Exhibit 10.1

[Execution Version]

Contract No. ___

CONTRACT

FOR THE SUPPLY OF DFC® COMPONENTS

FROM FUELCELL ENERGY INC. (SELLER)

TO POSCO ENERGY (BUYER)

October 31, 2012

Confidential treatment requested as to certain portions of this exhibit marked
with an *. Such portions have been redacted and filed separately with the SEC.

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PURCHASE AND SALE CONTRACT

This PURCHASE AND SALE CONTRACT (the “Contract”) is made and entered into this
31st day of October, 2012, (the “Effective Date”) by and between POSCO Energy
CO., LTD. (formerly POSCO Power), a corporation duly organized and existing
under the laws of the Republic of Korea having a place of business at POSCO
Center, 440 Teheran-ro, Gangnam-gu, Seoul 135-777, Korea (hereinafter referred
to as “POSCO Energy” or the “Buyer”) and FuelCell Energy, Inc., a corporation
duly organized and existing under the laws of the State of Delaware, U.S.A.,
with its principal office at 3 Great Pasture Rd., Danbury, Connecticut, U.S.A.
(hereinafter referred to as “FCE” or the “Seller”). Buyer and Seller are
hereinafter sometimes referred to individually as a “Party” or collectively as
the “Parties.”
Each of the Parties acknowledges and agrees that all aspects of the performance
by the Parties under the terms of this Contract, and all other dealings between
the Parties in connection therewith, shall be governed by the principle of good
faith and fair dealing. Further, each Party agrees that it will perform its
functions under this Contract in cooperation with the other Party and in
accordance with prevailing industry standards.
RECITALS:

WHEREAS, POSCO ENERGY and FCE signed a Memorandum of Understanding (“MOA”) on
April 30 2012 in which the Parties agreed upon the framework for a purchase by
POSCO ENERGY of DFC Module Kits from FCE (the “2012 Purchase Contract MOA”);
WHEREAS, consistent with the framework as described in the 2012 Purchase
Contract MOA, the Buyer desires to purchase, and the Seller desires to sell, the
DFC Components Kits as described hereunder; and
WHEREAS, the Seller and the Buyers acknowledge and agree that the Buyer may,
without assuming any obligations set forth in this Contract, assign its rights
and obligations to NewCo, if established, subject to the requirements of Section
17.1 hereunder. In the event of any other assignment of this Contract by either
Party, the assignee shall assume, in writing (in form and substance reasonably
satisfactory to the other Party), the rights and obligations of the assigning
Party under this Contract.
Now, THEREFORE, in view of the foregoing premises and in consideration of the
mutual covenants and undertakings hereinafter provided, the Parties hereto agree
as follows:
1. DEFINITIONS

Unless the context otherwise requires, the following words shall have the
following meanings assigned to them in this Article 1. Where the context
requires, (i) words importing the singular only also include the plural; (ii)
words importing person(s) include corporations and vice versa; (iii) references
to statutes or regulations are to be construed as including all statutory or
regulatory provisions consolidating, amending or replacing the statute or
regulation referred to; (iv) the words “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; the words
“will” and “shall” shall be deemed to be interchangeable; and (v) references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments, extensions and other modifications to those instruments.
1.1
“2011 Purchase and Sale Contract” means the contract executed by the Parties as
of May 26, 2011 as to the purchase and sale of the DFC Components Kits
manufactured by Seller.

1.2
“Advance Payment Guarantee” has the meaning ascribed to it in Section 4.2.2.

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1.3
“Balance of Plant” or “BOP” means all subsystems for operation and generation of
electrical power by DFC's MCFCs in one or more stacks and including, but not
limited to, fuel pre-treatment boilers, water recovery, fuel exhaust burner,
inverter, control system, utility interface and start-up and stand-by equipment.
For the avoidance of doubt, BOP shall mean all components of the DFC Power Plant
other than the Fuel Cell Stack Module.

1.4
“Balance of Plant Skid” or “BOP Skid” means structural skid(s) with all BOP
components for the Power Plant with the exception of the Fuel Cell Module.

1.5
“Buyer’s Carrier” shall mean the freight forwarder engaged by Buyer at Buyer’s
sole discretion, to which Buyer shall assign responsibility for taking delivery
of the Equipment.

1.6
“Buyer’s Receiving Site” shall mean a location in the same country as the
Seller’s Delivery Site for DFC Modules, Non-Repeating Components, and/or
Repeating Components; and which location shall otherwise be designated at the
sole discretion of the Buyer.

1.7
“Commissioning” shall mean that period which begins with the first achievement
of the idle condition (“Hot Standby”) at the Site, after installation of BOP,
Module, and related equipment in accordance with the DFC Manuals or POSCO Plant
Manuals and execution of the Certificate of Mechanical Completion (CMC), and
ends with Final Acceptance.

1.8
“Consumables” shall mean the water treatment salts, catalysts, adsorbents, purge
gases, specialty gases, filters, gaskets, o-rings, fasteners and washers which
are specified in the Service Provider’s maintenance manual and necessary for the
Power Plant to perform its functions. Specifically excluded from the definition
of “Consumables” are Utilities.

1.9
“Contract” means this contract and the Annexes hereto, the Specifications and
all other agreements and documents, including the amendments and supplements
duly made hereto between the Buyer and the Seller to ascertain the rights and
obligations of the Parties upon agreement.

1.10“Contract Price” means the total amount to be paid by the Buyer to the
Seller as provided in Annex A hereof, which shall be subject to any valid
adjustments made through the application of the relevant provisions hereof.

1.11
“Contract Year” means the period commencing on November 1 of any calendar year
and ending on October 31 of the immediately following calendar year, except for
Contract Year 2013, which means the period commencing on May 1, 2013 until
October 31, 2013.

1.12
“Contract Year 2015 Invoicing Date” has the meaning ascribed to it in Section
4.2.4 A.

1.13
“Contract Year 2016 Invoicing Date” has the meaning ascribed to it in Section
4.2.4 A.

1.14
“Day” and “Month” mean a calendar day and month respectively according to the
Gregorian calendar.

1.15
“Delivery Milestones” has the meaning ascribed to it in Section 3.2.1 (C).

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1.16
“DFC Components” means a quantity of Repeating Components (RC) and Non-Repeating
Components (NRC) from which a complete DFC Module may be assembled.

1.17
“DFC Component Kit” or “Module Kit” shall mean one set of RC and NRC (DFC
Components) and other components necessary for the assembly of one complete DFC
Module.

1.18
“DFC Components Specifications” means the specifications attached to this
Contract as Appendix B.

1.19
“DFC Manuals” means the documents normally prepared and routinely provided by
Seller which contain, but are not necessarily limited to, instructions for
installation, operation, initial start-up, field procedures, instrumentation and
controls, and maintenance of the DFC Plants.

1.20
“DFC Module” means those components which comprise the fuel cell stack itself,
including the stack enclosure vessel, the fuel cell stack and its supporting
hardware, including individual fuel cells and cell assemblies, anodes, cathodes,
current collector plates, matrixes, manifolds, instrumentation, assembly and
compression hardware and/or the stack enclosure vessel.

1.21
“DFC Power Plants” or “DFC Plants” means the complete power plants manufactured
by Seller at the facilities of Seller or its sub-vendors, including BOP and DFC
Modules.

1.22
“DFC Specifications” means the documents prepared by Seller containing
performance specifications for the DFC Plants.

1.23
“Dispute” shall have the meaning set forth in Section 15.1.

1.24
“Documentation” shall have the meaning specified in Section 3.4.3.

1.25
“Effective Date” means the date first written above.

 
1.26
“Engineer” means the person designated by the Buyer as engineer, with
notification of such designation being sent to the Seller, for the purpose of
the inspection and testing stipulated in Article 9 hereof, or in absence of such
notification, the word Engineer means the Buyer or its duly authorized
representatives.

1.27
“Equipment” means the DFC Components Kits, Repeating Components, Non-Repeating
Components, and/or any machinery, equipment, apparatus, instruments, ship loose
items, materials and other items which may be supplied by Seller pursuant to
this Contract.

1.28
“EXW” or “Ex Works” shall have the meaning assigned as published by the United
Nations Commission on International Trade Law in the “International Commercial
Terms (INCOTERMS 2010) ” as amended, except as may be otherwise provided herein.

1.29
“Facilities” means the connections, interfaces, and supporting equipment for the
Plant, including the support system, slab or pedestal on which the Plant is
located, fuel supply, electrical distribution system, and equipment connected to
the Plant’s interface points but excluding the Plant itself.

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1.30
“FA Test” shall have the meaning set forth in Section 9.2.1.

1.31
“FCE Products” shall mean DFC Power Plants currently designated DFC300MA,
DFC1500 and DFC3000 with introductory ratings of 300 kW, 1.4 MW and 2.8 MW,
respectively and modifications and improvements thereof, regardless of how
designated by Seller, which are made available, or in the future may be made
available, for commercial use or sale by Seller.

1.32
“FM Notice” shall have the meaning set forth in Section 14.1.

1.33
“Force Majeure” shall mean unforeseen circumstances beyond the reasonable
control and without the fault or negligence of either Party and which such Party
is unable to prevent or provide against the exercise of reasonable diligence
including, acts of God, any acts or omissions of any civil or military
authority, earthquakes, strikes or other labor disturbances, wars (declared or
undeclared), terrorist and similar criminal acts, epidemics, civil unrest and
riots.

1.34
“Fuel Cell Module”, “DFC Module” or “Module” shall mean those components which
comprise the fuel cell stack itself, including the stack enclosure vessel, the
fuel cell stack, ship loose items related to the module end post and its
supporting hardware, including individual fuel cells and cell assemblies,
anodes, cathodes, current collector plates, matrixes, manifolds,
instrumentation, assembly and compression hardware and/or the stack enclosure
vessel, purchased by the Buyer pursuant to this Contract, the description and
the quantity of which are set forth in Annex A to this Contract.

1.35
“Hindered Party” and “Non-Hindered Party” shall have, respectively, the meaning
set forth in Section 14.1.

1.36
“ICC” shall have the meaning set forth in Section 15.2.

1.37
“Initial Down-payment” has the meaning ascribed to it in Section 4.2.1.

1.38
“Inspection Report” shall have the meaning set forth in Section 9.1.

1.39
“Master Services Agreement” means (i) the agreement executed between the Parties
as of April 4, 2008 as the same may be modified, amended, or novated from time
to time in accordance with the terms and conditions thereof, or (ii) the
agreement to be executed between the Parties regarding each Party’s respective
obligations as to the maintenance and operation of the DFC Plants or POSCO
Plants, as the case may be, purchased by a Third Party Owner.

1.40
“Module Specifications” mean the Specifications attached to this Contract as
Appendix A.

1.41
“NewCo” means a company to be established by Buyer in Korea to construct,
assemble, manufacture, use, sell, import, distribute, maintain, service and/or
repair the POSCO Products and POSCO Parts

1.42
“Non-Repeating Components” or “NRC” means parts and components of the DFC
Modules other than RC, necessary to assemble a DFC Module.

1.43
“NRC Localization Plan” means the agreement executed between the Parties as of
April 24, 2012 regarding a detailed plan of NRC procurement from Korean vendors.

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1.44
“POSCO Plant” or “Plant” shall mean the carbonate-based fuel cell power plant
which is manufactured by Buyer using the Direct FuelCell® technology of the
Seller.

1.45
“POSCO Plant Specifications” means the documents prepared by Buyer or POSCO
Affiliate, which contain performance specifications for the POSCO Plant, as
further described in paragraph 3.4.4 hereunder.

1.46
“POSCO Plant Manuals” means the documents prepared by Buyer or POSCO Affiliate
which contain instructions for installation, operation, and maintenance of the
POSCO Plant.

1.47
“POSCO Energy Fuel Cell Stack Module Manufacturing Facility” means a facility in
Korea for stack assembly and conditioning activities to complete the manufacture
of DFC Modules using DFC Components Kits.

1.48
“POSCO Products” means any products, regardless of designation, which are the
same as, or a modification or derivation in whole or in part of FCE Products.

1.49
“POSCO Parts” means any parts or components of POSCO Products other than the DFC
Module.

1.50
“Purchase Order” means any order for purchase issued by Buyer to Seller
indicating types, quantities, and agreed prices for products or services Seller
will provide to Buyer.

1.51
“Repeating Components” or “RC” shall consist of discrete fuel cell packages
assembled from active components, excluding NRC, which are necessary for the
assembly of DFC Modules.

1.52
“Rules” shall have the meaning set forth in Section 15.2.

1.53
“Seller’s Delivery Site(s)” shall mean the point of EXW delivery of the
Equipment.

1.54
“Service Agreement” means a long term service agreement in respect of the Plant
between the Buyer (or its designee) and the Third Party Owner.

1.55
“Site” means the location upon which the Plant and the Facilities will be
installed and erected in accordance with the specifications and requirements of
which are set forth in Appendix A (Specifications).

1.56
“Spares” shall have the meaning set forth in Article 30.

1.57
“Third Party Owner” means any company or other entity that purchases the
Equipment from the Buyer and operates the Facilities at the Site.

1.58
“Warranty Period” shall have the meaning set forth in Section 10.1.

1.59
“UoM” mean the units of measurement.

1.60
“Utilities” shall mean air, water, wastewater, fuel and electric startup power
required to operate the Power Plant.

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2. Not Used

3. SCOPE OF CONTRACT

3.1    The division of responsibility between Seller and Buyer for each
manufacturing stage of POSCO Plants, for which DFC Components Kits shall be
supplied under this Contract, shall be as described in this Section 3.1.

Manufacturing Category 4 (MC-4): Seller supplies DFC Components Kits, and Buyer
assembles DFC Components Kits into DFC Modules and supplies BOP. In this stage
Buyer will complete the manufacture of DFC Modules using DFC Components Kits in
POSCO Energy Fuel Cell Stack Module Manufacturing Facility.

Manufacturing Category 5 (MC-5): Seller supplies DFC Components Kits excluding
the parts to be manufactured by Korean vendors in accordance with the NRC
Localization Plan as indicated in Section 3.3, and Buyer assembles DFC
Components Kits into DFC Modules, and supplies BOP. The further division of
responsibilities between Seller and Buyer in this stage shall be set forth in a
modification to this Contract, if any, as indicated in Section 3.3.

3.2    Responsibilities of the Parties Under Manufacturing Category 4 (“MC-4”)

3.2.1    The Seller agrees to sell the quantity of DFC Components Kits, and the
Buyer agrees to purchase and take delivery of the DFC Components Kits, as
indicated in this section. In addition, the Seller shall provide the following
materials, parts, documents, supplies, assistance, and support as specifically
set forth herein:

A.    Seller shall design, engineer, and manufacture the DFC Components Kits
conforming to the DFC Components Specifications provided in Appendix B, in the
quantities to be shipped to Buyer according to the schedule indicated in this
section;

B.    Seller agrees to supply Buyer with other materials, parts, documents,
supplies, assistance, and support required and necessary for the assembly and
conditioning of DFC Modules using DFC Components Kits purchased from Seller in
accordance with this Contract;

C.    Seller acknowledges that time is of the essence with respect to Seller
meeting its obligation to supply the DFC Components Kits purchased by Buyer
hereunder. To that end, Seller shall use all commercially reasonable efforts to
complete the deliveries of DFC Module Kits in accordance with the delivery
schedule set forth in Annex A hereunder (“Delivery Milestones”). POSCO Energy
agrees to purchase from FCE the following quantity of DFC Components Kits;
provided, that Seller has met the applicable Delivery Milestones:

i.
For delivery in Contract Year 2013, twelve (12) DFC Components Kits with pricing
and delivery dates as indicated in Annex A hereunder; and

ii.
For delivery in Contract Year 2014 starting from November 1, 2013, twenty-nine
(29) DFC Components Kits with pricing and delivery dates as indicated in Annex A
hereunder; and

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iii.
For delivery in Contract Year 2015 starting from November 1, 2014, twenty-four
(24) DFC Components Kits with pricing and delivery dates as indicated in Annex A
hereunder; and

iv.
For delivery in Contract Year 2016 starting from November 1, 2015, twenty-two
(22) DFC Components Kits with pricing and delivery dates as indicated in Annex A
hereunder.

3.2.2    Seller and Buyer acknowledge that: (a) nickel pricing has a significant
impact on the cost of Module Kits; (b) Seller is only able to secure firm fixed
pricing for nickel eighteen (18) months in advance; (c) Module Kit pricing for
Contract Year 2013 and Contract Year 2014 is based on nickel pricing of * per
pound (USD * per pound, the “Baseline Nickel Price”); and (d) a change of one
dollar per pound in nickel pricing may result in approximately a * change in
Module Kit cost. Accordingly, the Parties agree to review the pricing in Annex A
and if necessary, make adjustments according to the following procedures:

i.
Thirty (30) days prior to March 1, 2014, for Contract Year 2015 deliveries, and
thirty (30) days prior to March 1, 2015, for Contract Year 2016 deliveries, the
Parties shall commence reviewing the nickel price on the London Metals Exchange
(“LME Nickel Price”). If the 30-day trailing average LME Nickel Price deviates
more or less than 50 U.S. cents from the Baseline Nickel Price, and only for
such nickel price deviation, the Parties shall commence re-negotiating Module
Kit pricing for the affected Contract Year. Each price adjustment, if occurred,
shall apply to one year of deliveries. There shall be no pricing adjustment for
deliveries in Contract Year 2013 or Contract Year 2014. The amount of pricing
adjustments in each case shall be based on good faith mutual agreement between
the Parties.

ii.
FCE agrees to provide supporting documentation showing the impact of LME Nickel
Price changes on Module Kit pricing to POSCO Energy (i.e. evidence supporting
approximately * change in Module Kit cost) (i) within fifteen (15) days from the
Effective Date and (ii) upon the commencement of the pricing review for each
affected Contract Year.

iii.
Nickel price fluctuations in the range * per pound shall have no impact on
Module Kit pricing.

iv.
Parties intend to agree on revised Module Kit pricing by March 30, 2014 for
Contract Year 2015 deliveries, and by March 30, 2015 for Contract Year
deliveries, unless Parties otherwise agree.

3.2.3     Buyer shall comply with the drawings, manufacturing practices,
instructions and quality plans provided in writing by Seller (the “Seller
Instructions”) in assembling and conditioning of DFC Modules incorporating the
DFC Components Kits purchased from Seller under this Contract to the extent that
such Seller Instructions address the Buyer’s particular activities in assembling
and conditioning of DFC Modules, unless Buyer obtains a prior written approval
by Seller to do otherwise. In the event that Buyer fails to comply with the
Seller Instructions without prior written approval by Seller and such failure
directly results in an adverse impact on the performance of a DFC Module
manufactured by Buyer incorporating a DFC Components Kit purchased from Seller
after such DFC Module is installed in a Site, the warranties for such DFC
Components Kit as specified in Article 9.2 and 10.2.1 (B) shall not apply.

3.2.4    During all stages of manufacture of DFC Modules by Buyer, Seller shall
have the right to have its technical representative(s) present at the POSCO
Energy Stack Module Manufacturing Facility, at Seller’s cost, for the purpose of
inspecting the materials used and the work performed by Buyer. The Seller’s
technical

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

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representative(s) shall have the right to supervise and advise whether the
performance of any work is correct for the manufacture of DFC Modules by Buyer.
The performance of the aforesaid functions by the Seller’s technical
representative(s) shall in no way relieve either Party of its obligations under
this Contract.

3.2.5    With respect to DFC Components Kits provided to Buyer by Seller under
this Contract, Seller shall be responsible to Buyer as set forth hereunder. In
the event that any DFC Components Kits, manufactured by Seller and assembled
into a complete DFC Module by Buyer under this Contract, fails to perform as
stipulated by Seller in Appendix B, Seller provides Buyer with the remedies as
set forth in Article 9 and Article 10 as well as other remedies allowed in this
Contract to the extent that any such failure is due to the improper performance
of the DFC Components Kits supplied by Seller.

3.2.6    With respect to each DFC Module assembled, installed and/or operated by
Buyer, incorporating DFC Components manufactured by Seller, Seller shall be
responsible to Buyer as set forth hereunder.

(a) In the event that any DFC Module fails to achieve the performance levels
indicated by the Module Specifications provided in Appendix A of this Contract
after the expiration of the Warranty Period as set forth in Section 10.1 but
before such DFC Module’s expected term of life as indicated in Appendix A, Buyer
and Seller shall consult with each other and negotiate in good faith to provide
a fair and reasonable remedy for Buyer based on the results of the root cause
analysis to be conducted under Article 3.2.7 below.

(b) If any such failure of DFC Module as described in this Section 3.2.6 is due
to incorrect drawings or data furnished and specified to Buyer by Seller, then
Seller shall furnish corrected drawings or data to Buyer, and consult with Buyer
with respect to correcting the performance of the DFC Module.

3.2.7     Root Cause Investigation for Premature DFC Module Failure after
Warranty Period. When any premature DFC Module failure occurs as indicated in
Section 3.2.6, Seller shall establish a joint investigation team with Buyer,
commence a joint investigation of each premature DFC Module failure upon
receiving a notice from Buyer of such failure and submit a report to Buyer
containing detailed information about the cause or causes of the failure,
including the root cause, within fourteen (14) days from the Buyer’s notice of
premature DFC Module failure. In those cases where more time is needed, an
initial report outlining progress made towards final root cause determination
shall be issued within fourteen (14) days from, and a final report shall be
issued within forty-five (45) days from Seller’s access to the failed hardware,
with bi-weekly updates until completion of the investigation. Buyer shall
promptly provide necessary data and hardware required by Seller in order to
complete the joint investigation. In the event that Seller fails to submit the
root cause determination final report within such period, Buyer shall have the
option to suspend the remaining deliveries and progress payments pursuant to
Section 16.1.1. In the event that the Parties fail to agree as to the result of
the investigation as described herein or appropriate corrective actions thereof,
Buyer shall have the option to claim a Dispute pursuant to Article 15, or to
suspend pursuant to Section 16.1.1. Buyer’s recourse under either of the
preceding two sentences shall not be limited to the remedies identified in each
sentence.

3.2.8    Seller’s Responsibility Under the Service Agreements. For DFC Modules
assembled by Buyer incorporating DFC Components supplied by Seller, Buyer shall
be responsible to the Third Party Owner for warranty, performance guarantees,
and service obligations related to the DFC Modules, without giving prejudice to
the Seller’s obligations under the Master Services Agreement with respect to any
POSCO Plant purchased by a Third Party Owner. In any case, Seller shall retain
its obligations to Buyer with regards to the performance guarantee of and the
warranties for the DFC Components supplied by Seller as described in Section 9.2
and in Article 10.

3.3    Responsibilities of the Parties Under Manufacturing Category 5 (“MC-5”)

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3.3.1    The details of the responsibilities of Seller and Buyer under
Manufacturing Category 5 (“MC-5”) shall be set forth in a modification to this
Contract to be executed by the Parties, if any, consistent with the intent of
the Parties as expressed in Section 3.2 above, and Section 3.3.2 hereunder.

3.3.2    Procurement of NRC from Korean Vendors. Upon successful implementation
of NRC Localization Plan executed between the Parties as of April 24, 2012,
Buyer and Seller may directly purchase from such vendors in Korea those NRC
items that have been qualified in accordance with the vendor qualification
procedures described in the NRC Localization Plan. Seller shall not in any case
include those NRC items directly purchased from such vendors in the scope of the
purchase by Buyer in accordance with this Contract as modified or amended from
time to time.

Seller agrees that Buyer may change the scope of DFC Components Kits designated
in Annex A from MC-4 to MC-5 to account for the NRC Localization Plan by
excluding those NRC items procured from Korean vendors subject to the
requirement that Buyer must provide advance notice in writing to Seller in
accordance with the NRC Localization Plan. The adjustment of pricing of DFC
Components Kits of MC-5 in account of the NRC Localization Plan shall be in
accordance with a schedule of individual parts and components, which comprise
NRC and RC, including pricing, part number, part description, quantities, UoM
and unit price, to be included in Annex B hereunder and incorporated into the
NRC Localization Plan (hereafter “Annex B”). Such change in the scope shall be
subject to the requirements of the NRC Localization Plan as regards vendor
qualification procedures.

3.4    General Conditions

3.4.1    The Seller’s performance of its obligations under this Contract,
including its design and engineering services, shall be performed (i) with the
utmost care and diligence, (ii) in accordance with generally accepted
international professional standards, and (iii) as expeditiously as is
consistent with the preceding standards of professional skill, care and
diligence. The Seller represents, covenants and agrees that all persons who will
perform or be in charge of the work under this Contract shall have experience
and that whenever required by applicable law, such persons shall be licensed and
qualified to practice under such law.

3.4.2    In performing its duties and obligations hereunder, the Seller shall,
at all times, act in the capacity of an independent contractor, and shall not in
any respect be deemed (or act as) an agent of the Buyer, except as otherwise
provided under this Contract.

3.4.3    Seller agrees to provide the Seller’s operating instruction manuals,
drawings, graphs, tables, exhibits and other documentation (the “Documentation”)
in metric units to the extent available and in use at Seller’s factory.

3.4.4
Buyer shall be responsible for establishing the POSCO Plant Specifications and
the POSCO Plant Manuals (collectively, “POSCO Plant Specifications and
Manuals”). Buyer agrees that the POSCO Plant Specifications and Manuals shall
use the DFC Specifications and DFC Manuals as a guide. Buyer additionally agrees
that the POSCO Plant Specifications and Manuals shall not exceed the performance
levels established in the DFC Specifications and DFC Manuals, nor shall such
POSCO Plant Specifications and Manuals allow operating conditions any more
severe than such contained in the DFC Specifications and DFC Manuals, without
the prior written approval of Seller.

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4. CONTRACT PRICE AND PAYMENT TERMS

4.1
The Contract Total Price set forth in Annex A covers the Scope of Contract set
forth in Article 3 above, subject to Section 3.3.2 and Section 4.1.1 below.

4.1.1     Price Adjustment for Cost Reductions. Seller and Buyer agree to create
a joint team and establish a detailed plan to achieve cost reductions, in order
to determine a baseline for cost reductions and specify a procedure for periodic
updates. For those cost reduction initiatives which are identified by the joint
team and mutually agreed by the Parties, and for which the expenses related to
such cost reduction initiatives are equally divided between the Parties, the
cost reduction benefits shall be allocated on a 50% sharing basis, by means of a
decrease in the pricing of items in Annex A. Seller and Buyer shall maintain a
transparent log of cost-reduction results to be achieved by the joint team of
Buyer and Seller, and Seller shall provide a cost reduction achievement report
to Buyer every two months starting with the Effective Date of this Contract.

4.2
Payment Terms

4.2.1    Initial Down-payment. Buyer agrees to make a down-payment to Seller in
the amount of ten million US dollars (USD $10 million), which shall be received
by FCE on or before October 31, 2012 (“Initial Down-payment”).

4.2.2.    Advance Payment Guarantee. Seller and Buyer agree (i) to follow the
advance payment bond and lien procedures included herein as Annex C (“Advance
Payment Guarantee”) and (ii) that the Advance Payment Guarantee shall be
received by Buyer in accordance with the provision (A) of Annex C.

4.2.3
Payments for DFC Components Kits sold to Buyer designated for delivery in
Contract Year 2013 and Contract Year 2014 as indicated in Annex A, shall be made
by the Buyer to the Seller in accordance with the following schedule; provided,
that Seller has met the applicable Delivery Milestones:

A.
The first payment in the amount of eleven point forty-three percent (11.43%) of
the price of individual DFC Components Kits shall be allocated from the Initial
Down-payment.

B.
The second payment in the amount of twenty-eight point fifty-seven percent
(28.57%) of the aggregate price of DFC Components Kits designated for delivery
in Contract Year 2013 and Contract Year 2014 shall be invoiced on December 15,
2012, it being understood and agreed that this payment shall be received by FCE
no later than January 15, 2013.

C.
The third payment in the amount of fifteen percent (15%) of the price of
individual DFC Components Kits (RC and/or NRC) shall be invoiced twelve (12)
weeks prior to EXW shipment date.

D.
The fourth payment in the amount of twenty percent (20%) of the price of
individual DFC Components Kits (RC and/or NRC) shall be invoiced four (4) weeks
prior to EXW shipment date.

E.
The fifth payment in the amount of twenty-five percent (25%) of the price of
individual DFC Components Kits (RC and/or NRC) shall be invoiced at the EXW
shipment date.

4.2.4
Payments for DFC Components Kits sold to Buyer for delivery in Contract Year
2015 and Contract Year 2016 as indicated in Annex A, shall be made by the Buyer
to the Seller in accordance with the following schedule; provided, that Seller
has met the applicable Delivery Milestones:

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A.
The first payment in the amount of fifteen percent (15%) of the total price of
all DFC Components Kits to be delivered in Contract Year 2015 shall be invoiced
on December 15, 2013 (hereafter the “Contract Year 2015 Initial Invoicing
Date”), and the first payment in the amount of fifteen percent (15%) of the
total price of all DFC Component Kits to be delivered in Contract Year 2016
shall be invoiced on December 1, 2014 (hereafter the “Contract Year 2016 Initial
Invoicing Date”).

B.
The second payment in the amount of twenty-five percent (25%) of the aggregate
price of DFC Components Kits to be delivered in Contract Year 2015 shall be
invoiced fourteen (14) weeks after the Contract Year 2015 Initial Invoicing
Date; and the second payment in the amount of twenty-five percent (25%) of the
aggregate price of DFC Component Kits to be delivered in Contract Year 2016
shall be invoiced fourteen (14) weeks after the Contract Year 2016 Initial
Invoicing Date.

C.
The third payment in the amount of fifteen percent (15%) of the price of
individual DFC Components Kits shall be invoiced twelve (12) weeks prior to the
EXW shipment date of individual DFC Components Kits.

D.
The fourth payment in the amount of twenty percent (20%) of the price of
individual DFC Components Kits shall be invoiced four (4) weeks prior to EXW
shipment date of individual DFC Components Kits.

E.
The fifth payment in the amount of twenty-five percent (25%) of the price of
individual DFC Components Kits shall be invoiced at the EXW shipment date of
individual DFC Components Kits.

4.3    Method of Payment. POSCO Energy shall remit payment to FCE via letter of
credit (L/C) for the second payment, and via wire transfer (T/T) for the first,
third, fourth and fifth payment as indicated in Section 4.2.3, and via letter of
credit (L/C) for the first and second payment, and via wire transfer (T/T) for
the third, fourth and fifth payment as indicated Section 4.2.4 above.

4.4     Payment Default Rate. Payments invoiced by Seller shall be due within
thirty (30) days after the date of invoice; provided, that Seller has complied
with all of its prior obligations under this Contract. In the event that any
payment due from Buyer under this Contract is not paid when due, Buyer shall pay
Seller interest on such overdue payment during a period commencing on such due
date until the date that such overdue payment is actually made to Seller, the
annual rate of interest being equal to two percent (2%) above the highest
commercial prime rate as published in the Wall Street Journal on the day the
payment first became due. Nothing in this paragraph shall prevent the Seller
from exercising other remedies available under this Contract.

5. Not Used.

6. DELIVERY; TITLE TRANSFER; INSPECTION

6.1    Delivery.

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6.1.1    Shipment Terms for the Equipment. Seller agrees to supply, and Buyer
agrees to purchase, the Equipment in the quantities and prices as indicated in
Annex A hereunder, and Annex B, which shall be added as a part of this Contract
later, on the basis of EXW Seller’s Delivery Sites. For the avoidance of doubt,
Seller shall be responsible for crating and/or otherwise preparing the Equipment
for shipment in compliance with Article 7 of this Contract; and the cost for
preparing the Equipment for such shipment is included in the pricing as
indicated in Annex A hereunder. Annex B will provide the detailed component
parts pricing and other information which will be used by the Parties to adjust
the pricing in Annex A after certain components are localized pursuant to the
NRC Localization Plan. In the event that the part number, part description, UoM
and/or quantities in Annex B hereunder are changed based on the Seller’s latest
technical information including, without limitation, drawing, specification, and
BOM, Annex B hereunder shall be modified based on such changes before the EXW
shipment date of the Component Kit to which the changes described herein are
applied.

6.1.2    Shipment in Place. In the event that Buyer’s Carrier has not been
designated by Buyer or otherwise is unready to take delivery of the Equipment on
the EXW delivery dates as indicated in Annex A, Seller may ship any such
shipment in place, or ship to storage at Buyer’s expense; and, Buyer agrees to
make payments for such shipments according to the payment schedule indicated in
Article 4 hereunder.

6.1.3    Designation of Seller’s Delivery Sites. Seller agrees to notify Buyer
within 60 days after the Effective Date of this Contract, of the Seller’s
Delivery Site(s) for the Equipment. The Seller’s Delivery Sites shall not exceed
four (4) physical locations (including the location(s) in Fuel Cell Energy Site
in Connecticut) for any given DFC Component Kit. Any and all deliverables to the
Buyer shall be shipped to such locations at Seller’s expense. After the
execution of this Contract, the Parties shall negotiate in good faith to
minimize any inland shipping expenses and ensure the quality of the Equipment
during the inland shipping. The Parties further agree to discuss increasing the
number of Seller’s Delivery Sites in support of cost reduction and NRC
Localization efforts.

6.1.4    Additional Shipping Services. At the request of Buyer, Seller agrees to
provide additional shipping services to Buyer, including trucking and insurance
services necessary to transport the Equipment from the Seller’s Delivery Site to
the Buyer’s Receiving Site. For the avoidance of doubt, such additional shipping
services are not included in the pricing indicated in Annex A, and shall only be
arranged by Seller upon receipt of written request from Buyer, which shall
include costs which Buyer shall reimburse to Seller upon completion of the
additional shipment services.

6.1.5    Partial shipments shall be permitted when approved in advance by Buyer
for individual parts of a DFC Components Kit; provided, however, that Seller
shall use its utmost effort to avoid partial shipments.

6.1.6    If either the Buyer or the Seller wishes to adjust the delivery
schedule set forth in Annex A, the Parties shall, after agreeing to an
appropriate price adjustment in a good faith and commercially reasonable manner,
cooperate to adjust the delivery schedule.

6.2
Communication

6.2.1    The Seller shall provide to the Buyer, by facsimile or email, the
information necessary for the Buyer's vessel arrangement and necessary insurance
pursuant to Article 6.6 at least 30 days prior to each shipment, including the
name of Equipment, the approximate number of packages, total weight and
measurement, shipping documents in accordance with Annex B hereunder, and other
pertinent information (including information for customs clearance and inland
transportation). The Buyer shall inform, by email or facsimile,

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the Seller of the status of container arrangements from the forwarder seven (7)
days prior to the date of shipping.

6.2.2    The Seller shall, immediately after the completion of each shipment,
notify the Buyer by facsimile or email of the contents of cargo shipped and
expected date of arrival and other pertinent information.

6.3
Liquidated Damages for Delayed Delivery.

In the event the EXW delivery date of the Equipment is delayed more than fifteen
(15) days beyond the EXW shipment dates indicated in Annex A through the fault
of the Seller, or the loading date is delayed due to the Seller’s failure to
provide or omission of the necessary information to be provided to Buyer in
pursuance of Section 6.2, the Buyer is entitled to claim liquidated damages per
day of delay in an amount equivalent to 0.15% of the price for the delayed
Equipment. Such liquidated damages shall not exceed seven percent (7%) of the
price of the delayed Equipment. In the event that liquidated damages under this
Section reach seven percent (7%) of the price of the delayed Equipment, Buyer
shall have recourse to Article 16.1.4 below. Prior to implementing the
provisions of Article 16.1.4 pursuant to this Section, Buyer agrees that it
shall discuss with Seller alternate remedies in good faith.

6.4 Title Transfer. Title to the Equipment and risk of loss shall transfer to
Buyer at the time EXW delivery is completed at the Seller’s Delivery Site,
provided, that nothing in this Contract shall (i) limit the Seller’s obligations
to replace defective or deficient Equipment under this Contract or (ii)
otherwise limit the Buyer’s rights under Articles 9, 10 and 11.

6.5
Inspection; Rejection

6.5.1    The Seller or its designated representative shall inspect the Equipment
following the procedures as indicated in Section 9.1 at the EXW location for
quality assurance. The Buyer will have the right to be present at the time of
such inspection, and the Seller shall provide Buyer with thirty (30) days prior
notice of any such inspection.
6.5.2    In the event that any Equipment is found to be defective or deficient
after the inspection pursuant to Section 6.5.1, Seller shall immediately repair
or replace the affected Equipment with new Equipment in conformance with the
Specifications. In the event that such repair or replacement is not possible
prior to any shipment, Buyer may accept the shipment including the affected
Equipment, and Seller shall provide to Buyer, within five (5) business days from
the EXW shipment date for affected Equipment, a written plan to replace the
affected Equipment with new Equipment in conformance with the Specifications,
targeting to supply the replacement Equipment to Buyer within fourteen (14) days
from the EXW shipment date for affected Equipment at the EXW location. For
avoidance of doubt, Seller shall be responsible for all costs incurred in
relation to the delivery of the replacement Equipment to the POSCO Energy Stack
Module Manufacturing Facility. If the replacement of the affected Equipment is
not possible within fourteen (14) days, Buyer shall have recourse to the
procedures in Section 10.2.2 hereunder as a remedy.

6.6
Insurance. Seller shall bear the cost of insuring the Equipment prior to the
time of EXW Delivery. Buyer shall bear the cost of insuring the Equipment from
the time of EXW Delivery.

7. PACKING

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7.1    The Equipment to be shipped to the Buyer shall be packed and shipped in
accordance with the Specifications and if not specified therein, shall be packed
in sea-worthy packing conditions according to usual international commercial and
industrial practice; that is, the packing of the DFC Components shall utilize
proper anti-corrosion and/or anti-rust compounds or coatings and protective
water proof wrapping and/or packing as the case may be. In case of wood
packaging materials, the Seller shall comply with the quarantine requirements
set forth in Article 7.3 hereof. Such packing shall be sufficiently strong
including skids so that it will not break or fall apart under normal handling.

Interior blocking, bracing and cushioning shall be provided where necessary to
absorb shocks, prevent rattling and relieve destructive forces. Additionally the
Equipment should have proper devices on it to record any shock during
transportation. Packing containing fragile materials should be so marked in bold
stout letters.

In accordance with good packing practices, the Equipment shall be packed in the
smallest possible approved containers since steamship freight is usually based
on cubic measurements.

7.2    Marking shall include the following information and any other information
reasonably requested by Buyer:

A.
For: POSCO Energy;

B.
Contract number or name of Contract;

C.
Port of destination;

D.
Item number, package number in sequence and quantity per package;

E.
Commodity description;

F.
Net weight, gross weight, dimension and cubic measurement;

G.
Shipper's marks;

H.
Origin of the Equipment/Port of Export;

I.
Caution marks, if necessary; and

J.
Shipping mark.

1. POSCO Energy

7.3    Wood Packaging. In case of wood packaging materials, the following
conditions should be met:

The Quarantine Requirements on Wood Packaging Materials of Imported Consignments
Respective packing list shall be attached on each wood packing container.

•
Regulated Articles: All non-manufactured wood packaging materials such as
pallets, crating, dunnage, packing blocks, etc.

•
Exempted Articles: Manufactured wood packaging materials such as plywood,
particle board, oriented strand board, veneer, etc.

•
Regulated Areas: All countries.

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•
Requirements: All imported wood packaging materials should be treated by
following methods, and present the mark which certifies the approved treatment
on two opposite sides of the article.

•
Treatment methods: Heat Treatment (HT) or Methyl Bromide (MB) fumigation
according to the Annex Ⅰ of ISPM No. 15.

ISPM 15 mark
[dfcpurchasecontractimage1.gif]
•
The mark should contain the valid symbol approved by IPPC, country code, unique
number of the producer/treatment facility assigned by the NPPO of exporting
countries, treatment methods (HT, MB).

•
Only HT is accepted as a proper treatment for coniferous wood packaging
materials from pine wood nematode distributed countries.

•
Subjected countries : Japan, China, Taiwan, US, Canada, Mexico, Portugal,
Vietnam (pine wood)

•
Non-compliance Measures

•
Treatment, Disposal or Return to the origin at the expense of the Seller.

7.4    In case that special arrangements are required for unloading, packing,
handling, storage and operation of the Equipment, Seller shall recommend to
Buyer the required method and procedures to facilitate Buyer’s suitable
arrangement. In that case Buyer may, if necessary, establish the method and
procedures under consultation with Seller.

7.5    Seller may reuse shipping crates. Seller shall provide logistics for the
return of used shipping crates and Buyer shall cooperate with Seller arranging
to have such crates returned to Seller.

8. DRAWINGS AND DOCUMENTS

8.1    The Seller shall provide, or has already provided to the Buyer:

A.
Appropriate drawings, reports, guidelines, manuals, programs, software, and data
for assembly of the DFC Components into DFC Modules;

B.
All drawings, manuals and reports shall be complete, neat and legible, for the
purpose of their use to permit adequate review, and operation as applicable;

C.
All drawings, manuals and reports shall be in accordance with the Specifications
provided in Appendix A and/or Appendix B.

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9.
PERFORMANCE GUARANTEES AND ACCEPTANCE TESTS

9.1    Standard Pre-Shipment Factory Inspection Procedures for DFC Components
The Seller agrees to provide thirty (30) days advance written notice to Buyer
for pre-shipment inspection of Repeating Components to be shipped to Buyer
pursuant to this Contract. The Parties shall negotiate in good faith to agree on
the standard pre-shipment factory inspection procedures for DFC Components Kits.
The Seller shall conduct normal and standard inspections of all materials and
the workmanship of all DFC Components Kits to be supplied under this Contract
before any shipment, or in accordance with the standard pre-shipment factory
inspection procedures for DFC Components Kits after the Parties set up the
inspection procedures through negotiation as described herein. Seller shall
prepare a report documenting results of the inspections for DFC Components Kits
(the “Inspection Report”). One copy of the Inspection Report for each set of DFC
Components Kits provided pursuant to this Contract shall be supplied to Buyer
prior to shipment. Seller shall provide a standard form of the Inspection Report
within thirty (30) days of the Effective Date. Such inspection, examination or
testing, if made, shall not relieve Seller from any obligations under the
Contract.
If any DFC Components Kits or any other Equipment is found to be defective or
deficient after such inspection pursuant to this Section, the Seller shall
immediately notify Buyer of such defect or deficiency, and repair or replace the
affected Equipment with new Equipment in conformance with the Specifications. In
the event that such repair or replacement is not possible prior to any shipment,
Buyer may accept the shipment including the affected Equipment, and Seller shall
provide to Buyer, within five (5) business days from the EXW shipment date for
the affected Equipment, a written plan to replace the affected Equipment with
new Equipment in conformance with the Specifications, targeting to supply the
replacement Equipment to Buyer within fourteen (14) days of the EXW shipment
date for the affected Equipment at the EXW location. For the avoidance of doubt,
Seller shall be responsible for all costs incurred in relation to the delivery
of the replacement Equipment to the POSCO Energy Stack Module Manufacturing
Facility. If such replacement of the affected Equipment is not possible within
fourteen (14) days, Buyer shall have recourse to the procedures in Section
10.2.2 hereunder as a remedy.
9.2    Performance Guarantee for DFC Components
9.2.1    The guaranteed power output and efficiency for the POSCO Plant final
acceptance test at the Site (the “FA Test”) shall be as set forth in the POSCO
Plant Specifications. If after repeated FA Tests over a period of six (6) months
from the first FA Test, the POSCO Plant fails to achieve the guaranteed power
output and/or efficiency set forth in the POSCO Plant Specifications for causes
attributable to the DFC Components provided by Seller, but achieves at least 95%
of the guaranteed power output and/or efficiency, Seller shall reimburse Buyer
an amount of the Contract Price for the DFC Components, which is proportional to
the reduction in either the power output or the efficiency, whichever amount is
higher.
9.2.2    In the event the POSCO Plant fails to achieve at least 95% of the
guaranteed power output and/or efficiency due to the fault of the DFC Components
after repeated FA tests, Seller shall notify Buyer in writing of the reason for
such failure. If the reason is attributable to causes related to DFC Components
provided by Seller, then Seller shall have a period of six (6) months from the
first FA test to take necessary corrective actions and repeat the FA test to
achieve equal to or greater than 95% of the guaranteed power output and/or
efficiency. If at the end of such time period 95% of the guaranteed power output
and/or efficiency is still not achieved, then Buyer shall have recourse to the
applicable provisions of Article 10 below or Section 3.2.5 hereunder if Article
10 does not apply.

10. WARRANTIES

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10.1    Warranties Against Defects, Etc. The Seller warrants, for a period of
twenty-one (21) months from the date of each EXW shipment, (the “Warranty
Period”) that (i) the DFC Components to be delivered hereunder shall be free
from defects in material and workmanship; and (ii) the DFC Components conform to
the DFC Component Specifications as indicated in Appendix B hereunder and other
requirements set forth in this Contract. The Parties agree that the Warranty
Period specified in this paragraph is unique to this Contract and does not
necessarily indicate the warranty period for future purchase contracts between
the Parties.

10.2    Remedies for Breach of Warranties Against Defects, Etc.

10.2.1    

(A) Remedies for Defects Prior to Commissioning. If any DFC Components Kits
purchased from Seller under this Contract do not meet the Warranties set forth
in Article 10.1 during the Warranty Period and prior to Commissioning, the Buyer
shall promptly notify the Seller in writing (the “Notice of Defect”). To
facilitate continuation of Buyer’s production activities, Buyer shall have the
ability to use new replacement parts from Buyer’s inventory to correct the
defects, following the procedures as set forth in Article 1 of Appendix C
hereunder (“Replacement from Buyer’s Inventory”). In the event Buyer elects to
correct defects by Replacement from Buyer’s Inventory, Seller shall deliver, at
its own expense and cost, sufficient new replacement parts to Buyer to enable
restoration of Buyer’s inventory within sixty (60) days from its receipt of
Buyer’s Notice of Defect. Buyer shall have a sole right to determine whether or
not the Buyer’s Inventory is sufficient and in the event Buyer elects not to
correct the defects by Replacement from Buyer’s Inventory due to its
insufficiency, at the Buyer’s sole discretion, then Seller shall, at its own
expense and cost, correct the defects by replacing the affected DFC Components
Kits or parts thereof, within fourteen (14) days of its receipt of Buyer’s
Notice of Defect, without regards to the allocation of responsibilities
following the result of the investigation in pursuance of Section 10.2.1(C). In
the event that Seller does not complete the replacement within the time periods
as required by this provision, Buyer shall have recourse to Section 10.2.2(A)
hereunder as a remedy.
    
(B) Remedies for Defects After Commissioning. If any DFC Components Kits
purchased from Seller under this Contract and being incorporated into the DFC
Modules by Buyer do not meet the Warranties set forth in Article 10.1 during the
Warranty Period and after Commissioning, the Buyer shall promptly send a Notice
of Defect to the Seller. Seller shall, at its own expense and cost, correct the
defects by: (i) repairing the defective parts of the DFC Component Kits and/or
any other Equipment thereof, or (ii) replacing the defective parts if repair is
impossible, within thirty (30) days of its receipt of Buyer’s Notice of Defect,
without regards to the allocation of responsibilities following the result of
the investigation in pursuance of Section 10.2.1(C). If the Seller does not
complete the correction of such defects within thirty (30) days from the date of
its receipt of the Buyer’s Notice of Defect, the Buyer shall have recourse to
Section 10.2.2(B) hereunder as a remedy.

(C) Root Cause Investigations. Simultaneously with the corrective actions
carried out pursuant to Sections 10.2.1(A) and 10.2.1(B), Seller shall establish
a joint investigation team with Buyer, commence a joint investigation and
provide a report to Buyer containing detailed information about the cause or
causes of the defects, including the root cause, within fourteen (14) days of
its receipt of the Buyer’s notice of defects. In those cases where more time is
needed, Seller shall provide an initial report outlining progress made towards
final root cause determination within fourteen (14) days from, and then provide
a final report to Buyer within forty-five (45) days from its receipt of the
Buyer’s notice, with bi-weekly updates until completion of the investigation.
Buyer shall promptly provide necessary data and hardware required by Seller in
order to

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complete Seller’s investigation. In the event that Seller fails to issue a root
cause determination final report to Buyer within such period, Buyer shall have
the option to suspend the remaining deliveries and progress payments pursuant to
Section 16.1.1. In the event that the Parties do not agree as to the result of
the investigation as described herein or appropriate corrective actions thereof,
and the Parties do not reach an agreement within fifteen (15) days after the
issuance of the final report, Buyer shall have the option to claim a Dispute
pursuant to Article 15, or to suspend pursuant to Section 16.1.1. Buyer’s
recourse under either of the preceding two sentences shall not be limited to the
remedies identified in each sentence.

(D) Cost and Reimbursement. For the avoidance of doubt, the Seller shall bear
all costs and expenses incurred in connection with the corrective measures
specified above, including international shipping expenses, customs clearance at
a Korean port, inland transportation from the port to the POSCO Energy Fuel Cell
Stack Module Manufacturing Facility; with the exception that for the period
commencing with EXW shipment and ending with the start of Commissioning for each
Module, Seller, at its own cost and expenses, shall supply replacement parts,
and repair and supervisory technical support as corrective measures required by
Section 10.2.1 (A), and/or (C), while Buyer shall be responsible for
international shipping expenses, customers clearance at a Korean port, inland
transportation from the port to the POSCO Energy Fuel Cell Stack Module
Manufacturing Facility. If, after the submission of the final report to Buyer,
Buyer is found responsible for the defects, Seller shall be reimbursed by Buyer
for its actual expenses incurred in investigating the cause of the defects and
implementing the corrective actions pursuant to this Article to such extent that
the defects or deficiencies are not attributable to Seller, but attributable to
Buyer.

10.2.2     Buyer’s Option for Correction of Defects.

(A)
If Buyer elects not to correct defects by Replacement from Buyer’s Inventory,
and the correction of defective DFC Component Kits and/or any other Equipment
thereof by Seller is not achieved within fourteen (14) days from the Seller’s
receipt of the Buyer’s Notice of Defect as set forth in Section 10.2.1(A), Buyer
may commence correcting the defects at the Buyer’s expense to be reimbursable by
Seller, through repair of the defective DFC Component Kits and/or any other
Equipment thereof. In the event that Buyer corrects the defects through a
repair, such repairs are subject to Seller’s prior approval, which shall be
given to Buyer within three (3) days after the Seller’s receipt of Buyer’s
notice of such repair. Seller shall reimburse the expenses incurred by Buyer for
correction of the defects made in pursuance of this provision within thirty (30)
days from the date of its receipt of the Buyer's invoice of such expenses.
Notwithstanding the correction procedures by Buyer as set forth herein, the
Seller’s obligation to commence investigation and submit a report to Buyer
remains the same as indicated in Section 10.2.1(C).

(B)
If the correction of defective DFC Component Kits and/or any other Equipment
thereof by Seller is not achieved within the time periods indicated in Section
10.2.1(B), Section 6.5.2 or Section 9.1 hereinabove, Buyer may commence
correcting the defects at the Buyer’s expense to be reimbursable by Seller,
through repairing or replacing the defected DFC Component Kits and/or any other
Equipment thereof. In the event that Buyer corrects the defects through a
repair, such repairs are subject to Seller’s prior approval, which shall be
given to Buyer within three (3) days after the Seller’s receipt of Buyer’s
notice of such repair. In the event that Seller does not provide its approval to
Buyer within three (3) days, Buyer may commence correcting the defects through a
replacement on its own, and Seller shall supplement new DFC Component Kits
and/or any other Equipment in conformance with the DFC Components Specifications
to Buyer within thirty (30) days from the date on which the time period for
Seller to replace the defective DFC Component Kits and/or any other Equipment
thereof in accordance with Section 10.2.1(B), Section 6.5.2, or Section 9.1
expires. Seller shall reimburse the expenses incurred by Buyer for correction of
the defects made in pursuance

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of this provision within thirty (30) days from the date of its receipt of the
Buyer's invoice of such expenses. Notwithstanding the correction procedures by
Buyer as set forth herein, the Seller’s obligation to commence investigation and
submit a report to Buyer remains the same as indicated in Section 10.2.1(C).

10.2.3 Liquidated Damage for Delayed Shipment of Warranty Parts. In the event
that Seller fails to deliver the replacement DFC Component Kits and/or any other
Equipment thereof within the time periods specified in Section 10.2.1(A) or
Section 10.2.2 (B), the Buyer shall be entitled to claim liquidated damages per
day of delay in an amount equivalent to 0.15% of the price for the delayed DFC
Component Kits and/or any other Equipment thereof; with the exception that
liquidated damages shall not be incurred under this paragraph if Seller is at
the same time accumulating liquidated damages for delayed delivery pursuant to
Section 6.3 hereunder. Such liquidated damages shall not exceed seven percent
(7%) of the price of the affected DFC Component Kit. In the event that
liquidated damages under this Section reach seven percent (7%) of the price of
the affected DFC Component Kit, Buyer shall have recourse to Article 16.1.4
below. Prior to implementing the provisions of Article 16.1.4 pursuant to this
Section, however, Buyer agrees to discuss with Seller alternate remedies in good
faith.

10.3     Warranty Period Extension. In the event that any DFC Components Kits
and/or any other Equipment thereof is found to be defective and is repaired or
replaced in satisfaction of Seller’s obligations in connection with the warranty
as provided in this Article 10, the warranty period for the affected DFC
Component Kit(s) shall be extended for a period of time equivalent to the time
period starting with Buyer’s notification to Seller of the defect, and ending
with the resolution of such issue by the Seller in accordance with the warranty
provisions hereunder.

10.4    General Warranty Provisions

10.4.1    Title Warranty. Seller shall warrant that the DFC Component Kits
and/or any other Equipment are delivered hereunder free from any and all
rightful, legitimate and proven claims, demands, liens and/or encumbrances of
title. If any failure to comply with this warranty appears at any time, Buyer
will give prompt written notice to Seller, and Seller shall defend the title
thereto and save Buyer harmless from or reimburse all losses, damages and
liabilities of every kind, arising in connection with such failure. This
warranty shall be extended during the period of such title defense without limit
as to time.

10.4.2    Assignment of Warranty. The warranty provided in this Article 10 may
be assigned by the Buyer to the Third Party Owner upon final sale, provided that
the terms of the warranty shall be determined in accordance with this Article
without regard to any such sale.

10.4.3    Seller shall not be responsible for removal or replacement of any
structure or part of the Facility required to perform Seller’s warranty
obligations under this Contract.

10.5    The Seller does not warrant the DFC Components Kits or any repaired or
replacement parts against normal wear and tear including that due to expected
degradation in accordance with the DFC Components Specifications, environment or
operation, including excessive operation at peak capability, frequent
starting/stopping, type of fuel, or erosion, corrosion or material deposits from
fluids. The warranties and remedies set forth herein are further conditioned
upon (i) the proper storage, installation, operation, and maintenance of the DFC
Components Kits and conformance with the DFC Components Specifications and
instruction manuals (including revisions thereto) provided by the Seller and/or
its subcontractors; (ii) the proper operation and maintenance of the POSCO Plant
in accordance with the POSCO Plant Manuals, or in the absence of such POSCO
Plant Manuals, the DFC Plant Manuals as applicable; and (iii) repair or
modification pursuant

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to Seller’s instructions or approval. Buyer shall keep proper records of
operation and maintenance during the warranty period. These records shall be
kept in the form of logsheets and copies shall be submitted to Seller upon its
request. Seller does not warrant any equipment or services of others designated
by Buyer where such equipment or services are not normally supplied by Seller.

10.6    The Seller shall be exempted from its obligation to correct, repair
and/or replace the DFC Components, or any Equipment under Article 10.2 to the
extent a defect or non-conformance is the result of improper assembly,
installation or damage resulting from the Buyer’s failure to comply with the
Seller’s Instructions regarding installation, operation and maintenance of the
Module.

10.7    Changes, modifications or alterations by the Buyer or its vendors,
suppliers, employees or agents, to the Buyer’s Plant or its components provided
herein other than specified in Section 10.6 above, without the written approval
of Seller, shall void all Seller’s obligations and warranties hereunder, and may
void third party equipment certifications, including safety, environmental and
interconnection.

10.8    Exclusive Remedy. Except as otherwise set forth in this Contract, the
remedies set forth in this Article 10 are the exclusive remedies for all claims
based on failure of or defect in the Equipment provided under this Contract,
whether the failure or defect arises before or during the warranty period and
whether a claim, however instituted, is based on contract, indemnity, warranty,
tort (including negligence), strict liability or otherwise. THE FOREGOING
WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES
WHETHER WRITTEN, ORAL, IMPLIED OR STATUTORY. NO IMPLIED STATUTORY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE SHALL APPLY.

10.9    If defective DFC Component Kits and/or any other Equipment thereof is
replaced in accordance with this Article, Section 6.5.2 or Article 9, and if
Seller requests, Buyer agrees to return the affected DFC Component Kits and/or
any other Equipment thereof to FCE Korea or other location in Korea as may be
determined pursuant to Section 10.2.4 and to no other places. For the avoidance
of doubt, Seller shall be responsible for all costs incurred in relation to such
return(s).

11. LIMITATION OF LIABILITY AND INDEMNIFICATION

11.1    Each Party (Indemnitor) agrees to indemnify and hold harmless the other
Party (Indemnitee) from and against any and all losses, obligations,
liabilities, damages, claims which may be asserted against or sustained or
incurred by the Indemnitee arising out of or related to any breach of any of the
representations, warranties, agreements and covenants made by Indemnitor in this
Contract; any bodily injury or death suffered by anyone; any property damage of
any third Parties; or any wrongful and negligent act of Indemnitor that occurs
under this Contract.

11.2    The provisions of this Article shall prevail over any conflicting or
inconsistent provisions contained in any of the documents comprising this
Contract, except to the extent that such provisions further restrict any Party’s
liability.

12. COSTS AND CHARGES

12.1    In case that repair, making good, replacement or modification of the DFC
Components Kits or any other Equipment thereof provided by Seller is required in
accordance with this Contract, the Seller shall at its own expense make
available at the Site the replacement parts necessary for the performance of the
above.

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12.2    In the event that non-commercial cargo must be shipped due to reasons
attributable to Seller, including the Seller’s errors in preparation of
transport documents, or incorrect negotiation against the transport documents,
Seller shall deliver such cargo to the Site and shall pay all costs including
the ocean freight, premium, expenses for inland transportation to the Site,
importation taxes, and custom duties.

12.3    In case any vessel arrangement made by the Seller without prior consent
by or consultation with the Buyer, the Seller shall bear all associated costs
and expenses including the ocean and/or air freight. In cases where Buyer
arranges shipment of Equipment, Seller agrees to submit to Buyer in a timely
manner the packing lists necessary for Buyer to arrange ship and/or shore
cranes.

13. PATENTS, INTELLECTUAL PROPERTY AND CONFIDENTIALITY

13.1    The Seller shall indemnify and hold the Buyer or the Third Party Owner,
its employees, engineers and agents harmless against all proximate costs,
actions, claims and demands brought by a third party by reason or in consequence
of any infringement by the Module, the DFC Component Kits or parts thereof, or
by the use of process that have been supplied by the Seller as a result of
engineering services, any patent, design patent, trade mark or copyright.

13.2    In the event that any claim is made or action is brought against the
Buyer or the Third Party Owner, including its employees, engineers and/or
agents, relating to such infringement, the Buyer shall promptly notify the
Seller thereof and the Seller at its expense and option may request the
assistance of the Buyer and shall conduct, on behalf of the Buyer all
negotiations for settlement of such dispute or litigation as may arise
therefrom.

13.3    If, in such a suit or proceedings, the Module, the DFC Component Kits or
parts thereof are held to constitute an infringement and the use thereof is
enjoined, Seller promptly shall, at its option and expense, either procure for
Buyer the right to continue using such Module/DFC Component Kits, or replace
such infringing Module/DFC Component Kits with non-infringing Module/DFC
Component Kits which are equal to or better than the previous Module/DFC
Component Kits, or modify the infringing Module/DFC Component Kits so that they
become non-infringing without impairing the quality, performance or any
guarantee on the original Module/DFC Component Kits, provided, however, that
nothing contained herein shall be deemed to relieve Seller from its warranty
obligations under the Contract.

13.4    Intellectual property and confidentiality
(A)     Buyer acknowledges that all of the Seller’s technology in and relating
to the DFC Components provided by Seller, whether developed by or for Seller
prior to or after the Effective Date of this Contract, is and shall remain the
property of Seller or its third party licensors.

(B) Use of Confidential Information. All written information marked
“proprietary” or “confidential” (or if oral, subsequently reduced to a writing
so marked and delivered to the receiving Party within thirty (30) days of its
oral disclosure) which the disclosing Party discloses to the receiving Party as
a result of the provisions of this Contract, whether contained in blueprints,
drawings, written reports, letters or memoranda, process descriptions, operating
procedures, supplier lists and/or other written data, shall be treated as
confidential unless (a) such information shall have been in the possession of
the receiving Party prior to its receipt from the disclosing Party, (b) such
information is or becomes part of the public knowledge or literature through no
fault of the receiving Party, vendors or suppliers, (c) such information shall
otherwise become available

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to receiving Party from a source other than the disclosing Party, said source
not being violative of any obligation of secrecy with respect to such
information, or (d) the furnishing or use of such information is required by any
legal requirement or any Governmental Authority. Information which is so
considered to be confidential shall be held by the receiving Party for its sole
benefit and used only in accordance with this Contract; provided that the
receiving Party may share proprietary or confidential information with its
affiliates; and, further provided, that the receiving Party shall cause its
Affiliates to restrict the use so as to be consistent with the terms of this
Contract and to restrict disclosure to its employees, on a need-to-know basis,
of any confidential or proprietary information shared with such affiliates. The
receiving Party shall use all reasonable efforts to prevent the use of all or
any part of such confidential information belonging to the disclosing Party in
any other connection or the transmission thereof to third parties unless and
until it has first obtained the written consent of the disclosing Party
specifically authorizing such use or transmission. The Parties understand that
information may be provided which is subject to a confidentiality agreement with
a third party. The Parties agree that such information shall be held in
confidence in accordance with the terms of the third party confidentiality
agreement. No Party shall be obligated to divulge third party confidential
information to the other Party. Any breach of the confidentiality provisions of
this paragraph may be considered material breach of this agreement by the
non-breaching Party. All obligations under this article shall apply mutatis
mutandis to the Parties.

14. FORCE MAJEURE

14.1    Should either Party be prevented wholly or in part from fulfilling any
of its obligations under the Contract for reasons of Force Majeure, such
obligation shall be suspended to the extent and for as long as such obligation
is affected by an event of Force Majeure and the Party suffering from such event
of Force Majeure (the “Hindered Party”) shall be entitled to such extension of
time to fulfill such obligation as may be reasonably necessary in view of
circumstances, unless the Hindered Party fails to notify the other Party (the
“Non-Hindered Party”) by fax or email of the date when such delay commenced, and
reasons therefore within seven (7) days from the occurrence of such event of
Force Majeure (the “FM Notice”). The Hindered Party shall try to use its
commercially reasonable efforts to avoid or remove such causes of the Force
Majeure, to mitigate the effect of an event of Force Majeure, and to complete
performance of its obligations under the Contract with the reasonable promptness
whenever such causes are removed.

14.2    If, after ninety (90) days from the date of the receipt by the
Non-Hindered Party of the FM Notice, the Hindered Party is still prevented, for
the reasons beyond its control, from continuing to perform its obligations under
the Contract, then the Non-Hindered Party shall be entitled to terminate this
Contract, without any liability to each other by delivering a written notice
thereof to the Hindered Party.

15. DISPUTES AND ARBITRATION

15.1    Any dispute, action, claim or controversy of any kind arising from or in
connection with this Contract (the “Dispute”) whether based on contract, tort,
common law, equity, statute, regulation, order or otherwise, shall be resolved
as follows:

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(i)    Upon written request of any Party, the Parties shall meet and attempt to
resolve any such Dispute. Such meetings may take place via teleconference or
videoconference. The Parties shall meet as often as the Parties reasonably deem
necessary to discuss the problem in an effort to resolve the Dispute without the
necessity of any formal proceeding.

(ii)    Formal proceedings for the resolution of a Dispute may not be commenced
until the later of (i) the Parties concluding in good faith that amicable
resolution through continued negotiation of the matter does not appear likely;
or (ii) the expiration of a sixty (60) day period immediately following the
initial request by either Party to resolve the Dispute; provided, however, that
this Section will not be construed to prevent a Party from instituting formal
proceedings earlier to avoid the expiration of any applicable limitations
period, to preserve a superior position with respect to other creditors or to
seek temporary or preliminary injunctive relief.

15.2    If the Parties are unable to resolve any Dispute pursuant Section 15.1,
shall be finally settled under the Rules of Arbitration (the “Rules”) of the
International Chamber of Commerce (the “ICC”) by three (3) arbitrators
designated by the Parties. Each Party shall designate one arbitrator. The third
arbitrator shall be designated by the two arbitrators designated by the Parties.
If either Party fails to designate an arbitrator within thirty (30) days after
the filing of the Dispute with the ICC, such arbitrator shall be appointed in
the manner prescribed by the Rules. The seat of an arbitration proceeding
hereunder shall be in Singapore and such arbitration proceeding shall be
conducted in the English language. The decision or award of the arbitrators
shall be in writing and is final and binding on both Parties. The arbitration
panel shall award the prevailing Party its attorneys’ fees and costs,
arbitration administrative fees, panel member fees and costs, and any other
costs associated with the arbitration, the enforcement of any arbitration award
and the costs and attorney’s fees involved in obtaining specific performance of
an award; provided, however, that if the claims or defenses are granted in part
and rejected in part, the arbitration panel shall proportionately allocate
between the Parties those arbitration expenses in accordance with the outcomes;
provided, further, that the attorney’s fees and costs of enforcing a specific
performance arbitral award shall always be paid by the non-enforcing Party,
unless the applicable action was determined to be without merit by final,
non-appealable decision. The arbitration panel may only award damages as
provided for under the terms of this Contract and in no event may award
punitive, consequential and special damages. In the event of any conflict
between the Rules and any provision of this Contract, this Contract shall
govern.

16. TERMINATION AND ASSURANCE

16.1    Suspension and Termination due to the Seller’s Default

16.1.1
Buyer may suspend the delivery of and the progress payments for the remaining
unshipped Items as indicated in Annex A in pursuance of Section 3.2.7 or Section
10.2.1(C). If the suspension according to this Section continues for more than
ninety (90) days without appropriate remedy by Seller, this Contract shall
automatically terminate in accordance with Section 16.1.3.

16.1.2
If the Seller should materially breach the provisions of this Contract other
than as set forth in Section 16.1.3, Section 16.1.4 or Section 16.1.5, which
breach is not cured within sixty (60) days following the Seller’s receipt from
the Buyer’s notice of such breach, the Contract shall automatically terminate
unless the Buyer waives such termination within thirty (30) days (or such longer
time period as the Buyer and the Seller may hereafter agree in writing) after
60-day cure period end. In the event of such termination, Seller shall refund to
Buyer all payments theretofore made to Seller, less direct costs and
non-cancelable commitments already incurred by Seller for

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the manufacture and assembly of the DFC Component Kits that could have been
delivered to Buyer but for such termination. Upon such termination, Seller shall
also be (i) obligated to ship to Buyer all parts and material which Seller has
purchased in fulfillment of this Contract, and for which Seller has received
payment from Buyer prior to such termination and (ii) responsible for direct
costs and non-cancelable commitments (if any) related to installation and
assembly of the DFC Component Kits into the Module as well as of the Module into
a complete Plant, which has been incurred by Buyer prior to the date of
termination. Upon such automatic termination, Buyer shall take commercially
reasonable steps to minimize the Seller’s expenses in cooperation with Seller.

16.1.3
Termination for Prolonged Suspension. In the event that the suspension continues
for more than ninety (90) days in pursuance of Section 16.1.1, then this
Contract shall automatically terminate unless the Buyer waives such termination
within thirty (30) days (or such longer time period as the Buyer and the Seller
may hereafter agree in writing) after the 90 day suspension period pursuant to
Section 16.1.1 ends. In the event of such termination, Seller shall refund to
Buyer all payments theretofore made to Seller, less direct costs and
non-cancelable commitments already incurred by Seller for the manufacture and
assembly of the DFC Component Kits that could have been delivered to Buyer but
for such termination. Upon such termination, Seller shall also be (i) obligated
to ship to Buyer all parts and material which Seller has purchased in
fulfillment of this Contract, and for which Seller has received payment from
Buyer prior to such termination and (ii) responsible for direct costs and
non-cancelable commitments (if any) related to installation and assembly of the
DFC Component Kits into the Module as well as of the Module into a complete
Plant, which has been incurred by Buyer prior to the date of termination. Upon
such automatic termination, Buyer shall take commercially reasonable steps to
minimize the Seller’s expenses in cooperation with Seller.

16.1.4
Termination for Delivery Delay. In the event that the liquidated damage due to
the delay in delivery of any DFC Components or any Equipment under Article 6.3
or Article 10.2.3 has reached the maximum amount set forth in each Section, then
the Contract shall automatically terminate unless the Buyer waives such
termination within thirty (30) days (or such longer period as the Buyer and the
Seller may hereafter agree in writing) after the date on which the liquidated
damages has reached such amount. In the event of such termination, Seller shall
refund to Buyer all payments theretofore made to Seller, less direct costs and
non-cancelable commitments already incurred by Seller for the manufacture and
assembly of the DFC Component Kits that could have been delivered to Buyer but
for such termination. Upon such termination, Seller shall also be (i) obligated
to ship to Buyer all parts and material which Seller has purchased in
fulfillment of this Contract, and for which Seller has received payment from
Buyer prior to such termination and (ii) responsible for direct costs and
non-cancelable commitments (if any) related to installation and assembly of the
DFC Component Kits into the Module as well as of the Module into a complete
Plant, which has been incurred by Buyer prior to the date of termination. Upon
such automatic termination, Buyer shall take its commercially reasonable steps
to minimize the Seller’s expenses in cooperation with Seller.

16.1.5
Termination for Insolvency Event. In the event that:

(a)
FCE becomes bankrupt, insolvent, dissolves, takes steps to obtain or obtains or
is granted a court decision for the suspension of payment obligations or
institutes reorganization, liquidation or any similar proceedings;

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(b)
A trustee, administrator, liquidator, custodian, provisional manager, or similar
Person in a proceeding referred to in paragraph (a) above is appointed (i) with
consent, approval or non-objection of FCE, or (b) if FCE has objected to or has
not consented to or approved of such appointment, such appointment has not been
set aside or stayed within sixty (60) days of the date thereof; or

(c)
A court having jurisdiction enters an order winding-up or otherwise confirming
the bankruptcy or insolvency of FCE, which order or confirmation (i) is made
with the consent, approval or non-objection of FCE, or (ii) if FCE has objected
to or has not consented to or approved of such order or confirmation, such order
or confirmation has not been set aside or stayed within sixty (60) days of the
date hereof,

then the Contract shall automatically terminate. In the event of such
termination Seller shall refund to Buyer all payments theretofore made to
Seller, less direct costs and non-cancelable commitments already incurred by
Seller for the manufacture and assembly of the DFC Component Kits that could
have been delivered to Buyer but for such termination. Upon such termination,
Seller shall also be (i) obligated to ship to Buyer all parts and material which
Seller has purchased in fulfillment of this Contract, and for which Seller has
received payment from Buyer prior to such termination and (ii) responsible for
direct costs and non-cancelable commitments (if any) related to installation and
assembly of the DFC Component Kits into the Module as well as of the Module into
a complete Plant, which has been incurred by Buyer prior to the date of
termination. Upon such automatic termination, Buyer shall take commercially
reasonable steps to minimize the Seller’s expenses in cooperation with Seller.

16.2
Termination Due to the Buyer’s Default

16.2.1
In the event of a payment-related material breach of this Contract by Buyer
which extends longer than thirty (30) days after the date payment is due, then
Seller may, at its option, either (i) stop work, terminate the Contract for
breach and initiate suit for collection of outstanding balances; or (ii) stop
work, invoice Buyer in advance for all remaining payments due under this
Contract, and continue performance of this Contract upon receipt of such
payments from Buyer, with appropriate schedule adjustments needed for any delay.

16.2.2
If Buyer elects to delay authorizing shipment of the Module Kits with scheduled
EXW shipment dates pursuant to the schedule in Annex A through no fault of
Seller, and such delay is extended for more than 120 days for any such given
Module Kit or two or more such Module Kits for more than 60 days each, then
Seller may, at its sole discretion, terminate this Contract by providing written
notice to Buyer, and in the event of such termination, Seller shall be entitled
to retain advance payments received up to such date as Seller’s cost coverage
and damage award. Buyer shall be responsible for direct costs and non-cancelable
commitments (if any) already incurred by Seller for the manufacture and assembly
of the DFC Component Kits that could have been delivered to Buyer but for such
termination in excess of the advance payments received up to the time of such
termination. Upon such termination, Seller shall take commercially reasonable
steps to minimize the Buyer’s expenses in cooperation with Buyer.

16.3    Termination for Other Causes

This Contract may be terminated by either Party (i) due to a Force Majeure event
that exceeds the period set forth in Article 14.2; or (ii) if a change in any
Applicable Law would materially and adversely affect any rights or obligations
of any Party and the Parties under this Contract, in their exercise of
commercially reasonable good faith efforts, failed to agree to an appropriate
modification or an amendment of the terms and conditions of this Contract, after
complying with the procedures set forth in Article 21 below. In addition,

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if there exist reasonable grounds to doubt either the Buyer's or the Seller's
ability to perform its obligations under this Contract in full, then the other
Party shall have the right to demand assurances for adequate performance. If no
such assurances are provided within sixty (60) days of the request, then the
Party demanding assurances may terminate this Contract on written notice to the
other Party.

16.4    Seller and Buyer understand and agree that any suspension, termination,
or other action provided for under this Section 16 shall be subject to the terms
of Section 15 “Disputes and Arbitration,” including to a stay issued pursuant to
such proceedings pending the outcome of the resolution of such proceedings.

17. ASSIGNMENT AND SUB-CONTRACTING

17.1    Except as provided in Section 10.4.2, neither Party shall, without the
consent in writing of the other Party, which shall not be unreasonably withheld,
assign or transfer the Contract or the benefits or obligations thereof or any
part thereof to any person. Any such placing of sub-orders shall not relieve the
Seller from its obligations under the Contract.

18. TAXES AND DUTIES

18.1    The Seller shall pay and bear all the taxes, charges, customs duties and
tariffs for the sale or export of the DFC Component Kits assessed or imposed on
the Seller by the government or other competent authorities of the Seller's
country in relation to the Contract, subject to the provisions of Article 6.1.1
above.

18.2    The Buyer shall pay and bear all the taxes, charges, customs, duties and
tariffs for the purchase or import of the DFC Component Kits assessed or imposed
on the Buyer by the government or other competent authorities of the Republic of
Korea in relation to the Contract, subject to the provisions of Article 6.1.1
above.

18.3    In case the Seller is required to collect the VAT from the Buyer, the
Seller shall invoice to the Buyer. The Buyer shall then pay such VAT amount to
the Seller within thirty (30) days after receipt of the invoice, or shall
reimburse the Seller within thirty (30) days after receipt of the Seller’s
invoice and evidence of payment in case the Seller is required to pay the VAT in
advance.

18.4    The Buyer shall bear any and all import duties and related taxes imposed
by the Korean Government on the imported DFC Component Kits and/or materials,
and it shall be responsible for any and all matters relating to customs
clearance.

19. GOVERNING LAW

The Contract shall be governed, interpreted and construed under the laws of the
State of New York.

20. LOCAL LAW COMPLIANCE

20.1    Local Law Compliance

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20.1.1    The Seller shall comply with, and cause its personnel to comply with,
all applicable laws of the Republic of Korea and any political subdivision
thereof, in the performance of its duties under this Contract.

20.1.2    The Buyer shall be responsible for obtaining the necessary
certifications, approvals, licenses, permits and authorizations from the
applicable Korean governmental authorities (the “Approvals”) to perform its
obligations under this Contract.

20.1.3.    The Parties acknowledge and agree that the FCE technology contained
in the DFC Components Kits supplied by the Seller under this Contract is a new
generating technology, with codes and standards still under development;
therefore, securing the applicable permits and other authorizations may require
significant interaction with and education of the applicable Korean regulatory
authorities. The Seller agrees to provide commercially reasonable cooperation to
Korean regulatory authorities pursuant to this Section. For the avoidance of
doubt, in the event that Buyer is required to obtain the Approvals for the DFC
Components Kits and/or any other Equipment thereof supplied by the Seller under
this Contract, the Seller shall cooperate with the Buyer in obtaining such
Approvals including, without limitation, by providing drawings, specifications
and/or any other documentation required by the Korean governmental authorities.

21. ADDITION AND AMENDMENT

No modification, alteration, addition or change in the terms hereof shall be
binding on the Parties hereto, unless it is reduced to writing in the English
language and duly executed by the Parties hereto in the same manner as the
execution of the Contract and subject to such government approval as may be
required under the applicable laws and regulations of the countries concerned.

22. NOTICE

All notices pursuant to this Contract including daily communication to be given
to either Party will be deemed to have been duly given if delivered personally
or by internationally recognized courier service, or by facsimile, to the
addresses set forth below. Either Party may change its address by giving prior
notice to the other Party in the same manner set forth hereinabove.

For the Buyer:

*

Ms. Ji-Hyung Kim, Esq.
General Counsel
Legal Affairs Team
POSCO Energy
POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul 135-777, Korea
phone 82-2-3457-2026
facsimile 82-2-3457-2115
kim.jihyung@poscoenergy.com

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

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For the Seller:

Mr. Ross M. Levine, Esq.
Vice President, Legal Affairs
FuelCell Energy Inc.
3 Great Pasture Road
Danbury, CT 06813
phone 203 825 6057
facsimile: 203 825 6069
rlevine@fce.com

23. ENTIRE CONTRACT

The Contract sets forth the entire agreement and understandings between the
Parties as to the subject matter of this Contract. It supersedes upon
effectiveness of the Contract all prior discussions, agreements and
understandings of any and every nature between them.

24. PUBLICITY

Neither Party shall engage in any advertising, sales promotion, press releases,
public announcements, articles for journals or any other publications, or
presentation material for any meeting, seminar or conference, or any other
publicity matter relating to this Contract wherein the name of the other Party,
its logo and/or trademark, or that of its parent company or any of its
affiliates is mentioned or otherwise identifiable; or wherein any aspect of this
project is mentioned or identified, without the prior written consent of the
other Party.

 

25. CONSEQUENTIAL DAMAGES

Except as may be otherwise agreed between the Parties, or expressly set forth to
the contrary in this Contract, neither Party shall be liable to the other for
any incidental, indirect, special or consequential damages, however caused, and
based on any theory of liability, arising out of or related to the performance
of this Contract.

26. INSURANCE

Each Party shall maintain the following insurance coverage written with carriers
authorized to insure risks at the Site location, with the other Party named as
additional insured, providing thirty (30) days written notification of
cancellation:

27.1    Worker's Compensation providing statutory limits and coverage and
Employer's Liability, in an amount not less than $500,000 policy limit; and,

27.2    Commercial General Liability covering bodily injury (including death)
and property damage in an amount not less than One Million Dollars ($1,000,000)
per occurrence; including Premises Operations, Contractual Liability, Products
and Completed Operations, and Broad Form Property Damage.

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27.3    Commercial Automobile Liability in an amount not less than One Million
Dollars ($1,000,000) combined single limit per accident, covering all owned,
non-owned, leased, rented or hired autos used in connection with the performance
of this Contract.

27. COUNTERPARTS

This Contract may be executed by the Parties hereto in separate counterparts, by
facsimile or electronically, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute but one and
the same instrument.

28. SEVERABILITY

If any provision of this Contract is invalid or unenforceable under any
applicable statute or rule of law, then the remainder of this Contract shall
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any Party hereto. Upon determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Contract so as to effect the original
intent of the Parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.

29. WAIVER

No waiver shall be deemed to have been made by any Party of any of its rights
under this Contract unless the same shall be in a writing that is signed on its
behalf by its authorized officer. Any such waiver shall constitute a waiver only
with respect to the specific matter described in such writing and shall in no
way impair the rights of the Party granting such waiver in any other respect or
at any other time.

30. SPARES

30.1 Seller and Buyer agree that if, during the period between the EXW shipment
date of a DFC Module Kit supplied under this Contract and the conditioning of a
DFC Module incorporating such DFC Module Kit, any defect(s) in NRC or RC of a
DFC Module Kit (the “Cell Defect”), including physical breakage of NRC and/or RC
and non-conformance of NRC and/or RC to Appendix B hereto, are found, Buyer
shall be able to replace the defective portion of NRC and/or RC of such DFC
Module Kit with the non-defective portion of NRC and/or RC of any DFC Module Kit
purchased and delivered to Buyer under this Contract or any other Replacement
from Buyer’s Inventory (the “Cell Replacement”). If any Cell Defect is
attributable to Seller, Seller shall procure, at its own costs and expenses, the
Cell Replacement in accordance with applicable warranty provisions in Article
10; provided that the period of warranty for the DFC Module Kit, of which a
defective portion of NRC and/or RC are substituted with any Cell Replacement,
shall be a period of twenty-one (21) months from the EXW shipment date of such
DFC Module Kit with the Cell Defect. If any Cell Defect is incurred in transit
after the EXW shipment date of the DFC Module Kit with such Cell Defect, or is
caused by a handling mistake by the Buyer’s personnel during the assembly of a
DFC Module, or is incurred during a continuity check of DFC Module being
assembled, or for any other purposes of the Cell Replacement, Buyer shall be
able to purchase from Seller a certain amount of DFC Module Kits or any other
Equipment thereof for Buyer to use as spares, with pricing as indicated in
Article 2 of Appendix C of this Contract.

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IN WITNESS WHEREOF, the Parties have executed this Contract on the day and year
above written.

POSCO Energy Co. Ltd.                

/s/ Chang Kwan Oh
Chang Kwan Oh
President & CEO
POSCO Energy Co. Ltd.

Signing date: October 31, 2012

FuelCell Energy, Inc.

/s/ Arthur A. Bottone
Arthur A. Bottone
President & CEO
FuelCell Energy, Inc.

Signing date: October 31, 2012            

 

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ANNEX A

Delivery Schedule, Equipment Description, and Contract Price

Part I – Delivery Schedule (all of the below Deliveries are DFC Module Kits with
1.4 MW output)
Contract
Year
Item # overall
Item #
by year
Kits per month
EXW Shipment Date
Contract
Year
Item # overall
Item #
by year
Kits per month
EXW Shipment Date
2013
73
1
2
8-May-13
2015
117
4
2
19-Dec-14
2013
74
2
2
22-May-13
2015
118
5
2
7-Jan-15
2013
75
3
2
12-Jun-13
2015
119
6
2
23-Jan-15
2013
76
4
2
26-Jun-13
2015
120
7
2
6-Feb-15
2013
77
5
2
10-Jul-13
2015
121
8
2
20-Feb-15
2013
78
6
2
24-Jul-13
2015
122
9
2
6-Mar-15
2013
79
7
2
14-Aug-13
2015
123
10
2
20-Mar-15
2013
80
8
2
28-Aug-13
2015
124
11
2
3-Apr-15
2013
81
9
2
11-Sep-13
2015
125
12
2
17-Apr-15
2013
82
10
2
25-Sep-13
2015
126
13
2
8-May-15
2013
83
11
2
9-Oct-13
2015
127
14
2
22-May-15
2013
84
12
2
23-Oct-13
2015
128
15
2
5-Jun-15
2014
85
1
2
8-Nov-13
2015
129
16
2
19-Jun-15
2014
86
2
2
22-Nov-13
2015
130
17
2
10-Jul-15
2014
87
3
2
6-Dec-13
2015
131
18
2
24-Jul-15
2014
88
4
2
20-Dec-13
2015
132
19
2
7-Aug-15
2014
89
5
3
7-Jan-14
2015
133
20
2
21-Aug-15
2014
90
6
3
16-Jan-14
2015
134
21
2
4-Sep-15
2014
91
7
3
28-Jan-14
2015
135
22
2
18-Sep-15
2014
92
8
2
7-Feb-14
2015
136
23
2
5-Oct-15
2014
93
9
2
21-Feb-14
2015
137
24
2
19-Oct-15
2014
94
10
3
4-Mar-14
2016
138
1
2
6-Nov-15
2014
95
11
3
13-Mar-14
2016
139
2
2
20-Nov-15
2014
96
12
3
24-Mar-14
2016
140
3
2
4-Dec-15
2014
97
13
2
4-Apr-14
2016
141
4
2
18-Dec-15
2014
98
14
2
18-Apr-14
2016
142
5
2
8-Jan-16
2014
99
15
3
1-May-14
2016
143
6
2
22-Jan-16
2014
100
16
3
12-May-14
2016
144
7
2
5-Feb-16
2014
101
17
3
21-May-14
2016
145
8
2
19-Feb-16
2014
102
18
2
6-Jun-14
2016
146
9
2
4-Mar-16
2014
103
19
2
20-Jun-14
2016
147
10
2
18-Mar-16
2014
104
20
3
2-Jul-14
2016
148
11
2
8-Apr-16
2014
105
21
3
14-Jul-14
2016
149
12
2
22-Apr-16
2014
106
22
3
23-Jul-14
2016
150
13
2
6-May-16
2014
107
23
2
1-Aug-14
2016
151
14
2
20-May-16
2014
108
24
2
22-Aug-14
2016
152
15
2
3-Jun-16
2014
109
25
3
3-Sep-14
2016
153
16
2
17-Jun-16
2014
110
26
3
12-Sep-14
2016
154
17
2
8-Jul-16
2014
111
27
3
23-Sep-14
2016
155
18
2
22-Jul-16
2014
112
28
2
10-Oct-14
2016
156
19
2
5-Aug-16
2014
113
29
2
24-Oct-14
2016
157
20
2
22-Aug-16
2015
114
1
2
7-Nov-14
2016
158
21
1
23-Sep-16
2015
115
2
2
21-Nov-14
2016
159
22
1
21-Oct-16
2015
116
3
2
5-Dec-14
 
 
 
 
 

31
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ANNEX A (continued)

Delivery Schedule, Equipment Description, and Contract Price

Part II – Contract Price

Contract Year
Description
Quantity
Price per Unit
Extended Price
2013
DFC Module Kits (1.4MW output)
12
*
*
2014
DFC Module Kits (1.4MW output)
29
*
*
2015
DFC Module Kits (1.4MW output)
24
*
*
2016
DFC Module Kits (1.4MW output)
22
*
*
 
 
 
Contract Price:
$181,387,313.00

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

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ANNEX B

DFC Module Kit Price Allocation
                                               
Part Number
Description
Order Qty
Unit Price
Extended Price
*
*
*
*
*

ANNEX C

Advance Payment Guarantees

(A)Seller shall deliver to Buyer an approved, unconditional and irrevocable
Advance Payment Guarantee, in a form which shall be subject to prior approval of
Buyer, in an amount equal to 44.7 % of the Contract Price for Contract Year 2013
and Contract Year 2014, in an amount equal to 47.9% of the Contract Price for
Contract Year 2015, and in an amount equal to 48.6 % of the Contract Price for
Contract Year 2016, in each case as indicated in Part II of Annex A, in
accordance with provisions (B), (C) and (D) hereunder, which shall be valid from
the date of each Contract Year’s first payment from Buyer to Seller until the
full repayment of the amount of Advance Payment Guarantee by Seller.

(B)Seller shall deliver a bond from a bank, insurance or securities company
approved by Buyer in the amount of six percent (6%) of the Contract Price for
Contract Year 2013 and Contract Year 2014 as indicated in Part II of Annex A
within seven (7) days after the Effective Date, Seller shall deliver a bond from
a bank, insurance or securities company approved by Buyer in the amount of six
percent (6%) of the Contract Price for Contract Year 2015 and Contract Year 2016
as indicated in Part II of Annex A on or prior to the date on which first
payments for each Contract Year is due as defined in Section 4.2.4(A) and
Section 4.4 of this Contract.

(C)Seller hereby assigns a lien and security interest to Buyer in pursuance of
provisions (D) and (E) of this Annex C below, in order to compensate the
difference between the amount of the Advance Payment Guarantee specified in the
provision (A) of this Annex C and the bonds delivered by Seller for each
Contract Year in accordance with the provision (B) of this Annex C above. If the
amounts of advance payments made by Buyer to Seller are below the forty-four
point seven percent (44.7%) of the Contract Price for Contact Year 2013 and
Contract 2014, the forty-seven point nine percent (47.9%) of the Contract Price
for Contract Year 2015 or the forty eight point six percent (48.6%) of the
Contract Price for Contract Year 2016 at the time of termination under this
Contract, the lien and security interest assigned by Buyer hereunder are to
compensate only the difference between the amounts of advance payments made by
Buyer to Seller in accordance with times and amounts specified in Sections
4.2.3. and 4.2.4, and the bonds delivered by Seller for applicable Contract
Years. Seller shall use the advance payments made by Buyer only for the Seller’s

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

33
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performance of this Contract and for no other purposes. Seller shall provide the
necessary documentation to perfect the assignment of the lien and security
interest to Buyer, in pursuance of the provisions (D) and (E) of this Annex C
below, at the same time as Seller delivers the bond to Buyer in accordance with
the provision (B) of this Annex C or within seven (7) days from Seller’s
purchases of the goods to be assigned, pledged and/or granted as collateral
security to Buyer in accordance with the provision (D) of this Annex C.

(D)     Assignment, Pledge and Grant of Security Interest. As collateral
security for the performance of this Contract, Seller hereby assigns, pledges,
and grants to Buyer a lien on and continuing security interest in all of the
Seller's right, title and interest in, to and under, all materials, parts and
components purchased by Seller for performance of this Contract (the "Purchased
Goods") whether now owned or hereafter acquired by the Seller and wherever
located. Buyer shall be the first lien-holder and the first creditor of the
security interest in the Purchased Goods. Seller shall retain possession of all
such Purchased Goods for use in performance of this Contract and shall be
entitled to use all Purchased Goods in all manufacturing efforts as required
under this Contract for incorporation of the Purchased Goods into the Module
Kits being supplied under this Contract. Seller shall be responsible for
insurance and risk of loss of the Purchased Goods until such time that title to
the Module Kits in which the Purchased Goods are incorporated passes to Buyer.
In the event of termination of this Contract for any reason, Seller shall make
an accounting to Buyer of all Purchased Goods for which title has passed to
Buyer, but which have not been consumed in production of the Module Kits, and
shall thereupon promptly either (a) deliver all such Purchased Goods to Buyer or
Buyer's designee or (b) submit a proposal to Buyer for Seller to purchase all or
a portion of the Purchased Goods from Buyer. Buyer may, at its sole discretion,
accept or reject the proposal for such purchase. If Buyer rejects the purchase
proposal by Seller, Seller shall promptly deliver the Purchased Goods to Buyer.
In case Seller proposes to purchase only a portion of such Purchased Goods, and
Buyer accepts such proposal, Seller shall promptly deliver the remaining
Purchased Goods to Buyer.

(E) UCC Financing Statement. It is the intention of the Parties that the
Security Interest and Lien granted in the provision (D) of this Annex C above
shall be recorded by the filing of a UCC Financing Statement with the Office of
the Secretary of State of the State of Connecticut. Seller agrees that from time
to time, Seller shall promptly execute and deliver all instruments and
documents, and take all action, including, without limitation, security or
assignment agreement(s) between Buyer and Seller and/or among Seller and
Seller’s suppliers, that may be reasonably necessary or desirable, or that Buyer
may reasonably request, in order to perfect and protect the lien and security
interest granted hereby or to enable Buyer to exercise and enforce its rights
and remedies hereunder with respect to the Purchased Goods. In all security or
assignment agreement(s) that Seller may enter into with its suppliers of
materials to be provided under this Contract, Seller shall include a provision
that such agreement(s) shall be assignable to Buyer without approval of such
suppliers. Without limiting the generality of the foregoing, Seller (i) at the
request of Buyer, shall execute such instruments, endorsements or notices, as
may be reasonably necessary or desirable or as Buyer may reasonably request, in
order to perfect and preserve the assignments and security interests granted
hereby, and (ii) authorizes Buyer to file any financing statements, amendments
or continuations without the signature of the Seller to the extent permitted by
applicable law in order to perfect or maintain the perfection of the security
interest granted under this Contract.

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APPENDIX A

Specifications for DFC® Stack Modules

C1400 Stack Module Specification

1.0    Introduction
This specification document describes the interfaces and functional operation of
the C1400 Direct FuelCell ® (DFC®) stack module. The C1400 stack module is
comprised of four DFC stack modules, and the associated enclosure and process
and electrical connections. When operated in a standard FCE DFC3000 BOP, two of
these modules produce enough DC power to provide a net AC (after powerplant
parasitic loads) of 2.8 MW at ISO conditions.
2.0    Scope
This document describes one C1400 module. The specification provides preliminary
dimensional and interface data that can be used for planning and design. Final
drawings will be provided as part of formal project data submittal.

3.0     Specifications

3.1    Dimensions and Weights

Height:    166.25 inches
Width:    161.5 inches
Length:    226 inches
Detailed dimensional information is provided on drawing 20536

Weight:    100,000 lbs

3.2    Mechanical Interfaces

3.2.1    Piping Interfaces

*

3.3    Civil Interfaces

*

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

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3.4    Electrical and Control Interfaces

3.4.1    DC Connections

*

3.4.2    Grounding
*
3.4.3    Control Power

*

3.4.4     Module I/O

*

3.5    Performance Specification
Table 1 summarizes the projected output from the stack module at rated load.
This table shows the DC output from the stack module, which is comprised of the
output from four DFC stacks connected as two parallel strings, each with two
series-connected stacks.
Table 1
Nominal Stack Module Output at Rated Load

*

This performance is for a powerplant operating at sea level atmospheric
pressure. Module DC voltage will reduce by 2 volts for every 1000 feet of
elevation above sea level due to reduced cell electrochemical performance at
lower pressure. In addition to this module power output decrease, there will
also be BOP impacts on power and efficiency due to elevation and ambient
temperature, depending on the BOP design.
This performance requires the proper supply of process gasses to the module.
Table 2 shows the process flows required for rated operation.

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

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Table 2
Fuel and Air Gas Flows Needed to Produce Specified DC Output

 
Anode Inlet,
Natural Gas Fuel
Anode Inlet,
Digester Gas Fuel
Air Flow (at module inlet, after air blower, combination of primary and
secondary air)
 
 
 
 
 
 
 
Temperature, deg F
*
*
*
Volume Flow, SCFM
*
*
*
Molar Flow, lbmol/hour
*
*
*
Mass Flow, lb/h
*
*
*
 
 
 
 
 
 
 
Components
lb-mole/hr
mole %
lb-mole/hr
mole %
lb-mole/hr
mole %
Hydrogen
*
*
*
*
*
*
Methane
*
*
*
*
*
*
Carbon Monoxide
*
*
*
*
*
*
Carbon Dioxide
*
*
*
*
*
*
Water
*
*
*
*
*
*
Nitrogen
*
*
*
*
*
*
Oxygen
*
*
*
*
*
*
Total
*
*
*
*
*
*

*

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

37
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Table 3
Contaminant Limits for Fuel and Air Process Streams
 
Contaminant
Air limit, ppb
Fuel limit, ppb
Total sulfur compounds
*
*
Total halogens, halides, or hypochlorite
*
*
Particulates
*
*
Siloxanes
*
*
Metals
*
*
Mercury
*
*
Lead
*
*
Selenium
*
*
Cadmium
*
*
Arsenic
*
*
Vanadium
*
*
Tin
*
*
Potassium
*
*
Sodium
*
*
Zinc
*
*
Barium
*
*
Iron
*
*
Chromium
*
*

*
3.6    Stack Module Life
*
Table 4
Life Impacts of Stack Operation Transients

Life Impacting Event
Allowed in 5 year life
Allowed per year
Impact on life if exceeded
*
*
*
*
*
*
*

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

38
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APPENDIX B

DFC Components Specifications

C1400 Stack Module Kit Scope Specification

1.0    Introduction
This specification describes scope of supply for Direct FuelCell stack module
component kits, which will be used in the assembly of C1400 stack modules.
Detailed documentation including drawings, part numbers, part descriptions, UoM
and quantities relating to DFC Components, based on the Seller’s latest
technical information, are continuously and regularly updated by Seller, and
notified and made available to Buyer on Seller’s web-portal system designated by
Seller as *.
2.0    Scope
This document describes the component kit for one C1400 module.

3.0     Specifications

3.1    Dimensions and Weights

Total weight of component kit: 100,000 lbs plus packaging weight
Components are to be provided in multiple skids. The following table provides
the individual dimensions and weights:

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

39
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Gaylord Pack or Crate
Dimensions
Weight
Gaylord Pack or Crate
Dimensions
Weight
Gaylord #1
41"x41"x34"
888 lbs
A6
156"x 8"x 8"
500 lbs
Gaylord #2
54"x47"x40"
636 lbs
A7
114" x 45" x 34"
365 lbs
Gaylord #3
55"x48"x39"
283 lbs
A8
114" x 45" x 34"
365 lbs
Gaylord #4
64"x64"x30"
1213 lbs
A9
73" x 41" x 27"
312 lbs
Gaylord #5
65"x41"x29"
882 lbs
A10
48" x 24" x 17"
180 lbs
Gaylord #6
65"x41"x29"
882 lbs
Crate 1 of 26
67"x37"x39"
2140 lbs
Gaylord #7
65"x41"x29"
882 lbs
Crate 2 of 26
67"x37"x39"
2140 lbs
Gaylord #8
65"x41"x29"
882 lbs
Crate 3 of 26
67"x37"x39"
2140 lbs
Gaylord #9
57"x35"x32"
784 lbs
Crate 4 of 26
67"x37"x39"
2140 lbs
Gaylord #10
57"x35"x32"
784 lbs
Crate 5 of 26
67"x37"x39"
2140 lbs
Gaylord #11
57"x35"x32"
784 lbs
Crate 6 of 26
67"x37"x39"
2140 lbs
Gaylord #12
57"x35"x32"
784 lbs
Crate 7 of 26
67"x37"x39"
2140 lbs
Gaylord #13
53"x50"x22"
2370 lbs
Crate 8 of 26
67"x37"x39"
2140 lbs
Gaylord #14
53"x50"x22"
2370 lbs
Crate 9 of 26
67"x37"x39"
2140 lbs
Gaylord #15
53"x50"x22"
2370 lbs
Crate 10 of 26
67"x37"x39"
2140 lbs
Gaylord #16
53"x50"x22"
2370 lbs
Crate 11 of 26
67"x37"x39"
2140 lbs
Gaylord #19 & #20
42"x37"x66"
143 lbs
Crate 12 of 26
67"x37"x39"
2140 lbs
Gaylord #21 & #22
42"x37"x66"
143 lbs
Crate 13 of 26
67"x37"x39"
2140 lbs
TRPack #24
128"x68"x43"
1987 lbs
Crate 14 of 26
67"x37"x39"
2140 lbs
TRPack #25
128"x68"x43"
1987 lbs
Crate 15 of 26
67"x37"x39"
2140 lbs
TRPack #26
128"x68"x58"
2579 lbs
Crate 16 of 26
67"x37"x39"
2140 lbs
TRPack #27
128"x68"x58"
2579 lbs
Crate 17 of 26
67"x37"x39"
2140 lbs
TRPack #28
96"x37"x18"
219 lbs
Crate 18 of 26
67"x37"x39"
2140 lbs
TRPack #29
147"x6"diameter
13 lbs
Crate 19 of 26
67"x37"x39"
2140 lbs
TRPack #30
112"x23"x22"
351 lbs
Crate 20 of 26
67"x37"x39"
2140 lbs
TRPack #31
75"x51"x36"
297 lbs
Crate 21 of 26
67"x37"x39"
2140 lbs
TRPack #32
60"x44"x30"
249 lbs
Crate 22 of 26
67"x37"x39"
2140 lbs
TRPack #34
128"x48"x68"
1998 lbs
Crate 23 of 26
67"x37"x39"
2140 lbs
TRPack #35
55"x55"x83"
574 lbs
Crate 24 of 26
67"x37"x39"
2140 lbs
TRPack #36
44"x44"x56"
329 lbs
Crate 25 of 26
67"x37"x39"
2140 lbs
TRPack #37
75"x35"x29"
724 lbs
Crate 26 of 26
67"x37"x39"
2140 lbs
TRPack #38
44"x44"x47"
592 lbs
Crate 1 of 1
67"x37"x39"
1885 lbs
TRPack #39
44"x44"x70"
603 lbs
Crate 1 of 7
63"x37"x30"
1170 lbs
TRPack #40
44"x49"x42"
359 lbs
Crate 2 of 7
63"x37"x30"
1170 lbs
Vessel & Base Assembly
19'4.5"x13'6.5"x13'2-5/8"
34750 lbs
Crate 3 of 7
63"x37"x30"
1170 lbs
A1
99" x 84" x 19"
1002 lbs
Crate 4 of 7
63"x37"x30"
1170 lbs
A2
45"x12"x11"
200 lbs
Crate 5 of 7
63"x37"x30"
1170 lbs
A3
140" x 68" x 32 "
1144 lbs
Crate 6 of 7
63"x37"x30"
1170 lbs
A4
48"x 41"x 33"
160 lbs
Crate 7 of 7
63"x37"x30"
1170 lbs
A5
54"x 42"x 23"
342 lbs
Crate 1 of 1
63"x37"x30"
1180 lbs

40
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3.2 Repeating Component Subassembly listing.

Item
Numbers per Kit
 
 
Cell Packages
1,300

Reforming Units
264

Matrix
1,604

 
 
End Cells
8

Low Fill
20

High Fill
16

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APPENDIX C

Spare Parts Procurement Procedures

1.
General Procedures

1.1.
Seller agrees that Buyer has a right to use Buyer’s existing components of RC
and NRC supplied by Seller and stored in Buyer’s inventory.

1.2.
Buyer agrees to apply ‘First-In, First-Out’ (“FIFO”) inventory management
consuming the oldest inventory items first.

1.3.
If any DFC components delivered by Seller are found to be defective or
deficient, Buyer bears the responsibility of claiming the defect or deficiency
to the Seller using Seller’s stacking log system within 48 hours after the
initial finding. Seller shall avoid Buyer’s production stoppage by enabling
Buyer to replace the claimed parts with components from the next available kit
item or from Buyer’s spares inventory during the process of Seller’s warranty
disposition of claimed component.

1.4.
For the purpose of reducing human error and mistakes, manual data logging is not
allowed during Buyer’s final assembly operation.

1.5.
During all stages of assembly and test of DFC modules by Buyer, Seller shall
maintain the right to have its technical representative(s) present at Buyer’s
Plant at the Seller’s own cost, for the purpose of ensuring Buyer’s compliance
to Seller’s standard procedures and quality standard. The performance of the
aforesaid functions by the Seller’s technical representative(s) shall in no way
relieve Buyer of its obligations under this agreement.

1.6
Failure to adhere to the above requirements by Buyer may void Seller’s
warranties.

2.
Pricing

2.1.
Preannounced Replenishment of Spares. Subject to the requirements set forth
below, Seller agrees to provide spare RC and NRC components with pricing
outlined in Annex B of this Contract.

2.1.1.
Purchase Quantity Requirement. Buyer agrees that spares purchase quantity should
amount to the minimum RC packing unit as defined in Appendix C Table 8A for the
purpose of reducing cost of logistics.

2.1.2.
Lead time. The Parties agree that Seller requires minimum 12 months lead time
for Seller’s production planning and resource arrangement.

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2.2.
Special Replenishment of Spares. Seller agrees to provide special shipment(s) of
replacement kit components with the pricing outlined in Section 8 of this
Appendix, provided Buyer’s replenishment request fails to meet the condition set
forth in section 2.1.1 or section 2.1.2 above.

3.
Payment Terms. 100% amount shall be invoiced upon Purchase Order. Payments shall
be due 30 days from the invoice date.

4.
Deliveries

4.1.
Place. All Spares are to be shipped on the basis of EXW Seller’s delivery site.

4.2.
Transport Documents. As soon as each shipment, as provided for in this Article,
is made, Seller shall send to Buyer complete sets of documents, Three (3) sets
via the ship's master and Three (3) sets by air courier service and by
electronic mail, each set consisting of the following transport documents:

(1) A clean on board bill of lading;
(2) A commercial invoice;
(3) A packing list.
In case (i) such documents described above fail to be submitted to Buyer prior
to the arrival date of each shipment at the discharging port due to Seller’s
fault, or (ii) any shipment fails to be released from the discharging port or to
pass any customs clearance due to any omission or error in such documents
described above, Seller shall bear all costs and expenses incurred therefrom.

5.
Warranties, Remedies and Limitations

5.1.
Warranty. Only Manufacturers’ standard warranty shall be in effect for all
material purchased herein. This warranty period is 21 months from Ex Works
delivery.

5.2.
Title. Seller warrants to Buyer that it will convey good title to the goods sold
hereunder. Seller's liability and Buyer's remedy under this warranty are limited
to the removal of any title defect or, at the election of Seller, to the
replacement of the goods or parts thereof which are defective in title.

5.3.
Seller shall not be liable and the Warranties stipulated in this Article shall
not apply if and to the extent that the Equipment damaged or altered pursuant to
the following:

5.3.1.
Damage in transit, improper storage or handling, incorrect or negligent
operations or improper maintenance;

5.3.2.
Any alterations made by Buyer without the consent of Seller;

5.3.3.
Normal wear and tear.

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5.4.
Exclusive Remedy. Except as otherwise set forth herein, the remedies set forth
in this Article are the exclusive remedies for all claims based on failure of or
defect in the Equipment provided under this Contract, whether the failure or
defect arises before or during the warranty period and whether a claim, however
instituted, is based on contract, indemnity, warranty, tort (including
negligence), strict liability or otherwise. THE FOREGOING WARRANTIES ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES WHETHER
WRITTEN, ORAL, IMPLIED OR STATUTORY. NO IMPLIED STATUTORY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE SHALL APPLY.

5.5
The provisions under this Article 5. Warranties, Remedies and Limitations are
guidance only, and shall not be interpreted as the commercial terms of any
Purchase Order.

6.
Liquidated Damages

6.1.
Liquidated Damages for Delayed Delivery: In the event the EXW delivery date of
the Equipment is delayed beyond 12 months from Buyer’s issuance of Purchase
Order for Preannounced Replenishment or dates indicated in Appendix B for
Special Replenishment through the fault of the Seller, the Buyer is entitled to
claim liquidated damages per day of delay in an amount equivalent to 0.11% of
the price for the delayed Equipment. Such liquidated damages shall not exceed
seven percent (7%) of the price of the delayed Equipment. In no event shall
Seller be considered liable for any cost, expense or consequence of any nature
by Buyer for any late deliveries by any vendor or supplier of any of the goods
or materials being provided under this Contract.

6.2
The provisions under this Article 6. Liquidated Damages are guidance only, and
shall not be interpreted as the commercial terms of any Purchase Order.

7.
Templates of RC packages with Minimum Quantity Requirement

7.1.
POSCO Energy shall use the templates indicated in Table 8.A for ordering RC.

7.2.
Each template shows minimum quantity requirement per standard shipping unit
(crate) with constituent parts of standard packing unit for RC shipment.

7.3.
Each RC spares purchase shall consist of identification of templates required by
POSCO Energy and the order quantity of each template.

8.
Pricing for Special Replenishment Spares

8.1 Minimum quantities, prices and lead time of each component are listed in
Table 8.A below. Purchase orders must comply with these values in order to be
processed by FCE.

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8.2 Items less than $200 requires a transaction cost of $200 and minimum
shipping quantities.    

Table 8.A

part number
part description
qty
UoM
lead time (weeks)
EXW FCE price each
EXW FCE price ext
*
*
*
*
*
*
*

* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for Confidential
Treatment.

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