule 405 under the Securities Act with respect to the
offering contemplated by this Agreement (any such free writing prospectus being
referred to herein as a “Free Writing Prospectus”).

 

(f)                Free Writing Prospectuses. The Company shall furnish to the
Agent for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of each proposed Free Writing Prospectus or any
amendment or supplement thereto to be prepared by or on behalf of, used by, or
referred to by the Company and the Company shall not file, use or refer to any
proposed Free Writing Prospectus or any amendment or supplement thereto without
the Agent’s consent, such consent not to be unreasonably withheld, conditioned
or delayed. The Company shall furnish to the Agent, without charge, as many
copies of any Free Writing Prospectus prepared by or on behalf of, or used by
the Company, as the Agent may reasonably request. If at any time when a
prospectus is required by the Securities Act (including, without limitation,
pursuant to Rule 173(d)) to be delivered in connection with sales of the Shares
(but in any event if at any time through and including the date of this
Agreement) there occurred or occurs an event or development as a result of which
any Free Writing Prospectus prepared by or on behalf of, used by, or referred to
by the Company conflicted or would conflict with the information contained in
the Registration Statement or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, the Company shall promptly
amend or supplement such Free Writing Prospectus to eliminate or correct such
conflict or so that the statements in such Free Writing Prospectus as so amended
or supplemented will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances prevailing at such subsequent time, not
misleading, as the case may be; provided, however, that prior to amending or
supplementing any such Free Writing Prospectus, the Company shall furnish to the
Agent for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of such proposed amended or supplemented Free
Writing Prospectus and the Company shall not file, use or refer to any such
amended or supplemented Free Writing Prospectus without the Agent’s consent,
such consent not to be unreasonably withheld, conditioned or delayed.

 

  21 

 

 

(g)               Filing of Agent Free Writing Prospectuses. The Company shall
not to take any action that would result in the Agent or the Company being
required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a Free Writing Prospectus prepared by or on behalf of the Agent
that the Agent otherwise would not have been required to file thereunder.

 

(h)               Copies of Registration Statement and Prospectus. After the
date of this Agreement through the last time that a prospectus is required by
the Securities Act (including, without limitation, pursuant to Rule 173(d)) to
be delivered in connection with sales of the Shares, the Company agrees to
furnish the Agent with copies (which may be electronic copies) of the
Registration Statement and each amendment thereto, and with copies of the
Prospectus and each amendment or supplement thereto in the form in which it is
filed with the Commission pursuant to the Securities Act or Rule 424(b) under
the Securities Act, both in such quantities as the Agent may reasonably request
from time to time; and, if the delivery of a prospectus is required under the
Securities Act or under the blue sky or securities laws of any jurisdiction at
any time on or prior to the applicable Settlement Date for any period set forth
in an Issuance Notice in connection with the offering or sale of the Shares and
if at such time any event has occurred 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 any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it is necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the Exchange Act, to
notify the Agent and to request that the Agent suspend offers to sell Shares
(and, if so notified, the Agent shall cease such offers as soon as practicable);
and if the Company decides to amend or supplement the Registration Statement or
the Prospectus as then amended or supplemented, to advise the Agent promptly by
telephone (with confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented that will correct
such statement or omission or effect such compliance (it being acknowledged that
the Company may delay the filing of any amendment or supplement, if, in the
reasonable judgment of the Company, it is in the best interest of the Company);
provided, however, that if during such same period the Agent is required to
deliver a prospectus in respect of transactions in the Shares, the Company shall
promptly prepare and file with the Commission such an amendment or supplement.

 

(i)                 Blue Sky Compliance. The Company shall cooperate with the
Agent and counsel for the Agent to qualify or register the Shares for sale under
(or obtain exemptions from the application of) the state securities or blue sky
laws or Canadian provincial securities laws of those jurisdictions designated by
the Agent, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution
of the Shares. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company will advise
the Agent promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its commercially reasonable
efforts to obtain the withdrawal thereof as soon as reasonably practicable.

 

  22 

 

 

(j)                 Earnings Statement. As soon as practicable, the Company will
make generally available to its security holders and to the Agent an earnings
statement (which need not be audited) covering a period of at least twelve
months which shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 under the Securities Act, provided that the Company will be deemed
to have furnished such statements to its security holders and the Agent to the
extent they are filed on EDGAR or any successor system.

 

(k)               Listing; Reservation of Shares. (a) The Company will maintain
the listing of the Shares, on the Principal Market; and (b) the Company will
reserve and keep available at all times, free of preemptive rights, Shares for
the purpose of enabling the Company to satisfy its obligations under this
Agreement.

 

(l)                 Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Shares.

 

(m)             Due Diligence. During the term of this Agreement, the Company
will reasonably cooperate with any reasonable due diligence review conducted by
the Agent in connection with the transactions contemplated hereby, including,
without limitation, providing information and making available documents and
senior corporate officers, during normal business hours and at the Company’s
principal offices, as the Agent may reasonably request from time to time.

 

(n)               Representations and Warranties. The Company acknowledges that
each delivery of an Issuance Notice and each delivery of Shares on a Settlement
Date shall be deemed to be (i) an affirmation to the Agent that the
representations and warranties of the Company contained in or made pursuant to
this Agreement are true and correct as of the date of such Issuance Notice or of
such Settlement Date, as the case may be, as though made at and as of each such
date, except as may be disclosed in the Prospectus (including any documents
incorporated by reference therein and any supplements thereto); and (ii) an
undertaking that the Company will advise the Agent if any of such
representations and warranties will not be true and correct as of the Settlement
Date for the Shares relating to such Issuance Notice, as though made at and as
of each such date (except that such representations and warranties shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Shares).

 

(o)               Deliverables at Triggering Event Dates; Certificates. The
Company agrees that on or prior to the date of the first Issuance Notice and,
during the term of this Agreement after the date of the first Issuance Notice,
upon:

 

(A)       the filing of the Prospectus or the amendment or supplement of any
Registration Statement or Prospectus (other than a prospectus supplement
relating solely to an offering of securities other than the Shares or a
prospectus filed pursuant to Section 4(a)(ii)(B)), 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 Prospectus;

 

  23 

 

 

(B)       the filing with the Commission of an annual report on Form 10-K or a
quarterly report on Form 10-Q (including any Form 10-K/A or Form 10-Q/A
containing amended financial information or a material amendment to the
previously filed annual report on Form 10-K or quarterly report on Form 10-Q),
in each case, of the Company; or

 

(C)       the filing with the Commission of a current report on Form 8-K of the
Company containing amended financial information (other than information
“furnished” pursuant to Item 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to reclassification of certain
properties as discontinued operations in accordance with Statement of Financial
Accounting Standards No. 144) that is material to the offering of securities of
the Company in the Agent’s reasonable discretion;

 

(any such event, a “Triggering Event Date”), the Company shall furnish the Agent
(but in the case of clause (C) above only if the Agent reasonably determines
that the information contained in such current report on Form 8-K of the Company
is material) with a certificate as of the Triggering Event Date, in the form and
substance satisfactory to the Agent and its counsel, substantially similar to
the form previously provided to the Agent and its counsel, modified, as
necessary, to relate to the Registration Statement and the Prospectus as amended
or supplemented, (A) confirming that the representations and warranties of the
Company contained in this Agreement are true and correct, (B) that the Company
has performed all of its obligations hereunder to be performed on or prior to
the date of such certificate and as to the matters set forth in Section
5(a)(iii) hereof, and (C) containing any other certification that the Agent
shall reasonably request. The requirement to provide a certificate under this
Section 4(o) shall be waived for any Triggering Event Date occurring at a time
when no Issuance Notice is pending or a suspension is in effect, which waiver
shall continue until the earlier to occur of the date the Company delivers
instructions for the sale of Shares hereunder (which for such calendar quarter
shall be considered a Triggering Event Date) and the next occurring Triggering
Event Date. Notwithstanding the foregoing, if the Company subsequently decides
to sell Shares following a Triggering Event Date when a suspension was in effect
and did not provide the Agent with a certificate under this Section 4(o), then
before the Company delivers the instructions for the sale of Shares or the Agent
sells any Shares pursuant to such instructions, the Company shall provide the
Agent with a certificate in conformity with this Section 4(o) dated as of the
date that the instructions for the sale of Shares are issued.

 

(p)               Legal Opinion. On or prior to the date of the first Issuance
Notice and on or prior to each Triggering Event Date with respect to which the
Company is obligated to deliver a certificate pursuant to Section 4(o) for which
no waiver is applicable and excluding the date of this Agreement, the Company
shall cause Foley & Lardner LLP, counsel to the Company, to furnish to the Agent
a negative assurances letter and a written legal opinion, each dated the date of
delivery, in form and substance reasonably satisfactory to Agent and its
counsel, substantially similar to the form previously provided to the Agent and
its counsel, modified, as necessary, to relate to the Registration Statement and
the Prospectus as then amended or supplemented. In lieu of such opinions for
subsequent periodic filings, in the discretion of the Agent, the Company may
furnish a reliance letter from such counsel to the Agent, permitting the Agent
to rely on a previously delivered opinion letter, modified as appropriate for
any passage of time or Triggering Event Date (except that statements in such
prior opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented as of such Triggering Event Date).

 

  24 

 

 

(q)               Comfort Letter. On or prior to the date of the first Issuance
Notice and on or prior to each Triggering Event Date with respect to which the
Company is obligated to deliver a certificate pursuant to Section 4(o) for which
no waiver is applicable and excluding the date of this Agreement, the Company
shall cause KPMG LLP, the independent registered public accounting firm who has
audited the financial statements included or incorporated by reference in the
Registration Statement, to furnish the Agent a comfort letter, dated the date of
delivery, in form and substance reasonably satisfactory to the Agent and its
counsel, substantially similar to the form previously provided to the Agent and
its counsel; provided, however, that any such comfort letter will only be
required on the Triggering Event Date specified to the extent that it contains
financial statements filed with the Commission under the Exchange Act and
incorporated or deemed to be incorporated by reference into a Prospectus. If
requested by the Agent, the Company shall also cause a comfort letter to be
furnished to the Agent within ten (10) Trading Days of the date of occurrence of
any material transaction or event requiring the filing of a current report on
Form 8-K containing material amended financial information of the Company,
including the restatement of the Company’s financial statements. The Company
shall be required to furnish no more than one comfort letter hereunder per
calendar quarter.

 

(r)              Secretary’s Certificate. On or prior to the date of the first
Issuance Notice and on or prior to each Triggering Event Date with respect to
which the Company is obligated to deliver a certificate pursuant to Section 4(o)
for which no waiver is applicable, the Company shall furnish the Agent a
certificate executed by the Secretary of the Company, signing in such capacity,
dated the date of delivery (i) certifying that attached thereto are true and
complete copies of the resolutions duly adopted by the Board of Directors of the
Company authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (including, without
limitation, the issuance of the Shares pursuant to this Agreement), which
authorization shall be in full force and effect on and as of the date of such
certificate, (ii) certifying and attesting to the office, incumbency, due
authority and specimen signatures of each Person who executed this Agreement for
or on behalf of the Company, and (iii) containing any other certification that
the Agent shall reasonably request.

 

(s)              Agent’s Own Account; Clients’ Account. The Company consents to
the Agent trading, in compliance with applicable law, in the Common Shares for
the Agent’s own account and for the account of its clients at the same time as
sales of the Shares occur pursuant to this Agreement.

 

(t)               Investment Limitation. The Company shall not invest, or
otherwise use the proceeds received by the Company from its sale of the Shares
in such a manner as would require the Company or any of its subsidiaries to
register as an investment company under the Investment Company Act.

 

  25 

 

 

(u)               Market Activities. The Company will not take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Shares or any
other reference security, whether to facilitate the sale or resale of the Shares
or otherwise, and the Company will, and shall cause each of its affiliates to,
comply with all applicable provisions of Regulation M. If the limitations of
Rule 102 of Regulation M (“Rule 102”) do not apply with respect to the Shares or
any other reference security pursuant to any exception set forth in Section (d)
of Rule 102, then promptly upon notice from the Agent (or, if later, at the time
stated in the notice), the Company will, and shall cause each of its affiliates
to, comply with Rule 102 as though such exception were not available but the
other provisions of Rule 102 (as interpreted by the Commission) did apply. The
Company shall promptly notify the Agent if it no longer meets the requirements
set forth in Section (d) of Rule 102.

 

(v)                Notice of Other Sale. Without the written consent of the
Agent, 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
Shares or securities convertible into or exchangeable for Common Shares (other
than Shares hereunder), warrants or any rights to purchase or acquire Common
Shares, during the period beginning on the third Trading Day immediately prior
to the date on which any Issuance Notice is delivered to the Agent hereunder and
ending on the third Trading Day immediately following the Settlement Date with
respect to Shares sold pursuant to such Issuance Notice, provided that if the
sale of Shares pursuant to an Issuance Notice is suspended or an Issuance Notice
is suspended or terminated, then such period will end on the third Trading Day
immediately following the Settlement Date with respect to Shares sold pursuant
such Issuance Notice prior to such suspension or termination; and will not
directly or indirectly enter into 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 Shares (other than the Shares offered pursuant
to this Agreement) or securities convertible into or exchangeable for Common
Shares, warrants or any rights to purchase or acquire, Common Shares prior to
the termination of this Agreement; provided, however, that such restrictions
will not be required in connection with the Company’s (i) issuance or sale of
Common Shares (including restricted stock), options to purchase Common Shares,
restricted stock units, phantom equity awards or Common Shares issuable upon the
exercise of options or other equity awards pursuant to any employee or director
share option, incentive or benefit plan, share purchase or ownership plan,
long-term incentive plan, dividend reinvestment plan, inducement award under the
rules of the Nasdaq Stock Market or other compensation plan of the Company or
its subsidiaries, (ii) issuance or sale of Common Shares issuable upon exchange,
conversion or redemption of securities or the exercise or vesting of warrants,
options or other equity awards, (iii) modification of any outstanding options,
warrants or other rights to purchase or acquire Common Shares, (iv) issuance of
Common Shares issuable upon the exercise of participation rights disclosed in
the Prospectus (including any documents incorporated by reference therein), (v)
issuance or sale of Common Shares, or securities convertible into or exercisable
for Common Shares, 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 Shares hereby, provided that the aggregate number of Common Shares issued
under this subsection (v) pursuant to any such arrangement shall not exceed five
percent (5%) of the number of Common Shares outstanding immediately prior to
giving effect to such issuance; and (vi) issuance or sale of Common Shares in
connection with any acquisition, strategic investment or other similar
transaction (including any joint venture, strategic alliance or partnership)
provided that the aggregate number of Common Shares issued under this subsection
(vi) pursuant to any such arrangement shall not exceed five percent (5%) of the
number of Common Shares outstanding immediately prior to giving effect to such
issuance.

 

  26 

 

 

Section 5. CONDITIONS TO DELIVERY OF ISSUANCE NOTICES AND TO SETTLEMENT

 

(a)               Conditions Precedent to the Right of the Company to Deliver an
Issuance Notice and the Obligation of the Agent to Sell Shares. The right of the
Company to deliver an Issuance Notice hereunder is subject to the satisfaction,
on the date of delivery of such Issuance Notice, and the obligation of the Agent
to use its commercially reasonable efforts to place Shares during the applicable
period set forth in the Issuance Notice is subject to the satisfaction, on each
Trading Day during the applicable period set forth in the Issuance Notice, of
each of the following conditions:

 

(i)Accuracy of the Company’s Representations and Warranties; Performance by the
Company. The Company shall have delivered the certificate required to be
delivered pursuant to Section 4(o) on or before the date on which delivery of
such certificate is required pursuant to Section 4(o). The Company shall have
performed, satisfied and complied, in all material respects, with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to such date, including, but not
limited to, the covenants contained in Section 4(p), Section 4(q) and Section
4(r).

 

(ii)No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby that
prohibits or directly and materially adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have been commenced that
may have the effect of prohibiting or materially adversely affecting any of the
transactions contemplated by this Agreement.

 

(iii)Material Adverse Changes. Except as disclosed in the Prospectus and the
Time of Sale Information, (A) in the judgment of the Agent there shall not have
occurred any Material Adverse Change; and (B) there shall not have occurred any
downgrading, and no written notice shall have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any
securities of the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization” as such term is defined for purposes
of Section 3(a)(62) of the Exchange Act.

 

(iv)No Suspension of Trading in or Delisting of Common Shares; Other Events. The
trading of the Common Shares (including without limitation the Shares) shall not
have been suspended by the Commission, the Principal Market or FINRA and the
Common Shares (including without limitation the Shares) shall have been approved
for listing or quotation on and shall not have been delisted from the Nasdaq
Stock Market, the New York Stock Exchange or any of their constituent markets.
There shall not have occurred (and be continuing in the case of occurrences
under clauses (A) and (B) below) any of the following: (A) trading or quotation
in any of the Company’s securities shall have been suspended or limited by the
Commission or by the Principal Market or trading in securities generally on the
Principal Market shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or FINRA; (B) a general banking moratorium shall have been
declared by any federal or New York authorities; or (C) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political,
financial or economic conditions, as in the judgment of the Agent is material
and adverse and makes it impracticable to market the Shares in the manner and on
the terms described in the Prospectus or to enforce contracts for the sale of
securities.

 

  27 

 

 

(b)               Documents Required to be Delivered on each Issuance Notice
Date. The Agent’s obligation to use its commercially reasonable efforts to place
Shares hereunder shall additionally be conditioned upon the delivery to the
Agent on or before the Issuance Notice Date of a certificate in form and
substance reasonably satisfactory to the Agent, executed by the President and
Chief Executive Officer or Chief Financial Officer of the Company, to the effect
that all conditions to the delivery of such Issuance Notice shall have been
satisfied as of the date of such certificate (which certificate shall not be
required if the foregoing representations shall be set forth in the Issuance
Notice).

 

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

 

Section 6. INDEMNIFICATION AND CONTRIBUTION

 

(a)                Indemnification of the Agent. The Company agrees to indemnify
and hold harmless the Agent, its officers and employees, and each person, if
any, who controls the Agent within the meaning of the Securities Act or the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which the Agent or such officer, employee or controlling person may become
subject, under the Securities Act, the Exchange Act, other federal or state
statutory law or regulation, or the laws or regulations of foreign jurisdictions
where Shares have been offered or sold or at common law or otherwise (including
in settlement of any litigation), insofar as such loss, claim, damage, liability
or expense (or actions in respect thereof as contemplated below) arises out of
or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, 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; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any Free Writing Prospectus that the Company has
used, referred to or filed, or is required to file, pursuant to Rule 433(d) of
the Securities Act 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; or (iii) any act or failure to act or any
alleged act or failure to act by the Agent in connection with, or relating in
any manner to, the Common Shares or the offering contemplated hereby, and which
is included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon any matter covered by clause (i) or (ii)
above, provided that the Company shall not be liable under this clause (iii) to
the extent that a court of competent jurisdiction shall have determined by a
final judgment that such loss, claim, damage, liability, expense or action
resulted directly from any such acts or failures to act undertaken or omitted to
be taken by the Agent through its bad faith or willful misconduct, and to
reimburse the Agent and each such officer, employee and controlling person for
any and all documented expenses (including the reasonable and documented
out-of-pocket fees and disbursements of counsel chosen by the Agent) as such
expenses are reasonably incurred by the Agent or such officer, employee or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability, expense or action to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by the Agent
expressly for use in the Registration Statement, any such Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto), it being
understood and agreed that the only such information furnished by the Agent to
the Company consists of the first sentence of the ninth paragraph under the
caption “Plan of Distribution” in the Prospectus. The indemnity agreement set
forth in this Section 6(a) shall be in addition to any liabilities that the
Company may otherwise have.

 

  28 

 

 

(b)               Indemnification of the Company and its Directors and Officers.
The Agent agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or the laws or regulations of
foreign jurisdictions where Shares have been offered or sold or at common law or
otherwise (including in settlement of any litigation), which arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, 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 (ii) any untrue statement or alleged untrue statement
of a material fact contained in 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; but, for each of (i)
and (ii) above, only to the extent arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Agent expressly for use in the Registration Statement or the
Prospectus (or any amendment or supplement thereto), it being understood and
agreed that the only such information furnished by the Agent to the Company
consists of the information set forth in the first sentence of the ninth
paragraph under the caption “Plan of Distribution” in the Prospectus, and to
reimburse the Company and each such director, officer and controlling person for
any and all documented expenses (including the reasonable and documented
out-of-pocket fees and disbursements of counsel chosen by the Company) as such
expenses are reasonably incurred by the Company or such officer, director or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The indemnity agreement set forth in this Section 6(b) shall be in
addition to any liabilities that the Agent or the Company may otherwise have.

 

  29 

 

 

(c)               Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 6 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 6, notify
the indemnifying party in writing of the commencement thereof, but the omission
to so notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 6 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the fees and
expenses of more than one separate counsel (together with local counsel),
representing the indemnified parties who are parties to such action), which
counsel (together with any local counsel) for the indemnified parties shall be
selected by the indemnified party (in the case of counsel for the indemnified
parties referred to in Section 6(a) and Section 6(b) above), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party at the
expense of the indemnifying party, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying party and shall be paid
as they are incurred.

 

(d)               Settlements. The indemnifying party under this Section 6 shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
6(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request; and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.

 

  30 

 

 

(e)               Contribution. If the indemnification provided for in this
Section 6 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Agent, on
the other hand, from the offering of the Shares pursuant to this Agreement; or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Agent, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Agent,
on the other hand, in connection with the offering of the Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total gross proceeds from the offering of the Shares (before deducting expenses)
received by the Company bear to the total commissions received by the Agent. The
relative fault of the Company, on the one hand, and the Agent, on the other
hand, shall be determined by reference to, among other things, whether any such
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, on the one hand, or the Agent, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 6(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 6(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 6(e); provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 6(c) for purposes of indemnification.

 

The Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 6(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 6(e).

 

Notwithstanding the provisions of this Section 6(e), the Agent shall not be
required to contribute any amount in excess of the agent fees received by the
Agent in connection with the offering contemplated hereby. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 6(e),
each officer and employee of the Agent and each person, if any, who controls the
Agent within the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as the Agent, and each director of the Company,
each officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company with the meaning of the Securities Act
and the Exchange Act shall have the same rights to contribution as the Company.

 

  31 

 

 

Section 7. TERMINATION & SURVIVAL

 

(a)               Term. Subject to the provisions of this Section 7, the term of
this Agreement shall continue from the date of this Agreement until the end of
the Agency Period, unless earlier terminated by the parties to this Agreement
pursuant to this Section 7.

 

(b)               Termination; Survival Following Termination.

 

(i)Either party may terminate this Agreement prior to the end of the Agency
Period, by giving written notice as required by this Agreement, upon ten (10)
Trading Days’ notice to the other party; provided that, (A) if the Company
terminates this Agreement after the Agent confirms to the Company any sale of
Shares, the Company shall remain obligated to comply with Section 3(b)(v) with
respect to such Shares and (B) Section 2, Section 6, Section 7 and Section 8
shall survive termination of this Agreement. If termination shall occur prior to
the Settlement Date for any sale of Shares, such sale shall nevertheless settle
in accordance with the terms of this Agreement.

 

(ii) In addition to the survival provision of Section 7(b)(i), the respective
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers and of the Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Agent or the Company or any of its or their
partners, officers or directors or any controlling person, as the case may be,
and, anything herein to the contrary notwithstanding, will survive delivery of
and payment for the Shares sold hereunder and any termination of this Agreement.

 

Section 8. MISCELLANEOUS

 

(a)               Press Releases and Disclosure. The Company may issue a press
release describing the material terms of the transactions contemplated hereby as
soon as practicable following the date of this Agreement, and may file with the
Commission a Current Report on Form 8-K, with this Agreement attached as an
exhibit thereto, describing the material terms of the transactions contemplated
hereby, and the Company shall consult with the Agent prior to making such
disclosures, and the parties hereto shall use all commercially reasonable
efforts, acting in good faith, to agree upon a text for such disclosures that is
reasonably satisfactory to all parties hereto. No party hereto shall issue
thereafter any press release or like public statement (including, without
limitation, any disclosure in reports filed with the Commission pursuant to the
Exchange Act) related to this Agreement or any of the transactions contemplated
hereby without the prior written approval of the other party hereto, except as
may be necessary or appropriate in the reasonable opinion of the party seeking
to make disclosure to comply with the requirements of applicable law or stock
exchange rules, including, for the avoidance of doubt, disclosure regarding
periodic sales under this Agreement as required to be included in the Company’s
periodic reports pursuant to the rules of the Exchange Act. If any such press
release or like public statement is so required, the party making such
disclosure shall consult with the other party prior to making such disclosure,
and the parties shall use all commercially reasonable efforts, acting in good
faith, to agree upon a text for such disclosure that is reasonably satisfactory
to all parties hereto.

 

  32 

 

 

(b)               No Advisory or Fiduciary Relationship. The Company
acknowledges and agrees that (i) the transactions contemplated by this
Agreement, including the determination of any fees, are arm’s-length commercial
transactions between the Company and the Agent, (ii) when acting as a principal
under this Agreement, the Agent is and has been acting solely as a principal and
is not the agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (iii) the Agent has not assumed and will not
assume an advisory or fiduciary responsibility in favor of the Company with
respect to the transactions contemplated hereby or the process leading thereto
(irrespective of whether the Agent has advised or is currently advising the
Company on other matters) and the Agent does not have any obligation to the
Company with respect to the transactions contemplated hereby except the
obligations expressly set forth in this Agreement, (iv) the Agent and its
respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company, and (v) the Agent has
not provided any legal, accounting, regulatory or tax advice with respect to the
transactions contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.

 

(c)               Research Analyst Independence. The Company acknowledges that
the Agent’s research analysts and research departments are required to and
should be independent from their respective investment banking divisions and are
subject to certain regulations and internal policies, and as such the Agent’s
research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company or
the offering that differ from the views of their respective investment banking
divisions. The Company understands that the Agent is a full service securities
firm and as such from time to time, subject to applicable securities laws, may
effect transactions for its own account or the account of its customers and hold
long or short positions in debt or equity securities of the companies that may
be the subject of the transactions contemplated by this Agreement.

 

(d)               Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:

 

If to the Agent:

Jefferies LLC
520 Madison Avenue
New York, NY 10022
Facsimile: (646) 619-4437
Attention: General Counsel

 

with a copy (which shall not constitute notice) to:

 

Duane Morris LLP

1540 Broadway

New York, NY 10036

Attention: James T. Seery

Email: jtseery@duanemorris.com

 

If to the Company:

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, Connecticut 06813
Attention: Michael Bishop
Telephone: (203) 825-6049

Email: mbishop@fce.com

 

with a copy (which shall not constitute notice) 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

 

Any party hereto may change the address for receipt of communications by giving
written notice to the others in accordance with this Section 8(d).

 

  33 

 

 

(e)               Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 6, and in each case
their respective successors, and no other person will have any right or
obligation hereunder. The term “successors” shall not include any purchaser of
the Shares as such from the Agent merely by reason of such purchase.

 

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

 

(g)               Governing Law Provisions. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in such state. Any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in
the federal courts of the United States of America located in the Borough of
Manhattan in the City of New York or the courts of the State of New York in each
case located in the Borough of Manhattan in the City of New York (collectively,
the “Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a “Related Judgment”), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.

 

(h)               General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument,
and may be delivered by facsimile transmission or by electronic delivery of a
portable document format (PDF) file. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.

 

 

 

[Signature Page Immediately Follows]

 

  34 

 

 

If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms

 

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

 

The foregoing Agreement is hereby confirmed and accepted by the Agent in New
York, New York as of the date first above written.

 

JEFFERIES LLC           By: /s/ Michael Magarro     Name:     Michael Magarro  
  Title:   Managing Director    

 

 

 

 

EXHIBIT A

 

ISSUANCE NOTICE

 

[Date]

 

Jefferies LLC

520 Madison Avenue

New York, New York 10022

 

Attn: [__________]

 

Reference is made to the Open Market Sale Agreement between FuelCell Energy,
Inc. (the “Company”) and Jefferies LLC (the “Agent”) dated as of June 16, 2020.
The Company confirms that all conditions to the delivery of this Issuance Notice
are satisfied as of the date hereof.

 

Date of Delivery of Issuance Notice (determined pursuant to Section 3(b)(i)):

_______________________

 

Issuance Amount (equal to the total Sales Price for such Shares):

 

  $         Number of days in selling period:           First date of selling
period:           Last date of selling period:           Settlement Date(s) if
other than standard T+2 settlement:        

   

Floor Price Limitation: $ ____ per share

 

Comments:

 

 

                 

  By:         Name:         Title:      

 

 

A-1 

 

 

 

Schedule A

 

Notice Parties

 

The Company

 

Michael Bishop

 

Daniel Case

 

Jennifer Arasimowicz

 

 

The Agent

 

Mike Magarro