SECURITIES PURCHASE AGREEMENT BY AND BETWEEN FUELCELL ENERGY, INC. AND POSCO POWER FEBRUARY 7, 2007 TABLE OF CONTENTS

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ARTICLE 1		PURCHASE AND SALE OF SECURITIES		1
1.1		Purchase and Sale of Securities		1
1.2		Payment		2
1.3		Adjustment		2
1.4		Closing Date		2
1.5		Additional Purchaser Deliveries at the Closing		2
1.6		Additional Company Deliveries at the Closing		2
ARTICLE 2		REPRESENTATIONS AND WARRANTIES OF THE COMPANY		3
2.1		Organization and Qualification		3
2.2		Authorization; Enforcement		3
2.3		Capitalization.		3
2.4		Issuance of Shares		4
2.5		No Conflicts; Government Consents and Permits		4
2.6		SEC Documents, Financial Statements		5
2.7		Disclosure Controls and Procedures		6
2.8		Accounting Controls		6
2.9		Absence of Litigation		6
2.10		Intellectual Property Rights		7
2.11		No Material Adverse Change		7
2.12		Taxes		8
2.13		Real and Personal Property		8
2.14		Material Contracts		8
2.15		Employee Benefit Plans; Employee Matters		9
2.16		Environmental Laws		9
2.17		Compliance with Law		9
2.18		Insurance		9
2.19		Foreign Corrupt Practices		10
2.20		Related Party Transactions		10
2.21		No Integration; General Solicitation		10
2.22		No Registration Rights		11
2.23		NASDAQ		11
2.24		Investment Company		11
2.25		Acknowledgment Regarding Purchaser’s Purchase of Shares		11
2.26		Accountants		11
2.27		Takeover Provision		12
2.28		No Manipulation of Stock		12
2.29		Form S-3 Eligibility		12
2.30		Vote Required		12
2.31		Board Approval		12
2.32		Sarbanes-Oxley Act		12
2.33		Books and Records		12
2.34		Transfer Taxes		12
2.35		Fees		13

 

 

ARTICLE 3		PURCHASER’S REPRESENTATIONS AND WARRANTIES		13
3.1		Investment Purpose		13
3.2		Purchaser Status; Questionnaires		13
3.3		Reliance on Exemptions		13
3.4		Information		13
3.5		Acknowledgement of Risk		14
3.6		Governmental Review		14
3.7		Transfer or Resale		14
3.8		Legends		15
3.9		Authorization; Enforcement		16
3.10		Residency		16
3.11		No Short Sales		16
3.12		Brokers		16
3.13		Additional Representations by Non-US Person		16
ARTICLE 4		COVENANTS		16
4.1		Reporting Status and Public Information		16
4.2		Financial Information		17
4.3		Securities Laws Disclosure; Publicity		17
4.4		Covenants Pending Closing		17
4.5		Limits on Additional Issuances		18
4.6		Sales by Purchaser		18
4.7		Further Assurances		18
4.8		Consents and Approvals		18
4.9		No Solicitation		18
4.10		Form D and Blue Sky		18
4.11		Efforts to Satisfy Conditions		18
4.12		Use of Proceeds		19
4.13		Expenses		19
ARTICLE 5		CONDITIONS TO CLOSING		19
5.1		Conditions to Obligations of the Company		19
5.2		Conditions to Purchaser’s Obligations at the Closing		20
ARTICLE 6		REGISTRATION RIGHTS		22
6.1		Mandatory Registration		22
6.2		Demand Registrations		22
6.3		Piggy-Back Registrations		22
6.4		Ineligibility for Form S-3		23
6.5		Failure to File, Obtain and Maintain Effectiveness of Registration Statement		23
6.6		Related Obligations		24
6.7		Obligations of the Holder		29
6.8		Expenses of Registration		30
6.9		Indemnification		30
6.10		Assignment and Transfer		32
6.11		Amendment and Waiver of Registration Rights		32
6.12		Lock-Up Period		33

 

 

ARTICLE 7		MISCELLANEOUS		33
7.1		Termination		33
7.2		Effect of Termination		33
7.3		Governing Law; Jurisdiction		34
7.4		Counterparts; Signatures by Facsimile		34
7.5		Headings		34
7.6		Severability		34
7.7		Entire Agreement; Amendments; Waiver		34
7.8		Notices		34
7.9		Successors and Assigns		35
7.10		Third Party Beneficiaries		35
7.11		No Strict Construction		36
7.12		Equitable Relief		36
7.13		Survival of Representations and Warranties		36
7.14		Limitation on Enforcement of Remedies		36
7.15		Aggregation of Stock		36
7.16		Reproduction of Documents		36
7.17		Lost, etc. Certificates Evidencing Shares; Exchange		36
7.18		Draftsmanship		37

 

 

 

 

6.1 Mandatory Registration. As soon as reasonably practicable after six (6) months after the Closing, the Company shall prepare, and, as soon as practicable, but in no event later than thirty (30) days after such date (the “Filing Deadline”), file with the SEC a Registration Statement or Registration Statements (as necessary) on Form S-3. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration, subject to the provisions of Section 6.4. The Company shall use its best efforts to cause such Registration Statement to be declared effective by the SEC as soon as possible, but in no event later than the fifth Business Day after the SEC advises the Company that either (A) it will not review such Registration Statement or (B) it has no further comments with respect to such Registration Statement (the “Effectiveness Deadline”).

 

6.2 Demand Registrations. If for any reason prior to the expiration of the Registration Period, a Registration Statement required to be filed pursuant to Section 6.1 ceases to be effective or fails to cover all of the Registrable Securities required to be covered by such Registration Statement, a Holder may demand registration pursuant to the terms of and within the time frames set forth in Section 6.1 by providing written demand registration notice to the Company (a “Demand Registration”). The Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available therefore, if applicable), or both, so as to cover all of the Registrable Securities required to be covered by a Registration Statement hereunder, as soon as practicable, but in any event not later than ten (10) Business Days after the date that the Demand Registration notice is delivered to the Company. The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. The compliance by the Company with the provisions of this Section 6.2 shall not relieve the Company of any liability for a breach of this Agreement, including, without limitation, any breach by the Company of Section 6.1 hereof, and the Holder shall retain any remedies available at law or in equity with respect thereto. 

 

6.3 Piggy-Back Registrations. If at any time prior to the expiration of the Registration Period, the number of shares of Common Stock available for sale under a Registration Statement is insufficient to cover all of the Registrable Securities and the Company proposes to file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the Securities Act of any of its securities (other than on Form S-4 or Form S-8 (or their equivalents at such time) relating to securities to be issued solely in connection with any acquisition of any entity or business or to equity securities issuable in connection with stock option or other employee benefit plans approved by the Board), the Company shall promptly send to the Holder written notice of the Company’s intention to file a Registration Statement and of the Holder’s rights under this Section 6.3 and, if within twenty (20) days after receipt of such notice, the Holder shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities the Holder requests to be registered, subject to the priorities set forth in this Section 6.3 below. No right to registration of Registrable Securities under this Section 6.3 shall be construed to limit any registration required under Section 6.1 or 6.2. The obligations of the Company under this Section 6.3 may be waived by the Holder, provided such Holder is not named as a selling securityholder in any Registration Statement. If an offering in connection with which a Holder is entitled to registration under this Section 6.3 is an underwritten offering, then such Holder whose Registrable Securities are included in such Registration Statement shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the provisions of this Article 6, on the same terms and conditions as other shares of Common Stock included in such underwritten offering. If a registration pursuant to this Section 6.3 is to be an underwritten public offering and the managing underwriter(s) advise the Company in writing that, in their reasonable good faith opinion, marketing or other factors dictate that a limitation on the number of shares of Common Stock which may be included in the Registration Statement is necessary to facilitate and not adversely affect the proposed offering, then the Company shall include in such registration: (1) first, all securities the Company proposes to sell for its own account and (2) second, up to the full number of securities proposed to be registered for the account of the Holder entitled to registration under this Section 6.3, pro rata to such Holder on the basis of the number of Registrable Securities that it requested to be included in such registration.

 

 

6.4 Ineligibility for Form S-3. Subject to Section 6.1 as it relates to the use of Form S-1, in the event that Form S-3 is not available for any registration of Registrable Securities hereunder, the Company shall (i) register the sale of the Registrable Securities on another appropriate form reasonably acceptable to the Holder and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

 

6.5 Failure to File, Obtain and Maintain Effectiveness of Registration Statement. If a Registration Delay occurs the Company shall pay to a Holder of Registrable Securities (the “Registration Delay Payments”), as partial relief for the damages to such Holder by reason of any such Registration Delay, and calculated for each share of Common Stock for which a Registration Statement is required to be filed pursuant to the terms of Section 6.1 then outstanding that is a Registrable Security and not covered for resale at such time pursuant to the terms of a Registration Statement, an accruing amount per each such share equal to the Delay Payment Rate for each week (or portion thereof) during the Damages Accrual Period. The Registration Delay Payments shall accrue from the first day of the applicable Registration Delay through the date it is cured (the “Damages Accrual Period”), and shall be payable in cash to the record holder of the Registrable Securities entitled thereto on the earlier of the (i) last Business Day of each calendar month during which such Registration Delay Payments are incurred and (ii) the third Business Day after the event of failure giving rise to the Registration Delay Payments is cured. Nothing shall preclude a Holder from pursuing or obtaining any available remedies at law, specific performance or other equitable relief with respect to this Article 6 in accordance with applicable law. 

 

6.6 Related Obligations. At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 6.1, the Company will use its best efforts to effect the registration of the Registrable Securities in accordance with the intended method of distribution thereof and, pursuant thereto, the Company shall have the following obligations during the Registration Period (as hereinafter defined): 

 

(a) The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities (but in no event later than the Filing Deadline) and use its best efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as practicable after such filing (but in no event later than the applicable Effectiveness Deadline). The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earliest of (i) the three-year anniversary of the Closing Date; (ii) the date as of which the Holder may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144(k) promulgated under the Securities Act (or successor thereto) or (iii) the date on which the Holder shall have sold all the Registrable Securities covered by such Registration Statement either pursuant to the Registration Statement or in one or more transactions in which the Holder obtained unlegended certificates representing the Registrable Securities so purchased in accordance with applicable securities laws (the “Registration Period”), which Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall 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 (in the case of any prospectus only, in light of the circumstances under which they were made) not misleading.

 

(b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of distribution by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Article 6 (including pursuant to this Section 6.6(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act), the Company shall have incorporated such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement.

 

(c) The Company shall (i) permit a legal counsel for the Holder to review and comment upon those sections of (a) the Registration Statement which are applicable to the Holder at least five (5) Business Days prior to its filing with the SEC and (b) all other Registration Statements and all amendments and supplements to all Registration Statements which are applicable to the Holder (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC and (b) not file any Registration Statement (including any amendment or supplement thereto) or document in a form to which such legal counsel reasonably objects. The Company shall furnish to such legal counsel, without charge, (i) any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, provided the legal counsel shall keep such correspondence confidential and shall not provide copies thereof to the Holder without the Company’s prior consent, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by a Holder, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with a Holder’s legal counsel in performing the Company’s obligations pursuant to Section 6.6.

 

 

(d) The Company shall furnish to the Holder whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by such Holder, and all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Holder may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Holder may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Holder.

 

(e) If required under applicable law, the Company shall use its best efforts to (i) register and qualify the Registrable Securities covered by a Registration Statement under all other securities or “blue sky” laws of such jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change in the Company’s Certificate of Incorporation or Bylaws that the Board determines in good faith to be contrary to the best interests of the Company and its stockholders, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.6(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify a Holder who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

 

(f) As promptly as practicable after becoming aware of such event or development, the Company shall notify a Holder in writing of the happening of any event as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission 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, and promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to the Holder (or such other number of copies as such Holder may reasonably request). The Company shall also promptly notify a Holder in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to a Holder by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

 

(g) The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify a Holder who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

(h) At the reasonable request of a Holder and at such Holder’s expense, the Company shall use its best efforts to furnish to such Holder, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as a Holder may reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Holder.

 

(i) The Company shall, upon reasonable notice and during normal business hours, make available for inspection by (i) the Holder, (ii) any legal counsel representing an Holder and (iii) one firm of accountants or other agents retained by such Holder (collectively, the “Inspectors”) all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), which are requested for any purpose reasonably related to a Holder’s rights and/or the Company’s obligations under this Article 6, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector which is not a party hereto shall agree in writing prior to obtaining access to any Records, and a Holder hereby agrees, to hold in strict confidence and shall not make any disclosure (except to a Holder similarly bound by the terms hereof) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the Securities Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement of which the Inspector has knowledge. The Holder receiving the Records agrees that it shall, if permitted by applicable law, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company prior to making any such disclosure and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. The Holder undertaking an inspection pursuant to this Section 6.6(i) shall, and shall instruct its other Inspectors to, use commercially reasonable efforts to perform any such inspection in a manner designed to not materially disrupt the business activities of the Company. Nothing herein (or in any other confidentiality agreement between the Company and a Holder) shall be deemed to limit the Holder’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

 

 

(j) The Company shall hold in confidence and not make any disclosure of information concerning a Holder provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws or the rules of NASDAQ, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, (iv) such information has been made generally available to the public other than by disclosure in violation of this Article 6 or any other agreement, or (v) such Holder expressly consents in writing to the form and content of any such disclosure. The Company agrees that it shall, if permitted by applicable law, upon learning that disclosure of such information concerning a Holder is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Holder prior to making any such disclosure and allow such Holder, at the Holder’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

(k) The Company shall use its best efforts either to (i) cause all the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation and quotation of the Shares on NASDAQ. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 6.6(k).

 

(l) The Company shall cooperate with the Holder who holds Registrable Securities being offered and, to the extent applicable, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as such Holder may reasonably request and registered in such names as such Holder may request.

 

 

(m) If requested by a Holder, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment, as necessary, such information as a Holder requests to be included therein relating to the Holder and the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable, make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by a Holder holding Registrable Securities.

 

(n) The Company shall use its best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities within the United States.

 

(o) The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

 

(p) Notwithstanding anything to the contrary in this Section 6.6, at any time after the applicable Registration Statement has been declared effective by the SEC, the Company may delay the disclosure of material non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Holder in writing of the existence of material non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material non-public information to the Holder) and the date on which the Grace Period will begin, and (ii) notify the Holder in writing of the date on which the Grace Period ends; and, provided further, that no Grace Periods shall exceed sixty (60)] consecutive days and during any consecutive three hundred sixty (360) day period, such Grace Periods shall not exceed an aggregate of one hundred twenty (120) days and the first day of any Grace Period must be at least five (5) trading days after the last day of any prior Grace Period (an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Holder receives the notice referred to in clause (i) and shall end on and include the later of the date the Holders receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 6.6(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 6.6(f) with respect to the information giving rise thereto unless such material non-public information is no longer applicable. In the event that the Company shall exercise its right to effect a Grace Period hereunder, the Registration Period during which the Registration Statement is to remain effective shall be extended by a period of time equal to the duration of any Grace Periods.

 

 

(q) At the end of the Registration Period the Holder shall discontinue sales of shares pursuant to the Registration Statement upon receipt of notice from the Company of its intention to remove from registration the shares covered by such Registration Statement which remain unsold, and such Holder shall notify the Company of the number of shares registered which remain unsold immediately upon receipt of such notice by the Company.

 

6.7 Obligations of the Holder.

 

(a) At least seven (7) days prior to the first anticipated filing date of a Registration Statement, the Company shall notify a Holder in writing of the information the Company requires from such Holder if such Holder elects to have any of its Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Article 6 with respect to such Registrable Securities that such Holder shall furnish to the Company information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request, in each case within seven (7) Business Days of being notified by the Company of its necessity.

 

(b) A Holder by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Holder has notified the Company in writing of such Holder’s election to exclude all of such Holder’s Registrable Securities from such Registration Statement.

 

(c) A Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 6.6(g) or the first sentence of Section 6.6(f), such Holder will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 6.6(g) or the first sentence of Section 6.6(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of a Holder in accordance with the terms of this Agreement in connection with any sale of Registrable Securities with respect to which a Holder has entered into a contract for sale prior to such Holder’s receipt of a notice from the Company of the happening of any event of the kind described in Section 6.6(g) or the first sentence of Section 6.6(f) and for which such Holder has not yet settled.

 

(d) As promptly as practicable after becoming aware of such event, a Holder shall notify the Company in writing of the happening of any event as a result of which the information provided in writing by such Holder to the Company expressly for use in the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission 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; provided, however, that no separate written notification shall be required for any event disclosed by such Holder in a timely filing with the SEC relating to the Company’s securities.

 

 

6.8 Expenses of Registration. All expenses incurred in connection with registrations, filings or qualifications pursuant to Sections 6.1 through 6.8 of this Article 6, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, transfer agent fees and fees and disbursements of counsel for the Company, but excluding underwriting discounts and commissions, shall be paid by the Company. The Company shall also reimburse any Holder for the reasonable and documented fees and disbursements of its attorneys in connection with registration, filing or qualification pursuant to Sections 6.1 through 6.6 of this Article 6. The Company shall pay all of such Holder’s reasonable costs (including fees and disbursements of its attorneys) incurred in connection with the successful enforcement of the Holder’s rights under this Article 6.

 

6.9 Indemnification. In the event any Registrable Securities are included in a Registration Statement under this Article 6:

 

(a) To the extent permitted by law, the Company shall indemnify any Holder, the directors, officers, members, partners, employees, agents or other representatives of and each Person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which any registration that has been effected pursuant to this Agreement, against all claims, losses, damages, liabilities, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) (or action in respect thereof), including any Claims incurred in settlement of any litigation, commenced or threatened (subject to Section 6.9(c) below), arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement, prospectus (final or preliminary), any amendment or supplement thereof, issuer free-writing prospectus, circular, or other document incident to any such registration, qualification or compliance or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in light of the circumstances in which they were made, (ii) any violation by the Company of any rule or regulation promulgated by the Securities Act, the Exchange Act, or any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement applicable to the Company and relating to any action or inaction required of the Company in connection with any such registration, qualification or compliance, or (iii) any violation by the Company of the terms of this Article 6, and will reimburse any Holder, the directors, officers, members, partners, employees, agents or other representatives of and each Person controlling such Holder, for reasonable legal and other out-of-pocket expenses reasonably incurred in connection with investigating or defending any such Claim as incurred; provided that the Company will not be liable in any such case to the extent that any untrue statement or omission or allegation thereof is made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder for use in preparation of such Registration Statement, prospectus, amendment or supplement; provided further that the Company will not be liable in any such case where the Claim results from the material failure of such Holder to comply with the covenants and agreements contained in this Article 6 respecting sales of Registrable Securities.

 

 

(b) The Purchaser will indemnify the Company, the directors, officers, employees, agents, legal counsel and other representatives and each Person who controls the Company within the meaning of Section 15 of the Securities Act, against all Claims (or actions in respect thereof), including any Claims incurred in settlement of any litigation, commenced or threatened (subject to Section 6.9(c) below), arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement, prospectus (final or preliminary), any amendment or supplement thereof, issuer free-writing prospectus, circular or other documents, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in light of the circumstances in which they were made, and will reimburse the Company, the directors, officers, employees, agents, legal counsel and other representatives and each Person controlling the Company for reasonable legal and any other expenses reasonably incurred in connection with investigating or defending any such Claim as incurred, in each case to the extent, that such untrue statement or omission or allegation thereof is made in reliance upon and in conformity with written information furnished to the Company by or on behalf of a Holder for use in preparation of the Registration Statement, prospectus, amendment or supplement. Notwithstanding the foregoing, a Holder’s aggregate liability pursuant to subsection (b) and (d) of this Section 6.9 shall not exceed the net proceeds received by such Holder from the sale of the Registrable Securities pursuant to the Registration Statement giving rise to such liability.

 

(c) Each party entitled to indemnification under this Section 6.9 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party (at its expense) to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such Indemnified Party’s expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement, unless such failure is materially prejudicial to the Indemnifying Party in defending such claim or litigation. Notwithstanding the foregoing, an Indemnified Party shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. An Indemnifying Party shall not be liable for any settlement of an action or claim effected without its written consent (which consent will not be unreasonably withheld). No Indemnifying Party, in its defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

 

(d) If the indemnification provided for in this Section 6.9 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Claim referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Claim in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such Claim as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission provided, that in no event shall any contribution by a Holder hereunder when combined with amounts paid pursuant to subsection (b) of this Section 6.9 exceed the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such contribution obligation.

 

 

6.10 Assignment and Transfer. The rights to cause the Company to register Registrable Securities granted to the Purchaser by the Company in this Article 6 may be assigned to a Holder, provided that such Holder is an Affiliate of the Purchaser, in connection with a transfer by such Holder of all or a portion of its Registrable Securities; provided, however, that such transfer must be made at least five (5) days prior to the Filing Deadline and that (a) such transfer may otherwise be effected in accordance with applicable securities laws, including establishing the transferee’s qualification as an “accredited investor” within the meaning of the Securities Act; (b) such Holder gives prior written notice to the Company at least five (5) days prior to the Filing Deadline; and (c) such transferee agrees in writing with the Company to comply with and be bound by all of the provisions of this Agreement; and (d) such transfer is otherwise in accordance with the applicable requirements of this Agreement. Except as specifically permitted by this Section 6.10, the rights of a Holder with respect to Registrable Securities as set out herein shall not be transferable to any other Person, and any attempted transfer shall cause all rights of such Holder therein to be forfeited. Notwithstanding the foregoing provisions of this Section 6.10, no such restriction shall apply to a transfer by a Holder that is: (i) a partnership transferring to its partners or former partners in accordance with partnership interests; (ii) a corporation transferring to a wholly-owned subsidiary or a parent corporation that owns all of the capital stock of the Holder; (iii) a limited liability company transferring to its members or former members in accordance with their interest in the limited liability company; (iv) an affiliated investment fund transferring to another affiliated investment fund; or (v) an individual transferring to the Holder’s family member or trust for the benefit of an individual Holder; provided that in each case the transfer is effected in accordance with applicable securities laws, including establishing the transferee’s qualification as an “accredited investor” within the meaning of the Securities Act, and the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Holder hereunder.

 

6.11 Amendment and Waiver of Registration Rights. The rights of any Holder under the provisions of this Article 6 may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely) or amended by an instrument in writing signed by such Holder. Any amendment or waiver effected in accordance with this Section 6.11 shall be binding upon any Holder and the Company. By acceptance of the benefits under this Article 6, any Holder of the Registrable Securities hereby agree to be bound by the provisions hereof.

 

 

6.12 Lock-Up Period. For a period of six (6) months from the Closing Date, the Purchaser agrees not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any Shares, or any securities convertible into, exchangeable for or that represent the right to receive the Shares, whether now owned or hereinafter acquired, owned directly by the Purchaser or with respect to which the Purchaser has beneficial ownership within the rules and regulations of the SEC.

 

 

 

7.1 Termination. This Agreement may be terminated at any time with respect to the applicable parties prior to the Closing:

 

(a) By mutual written agreement of the Company and the Purchaser;

 

(b) By either the Company or the Purchaser if the Alliance Agreement has been terminated;

 

(c) By either the Company or the Purchaser, by written notice to the other parties (provided the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in this Agreement or the Related Agreements) if the Closing shall not have been consummated on or before April 7, 2007;

 

(d) By either the Company or the Purchaser by giving written notice to the other party or parties if any governmental entity shall have issued an injunction or other ruling prohibiting the consummation of any of the transactions contemplated by this Agreement and the Related Agreements and such injunction or other ruling shall not be subject to appeal or shall have become final and unappealable;

 

(e) By the Purchaser, if there shall have occurred an event or events constituting a Material Adverse Effect;

 

(f) By the Purchaser, if the Company shall have materially breached the terms of this Agreement and such breach is not cured within five (5) Business Days after receiving notice thereof; or

 

(g) By the Company if the Purchaser shall have materially breached the terms of this Agreement and such breach is not cured within five (5) Business Days after receiving notice thereof.

 

7.2 Effect of Termination. In the event of any termination of this Agreement pursuant to Section 7.1, all rights and obligations of the parties hereunder shall terminate without any liability on the part of any party or its Affiliates in respect thereof; provided, however, that such termination shall not relieve the Company or the Purchaser of any liability for any willful breach of this Agreement.

 

 

7.3 Governing Law; Jurisdiction. This Agreement will be governed by and interpreted in accordance with the laws of the State of New York. 

 

7.4 Counterparts; Signatures by Facsimile. This Agreement may be executed in two or more counterparts, all of which are considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other parties. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

7.5 Headings. The headings of this Agreement are for convenience of reference only, are not part of this Agreement and do not affect its interpretation.

 

7.6 Severability. If any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision will be deemed modified in order to conform with such statute or rule of law. Any provision hereof that may prove invalid or unenforceable under any law will not affect the validity or enforceability of any other provision hereof. 

 

7.7 Entire Agreement; Amendments; Waiver. This Agreement and the Related Agreements (including all schedules and exhibits hereto and thereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement and the Related Agreements supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. Except as otherwise provided herein, no provision of this Agreement may be amended or waived other than by an instrument in writing signed by the Company and the Purchaser, or in the case of a waiver, by the party against whom enforcement of such waiver is sought. Any amendment effected in accordance with this Section 7.7 shall be binding upon the holder of any Shares purchased under this Agreement at the time outstanding, each future holder of all such securities and the Company.

 

7.8 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed email, telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. The addresses for such communications are:

 

 

If to the Company:

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, CT 06813

Facsimile: (203) 825-6069

Attention: Ross Levine

 

with a copy to:

 

Robinson and Cole LLP

Financial Center

P.O. Box 10305

Stamford, CT ###-###-####

Facsimile: (203) 462-7599

Attention: Richard Krantz

 

If the Purchaser:

POSCO Power

Dacom Building, 10^th Floor

706-1 Yeoksam-dong, Kangnam-gu

Seoul 135-987, Korea

Facsimile: 011-82-2-3457-1960

Attention: Taehyoung (TH) Kim

 

with a copy to:

 

POSCO

POSCO Center

892 Daechi 4-Dong, Kangnam-gu

Seoul 135-777, Korea

Facsimile: 011-82-2-3457-1972

Attention: Bong-han “Stephen” Kim, Esq.

 

Each party will provide ten (10) days’ advance written notice to the other parties of any change in its address.

 

7.9 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the parties and their successors and permitted assigns. The Company will not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser, and the Purchaser may assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company, except as permitted in accordance with Section 6.10 hereof.

 

7.10 Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto, their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

 

7.11 No Strict Construction. The language used in this Agreement is deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 

 

7.12 Equitable Relief. The Company recognizes that, if it fails to perform or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Purchaser. The Company therefore agrees that the Purchaser is entitled to seek temporary and permanent injunctive relief in any such case. The Purchaser also recognizes that, if it fails to perform or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Company. The Purchaser therefore agrees that the Company is entitled to seek temporary and permanent injunctive relief in any such case

 

7.13 Survival of Representations and Warranties. Notwithstanding any investigation made by any party to this Agreement, all representations and warranties made by the Company and the Purchaser herein shall survive for a period of one (1) year from the Closing Date. All covenants contained herein shall survive the execution of this Agreement and the Closing of the transactions contemplated hereby (except to the extent expressly provided in this Agreement).

 

7.14 Limitation on Enforcement of Remedies. The Company hereby agrees that it will not assert against the shareholders, limited partners or any members of the Purchaser any claim it may have under this Agreement by reason of any failure or alleged failure by such Purchaser to meet its obligations hereunder.

 

7.15 Aggregation of Stock. All shares of Registrable Securities held or acquired by affiliated Person or Persons under common management or control shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

7.16 Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by the Purchaser on the Closing Date (except for certificates evidencing the Shares themselves), and (iii) financial statements, certificates and other information previously or hereafter furnished to the Purchaser, may be reproduced by the Purchaser by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process and the Purchaser may destroy any original document so reproduced. All parties hereto agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by the Purchaser in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

 

7.17 Lost, etc. Certificates Evidencing Shares; Exchange. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any certificate evidencing any Shares owned by the Purchaser and (in the case of loss, theft or destruction) of an unsecured indemnity satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such certificate, if mutilated, the Company will make and deliver in lieu of such certificate a new certificate of like tenor and for the number of securities evidenced by such certificate which remain outstanding. The Purchaser’s agreement of indemnity shall constitute indemnity satisfactory to the Company for purposes of this Section 7.17. Upon surrender of any certificate representing any Shares, for exchange at the office of the Company, the Company at its expense will cause to be issued in exchange therefor new certificates in such denomination or denominations as may be requested for the same aggregate number of Shares represented by the certificate so surrendered and registered as such holder may request. The Company will also pay the cost of all deliveries of certificates for such Shares to the office of the Purchaser (including the cost of insurance against loss or theft in an amount satisfactory to the holders) upon any exchange provided for in this Section 7.18.

 

 

7.18 Draftsmanship. Each of the parties hereto has been represented by its own counsel and acknowledges that it has participated in the drafting of this Agreement, and any applicable rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in connection with the construction or interpretation of this Agreement. Whenever required by the context hereof, the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; and the neuter gender shall include the masculine and feminine genders.

 

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first above written.

 

	FUELCELL ENERGY, INC.
	By:	/s/ R. Daniel Brdar
		Name: R. Daniel Brdar Title: President, CEO and Chairman

 

	POSCO POWER
	By:	/s/ Seung-Woo Lee
		Name: Seung-Woo Lee Title: President and CEO

 

SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

 

 

 

Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person controlling, controlled by or under direct or indirect common control with such Person (for the purposes of this definition “control,” when used with respect to any specified Person, shall mean the power to direct the management and policies of such person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing).

 

“Alliance Agreement” means that certain Alliance Agreement dated as of the date hereof between the Company and the Purchaser.

 

“Allowable Grace Period” has the meaning set out in Section 6.6(p).

 

“Board” has the meaning set forth in Section 2.3(c).

 

“Business Day” means a day Monday through Friday on which banks are generally open for business in New York City.

 

“Bylaws” has the meaning set forth in Section 2.3(d).

 

“Certificate of Incorporation” has the meaning set forth in Section 2.3(d).

 

“Claims” has the meaning set forth in Section 6.9(a).

 

“Closing” has the meaning set forth in Section 1.4.

 

“Closing Date” has the meaning set forth in Section 1.4.

 

“Common Stock” means the common stock, par value $0.0001 per share, of the Company.

 

“Company” has the meaning set forth in the introductory paragraph.

 

“Damages Accrual Period” has the meaning set forth in Section 6.5.

 

“Delay Payment Rate” means during the Damages Accrual Period, an amount per week (or portion thereof) per share of Common Stock equal to 1% of the per share Purchase Price of such Share.

 

“Demand Registration” has the meaning set forth in Section 6.2.

 

“DGCL” means the Delaware General Corporation Law.

 

 

“Disclosure Schedule” means the Disclosure Schedules of the Company delivered concurrently herewith and incorporated herein by reference.

 

“Effectiveness Deadline” has the meaning set forth in Section 6.1.

 

“Evaluation Date” has the meaning set forth in Section 2.7.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Filing Deadline” has the meaning set forth in Section 6.1.

 

“Financial Statements” means the financial statements of the Company included in the SEC Documents.

 

“Grace Period” has the meaning set forth in Section 6.6(p).

 

“Holder” means the Purchaser and any Person to whom the Purchaser, in accordance with Section 6.10 hereof, transfers its rights under Article 6 of this Agreement.

 

“Indemnified Party” has the meaning set forth in Section 6.9(c).

 

“Indemnifying Party” has the meaning set forth in Section 6.9(c).

 

“Inspectors” has the meaning set forth in Section 6.6(i).

 

“Intellectual Property Rights” has the meaning set forth in Section 2.10(a).

 

“Investment Company Act” has the meaning set forth in Section 2.24.

 

“Liens” means security interests, pledges, liens, charges, claims, options, restrictions on transfer, mortgages, rights of first refusal, preemptive or similar rights, proxies and voting or other agreements, or other encumbrances of any nature whatsoever.

 

“Market Price” has the meaning set forth in Section 1.1.

 

“Material Adverse Effect” means an event, change or occurrence that individually, or together with any other event, change or occurrence, has had or reasonably could be expected to have a material adverse effect on (a) the business, operations, assets, prospects or financial condition of the Company and its Subsidiaries, taken together as a whole, or (b) the ability of the Company to perform its obligations pursuant to the transactions contemplated by this Agreement and the Related Agreements.

 

“Material Contracts” has the meaning set forth in Section 2.14(a).

 

“Material Permits” has the meaning set forth in Section 2.5(c).

 

“NASDAQ” has the meaning set forth in Section 1.1.

 

 

“Offering” means the offer, sale, issuance and purchase of the Shares contemplated by this Agreement.

 

“Non-US Person” has the meaning set forth in Section 3.2.

 

“Per Share Purchase Price” has the meaning set forth in Section 1.1.

 

“Person” means any person, individual, corporation, limited liability company, partnership, trust or other nongovernmental entity or any governmental agency, court, authority or other body (whether foreign, federal, state, local or otherwise).

 

“Preferred Stock” has the meaning set forth in Section 2.3(a).

 

“Purchaser” has the meaning set forth in the introductory paragraph.

 

“Purchase Price” has the meaning set forth in Section 1.1.

 

“Records” has the meaning set forth in Section 6.6(i).

 

The terms “register,” “registered” and “registration” refer to the registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.

 

“Registrable Securities” means the Shares; provided, however, that securities shall only be treated as Registrable Securities if and only for so long as they (A) have not been disposed of pursuant to a Registration Statement declared effective by the SEC, (B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale or (C) are held by a Holder or a permitted transferee pursuant to Section 6.10.

 

“Registration Delay” means the occurrence of any of (i) a Registration Statement covering all of the Registrable Securities is not filed with the SEC on or before the Filing Deadline or is not declared effective on or before the Effectiveness Deadline, (ii) a Registration Statement in connection with a Demand Registration covering all of the Registrable Securities required to be covered thereby is not filed with the SEC on or before the deadline described in the last sentence of Section 6.2, (iii) on any day during the Registration Period (other than during an Allowable Grace Period), all of the Registrable Securities required to be included in such Registration Statement cannot be sold pursuant to such Registration Statement as a matter of law or because the Company has failed to perform the applicable time period required for such performance (including, without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, or to register a sufficient number of Shares, or (iv) a Grace Period exceeds the length of an Allowable Grace Period.

 

“Registration Delay Payments” has the meaning set forth in Section 6.5.

 

 

“Registration Period” has the meaning set forth in Section 6.6(a).

 

“Registration Statement” means a registration statement or registration statements of the Company filed under the Securities Act covering the Registrable Securities.

 

“Related Agreements” has the meaning set forth in Section 2.2.

 

“Required Approvals” has the meaning set forth in Section 2.5(b).

 

“Rule 144” means Rule 144 promulgated under the Securities Act, or any successor rule.

 

“Sarbanes-Oxley Act of 2002” means the Sarbanes-Oxley Act of 2002, as amended, and the related rules and regulations promulgated under such act or the Exchange Act.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Documents” has the meaning set forth in Section 2.6.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute.

 

“Share” and “Shares” has the meaning set forth in Section 1.1.

 

“Subsidiary” and “Subsidiaries” of any person shall mean any corporation, partnership, limited liability company, joint venture or other legal entity of which such Person (either above or through or together with any other subsidiary) owns, directly or indirectly, more than 50% of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

 

“Takeover Provision” has the meaning set forth in Section 2.27.

 

“Technology Transfer Agreement” means the Technology Transfer, License and Distribution Agreement dated as of the date hereof between the Company and the Purchaser.