Strategic Alliance Agreement

EXHIBIT 10.29


STRATEGIC ALLIANCE AGREEMENT


This Agreement dated as of April 1, 1997 is entered into by and among AMERICAN SUPERCONDUCTOR CORPORATION, a Delaware corporation (the "Company"), and CHARTH (COMPAGNIE HOLDING D' APPLICATIONS ET DE REALISATIONS THERMIQUES ET HYDRAULIQUES) S.A. (the "Purchaser"), a wholly-owned subsidiary of Electricite de France ("EDF").


WHEREAS, the Company is engaged in the research, development, commercialization, production and marketing of superconductor products for the electric power industry;


WHEREAS, the Purchaser is an affiliate of an electric utility that seeks to provide the best possible service to its customers at the lowest possible cost and to enhance its competitive position;


WHEREAS, the Purchaser believes that high temperature superconductivity is and will be one of the most significant technological developments affecting the electricity industry;


WHEREAS, the Purchaser believes that the Company is and will be a leader in the development and commercialization of high temperature superconductor products;


WHEREAS, the Company desires to (a) gain access to the Purchaser's understanding of the electricity market, including the Purchaser's knowledge of new technologies and market information and (b) obtain additional financing for future development of its high temperature superconductor products; and


WHEREAS, the Company and the Purchaser desire to form a strategic alliance to exchange information relating to high temperature superconductivity products, other emerging technologies affecting the electricity industry and market information regarding the electricity industry;


NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, the parties hereto agree as follows:


1. Advisory Board.


1.1 Establishment of Advisory Board; Appointment of Representatives.(a) Promptly following the execution of this Agreement, the parties shall establish an advisory board (the "Advisory Board"). The Advisory Board shall be comprised of six members, of which three members shall be designated by the Company and three members shall be designated by the Purchaser. The initial representatives of the Company shall be Gero Papst, Bob Schwall and Alex Malozemoff. The initial representatives of the Purchaser shall be Jean-Pierre Cerdan, Pierre Manuel and Pierre-Guy Therond. The Company and the Purchaser shall have the right at any time to replace its representatives with representatives of its choosing. 2
(b) The Advisory Board shall meet at least two times per year and at such times as the Purchaser and the Company shall agree. The meetings of the Advisory Board shall take place at the main offices of the Company in Westborough, MA or at such other place in or outside the United States as the Company and the Purchaser shall agree.


(c) The parties agree to prepare and distribute to each other an agenda for each meeting at least one month prior to such meeting and to consult and agree on the form of such agenda prior to each meeting. Each of the Company and the Purchaser may nominate and list on such agenda appropriate members of its scientific, engineering, marketing and business development staff to attend the meetings of the Advisory Board and to advise the Advisory Board with respect to certain items on the agenda. The topics for discussion at the meetings of the Advisory Board shall include those items listed on Appendix 1 attached hereto.


1.2 Purpose. The purpose of the Advisory Board shall be to (i) establish a framework for the exchange of information relating to developments in the field of high temperature superconductivity as well as other emerging technologies affecting the electricity industry; (ii) provide a forum for reviewing various technical, industrial and commercial topics relating to the development of high temperature superconductivity products as well as other emerging technologies affecting the electricity industry; and (iii) exchange market research information regarding current and future trends in the electricity industry.


1.3 Confidential Information. The Purchaser acknowledges that the Company is and may be in the future subject to certain laws and regulations restricting transfers of confidential information and is and may be in the future a party to agreements with certain strategic partners and governmental agencies that contain restrictions and limitations on the Company's ability to disclose certain confidential information to the Purchaser. The Company has previously provided to the Purchaser the text of such restrictions existing today. Subject to the Company's compliance with its obligations under such laws, regulations and agreements, the Company agrees to disclose to the Purchaser as much information as permissible with respect to the research and development being conducted and products being developed pursuant to such agreements. If there is any disagreement as to whether certain information may be disclosed, the parties agree to negotiate in good faith to resolve such disagreement.


1.4 Intellectual Property. The parties agree that any intellectual property that is created or developed by the Advisory Board, including trade secrets and know-how and intellectual property that may be protected by means of copyrights and patents, shall be jointly-owned by the Company and the Purchaser. The parties agree to consult with each other regarding the most appropriate methods for protecting their rights with respect to such property. It is the intention of EDF and the Company that the Company will be the primary means for developing and commercializing any such new technology.


1.5 Sharing of Information. The Company will make its best efforts in good faith and consistent with applicable laws, regulations, and contractual provisions to provide the Purchaser with as detailed a summary as possible, covering the state-of-the-art progress in superconductivity technology, the key project progress and status from existing


-2- 3 current and new strategic agreements that the Company enters into which may involve confidentiality undertakings concerning information developed solely by the Company. For new strategic agreements that the Company enters into, the Company will take into account in good faith its commitment to share information with the Purchaser at the level of detail presented in Appendix 1. It is understood that the Company has contracts with and will continue to pursue contracts with agencies of the U.S. government (e.g., the Department of Defense). These contracts may impose limitations on the Company's ability to provide certain information related to these contracts to the Purchaser, and the Company is obliged, under U.S. law, to observe these limitations.


1.6 Access to New Technologies. To the extent permitted by applicable laws and regulations governing technology transfer, the Company agrees to offer the Purchaser the right to test any new product or technology developed or manufactured by or for the Company on terms reasonably acceptable to both parties simultaneously with or within 90 days of providing any such new product or technology to any third party; provided that the Company shall not be required to offer the Purchaser this right if and to the extent any such new product or technology has been developed by the Company pursuant to an agreement prohibiting the disclosure of such new product or technology to the Purchaser. To the extent permitted by applicable laws and regulations governing technology transfer, in connection with any agreement entered into by the Company after the date hereof with a third party regarding the development of any new products or technologies, the Company agrees to use good faith efforts in the negotiation of the terms of such agreements to obtain or preserve the Company's right to allow the Purchaser to test such new products and technologies.


1.7 Access by the Purchaser to new products and technologies and other information disclosed to the Purchaser during Advisory Board meetings or otherwise pursuant to this Agreement shall be subject to the Confidential Disclosure Agreement dated November 13, 1996.


2. Authorization and Sale of Shares; Closing.


2.1 Authorization. The Company has duly authorized the sale and issuance to the Purchaser of 1,000,000 shares (the "Shares") of its Common Stock, $.01 par value per share ("Common Stock"), at a price of $10.00 per share (the "Purchase Price").


2.2 Closing. The closing ("Closing") of the sale and purchase of the Shares under this Agreement shall take place at the offices of Hale and Dorr, 60 State Street, Boston, Massachusetts, or at such other place as is mutually agreeable to the Company and the Purchaser at 10:00 a.m. on April 4, 1997 or at such other time and date as are mutually agreeable to the Company and the Purchaser. Subject to the terms and conditions of this Agreement, at the Closing, the Company will sell, issue and deliver to the Purchaser a certificate for the Shares, registered in the name of the Purchaser, against payment to the Company by the Purchaser of the Purchase Price therefor, by wire transfer, check, or other method acceptable to the Company. The date of the Closing is hereinafter referred to as the "Closing Date." If at the Closing any of the conditions specified in Section 5 shall not have been fulfilled, the Purchaser shall, at its election, be relieved of all of its obligations under this Agreement without thereby waiving any other rights it may have by reason of such failure or such non-fulfillment.


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3. Representations of the Company. The Company hereby represents and warrants to the Purchaser as follows:


3.1 Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the assets, business, financial condition or results of operations of the Company. The Company has all requisite corporate power and authority to carry on the business in which it is engaged and to own and use the properties owned and used by it. The Company has furnished to the Purchaser true and complete copies of its Certificate of Incorporation and By-laws, each as amended and as in effect on the date hereof. The Company is not in default under or in violation of any provision of its Certificate of Incorporation or By-laws.


3.2 Capitalization. The authorized capital stock of the Company consists of 20,000,000 shares of Common Stock, of which 9,562,157 shares were issued and outstanding as of February 28, 1997. As of February 28, 1997, other than options to acquire 1,906,635 shares of Common Stock issued to employees, directors and consultants of the Company, warrants to purchase in the aggregate 350,500 shares of Common Stock and the Company's obligation to issue shares of Common Stock and assume warrants pursuant to the Agreement and Plan of Merger among the Company, ASC Merger Corp. and Superconductivity, Inc., there are outstanding no options, warrants, convertible securities or other rights to acquire any capital stock of the Company. Neither the Company nor, to the Company's knowledge, any securityholder of the Company is a party to any agreement or instrument relating to the voting of the Common Stock or pursuant to which any other person has with respect to the Common Stock any preemptive right, right of first refusal, right of first offer, buy-sell agreement, right to require the Company to file a registration statement or other similar right (except registration rights agreements related to the warrants described above and registration rights agreements to be executed in connection with the Company's pending acquisition of Superconductivity, Inc.). All of the issued and outstanding shares of Common Stock are duly authorized, validly issued, fully paid and nonassessable. The Shares, when issued in accordance with this Agreement, will be duly authorized, validly issued, fully paid and nonassessable. The Shares, when issued in accordance with this Agreement, will be listed on the Nasdaq National Market or such other securities exchange on which Common Stock of the Company is then listed.


3.3 Authorization of Transaction. The execution and delivery of this Agreement by the Company, the performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly and validly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against it in accordance with its terms. The execution of and performance of the transactions contemplated by this Agreement and compliance with its provisions by the Company will not violate any provision of law and will not, with or without the passage of time, conflict with or result in any breach of any of


-4- 5 the terms, conditions or provisions of, or constitute a default under, its Certificate of Incorporation or its By-Laws or any indenture, lease, agreement or other instrument to which the Company is a party or by which it or any of its properties is bound, or any decree, judgment, order, statute, rule or regulation applicable to the Company, except where such conflict, breach or default would not have a material adverse effect on the assets, business, financial condition or results of operations of the Company.


3.4 Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority is required on the part of the Company in connection with the execution and delivery of this Agreement, the offer, issuance, sale and delivery of the Shares, or the other transactions to be consummated at the Closing, except such filings as shall have been made prior to and shall be effective on and as of the Closing or as are permitted to be made after the Closing. Based on the representations made by the Purchaser in Section 4 of this Agreement, the offer, sale and issuance of the Shares to the Purchaser will be in compliance with applicable federal securities laws.


3.5 Reports and Financial Statements. The Company has previously furnished to the Purchaser complete and accurate copies, as amended or supplemented, of its (a) Annual Report on Form 10-K for the fiscal years ended March 31, 1994, 1995 and 1996, as filed with the Securities and Exchange Commission (the "SEC"), and (b) all other reports filed by the Company under Section 13 and Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with the SEC since March 31, 1996 (such reports are collectively referred to herein as the "Company Reports"). The Company Reports constitute all of the documents required to be filed by the Company under Section 13 of the Exchange Act with the SEC since March 31, 1996. Each Company Report, as of its respective date, did not contain any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements of the Company included in the Company Reports (i) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (ii) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto, and in the case of quarterly financial statements, as permitted by Form 10-Q under the Exchange Act), (iii) fairly present the consolidated financial condition, results of operations and cash flows of the Company as of the respective dates thereof and for the periods referred to therein, and (iv) are consistent with the books and records of the Company.


3.6 Absence of Material Adverse Changes. Since December 31, 1996, there has not been any material adverse change in the assets, business, financial condition or results of operations of the Company, nor has there occurred any event or development which could reasonably be foreseen to result in such a material adverse change in the future.


3.7 Litigation. The Company is not a party to and, to the knowledge of the Company, is not threatened to be made a party to (a) any unsatisfied judgment, order, decree, stipulation or injunction or (b) any claim, complaint, action, suit, proceeding, hearing or


-5- 6 investigation of, in or before any court, administrative agency or commission, other governmental or regulatory authority, or arbitrator which, if determined adversely, would result in a material adverse change in the assets, business, financial condition or results of operations of the Company.


3.8 Compliance. The Company, and the conduct and operations of its business, are in compliance with each law (including rules and regulations thereunder) of any federal, state, local or foreign government, which (a) affects or relates to this Agreement or the sale and issuance of the Shares hereunder or (b) is applicable to the Company or its business, except for any violation of or default under a law which would not result in a material adverse change in the assets, business, financial condition or results of operations of the Company. The Company and, to the Company's knowledge, each other party thereto is not in default in any material respect and has received no notice that it is in default under any material agreement or instrument to which the Company is a party or by which it or its property may be bound.


3.9 Disclosure. No representation or warranty by the Company contained in this Agreement, and no statement contained in any document, certificate or other instrument delivered to or to be delivered by or on behalf of the Company pursuant to this Agreement (including without limitation the Company Reports), when read together, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.


4. Representations of the Purchaser. The Purchaser hereby repr ...