LLC INTEREST PURCHASE AGREEMENT (04-09-99)

EXHIBIT 10.12





PLUG POWER, LLC



LLC INTEREST PURCHASE AGREEMENT



Dated as of April 9, 1999

LLC INTEREST PURCHASE AGREEMENT



AGREEMENT, dated as of April 9, 1999, between PLUG POWER, LLC, a Delaware limited liability company (the "Company"), and Southern California Gas Company, a California corporation (the "Investor").



WHEREAS, the Company proposes to issue and sell to the Investor an aggregate of 1,000,000 Shares of Class A Membership Interests (the "Investor Interest") and a warrant (the "Warrant") to purchase 350,000 Shares of Class A Membership Interests (together, the Investor Interest and Warrant shall be referred to as the "Purchased Securities") for an aggregate purchase price of $6.67 million;



WHEREAS, the Investor desires to purchase the Purchased Securities;



NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:



1. Definitions. Unless otherwise defined in context or the context otherwise requires, capitalized terms used in this Agreement are defined on Schedule I hereto. Such terms shall be applicable to both the singular and plural forms of any of the terms therein defined.



2. Sale and Purchase. Upon the terms and subject to the conditions herein contained, the Company agrees to sell to the Investor, and the Investor agrees to purchase from the Company, on the Closing Date, the Purchased Securities. The Investor shall pay to the Company $6.67 million for the Purchased Securities and engage in the services set forth in Section 9.



3. Closing.



(a) The Closing shall occur at the offices of Plug Power, 968 Albany- Shaker Road, Latham, New York 12110, at the hour of 10:00 A.M., Eastern Standard Time, on the Closing Date.



(b) At the Closing, the Company shall deliver to the Investor a certificate evidencing the Investor Interest and a certificate evidencing the Warrant, which certificates shall be registered in the Investor's name, against delivery to the Company of payment by cashier's check or wire transfer of immediately available funds to an account specified in writing by the Company on or before the Closing Date in an amount equal to $6.67 million.



(c) At the Closing, the Investor shall execute the Limited Liability Company Agreement attached hereto as Schedule 3(c) as a Class A Member.



4. Restrictions on Transfer of Securities; Removal of Restrictions on Transfer of

Securities.



(a) The Investor understands and agrees that the Purchased Securities have not been registered under the Securities Act, and that accordingly they will not be fully transferable except as permitted under various exemptions contained in or promulgated by the Commission under the Securities Act, or upon satisfaction of the registration and prospectus delivery requirements of the Securities Act. The Investor acknowledges that it must bear the economic risk of its investment in the Purchased Securities for an indefinite period of time since they have not been registered under the Securities Act and therefore cannot be sold unless they are subsequently registered or an exemption from registration is available.



(b) The Investor hereby agrees with the Company as follows:



(i) The certificates evidencing the Purchased Securities, and each certificate issued in transfer thereof, will bear a legend to the following effect:



"The securities evidenced by this certificate have not been

registered under the Securities Act of 1933 and have been

taken for investment purposes only and not with a view to

the distribution thereof. and such securities may not be

sold or transferred unless there is an effective

registration statement under such Act covering, such

securities or the issuer corporation receives a reasonably

satisfactory opinion of counsel stating that such sale or

transfer is exempt from the registration and prospectus

delivery requirements of such Act."



(ii) The certificates representing the Purchased Securities, and each certificate issued in transfer thereof, will also bear any legend required under any applicable state securities law.



(iii) Absent an effective registration statement under the Securities Act, covering the disposition of such securities, the Investor shall not sell, transfer, assign, pledge, hypothecate or otherwise dispose of any of the Purchased Securities without first providing the Company with a reasonably satisfactory opinion of counsel to the effect that such sale, transfer, assignment, pledge, hypothecation or other disposition will be exempt from the registration and the prospectus delivery requirements of the Securities Act and the registration or qualification requirements of any applicable state securities laws, except that no such registration or opinion shall be required with respect to (A) a transfer not involving a change in beneficial ownership or (B) a sale to be effected in accordance with Rule 144 of the Commission under the Securities Act (or any comparable exemption).



(iv) The Investor consents to the Company's making a notation on its records or giving instructions to any transfer agent of the Purchased Securities in order to





implement the restrictions on transfer of the Purchased Securities set forth in this subsection (c).



5. Representations and Warranties by the Company. In order to induce the Investor to enter into this Agreement and to purchase the Purchased Securities, the Company hereby represents and warrants to the Investor as follows:



5.1 Organization, Standing etc. The Company is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to carry on its business, to own and hold its properties and assets, to enter into this Agreement, to issue the Purchased Securities and to carry out the provisions hereof. The copies of the Certificate of Formation and Limited Liability Company Agreement of the Company, which have been delivered to the Investor prior to the execution of this Agreement, are true and complete and have not been amended or repealed.



5.2 Qualification. The Company is duly qualified or licensed as a foreign limited liability company in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased makes such qualification, licensing, or domestication necessary.



5.3 Capitalization. The authorized capitalization of the Company consists of 40,000,000 Shares of Class A Membership Interests and 3 ),000,000 Shares of Class B Membership Interests. As of the Closing., Date, and prior to the issuance of the Investor Interest, the Company has 24,049,850 Shares of Class A Membership Interests and no Shares of Class B Membership Interests outstanding. All of the issued and outstanding Shares of the Company have been, and all of the Shares to be sold to the Investor will be, upon payment therefor, duly authorized and validly issued and fully paid and nonassessable. As of the Closing Date, and prior to the issuance of the Warrant, the Company has warrants and options outstanding, which upon exercise and payment of an aggregate of $90,250,900 to the Company, will entitle the holders of such warrants and options to an aggregate of 9,400,000 Shares of Class A Membership Interests and, as of February 12, 1999, 2,033,900 Shares of Class B Membership Interests. Other than such warrants and options, and the Warrant, there are no convertible securities with respect to the Company or agreements, arrangements or understandings to issue convertible securities with respect to the Company.



5.4 Company Authority. The Company has the power and authority to execute and deliver this Agreement. The execution and delivery of this Agreement has been duly authorized by all necessary Company action.



5.5 Binding Obligations. This Agreement constitutes the legal, valid and binding obligation of the Company and is enforceable against the Company in accordance with its terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally.





5.6 Brokers or Finders. No Person has or will have, as a result of the transactions contemplated herein and any action or omission of the Company, any right or valid g claim against the Company or any Investor for any commission, fee or other compensation as a finder or broker, or in any similar capacity.



5.7 Legal Proceedings. There are no actions, proceedings or claims pending or, to the knowledge of the Company, threatened against, relating to or affecting the Company or any of its assets or property, which, if determined adversely to the Company, would have a material adverse effect on the results of operations, financial condition or business of the Company.



5.8 Class A Membership Interests. The holders of Shares of Class A Membership Interests and the number of Shares held by such holders are as set forth on Schedule 5.8.



5.9 Warrants and Options. The holders of options and warrants to purchase Shares of Class A Membership Interests, the number of Shares underlying such options and warrants, the exercise price for such warrants and options and the expiration dates of such options and warrants are as set forth on Schedule 5.9.



5.10 The Company has not been charged, nor to the best of its knowledge is it threatened to be charged, with infringement of, nor to the best of its knowledge has it infringed, any existing patent, or pending application therefor, any registered or unregistered trademark, service mark, trade name, common-law or registered copyright, or other proprietary right of any property in connection with its business. The consummation of the transactions contemplated hereby will not alter or impair any of such rights. Use of the Company's PEM fuel cell system (the "Product") does not, and sale in the future would not, to the best knowledge of the Company, infringe upon any existing patent, or pending application therefor, agreement or right or claim of any party. A true and correct listing of all patents, trademarks, service marks, trade names, copyrights and licenses held by, and patent and trademark applications filed by the Company is attached as Schedule 5.10.



5.11 The Company is not (and to the best knowledge of the Company no other party is) and shall not be in breach or violation of, or default under, and there is no valid basis for a claim of breach or violation of, or default under, any agreement, instrument, or other obligation of any type to which the Company or GE Fuel Cell Systems, L.L.C. is a party or is bound (a "Material Contract") which involves a commitment or forbearance which could reasonably exceed $25,000 during a 12-month period and (a) relates to its business including, without limitation, the Product or (b) to which any of the Company's assets is subject, and no event has occurred which constitutes or, with the lapse of time or the giving of notice or both, would constitute such a breach, violation or default by the Company thereunder. Each Material Contract is listed on Schedule 5.11.



5.12 The Company has complied with, and is not in violation of, applicable federal,





state and local laws, rules and regulations materially affecting the operation of its business.



5.13 The Company has duly and timely filed all federal, state and local tax reports and returns required to be filed by it, and withheld and, if payable, paid, all taxes required to be withheld from or paid relating to salaries paid to its employees.



5.14 While they have not been audited, all of the financial statements, books and records of the Company for the calendar years 1997 and 1998, as made available to the Investor and its advisors for inspection prior to the Closing Date, have been prepared in accordance with generally accepted accounting principles, consistently applied throughout the periods covered thereby, and fairly and accurately present the financial condi ...