EXHIBIT 10.1

 

 

 

JOINT DEVELOPMENT AGREEMENT

between

FUELCELL ENERGY, INC.

and

EXXONMOBIL RESEARCH AND ENGINEERING COMPANY

 

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

 

ARTICLE 1 – DEFINITIONS

 

1

 

 

 

ARTICLE 2 – PROGRAM

 

1

 

 

 

ARTICLE 3 – PROGRAM GOVERNANCE

 

2

 

 

 

ARTICLE 4 – DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE

 

3

 

 

 

ARTICLE 5 – PUBLICITY AND PUBLICATIONS

 

5

 

 

 

ARTICLE 6 – OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS

 

6

 

 

 

ARTICLE 7 –LICENSE TO PROGRAM RESULTS

 

7

 

 

 

ARTICLE 8 – LICENSE TO BACKGROUND INFORMATION AND PATENTS

 

8

 

 

 

ARTICLE 9 – INFRINGEMENT OF THIRD PARTY PATENTS

 

11

 

 

 

ARTICLE 10 – PAYMENT

 

11

 

 

 

ARTICLE 11 – REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES

 

13

 

 

 

ARTICLE 12 – TERM AND TERMINATION

 

14

 

 

 

ARTICLE 13 – ARBITRATION AND GOVERNING LAW

 

17

 

 

 

ARTICLE 14 – ASSIGNMENT

 

18

 

 

 

ARTICLE 15 – FORCE MAJEURE

 

18

 

 

 

ARTICLE 16 – ADDRESSES AND NOTICES

 

18

 

 

 

ARTICLE 17 – COMPLIANCE

 

19

 

 

 

ARTICLE 18 – RECORDS AND AUDIT

 

20

 

 

 

ARTICLE 19 – TAXES

 

20

 

 

 

ARTICLE 20 – ADDITIONAL PROVISIONS

 

20

 

 

 

APPENDIX A – DEFINITIONS

 

24

 

 

 

APPENDIX B – SAMPLE PROJECT DESCRIPTION FORMAT

 

30

 

 

 

 

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JOINT DEVELOPMENT AGREEMENT

This Agreement is made as of the Effective Date between:

ExxonMobil Research and Engineering Company, a corporation of the State of
Delaware having offices at 1545 Route 22 East, Annandale, New Jersey 08801
(“ExxonMobil”); and

FuelCell Energy, Inc., a corporation of the State of Delaware having offices at
3 Great Pasture Road, Danbury, Connecticut 06810 (“FCE”).

ExxonMobil and FCE are engaged in collaborative research and development
projects to evaluate and develop Molten Carbonate Fuel Cells (MCFCs) to reduce
carbon dioxide emissions (i.e., achieve low cost carbon dioxide capture).
ExxonMobil and FCE wish to further the research and development efforts to
evaluate and develop new and/or improved MCFCs to reduce carbon dioxide
emissions from industrial and power sources (“Scope”). Therefore, in
consideration of the foregoing premises and mutual covenants contained herein,
ExxonMobil and FCE (each a “Party” and collectively the “Parties”) agree as
follows:

ARTICLE 1 – DEFINITIONS

1.01

Definitions.  The terms appearing in this Agreement in initial capital letters,
not otherwise defined in the preamble or body of this Agreement, are defined in
Appendix A.

ARTICLE 2 – PROGRAM

2.01

Program / Projects.  The collaborative research and development effort will
comprise one or more mutually agreed upon projects within the Scope during the
Term of this Agreement (each a “Project” and, collectively, the “Projects” or
the “Program”).  The details of each Project will be described in a written,
mutually agreed upon document (“Project Description”) - a template for which is
set forth in Appendix B.  Each Project Description will specify the scope and
content of the Project, the work to be undertaken by each Party and potential
third parties, the deliverables, the timing, any payments to be made not
otherwise set forth in this Agreement, and any other related objectives and
expectations.  When completed and signed by duly authorized representatives of
both Parties, each Project Description will become part of this Agreement and
will be governed by the terms and conditions of this Agreement.  Neither Party
makes any representations as to the number, frequency, or monetary value of the
Projects, except as otherwise set forth herein or in any Project Description.

2.02

Subcontracting.  ExxonMobil hereby consents to FCE hiring trade contractors
commonly used for facility modifications and individual engineering contractors
and individual staff from temporary agencies as needed to perform work pursuant
to a Project Description, provided that such contractors and staff are under
confidentiality and use restrictions no less restrictive than the terms and
conditions set forth herein.

2.03

Work Exclusivity/Independent Work.  During the Term of this Agreement, FCE will
not conduct any Work using Generation 1 Technology in Carbon Capture
Applications or any Work using Generation 2 Technology, independently or with
third parties outside this Agreement, without prior written approval from
ExxonMobil. Notwithstanding the foregoing, ExxonMobil hereby grants approval for
FCE solely to conduct Authorized Work using Generation 1 Technology with
Authorized Third Parties for Carbon Capture Applications and any Work using
Generation 2 Technology solely for Power Applications and Hydrogen Applications.

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ARTICLE 3 – PROGRAM GOVERNANCE

3.01

Steering Committee.  Promptly after the Effective Date, the Parties will
establish a committee that will oversee technical support and provide overall
supervision and administrative guidance for the Program (“Steering Committee” or
“SC”), further detailed as follows -

 

(a)

Composition.  Each Party will appoint in writing one or more of its employees as
SC members.  Each Party will have the right to change its SC members at any time
by giving written notice of such change to the other Party.  

 

(b)

Meetings.  Meetings of the SC will be in person or by phone at a location and
time agreed to in advance by the SC members.

 

(c)

Other Attendees.  In addition to the attendance of SC members, with prior
written notice to the other Party’s SC members, each Party may also bring to any
SC meeting such technical and other advisors as it may deem appropriate,
provided that such advisors are employees of a Party or its Affiliates and are
under written confidentiality and use restrictions at least as strict as those
imposed herein. Otherwise, a Party’s additional invitees may attend a SC meeting
only with the other Party’s advance written approval.

 

(d)

Responsibilities.  The responsibilities of the SC will include, but are not
limited to:  

 

i.

Project Endorsement and Monitoring. The SC will review and approve each Project
Description and amendment thereto prior to execution by the Parties.  (However,
no Project Description or amendment thereto will be effective unless and until
it is executed by duly authorized representatives of both Parties.)  The SC will
periodically monitor the ongoing status of all Projects, and make adjustments to
priorities within and between the Projects.  

 

ii.

Dispute Resolution.  Assist the Parties in resolving any disputes.

 

(e)

Votes.  Each Party only gets one vote on the SC regardless of the number of SC
members it appoints.  Except as otherwise stated in this Agreement, all
decisions by the SC will be by unanimous agreement.  In the absence of
unanimity, ExxonMobil’s SC representatives will have final decision making
authority with respect to only the following decisions required by the SC:
whether and where to seek patent protection and whether to maintain patent
assets, subject to the provisions of Paragraph 6.04 (Solicitation of Program
Patents Discretionary).   

 

(f)

Minutes.  All decisions by the SC will be documented in agreed upon minutes
distributed to SC members after the meeting.    

 

(g)

No Amendment Rights.  The SC may recommend but has no authority to amend the
terms and conditions of this Agreement.    

 

(h)

Costs. ExxonMobil will bear its own costs associated with participating in the
SC. FCE’s costs and expenses associated with its participation in the SC are
included in each Project’s budget as Direct Costs.

3.02

Technical Managers.  Each Party will appoint one manager for each Project
(“Technical Manager”).  The Technical Managers will be responsible for the
coordination of all technical activities arising under such Project, and will
serve as their Party’s technical liaison with the SC for the Project.  Each
Party will promptly notify the other Party in writing upon changing the
appointments.  The Technical Managers for each Project will be the primary
technical contacts between the Parties for that Project.  The Technical Managers
for each Project will jointly:

 

•

direct the work performed under a Project in accordance with the terms and
conditions of the Project Description;

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•

report to the SC on the progress of technical activities conducted under the
Project;

 

•

monitor and coordinate all intellectual property activities relative to each
Project; and

 

•

make recommendations to the SC on proposed publications containing Program
Information.

Unless otherwise mutually agreed, the Technical Managers for a Project will meet
in person at least once each calendar quarter during a Project at such locations
as the Technical Managers agree.  The Technical Managers will communicate
regularly by telephone or similar means between such meetings.  

ARTICLE 4 – DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE

4.01

Program Information Disclosure, Confidentiality and Use Restriction.  FCE will
promptly disclose to ExxonMobil, in written or other tangible form, any and all
Program Information including any Program Inventions.  Except as otherwise
permitted under this Agreement, FCE agrees to hold Program Information in
confidence, and not to disclose or make it available to any third party without
the express prior written consent of ExxonMobil, for a period commencing on the
Effective Date and ending twenty (20) years thereafter.  Without the express
prior written consent of ExxonMobil, FCE agrees to use and practice Program
Information only for the Program or as authorized in Article 7 (License to
Program Results).  

4.02

Background Information Disclosure, Confidentiality and Use Restriction.  Each
Party will make available its Background Information to the other Party that it
believes will be useful in carrying out work under the Program.  Except as
otherwise permitted under this Agreement, each Party agrees to hold the
Background Information it receives from the other Party in confidence, and to
not disclose or make available the other Party’s Background Information to any
third party without the express prior written consent of the other Party, for a
period commencing on the Effective Date and ending twenty (20) years thereafter.
Without the express prior written consent of the other Party, each Party agrees
to use and practice the other Party’s Background Information only for the
Program or as authorized in Article 8 (License to Background Information and
Patents).  

4.03

Non-Analysis of Background Samples. Except as otherwise agreed by the Parties in
writing, each Party agrees not to determine or have determined the composition
or physical structure of any Background Sample received from the other Party,
which includes unused, used and spent Background Samples or portions thereof,
whether by analyzing, having analyzed, inspection, reverse engineering or
otherwise.  

4.04

Information Handling Obligations.  Each Party will endeavor to mark Confidential
Information as follows:

 

(a)

Confidential Information first disclosed in tangible form or electronically will
be marked by the Disclosing Party as “confidential” or “proprietary” or with
words of similar import when provided, indicating whether the information is
“Program Information” or “Background Information”;

 

(b)

Confidential Information first disclosed orally or by visual display will be
identified by the Disclosing Party as “confidential” or “proprietary” or with
words of similar import at first disclosure and subsequently confirmed as
confidential in a summary provided in an e-mail or other written communication
delivered to the other Party within thirty (30) days after first disclosure,
that references the date of the confidential disclosure indicating whether the
information is “Program Information” or “Background Information”; and

 

(c)

If a Sample is sent to the other Party, the Sample will be marked by the
Disclosing Party as “confidential” or “proprietary” or with words of similar
import at the time of disclosure indicating whether the Sample is “Program
Information” or “Background Information”.

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The failure to appropriately mark information/materials as “confidential” or
“proprietary” upon initial disclosure to the Receiving Party will not be
considered a waiver of confidentiality.  Information/materials marked as
“proprietary” or “confidential” when first disclosed, without further
identification of the category of confidential information, will be
presumptively considered and treated as Program Information until the Disclosing
Party notifies the Receiving Party otherwise in writing.

4.05

Exceptions.  For the purposes of this Agreement, the obligations of
confidentiality and restricted use herein shall not apply to any information or
materials to the extent the Receiving Party can establish by documentary
evidence that one or more of the following exceptions apply:  

 

a.

the information or material was already in the Receiving Party’s or its
Affiliate’s lawful possession (free of any confidentiality and use restrictions)
and was not previously acquired directly or indirectly from the other Party
under a current obligation of confidentiality;

 

b.

the information or material was already in the public domain or subsequently
entered the public domain after disclosure through no fault of the Receiving
Party;

 

c.

the information or material was or is hereafter furnished to the Receiving
Party, or its Affiliate, on a non-confidential basis by a third party legally
entitled to provide the information or material without restriction;

 

d.

the information or material was independently developed by employees or agents
of the Receiving Party or its Affiliate who did not have access to relevant
information provided by the Disclosing Party; and/or

 

e.

the information or material was released from the confidentiality obligations of
this Agreement by the Disclosing Party’s written authorization.

The later occurrence of any one of the aforementioned exceptions will not excuse
any failure to adequately protect Confidential Information pursuant to this
Agreement prior to the existence of the exception.  More specific Confidential
Information will not be deemed to be within the foregoing exceptions merely
because it is embraced by more general information that is publicly available or
in the possession of Receiving Party pursuant to one of the exceptions.  Also a
combination of features will not be deemed within the foregoing exceptions
merely because individual features are publicly available or in Receiving
Party’s possession pursuant to one of the exceptions.  

4.06

Disclosure to Affiliates, Contractors, and Sub-licensees.  Notwithstanding
anything to the contrary in this Agreement, a Receiving Party may disclose a
Disclosing Party’s Confidential Information to its Affiliates, and said
Receiving Party may disclose the Disclosing Party’s Confidential Information to
their respective contractors providing services in furtherance of a Project as
well as to permitted sub-licensees hereunder, provided such Affiliates,
contractors, and sub-licensees have agreed to be bound by confidentiality and
limited use obligations no less protective of Disclosing Party’s Confidential
Information than the terms contained herein.  The Receiving Party will be liable
to the Disclosing Party for any unauthorized disclosure or misuse of the
Disclosing Party’s Confidential Information by such Affiliates, contractors, and
sub-licensees.

4.07

Compelled Disclosure.  In the event that a Receiving Party (or its Affiliate) is
required by law, court order or rule, or government authority to disclose the
Confidential Information that Receiving Party is obligated to hold in confidence
pursuant to Paragraph 4.01 (Program Information Disclosure, Confidentiality and
Use Restriction) and/or Paragraph 4.02 (Background Information Disclosure,
Confidentiality and Use Restriction), then the Receiving Party will promptly
notify the Disclosing Party prior to disclosure in order to enable the
Disclosing Party to seek a protective order at the Disclosing Party’s sole
expense.  In any event, the Receiving Party who is required to disclose such
information will request confidential treatment of the information and only
disclose the minimum amount of information reasonably necessary to comply with
such law, court order or rule, or government authority.  

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4.08

Disclosures in Patent Applications. Notwithstanding anything else in this
Agreement, ExxonMobil may disclose the minimum amount of FCE’s Confidential
Background Information reasonably necessary to support a Program Patent subject
to the review process in Paragraph 6.02 (Solicitation of Program Patents).

4.09

Return/Destruction.  At the Disclosing Party’s written request, the Receiving
Party agrees to return to Disclosing Party or, at Disclosing Party’s option,
dispose of or destroy, Disclosing Party’s Confidential Background Information
and any of Disclosing Party’s unused Background Samples. However,
notwithstanding anything else in this Paragraph, the Receiving Party may retain
such documents and materials to the extent such documents and materials are
identified as necessary for beneficial use of a further Project or a license
granted herein and the Receiving Party has notified the Disclosing Party in
writing of the need for such documents and materials.  Any dispute over whether
such documents and materials are necessary shall be escalated to senior
management for resolution.    Furthermore, notwithstanding anything else in this
Paragraph 4.09, the Receiving Party may retain one (1) copy of such documents
and materials in its secure files for the sole purpose of administering its
obligations under this Agreement and the Receiving Party will not be required to
purge or cause others to purge electronic archival media automatically generated
by backup computer systems if said media will be destroyed pursuant to a
systematic records retention process and not otherwise utilized.

 

4.10

Third Party Information.  Neither Party will knowingly disclose to the other
Party any proprietary or confidential information belonging to a Non-Affiliated
Third Party without the Receiving Party’s prior written consent.

ARTICLE 5 – PUBLICITY AND PUBLICATIONS

5.01

Publicity.  During the Term, and except for disclosures pursuant to Paragraphs
4.06 (Disclosure to Affiliates, Contractors and Sub-licensees), 4.07 (Compelled
Disclosure), 4.08 (Disclosure in Patent Applications), or as otherwise permitted
in this Agreement, the Parties agree that they will not disclose to any
Non-Affiliated Third Party that they have entered into this Agreement, nor make
any publications or publicity releases concerning the nature of this Agreement,
without first acquiring the written consent of the other Party, which consent
will not be unreasonably withheld, conditioned or delayed.  

Notwithstanding the foregoing, either Party may make such disclosure as it may
determine to be required by applicable law (such as filing with the U.S.
Securities and Exchange Commission), provided that in such case the Disclosing
Party will provide advance notice of such disclosure to the other Party and,
where legally permitted, an opportunity to redact its sensitive proprietary
information from such disclosure.

Further, during the Term, each Party agrees that it will not use the name,
service mark or trademark of the other Party, or any Affiliate of the other
Party, or provide any indication from which the identity of the other Party or
its Affiliate may reasonably be inferred in any publicity release or other
announcement, without first obtaining the written approval of the other
Party.  Notwithstanding the foregoing, each Party hereby grants approval for the
other Party to use its name, service mark or trademark in promotional materials
that have a generally accepted description of the Scope, which such generally
accepted description shall be mutually agreed to in writing beforehand. An
exception to this Paragraph will include U.S. patent prosecution that refers to
this Agreement as a “joint research agreement” under 35 U.S.C. § 102(c).

Further, each Party agrees to include appropriate attribution of the other Party
in any publicity release, advertising, print, media or other announcement
concerning the use of MCFCs for carbon capture, the Program or the Program
Results.

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5.02

Publications. The Parties recognize that Program Information may be suitable for
publication either jointly or individually.  Unless the other Party specifically
requests in writing not to be credited, appropriate recognition of the support
or encouragement of the other Party will be included in such publications.  The
Parties agree to cooperate with each other on the preparation of any such
publications.  If any proposed publication contains the non-publishing Party’s
Background Information, such information (including reference thereto) will be
deleted at the non-publishing Party’s request.  No publication that violates
Article 4 (Disclosure, Confidentiality and Restricted Use) or Paragraph 5.01
(Publicity) will be permitted without the prior written consent of the other
Party which may be obtained from a duly authorized member of each Party.

ARTICLE 6 – OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS

6.01

Ownership of Program Results.  ExxonMobil will solely own Program Information,
Program Patents, and copyrightable works resulting from the Program
(collectively, “Program Results”), irrespective of whether the Program Results
are conceived, created, developed or acquired by employees or other
representatives of FCE, ExxonMobil, or both.  FCE will assign, and hereby
assigns, to ExxonMobil ownership of Program Results.

6.02

Solicitation of Program Patents. ExxonMobil will have the sole responsibility
and the exclusive right to prepare, file, prosecute, and maintain Program
Patents pursuant to Paragraph 6.01 (Ownership of Program Results). Such right
will include the right to determine if, where, and when patent applications are
filed, and the scope of such patent applications.  Notwithstanding the
foregoing, ExxonMobil shall provide FCE notice of its intent to file any patent
application containing FCE’s Confidential Background Information and an
opportunity for FCE to review any such patent application for FCE’s Confidential
Background Information. If FCE does not respond within thirty (30) days from
ExxonMobil seeking such consent, then ExxonMobil may proceed with such filing.
The cost of preparing, filing, prosecuting, and maintaining any such patent
applications that ExxonMobil decides to pursue and maintain, as well as the cost
of maintaining any patents resulting therefrom, will be paid in full by
ExxonMobil.  For Program Patents, if one or more employees or other
representatives of FCE are determined to be inventors, then FCE will:

 

(i)

cause its employees, contractors, and consultants to render reasonable and
timely assistance to ExxonMobil and its attorneys or agents;

 

(ii)

assign, and will cause its and its Affiliates’ employees, contractors, and
consultants to assign, its right, title, and interest in and to such Program
Patent to ExxonMobil for filing; and

 

(iii)

cause its and its Affiliate employees, contractors, and consultants, to execute
any documents as may be required to effect such assignments, or file, prosecute,
and maintain any patent applications or patents that are based on, derived from,
or protect such Program Patent.  

ExxonMobil will hold formal legal title to all such patent applications, and
resulting patents.  

6.03

Cooperation in Soliciting Program Patents. The Parties agree to cooperate in the
preparation, filing, prosecution, and securing of patent applications and
patents, all without charge to such other Party. When ExxonMobil’s patent
counsel sends to FCE documents for review that contains FCE Confidential
Background Information, the Parties will follow the review process pursuant to
Paragraph 6.02 (Solicitation of Program Patents). Upon FCE’s written request,
ExxonMobil will provide a courtesy copy of any Program Patent that does not
contain any FCE Confidential Background Information prior to filing such
document. All Program Patent filings, and the status thereof, will be reported
to the Steering Committee.

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6.04

Solicitation of Program Patents Discretionary.  ExxonMobil has the unencumbered
right to file or not to file, prosecute, defend, maintain, abandon, or enforce
any Program Invention or Program Patent.  Notwithstanding the foregoing, in the
event ExxonMobil decides not to prosecute, defend, enforce, maintain or decides
to abandon any Program Patent, then ExxonMobil will provide notice thereof to
FCE, and FCE will then have the right, but not the obligation, to prosecute or
maintain the Program Patent and sole responsibility for the continuing costs,
taxes, legal fees, maintenance fees and other fees associated with that Program
Patent. The ownership of such Program Patent will remain with ExxonMobil.

The abandonment of a pending patent application in favor of a continuation
patent application, continuation-in-part patent application, or divisional
patent application, or in favor of another application of a related subject
(e.g. to overcome a double patenting rejection) and ExxonMobil’s decision not to
file any Program Patent, will not be deemed to be an election not to continue to
prosecute, issue, or maintain any Program Patent under Paragraph 6.04.  In
addition, (a) the failure to appeal a patent office or any administrative
tribunal or judicial decision adverse to any patent or patent application, or
(b) in the case of a co-pending non-provisional application in the U.S., (i)
failure to enter an international patent application into the national phase, or
(ii) to ratify a patent in any country, will not be deemed to be an election not
to continue to prosecute, issue, or maintain any Program Patent under Paragraph
6.04.

6.06

Joint Research Agreement.  The Parties acknowledge and agree that this Agreement
is a “joint research agreement” as defined in 35 U.S.C. §100(h).  The
specification of any patent application filed pursuant to this Agreement may
contain (or may be amended to contain) language required to invoke 35 U.S.C.
§102(b)(2)(C) and §102(c) as applicable.  Notwithstanding anything to the
contrary in Paragraph 5.01 (Publicity), ExxonMobil will have the right to invoke
these statutory provisions when exercising its rights to file patent
applications under this Agreement, without the prior written consent of FCE,
subject to the provisions of Paragraph 6.02 (Solicitation of Program
Patents).  Where ExxonMobil intends to invoke these statutory provisions, FCE,
upon request, will cooperate and coordinate its activities with ExxonMobil with
respect to any submissions, filings or other activities in support thereof.

6.07

Inventor Awards.  A Party will not be responsible for any inventor awards or
compensation that may be owed to the other Party’s employee(s) or to any
employees of the other Party’s Affiliates, agents, consultants, or contractors,
who are inventors of any Program Invention.  

6.08

Disposal of Prior JDA Project Patents. During the Term of this Agreement and for
two (2) years thereafter, in the event that either Party decides to sell or
convey its interest in or otherwise dispose of any Prior JDA Project Patent to
any Non-Affiliated Third Party, such Party will inform the other Party, who will
then have the right of first refusal to purchase or otherwise acquire the sole
interest at same or better terms. Any sale of a Prior JDA Project Patent to a
Non-Affiliated Third Party is subject to the licenses granted and other
obligations set forth in this Agreement.

ARTICLE 7 – LICENSE TO PROGRAM RESULTS

7.01

Grants to FCE of Program Results.  

 

(a)

FCE’s R&D Rights.  ExxonMobil grants FCE a worldwide, non-exclusive,
royalty-free, non-transferable (except pursuant to Article 14 (Assignment)),
non-sub-licensable (except as set forth in this Paragraph 7.01(a)) right and
license to practice Program Results solely to conduct research and development
for the Program. More particularly, said right and license to practice includes
the right to use, reproduce, and create derivative works of Program Information
under applicable copyrights and to make, use, and import (but not sell or offer
to sell) under the claims of Program Patents, in each case solely for research
and development for the Program. Said right and license may be extended to
contractors performing work on behalf of FCE but is not otherwise
sub-licensable.

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(b)

FCE’s Commercial Rights.  ExxonMobil agrees to grant or hereby grants FCE the
following rights and licenses:

 

(1)

Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide,
non-exclusive, royalty-free, perpetual, irrevocable (except as stated in
Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05
(Bankruptcy)), sub-licensable, non-transferable (except pursuant to Article 14
(Assignment)), right and license to practice Program Results solely for Power
Applications and Hydrogen Applications. More particularly, said right and
license to practice Program Results solely for Power Applications and Hydrogen
Applications includes the right to use, reproduce, and create derivative works
of Program Information under applicable copyrights and to make, use, import, and
sell or offer to sell under the claims of Program Patents; and   

 

(2)

Carbon Capture Applications.  In the event ExxonMobil notifies FCE that it has
formally decided not to pursue Generation 2 Technology for Carbon Capture
Applications, then upon FCE’s written request, ExxonMobil agrees to negotiate a
grant to FCE, under commercially reasonable terms to be determined in good
faith, a worldwide, non-exclusive, royalty-bearing (with the royalty to be
negotiated), non-sub-licensable (except as set forth in this Paragraph
7.01(b)(2)), non-transferable (except pursuant to Article 14 (Assignment)),
right and license to practice Program Results solely for Carbon Capture
Applications. More particularly, said right and license to practice Program
Results solely for Hydrogen Applications and Carbon Capture Applications will
include the right to use, reproduce, and creative derivative works of Program
Information under applicable copyrights and to make, use, import, and sell or
offer to sell under the claims of Program Patents. Said right and license will
be extendable to contractors performing work on behalf of FCE but will not
otherwise sub-licensable. Nothing in this Paragraph 7.01(b)(2) will create an
obligation on the part of ExxonMobil to grant FCE a right or license under
Program Results if the Parties do not agree on the terms and conditions of such
license.

ARTICLE 8 – LICENSE TO BACKGROUND INFORMATION AND PATENTS

8.01

Ownership Retained.  Each Party will retain its title and ownership rights to
its Background Information and Background Patents in all applicable
jurisdictions.  

8.02

Grant of Rights to Background Information and Background Patents.  

 

(a)

Grant to ExxonMobil.

 

1)

Carbon Capture Applications and Hydrogen Applications. To the extent not already
granted pursuant to the License Agreement, FCE grants ExxonMobil and its
Affiliates a worldwide, non-exclusive, royalty-free, irrevocable, perpetual,
sub-licensable, non-transferable (except pursuant to Article 14 (Assignment))
right and license to practice FCE Background Information and FCE Background
Patents for Generation 2 Technology in Carbon Capture Applications and Hydrogen
Applications. More particularly, said right and license to practice FCE
Background Information and FCE Background Patents for Generation 2 Technology in
Carbon Capture Applications and Hydrogen Applications includes the right to use,
reproduce, and create derivative works of FCE Background Information under
applicable copyrights and the right to make, use, import, and sell or offer to
sell under the claims of FCE Background Patents.

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2)

Other Applications. In the event FCE notifies ExxonMobil that it has formally
decided not to pursue Generation 2 Technology for Power Applications, then upon
ExxonMobil’s written request, FCE agrees to negotiate a grant to ExxonMobil and
its Affiliates, under commercially reasonable terms to be determined in good
faith, a worldwide, royalty-bearing (with the royalty to be negotiated),
non-exclusive, sub-licensable right and license to practice FCE Background
Information and FCE Background Patents for Generation 2 Technology in any
application outside of Carbon Capture Applications and Hydrogen Applications.
More particularly, said right and license to practice FCE Background Information
and FCE Background Patents for Generation 2 Technology in any application
outside of Carbon Capture Applications and Hydrogen Applications will include
the right to use, reproduce, and create derivative works of FCE Background
Information under applicable copyrights and the right to make, use, import, and
sell or offer to sell under the claims of FCE Background Patents. Nothing in
this Paragraph 8.02(a)(2) will create an obligation on the part of FCE to grant
ExxonMobil a license or right under FCE Background Patents or FCE Background
Information if the Parties do not agree on the terms and conditions of such
license.

 

(b)

Grant to FCE.

 

1)

Generation 1 Technology.  

 

i.

Outside of Carbon Capture Applications. ExxonMobil grants FCE a worldwide,
non-exclusive, royalty-free, non-sub-licensable (except as set forth herein),
perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to
Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non-transferable
(except pursuant to Article 14 (Assignment)) right and license to practice
ExxonMobil Background Information and ExxonMobil Background Patents for
Generation 1 Technology in any applications outside of Carbon Capture
Applications. More particularly, said right and license to practice ExxonMobil
Background Information and ExxonMobil Background Patents for Generation 1
Technology in any applications outside of Carbon Capture Applications includes
the right to use, reproduce, and create derivative works of ExxonMobil
Background Information under applicable copyrights and the right to make, use,
import, and sell or offer to sell under the claims of ExxonMobil Background
Patents. All rights and licenses in this Paragraph (b)(1)(i) may be extended to
contractors performing work on behalf of FCE but are not otherwise
sub-licensable.

 

ii.

Authorized Third Parties. ExxonMobil grants FCE a worldwide, non-exclusive,
royalty-free, non-sub-licensable (except as set forth herein), perpetual,
irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04
(Other Termination), and 12.05 (Bankruptcy)), non-transferable (except pursuant
to Article 14 (Assignment)) right and license to practice ExxonMobil Background
Information and ExxonMobil Background Patents for Generation 1 Technology in
Carbon Capture Applications, solely to conduct Authorized Work with Authorized
Third Parties. More particularly, said right and license to practice ExxonMobil
Background Information and ExxonMobil Background Patents for Generation 1
Technology in Carbon Capture Applications includes the right to use, reproduce,
and create derivative works of ExxonMobil Background Information under
applicable copyrights and the right to make, use, and import (but not sell or
offer to sell) under the claims of ExxonMobil Background Patents, solely to
conduct Authorized Work with Authorized Third Parties. All rights and licenses
in this Paragraph (b)(1)(ii) may be extended to contractors performing work on
behalf of FCE but are not otherwise sub-licensable.

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iii.

Carbon Capture Application. In the event that ExxonMobil fails to notify FCE
before the end of the Term of the Agreement of ExxonMobil’s intent to negotiate
a subsequent or follow-on commercial agreement, ExxonMobil agrees to negotiate a
grant to FCE, under commercially reasonable terms to be determined in good
faith, a worldwide, royalty-free, non-exclusive, non-sub-licensable (except as
set forth herein) right and license to practice ExxonMobil Background
Information and ExxonMobil Background Patents for Generation 1 Technology in
Carbon Capture Applications. More particularly, said right and license to
practice ExxonMobil Background Information and ExxonMobil Background Patents for
Generation 1 Technology in Carbon Capture Applications will include the right to
use, reproduce, and create derivative works of ExxonMobil Background Information
under applicable copyrights and the right to make, use, import, and sell or
offer to sell under the claims of ExxonMobil Background Patents. The rights and
licenses in this Paragraph (b)(1)(iii) will be extendable to contractors
performing work on behalf of FCE but will not otherwise sub-licensable. Nothing
in this section will create an obligation on the part of ExxonMobil to grant FCE
a license or right under ExxonMobil Background Patents or ExxonMobil Background
Information if the Parties do not agree on the terms and conditions of such
license.

 

2)

Generation 2 Technology.  

 

i.

Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide,
non-exclusive, royalty-free, non-sub-licensable (except as set forth herein),
perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to
Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non-transferable
(except pursuant to Article 14 (Assignment)) right and license to practice
ExxonMobil Background Information and ExxonMobil Background Patents for
Generation 2 Technology in Power Applications and Hydrogen Applications. More
particularly, said right and license to practice ExxonMobil Background
Information and ExxonMobil Background Patents for Generation 2 Technology in
Power Applications and Hydrogen Applications includes the right to use,
reproduce, and create derivative works of ExxonMobil Background Information
under applicable copyrights and the right to make, use, import, and sell or
offer to sell under the claims of ExxonMobil Background Patents. The right and
license in this Paragraph (b)(2)(i) may be extended to contractors performing
work on behalf of FCE but is not otherwise sub-licensable.

 

ii.

Outside of Power Applications and Hydrogen Applications. In the event ExxonMobil
notifies FCE that it has formally decided not to pursue Generation 2 Technology
for Carbon Capture Applications, then upon FCE’s written request, ExxonMobil
agrees to grant to FCE, under commercially reasonable terms to be determined in
good faith, a worldwide, royalty-bearing (with the royalty to be negotiated),
non-exclusive, sub-licensable, right and license to practice ExxonMobil
Background Information and ExxonMobil Background Patents for Generation 2
Technology in any application outside of Power Applications and Hydrogen
Applications. More particularly, said right and license to practice ExxonMobil
Background Information and ExxonMobil Background Patents for Generation 2
Technology in any application outside of Power Applications includes the right
to use, reproduce, and create derivative works of ExxonMobil Background
Information under applicable copyrights and the right to make, use, import, and
sell or offer to sell under the claims of ExxonMobil Background Patents. Nothing
in this section will create an obligation on the part of ExxonMobil to grant FCE
a license or right under ExxonMobil Background Patents or ExxonMobil Background
Information if the Parties do not agree on the terms and conditions of such
license.

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(c)

No Further Rights.  Notwithstanding any other provision in this Agreement, under
no circumstances will a Party to this Agreement, as a result of this Agreement,
have any right under or to the Background Information and Background Patents of
the other Party except as set forth in this Article.  Any other right and
license to Background Information and Background Patents not found in this
Article will be subject to a separate license agreement to be negotiated between
the Parties, as necessary.  

ARTICLE 9 – INFRINGEMENT OF THIRD PARTY PATENTS

9.01

Notification of Potential Infringement.  If either Party becomes aware of
alleged infringement of a third party's intellectual property rights relating to
its work under this Agreement, such Party will promptly notify the other Party
of such discovery and the Parties will consult with each other and discuss any
action to be taken.

9.02

Defense of Infringement Claims.  Each Party will be responsible for all expenses
(including attorney fees) and damages (e.g. royalties, settlement costs)
incurred in defense of a claim of infringement by its own equipment, products,
or processes, or by equipment, products, or processes of its Affiliates,
contractors or consultants.

9.03

Settlements. Each Party may resolve any risk or threat, or settle any suits or
action related to use of any Program Results, without the prior approval of the
other Party unless such resolution or settlement would cause the other Party to
be: (a) obligated to make any payment or part with any tangible or intangible
property right, or (b) obligated to assume any obligations with respect thereto,
or (c) subject to any injunction.

ARTICLE 10 –PAYMENT

10.01

Project Costs.  

 

a)

ExxonMobil will reimburse FCE for Research Costs (i.e., cumulative FTE Costs and
Direct Costs) for each Project subject to total caps set forth herein and in the
relevant Project Description. Research Costs of FCE paid for by ExxonMobil will
be limited to FTE Costs for time actually spent on the Program and Direct Costs
actually incurred and approved in advance by the Steering Committee.  The
cumulative Research Costs for the Program will not exceed forty-five million
United States dollars ($45,000,000 USD) over the Term of the Agreement (“Total
Research Cost”).  ExxonMobil will reimburse FCE for Research Costs after receipt
of invoices on a monthly basis.  Invoices for Direct Costs will be supported by
relevant third party invoices received by FCE documenting such costs.  
Materials shall be invoiced as incurred and subject to a thirty percent (30%)
service fee. All such payments will be made after ExxonMobil’s receipt of
invoices in accordance with the invoicing procedures specified in Paragraphs
10.01(b)-(e) and in Paragraph 10.04 (Invoices).

 

b)

First Invoice. FCE will invoice ExxonMobil an advance payment on or promptly
after the Effective Date (“Initial Payment”), said Initial Payment not to exceed
one-twelfth (1/12) of the Total Research Cost (i.e., three-million and
seven-hundred and fifty thousand United States dollars ($3,750,000 USD)).
Notwithstanding anything contained herein to the contrary, including Paragraph
10.04 (Invoices), such payment will be made within fifteen (15) days after
ExxonMobil’s receipt of invoice.

 

c)

Subsequent Monthly Invoices. Within fifteen (15) days after the end of each
calendar month that occurs during the remainder of the Term of the Agreement,
subject to Paragraph 10.01(e), FCE will calculate and invoice ExxonMobil for the
actual amounts incurred (for charges permitted in accordance with the respective
Project Description(s)) during the immediately preceding calendar month.

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d)

End of Term of the Program.

 

i.

By the fifteenth (15th) day of the last month of the Term of the Agreement,
ExxonMobil will have been invoiced for the actual charges incurred in all of the
prior months of the Term of the Agreement, but the most recently issued invoice
will not be due. Therefore, at such time ExxonMobil will not have yet paid for
the last two (2) months of the Term of the Agreement. When FCE issues the
invoice during the last month of the Term of the Agreement (“8th Inning
Invoice”), FCE will apply some or all of the Initial Payment, as applicable, as
credit against the amount due.

 

ii.

Within fifteen (15) days after the end of the Term of the Agreement, FCE will
issue an invoice (“9th Inning Invoice”) for the actual charges incurred during
the last month of the Term of the Agreement, subject to Paragraph 10.01(a). FCE
will apply any balance of the Initial Payment remaining after the 8th Inning
Invoice as a credit towards the amount due on the 9th Inning Invoice. If after
applying such credit, a balance of the Initial Payment still remains, FCE will
refund the balance to ExxonMobil within thirty (30) days, unless otherwise
mutually agreed (such as the Parties mutually agreeing to enter into a new
Project and apply the balance as a credit towards amounts payable by ExxonMobil
thereunder).

 

e)

Maximum Charges. The invoices sent by FCE under the foregoing procedure for each
year of the Agreement may not in the aggregate be more than half the Total
Research Cost, without prior written consent of ExxonMobil or amendment to the
Project Description. All such payments will be made after ExxonMobil’s receipt
of invoice in accordance with the invoicing procedures specified Paragraph 10.04
(Invoices).

10.02

Up-Front Exclusivity and Technology Access Payment. In exchange for FCE working
exclusively with ExxonMobil during the Term of the Agreement, pursuant to
Paragraph 2.03 (Work Exclusivity/Independent Work), and ExxonMobil’s access to
FCE Background Patents, pursuant to Paragraph 8.02(a) (Grant of Rights to
Background Information and Background Patents), on the Effective Date, FCE will
separately invoice, and ExxonMobil will pay a one-time up-front fee
(“Exclusivity and Technology Access Fee”) of five million United States dollars
($5,000,000 USD).

Such payment will be made within fifteen (15) days after ExxonMobil’s receipt of
invoice, notwithstanding anything contained herein to the contrary, including
Paragraph 10.04 (Invoices).  

10.03

Milestone Payments.  As further consideration for technical progress in the
Program, ExxonMobil shall pay the following sums upon achievement of the
following Program milestones (“Milestone Payments”):  

 

(a)

ExxonMobil will pay FCE a first Milestone Payment of five million United States
dollars ($5,000,000 USD) upon FCE achieving Milestone 1 to ExxonMobil’s
satisfaction; and

 

(b)

ExxonMobil will pay FCE a second and final Milestone Payment of five million
United States dollars ($5,000,000 USD), upon FCE achieving Milestone 2 to
ExxonMobil’s satisfaction.

All such Milestone Payments will be made after ExxonMobil’s receipt of invoice
in accordance with the invoicing procedures specified Paragraph 10.04
(Invoices).  The obligation to pay any such installment ends upon termination of
this Agreement by either Party for any reason prior to FCE achieving the
respective milestone.

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10.04

Invoices.  FCE will invoice ExxonMobil for any amount due under a Project at the
address (including the email address) in Article 16 (Addresses and
Notices).  Each invoice will identify this Agreement's identification number
LAW-2019-3608, the number of the particular Project Description to which it
pertains, and details of FTE Costs (including unique employee identifiers of the
FTEs) and Direct Costs.  FCE will not include charges relating to more than one
Project Description in any given invoice.  Except as otherwise specifically
provided herein, ExxonMobil agrees to pay FCE the amount of each invoice under
this Agreement within thirty (30) days following ExxonMobil's
receipt.  Notwithstanding the foregoing, if ExxonMobil has a good faith dispute
regarding any amounts invoiced by FCE, ExxonMobil may withhold payment for the
disputed amount, provided that ExxonMobil pays the undisputed amount and
notifies FCE in writing of the specific amount and nature of the dispute
promptly upon receipt of FCE’s invoice in which case the Parties shall attempt
to resolve the dispute in good faith. The Parties shall endeavor to resolve such
dispute within fifteen (15) days of notice of the dispute, and ExxonMobil shall
remit payment to FCE within fifteen (15) days of resolution of such dispute.

All such payments by ExxonMobil to FCE will be made by wire transfer in United
States Dollars. FCE shall provide the Bank Name, Bank Address, Bank Account, and
Swift Code in each invoice.

ARTICLE 11 – REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES

11.01

Mutual Representations and Warranties.  Each Party hereby represents and
warrants to the other, to the best of its knowledge, that:

 

(a)

as of the Effective Date:  

 

1.

the execution, delivery and performance of this Agreement by such Party does not
conflict with any agreement, instrument or undertaking, oral or written, to
which it is a party or by which it may be bound, and

 

2.

all necessary consents, approvals and authorizations of all governmental
authorities and third parties required to be obtained by such Party in
connection with the execution, delivery, and performance of this Agreement have
been or will be obtained;

 

(b)

it owns or controls, in the same sense of having the right to license or convey,
any Background Information to be provided to the other Party hereunder, and at
the date of transmittal to the other Party, such Background Information in the
Disclosing Party’s good faith belief will not be subject to any encumbrances or
restrictions on use by any third party that would materially affect the
Receiving Party’s exploitation of the rights granted in this Agreement; and

 

(c)

all of its professional and technical personnel who perform services on or for
all Projects are under written obligation:

 

(1)

not to disclose secret or confidential information except as authorized under
this Agreement or by their employer;

 

(2)

to assign to their employer all Program Inventions; and

 

(3)

to assign to their employer sole ownership of copyrights to all copyrightable
works created in connection with any Project.

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11.02

Warranty and Liability Disclaimers.  RECEIVING PARTY IS RESPONSIBLE FOR
DETERMINING HOW TO USE THE INFORMATION AND MATERIALS PROVIDED HEREUNDER.  TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, DISCLOSING PARTY DISCLAIMS LIABILITY
FOR ANY LOSS OR DAMAGE SUSTAINED BY RECEIVING PARTY (BUT NOT ANY THIRD PARTY)
THAT MAY OCCUR FROM RECEIVING PARTY’S USE OF, OR RELIANCE ON, SUCH INFORMATION
AND MATERIALS AND RECEIVING PARTY RELEASES DISCLOSING PARTY AND ITS AFFILIATES
FROM AND FOR ANY SUCH LIABILITY, LOSS OR DAMAGE, EVEN IF CAUSED BY DISCLOSING
PARTY’S OR ITS AFFILIATES’ NEGLIGENCE EXCEPT AS PROVIDED IN PARAGRAPH 11.04
(EXCEPTIONS TO LIMITATIONS ON LIABILITY).  NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, IS MADE REGARDING SUCH INFORMATION AND MATERIAL, OR ITS
COMPLETENESS, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.

11.03

Indirect or Enhanced Damages.  In no event will either Party be liable to the
other Party under this Agreement for any consequential, indirect, special,
incidental, punitive or exemplary loss or damage, including, without limitation,
business interruption, cost of capital, loss of anticipated revenues and
profits, loss of goodwill or increased operating costs, whether arising from
contract, warranty, tort, strict liability or otherwise regardless of whether
the possibility of such losses or damages have been made known to the first
Party, and each Party hereby expressly waives all such rights and remedies,
except for breach of any confidentiality or restricted use provisions of this
Agreement and except as provided in Paragraph 11.04 (Exceptions to Limitations
of Liability).

11.04

Exceptions to Limitations of Liability.  Notwithstanding anything to the
contrary in this Agreement, each Party will bear full responsibility, without
limit, for the following:

 

(i)

Gross Negligence or Willful Misconduct attributable to its personnel, and, in no
event, will a Party be required to release or indemnify the other Party for
Gross Negligence or Willful Misconduct attributable to the other Party; and

 

(ii)

its legal obligations to third parties wherein nothing in this Agreement is
intended to impair a party’s contribution and indemnity rights under law with
respect to third party claims.    

ARTICLE 12 – TERM AND TERMINATION

12.01

Term.  Unless sooner terminated in accordance with this Article, this Agreement
will continue in full force beginning on the Effective Date and ending two (2)
years thereafter (“Term”).

12.02

Early Termination.  The Parties recognize that circumstances may arise where
this Agreement’s early termination would be desirable.  Accordingly, either
Party may terminate this Agreement or all/part of a Project for any reason and
at any time upon giving the other Party sixty (60) days prior written notice. In
the event of early termination of a Project or this Agreement. In addition, if
this Agreement is terminated by ExxonMobil, ExxonMobil will pay FCE reasonable
non-refundable expenses incurred by FCE in satisfying authorized commitments
entered into by FCE with third parties prior to receipt of the termination
notice.  FCE will uses its best efforts to minimize termination expenses and
will give appropriate credit to ExxonMobil where applicable.  The total amount
paid FCE under this Agreement or for a Project, including all amounts paid
following termination, will not exceed the maximum authorized charge specified
in this Agreement or for a Project.  

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12.03

Failure to Perform.  If ExxonMobil fails to fulfill a material monetary
obligation or FCE fails to execute material tasks or obligations in material
compliance with all criteria set forth in a respective mutually agreed upon
Project Description, in the time and manner required herein, provided that in
the case of FCE’s tasks or obligations any non-compliance or delay in meeting
said criteria is not due to ExxonMobil or force majeure pursuant to Paragraph
15.01 (Force Majeure), the non-defaulting Party may give written notice of
intent to terminate this Agreement, specifying the details of such default.
Unless the defaulting Party has remedied such default within the Cure Period,
this Agreement may be terminated, without penalty, payment or prejudice to
claims then accrued, by written notice to the defaulting Party by the
non-defaulting Party specifying the date of termination which will be of
immediate effect.  In the event of termination under this Paragraph 12.03 where
FCE is the defaulting Party, FCE’s royalty-free licenses described in Paragraph
7.01(b)(1), 8.02(b)(1)(i), 8.02 (b)(1)(ii), 8.02(b)(1)(iii), and 8.02(b)(2)(i)
will immediately convert to royalty-bearing licenses, with the royalty rate to
be negotiated by the Parties in good faith.

12.04

Other Termination.  ExxonMobil may terminate this Agreement upon fifteen (15)
days written notice, without penalty, payment or prejudice to claims and
obligations then accrued, if FCE undergoes a Change in Control. Subject to
requirements of applicable law, FCE will provide notice to ExxonMobil prior to,
or promptly after, it becomes aware of any such Change in Control, and if prior
notice is prohibited by applicable Law, as soon as practicable or after such
notice is no longer prohibited, but in no event later than one (1) business day
after any public announcement with respect to any such asset transfer or Change
in Control. Notwithstanding anything else in this Agreement, in the event of
termination under this Paragraph 12.04 ExxonMobil may terminate any licenses
granted to FCE under this Agreement that would otherwise survive termination,
taking into account the circumstances surrounding the Change in Control. Any
licenses granted to ExxonMobil under this Agreement that would otherwise survive
termination will continue to survive termination.     

12.05

Bankruptcy.

 

(A)

To the extent a court of competent jurisdiction determines that this Agreement
is subject to assumption or rejection under Title 11 of the U.S. Code (the
“Bankruptcy Code”) or the applicable law of a bankruptcy or insolvency
proceeding in a non-U.S. jurisdiction:

 

(i)

All rights and licenses granted to ExxonMobil and its Affiliates under or
pursuant to this Agreement are, and will otherwise be deemed to be, for all
purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to
“intellectual property” as defined in section 101 of the Bankruptcy Code.

 

(ii)

If a case is commenced under the Bankruptcy Code by or against FCE and this
Agreement is rejected as provided in the Bankruptcy Code, and ExxonMobil or any
of its Affiliates elects to retain its rights hereunder as provided in the
Bankruptcy Code, then ExxonMobil and its Affiliates shall retain all rights
hereunder in perpetuity without further royalty payments of any kind and FCE (in
any capacity, including debtor-in-possession) and its successors and assigns
(including, without limitations, a trustee) shall not interfere with such
rights.

 

(iii)

In the event of bankruptcy or insolvency proceedings of FCE in a non-U.S.
jurisdiction, the rights, powers and remedies of ExxonMobil and its Affiliates
shall be applied under any applicable laws which are equivalent to Section
365(n) of the Bankruptcy Code, or if there is no such equivalent, the Parties
will take all such actions as are permissible under applicable law to permit the
continuation of the licenses contained in this Agreement to the maximum extent
possible.

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(iv)

In the event FCE admits in writing its inability generally to pay its debts as
they fall due in the general course, becomes or is determined to be insolvent,
makes a general assignment for the benefit of creditors, suffers or permits the
appointment of a receiver for its business or assets, or a substantial part
thereof, or becomes subject to a proceeding under any statute or act relating to
insolvency or the protection of rights of creditors, ExxonMobil receives, at its
election, continued access to all Program Information, including the Project
materials, equipment, and FCE’s Background Information and Background Patents,
and ExxonMobil will have access to relevant lab notebooks, computers containing
technical information and know-how, journals, ledgers and manuals containing
technical information and know-how in each case relating to the Program
Information and FCE's Background Information and Background Patents.    

 

(B)

To the maximum extent permitted under law, ExxonMobil may terminate this
Agreement upon fifteen (15) days written notice, without penalty, payment or
prejudice to claims and obligations then accrued, if FCE commences a voluntary
case under the Bankruptcy Code or a similar voluntary bankruptcy or insolvency
proceeding in a non-U.S. jurisdiction, or if an order for relief is entered in
an involuntary case filed against FCE under the Bankruptcy Code, and such case
is not dismissed within sixty (60) days of the entry of such order, or if FCE
makes a voluntary general assignment for the benefit of creditors, or suffers or
permits agrees to the entry of an order appointing a receiver in an action
actually pending in a court of competent jurisdiction for that portion of its
business or assets related to the Project. In the event of termination under
this Paragraph 12.05 and subject to ExxonMobil’s waiver (in its sole
discretion), any licenses granted to FCE under this Agreement that would
otherwise survive termination will automatically terminate and any licenses
granted to ExxonMobil under this Agreement that would otherwise survive
termination will continue to survive termination.   

12.06

Continuing Rights and Obligations.  Except as otherwise stated in this
Agreement, the following Articles and Paragraphs will survive termination of
this Agreement:

 

o

Article 1 (Definitions);

 

o

Article 4 (Disclosure, Confidentiality and Restricted Use);

 

o

Article 6 (Procurement and Ownership of Program Results)

 

o

Article 7 (License to Program Results), subject to Paragraphs 12.03 (Failure to
Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy);

 

o

Article 8 (License to Background Information and Patents), subject to Paragraphs
12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy);

 

o

Article 10 (Payment), but only to the extent there are continuing license and/or
royalty share obligations pertaining to the commercial use of Program Results,
Background Information and/or Background Patents;

 

o

Article 11 (Representations, Warranties, Indemnities and Liabilities);

 

o

Article 12 (Term and Termination) to the extent any clause therein speaks to
post termination rights and obligations;

 

o

Article 13 (Arbitration and Governing Law);

 

o

Article 14 (Assignment);

 

o

Article 16 (Addresses and Notices);

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o

Paragraph 17.03 (Export Controls and Trade Sanctions);

 

o

Article 18 (Records and Audit);

 

o

Article 19 (Taxes);

 

o

Paragraphs 20.02 (Independent Contractors), 20.03 (Independent Entities), 20.06
(No Third-Party Beneficiaries), 20.07 (Internal Conflict), 20.08 (Severability),
20.09 (Amendments; Modification; Waiver), 20.10 (Integration), and 20.11
(Execution); and

 

o

any rights and obligations contained in this Agreement which by their nature
should continue.  

Any rights and obligations that have accrued to either Party against the other
prior to the effective date of termination or expiration of this Agreement in
any respect will survive such termination or expiration, and rights that have
accrued to an Affiliate of a Party will continue regardless of any change in
Affiliate status during the Term of this Agreement or thereafter.

ARTICLE 13 – ARBITRATION AND GOVERNING LAW

13.01

Governing Law.  The validity and interpretation of this Agreement and the legal
relations of the Parties to it will be governed by the laws of the State of New
York without recourse to its conflicts of law rules.  

13.02

Arbitration Proceedings.  Both Parties will try to amicably resolve any dispute
arising out of or relating to this Agreement by involving representatives of the
Parties with authority to settle such disputes.  In the event the Parties are
unable to agree upon a resolution within a reasonable period of time, not to
exceed sixty (60) days after first notice of the difference unless otherwise
agreed in writing, any dispute arising out of or relating to this Agreement may
be referred to final and binding arbitration before three arbitrators under the
Rules of Arbitration of the International Chamber of Commerce. Each Party will
appoint one arbitrator within thirty (30) days of notice of such referral and
the two (2) so appointed will, within thirty (30) days from the appointment of
the last of the two (2) arbitrators, select a third arbitrator who will act as
the Chairman.  The arbitration will take place in New York City, New York and
the proceedings will be conducted in the English language. The arbitrators will
decide all questions and settle all disputes strictly in accordance with the
provisions of this Agreement, including the relevant indemnities and liability
limitations. The arbitrators will have no authority to award exemplary or
punitive damages, and the arbitral panel will certify in the decision that no
part of the award includes such damages.  The Parties waive their rights to seek
rulings from any court on issues of law that arise during the arbitration and to
challenge the award on the grounds that the arbitrators made errors of law.
Awards made pursuant to this Paragraph will be final and binding on the Parties
from the date made and judgment upon any award may be entered in any court
having jurisdiction. No Party hereto will raise defenses based on sovereign
immunity with respect to the arbitration, any judicial proceeding or ancillary
thereto or with respect to enforcement of any award, order or judgment rendered
in the arbitration or related judicial proceedings.

13.03

Cost of Arbitration.  The prevailing Party in an arbitration proceeding will be
entitled to recover from the other Party reasonable attorneys' fees, reasonable
out-of-pocket costs and disbursements, as well as any charges for the cost of
the arbitration and the fees of the arbitrators.  

13.05

Injunctive Relief.  No provision of this Agreement will prohibit any Party from
approaching any court having competent jurisdiction to seek injunctive relief in
case of urgency to prevent disclosure of its Confidential Information.

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ARTICLE 14 – ASSIGNMENT

14.01

Assignment.  The Agreement is not assignable, including any assignment by
operation of law (including but not limited to as a result of a merger or other
corporate action), by either Party without the prior written consent of the
other Party. Any and all assignments of this Agreement or of any part thereof
not made in accordance with this Article will be void. Notwithstanding the
foregoing, ExxonMobil may assign this Agreement to its Affiliates and FCE may
assign this Agreement to any of its wholly-owned and wholly-controlled
Affiliates, with prior written notice to the other Party, provided that (i) such
assignment by FCE shall be void if at any point such Affiliate ceases to be both
wholly-owned and wholly-controlled by FCE, (ii) Article 12, including but not
limited to Paragraphs 12.03, 12.04 and 12.05, shall be applicable to both FCE
and any Affiliate assignee of FCE, and (iii) no assignment pursuant to this
sentence will relieve the Parties of their obligations under this Agreement.

14.02

Assignees Bound.  Any assignee permitted in Paragraph 14.01 (Assignment) will
agree in writing to be bound by all the obligations of the assigning Party under
this Agreement, and a copy of such written agreement will be promptly provided
to the other Party.  Any Party making an assignment of this Agreement as
permitted in Paragraph 14.01 (Assignment) will remain bound by the continuing
obligations of confidentiality and nonuse applicable to such Party prior to the
assignment.

ARTICLE 15 – FORCE MAJEURE

15.01

A Party will not be liable to the other Party and will not be considered in
breach of this Agreement for delays or failures in performance resulting from
causes beyond the reasonable control of that Party, including, but not limited
to, acts of God, labor disputes or disturbances, material shortages or
rationing, riots, acts of war, new governmental regulations, communication or
utility failures, or casualties.  In such instance, the Party so affected will
promptly notify the other Party in writing of such prevention, restriction or
interference.  ExxonMobil or FCE, as the case may be, will be excused from
performing such obligations to the extent of such prevention, restriction or
interference; provided, however, that the Party so prevented, restricted or
interfered with will take all appropriate and reasonable steps to remedy such
failure or delay and will resume its performance under this Agreement with all
proper dispatch whenever such causes are removed.

ARTICLE 16 – ADDRESSES AND NOTICES

16.01

All notices, demands, requests, or other communications which a Party may desire
or be required to give under this Agreement to the other Party will be in
writing addressed as follows or to such other address designated by notice in
writing:

Page 18 of 31

 

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ExxonMobil:

 

ExxonMobil Research and Engineering Company

 

 

1545 Route 22 East

 

 

Annandale, NJ 08801-0900

 

 

Attention: Timothy Barckholtz, Senior Scientific Advisor

 

 

Email: tim.barckholtz@exxonmobil.com

 

 

 

FCE:

 

FuelCell Energy, Inc.

 

 

3 Great Pasture Road

 

 

Danbury, CT 06810

 

 

Attention: Anthony Leo, Executive Vice President

 

 

Email: tleo@fce.com

 

 

 

 

 

With a copy to:

 

 

 

 

 

FuelCell Energy, Inc.

 

 

3 Great Pasture Road

 

 

Danbury, CT 06810

 

 

Attention: Legal Department

 

Such notice, demand, request, or other communications will be deemed to have
been sufficiently given by and will be effective upon the earliest of: (a)
delivering the same to a reputable courier service that requires a signature
upon delivery; (b) mailing the same by registered or certified first-class mail,
postage prepaid, return receipt requested; (c) if an e-mail is provided, then by
e-mail with receipt confirmation followed by mailing the same or (d) actual
receipt by the addressee.  

ARTICLE 17 – COMPLIANCE

17.01

Business Standards. The Parties have established and maintain standards,
policies, and/or guidelines (“Policies”) applicable to lawful and ethical
conduct when conducting their business activities. Upon written request, a Party
will provide to the other Party a copy of, or electronic access to, such
Policies. The Parties agree to comply with such Policies when conducting
activities under this Agreement. These Policies pertain to, but may not be
limited to, gifts/entertainment/and other things of value and drugs and alcohol.
These Policies are communicated to the Parties’ employees, along with an
expectation that the employees will comply with these Policies.

17.02

Compliance with Laws.  All actions by each Party related to this Agreement will
comply with applicable laws and regulations.  Notwithstanding anything in this
Agreement to the contrary, no provision will be interpreted or applied so as to
require a Party or its Affiliates, to do, or to refrain from doing, anything
which would constitute a violation of, or be penalized by, any applicable laws
and regulations or result in a loss of economic benefit under such laws or
regulations.

17.03

Export Control and Trade Sanctions.  Neither Party will furnish, deliver, or
release the technology, services, software, or commodities made available to it
hereunder to any individual, entity, or destination, or for any use, except in
full accordance with all applicable laws, regulations, and requirements of the
United States with regard to export control and trade sanctions.  Both Parties
agree and understand that each will be responsible for ongoing compliance with
all such applicable laws, regulations, and requirements.  It will be a material
breach if a Receiving Party takes any action or uses any of a Disclosing Party’s
information in any manner which would violate United States laws, regulations,
or requirements restricting the export, re-export, transfer or release to
certain entities or destinations, including to persons within the Receiving
Party or its Affiliates, or to unrelated Third Parties.    

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ARTICLE 18 – RECORDS AND AUDIT

18.01

Recordkeeping. FCE will keep, or cause to be kept, true books, records, and
accounts in accordance with Generally Accepted Accounting Principles and
containing all information necessary for the accurate determination of all
amounts payable to FCE under this Agreement, and any other obligations under
this Agreement.  Such books, records and accounts will be maintained for a
period of at least three (3) years following the termination or expiration of
this Agreement, provided there are no pending disputes between the Parties.  In
the case of a dispute, the books, records, and accounts will be maintained for
one (1) year following resolution of such dispute.

18.02

Audit Rights.  At the request of ExxonMobil, FCE will permit, at reasonable
intervals and during regular business hours, during the Term of this
Agreement  and at least three (3) years thereafter, but no more than once per
fiscal year, an independent certified public accounting firm of nationally
recognized standing selected by ExxonMobil (and approved by FCE, which approval
will not be unreasonably withheld) to inspect, during regular business hours,
such books, records, and accounts and any part of the applicable operations and
facilities of FCE relevant to this Agreement, and to have access to FCE’s
knowledgeable personnel, as may be necessary to determine the completeness and
accuracy of any accounting and payments required to be made under this Agreement
and compliance with other terms of this Agreement, subject to the following:

 

(a)

ExxonMobil and its employees or other representatives will have the right to
reproduce for its internal records any of the documents kept by FCE in
accordance with Paragraph 18.01 (Recordkeeping), such reproduced documents shall
be subject to the confidentiality and use provisions contained in Article 4; and

 

(b)

all expenses of each such audit, including any pre-approved reasonable expenses
incurred by FCE for such audit, will be for the account of ExxonMobil.

FCE will cause any subcontractors to preserve documentation and allow ExxonMobil
to audit such books, records, and accounts of subcontractors by way of auditing
FCE.  

18.03

Accurate Records.  Both Parties agree that all records relating to any Project,
including invoices, financial reports, accounting reports, and other financial
records relating to any Project will be complete and reflect accurately the
facts about all activities and transactions, and both Parties may rely on all
such records as being complete and accurate in any further recordings and
reports made by the Parties for any purpose.  If either Party becomes aware that
any such records are inaccurate or incomplete, that Party will promptly notify
the other Party in writing and provide accurate and complete information.  

ARTICLE 19 – TAXES

19.01

Tax Responsibility.  Each Party will be responsible for and will bear its own
tax liabilities, of whatever kind and imposed by whatever taxing entity or
entities incurred in connection with the existence or any performance of any
activities under this Agreement or the granting of licenses or other rights and
considerations hereunder.    

19.02

Tax Cooperation.  Each Party will reasonably cooperate with the other Party to
assist the other Party in providing information to support tax filings
associated with this Agreement.

ARTICLE 20 – ADDITIONAL PROVISIONS

20.01

Site Requirements.  Each Party agrees that if any employees of the Party or its
Affiliates visit, or are physically located at, the facilities of the other
Party, during the course of the Program, then such employees will abide by all
site requirements of the other Party made known to them, including but not
limited to, site requirements pertaining to safety, security, health and the
environment.  

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20.02

Independent Contractors.  The relationship between the Parties is that of
independent contractors.  Nothing contained in this Agreement, or any course of
action by either Party pursuant to this Agreement, will be construed or deemed
to constitute or create a joint venture, partnership, agency or employment
relationship between the Parties or between either Party and the employees or
other representatives of the other Party.  

20.03

Independent Entities.  Each Party enters into this Agreement solely on its own
behalf and not on behalf of any other person or entity.  Each Party warrants
that it is an independent legal entity with the power and authority to enter
into Agreements solely on its own behalf.  No Party hereto will assert any
defense of sovereign immunity that may be available to it in any resolution of
any dispute under this Agreement; all such defenses are expressly waived by the
Parties.

20.04

Future Work.  This Agreement shall not constitute or imply any promise or
intention: (a) to enter into any other agreement of any nature, (b) to make any
purchase of products or services by either Party or its Affiliates, or (c) to
make any commitment by either Party, its Affiliates, or licensees with respect
to present or future marketing or supply of any product or service.

Notwithstanding the foregoing, prior to the end of the Term of this Agreement
and subject to FCE achieving Milestone 1 and Milestone 2 to ExxonMobil’s
satisfaction, the Parties agree to negotiate in good faith commercially
reasonable terms for the demonstration of Generation 2 Technology at one or more
of ExxonMobil’s commercial facilities.

20.05

Workplace Harassment.  Each Party’s employees, agents, and subcontractors who
will perform work hereunder or communicate with the other Party’s employees,
agents, customers, or contractors will not engage in any harassment of the other
Party’s employees, agents, customers, or contractors.  The term “harassment” as
used herein includes all forms of unlawful harassment based on race, color, sex,
religion, national origin, citizenship status, age, genetic information,
physical or mental disability, veteran, sexual orientation, gender identity or
other legally protected status; as well as all other forms of harassment, which,
while not unlawful, are inappropriate in a business setting.  If any of one
Party’s employees, agents, or subcontractors who perform work hereunder or
communicate with the other Party’s employees, agents, customers, or contractors
have not been informed of the standard of conduct above, the one Party will
inform them.  Each Party will promptly notify the other Party contact for the
applicable services of any report or complaint of harassment or of any violation
of the above standard of conduct. Each Party will cooperate with the other Party
in any investigation the other Party may make, including making each Party’s
employees, agents and subcontractors available for questioning by the other
Party’s designated investigators.  Each Party agrees not to retaliate against
anyone who reports an incident of harassment or who cooperates in any
investigation of a report of an incident.

20.06

No Third Party Beneficiaries.  No third parties are intended to be third party
beneficiaries under this Agreement.  None of the provisions of this Agreement
will be enforceable by a third party.  For the avoidance of doubt, permitted
assignees of a Party pursuant to Article 14 (Assignment) will not be considered
third parties for purposes of this Paragraph.  

20.07

Internal Conflict.  In the event of a conflict between the provisions in the
body of this Agreement and any Project Description, the terms of the body of
this Agreement will control.

20.08

Severability.  The provisions of this Agreement are deemed severable.  The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision hereof which can be
given effect without the invalid or unenforceable provision, and to this end the
provisions of this Agreement are declared to be severable and the balance of
this Agreement will be construed and enforced as if this Agreement did not
contain such invalid or unenforceable provision.  

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20.09

Amendment; Modification; Waiver. This Agreement may only be amended, modified,
or supplemented by an agreement in writing signed by authorized representatives
of each party hereto. No waiver by any party of any of the provisions hereof
will be effective unless explicitly set forth in writing and signed by the
waiving party. Except as otherwise set forth in this Agreement, no failure to
exercise, or delay in exercising, any rights, remedy, power, or privilege
arising from this Agreement will operate or be construed as a waiver thereof;
nor will any single or partial exercise of any right, remedy, power, or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power, or privilege.

20.10

Integration.  The Parties have entered into the following related agreements:
Prior JDA, Non-Disclosure Agreement, License Agreement, and Memorandum of
Understanding. This Agreement (including, for the avoidance of doubt, any fully
executed Project Descriptions) constitutes the entire agreement between the
Parties and it supersedes all negotiations, representations or agreements, oral
or written, express or implied, as to its specific subject matter.
Notwithstanding the foregoing, the status of the related agreements shall be as
follows:

Prior JDA. As of the Effective Date of this Agreement, the Prior JDA is
terminated. Any rights and obligations that were to survive termination of the
Prior JDA (pursuant to Section 14.06 of the Prior JDA) are also terminated,
except the confidentiality and use restrictions on Prior JDA Background
Information and Prior JDA Project Results. Such confidentiality and use
restrictions, as set forth in the Prior JDA, will survive termination but will
be superseded and replaced by the confidentiality and use restrictions set forth
in Article 4 (Disclosure, Confidentiality, and Restricted Use) of this
Agreement.

Memorandum of Understanding. As of the Effective Date of this Agreement, the
Memorandum of Understanding is terminated, but the confidentiality obligations
set forth in the Memorandum of Understanding shall survive termination.

Non-Disclosure Agreement and License Agreement. This Agreement does not modify,
abrogate, terminate or supersede any other prior written agreements between the
Parties except as specifically noted herein, and such agreements will continue
to be applicable in accordance with their terms.  For clarity, this Agreement
does not modify, abrogate, terminate or supersede the terms and conditions of
the Non-Disclosure Agreement or the License Agreement.

20.11

Arm’s Length Transaction. This Agreement represents a negotiated, arm’s length
transaction. The transactions contemplated under this Agreement are being made
by each Party for reasonably equivalent value and fair consideration. The
transactions contemplated in this Agreement will not constitute a fraudulent
transfer or fraudulent conveyance or any act with similar consequences or
potential consequences under 11 U.S.C. Section 548 and other similar laws, or
otherwise give rise to any right of any creditor of a Party whatsoever to lodge
any claim against the other Party or avoid the transactions hereunder.

20.12

Execution.  This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which together shall constitute one and
the same instrument.  Where provided for in applicable law, this Agreement may
be executed and delivered electronically.  If executing this Agreement using a
handwritten signature, a Party may deliver a copy of such signature via
electronic transmission and may provide the other Party a duplicate original so
each Party retains an original for its records.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their respective corporate names by their duly authorized officers.

 

FUELCELL ENERGY, INC.

 

EXXONMOBIL RESEARCH AND ENGINEERING COMPANY

 

 

 

 

By:

/s/ Jason B. Few

 

By:

/s/ Vijay Swarup

Name:

Jason B. Few

 

Name:

Vijay Swarup

Title:

President, Chief Executive Officer and Chief Commercial Officer

 

Title:

VP R&D

Date:

November 5, 2019

 

Date:

November 5, 2019

 

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APPENDIX A – DEFINITIONS

“Affiliate(s)” means any legal entity which, directly or indirectly, at the time
in question, controls, is controlled by, or is under common control with the
designated Party.  For the purposes of this definition, “control” is defined as
direct or indirect ownership of fifty percent (50%) or more of the voting
interest or economic interest in the controlled entity or such other
relationship whereby the controlling entity determines or has the right to
determine the majority of the Board of Directors or an equivalent governing body
of the controlled entity.

“Agreement” means this agreement, together with the appendices attached to this
agreement and any Project Descriptions, extensions, renewals, or amendments
hereof agreed to in writing and signed by the Parties.

“Authorized Third Parties” means Drax Group Plc. and Alberta Innovates
Corporation, and, subject to FCE obtaining the prior written consent of
ExxonMobil, which consent will not be unreasonably withheld, conditioned, or
delayed, the respective successors, assigns, joint venturers, partners and
contractors of each of them.

“Authorized Work” means non-commercial activities restricted to research and
development, pilot plant, deployment, and demonstration projects, and commercial
activities for which FCE has obtained the prior written consent of ExxonMobil.

“Background Information” in connection with a designated Party means technical
information, data, know-how, expertise, materials (including hardware, samples,
models, algorithms, and software), calculations, innovations, inventions,
discoveries, improvements, formulations, manufacturing techniques, equipment
designs, methods, processes, and the like, of the designated Party or its
Affiliates that is:

 

(a)

owned or controlled by the designated Party or its Affiliates (in the sense of
having the right to license without accounting to others); and

 

(b)

conceived, created, developed, or acquired by the designated Party or its
Affiliates:

 

(1)

prior to the Effective Date of this Agreement; or

 

(2)

at any time, but independently of any Project prior to the termination of this
Agreement.

Background Information includes Background Samples but does not include Program
Information.

Background Information further includes any business or financial information of
the indicated Party relating to the subject matter of this Agreement that is
disclosed to the other Party under this Agreement, including, but not limited
to, financial data, costs, margins, overhead, returns on capital employed,
marketing strategies, and licensing strategies and terms.

“Background Patents” in connection with a designated Party means all patents and
patent applications (including continuations, continuations-in-part, or
divisions thereof, any patent resulting therefrom, and reissues, re-exams or
extensions thereof, and revisions thereof arising from oppositions, inter or ex
parte proceedings, or other patent office or judicial proceedings) of all
countries, whenever filed, that are:

 

(a)

owned or controlled by the designated Party or its Affiliates (in the sense of
having the right to license without accounting to others); and

 

(b)

based solely on Background Information and not included in the definition of
Project Patents.

“Background Sample(s)” means ExxonMobil Background Sample(s) and/or FCE
Background Sample(s) depending on the context in which the term is utilized.

“Bankruptcy Code” is defined in Paragraph 12.05 (Bankruptcy).

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“Capture Rate” means the percentage of CO2 transferred from the cathode inlet to
the anode outlet.

“Carbon Capture Applications” means applications in which the MCFCs concentrate
carbon dioxide from industrial or power sources, and for any other purpose
attendant thereto or associated therewith.

“Carbonate Transference” means the current density that is due to carbonate
transfer as a percentage of total current density.

“Change in Control” means the occurrence of any one or more of the following at
any time after the date hereof with respect to FCE:  

 

a)

a merger or consolidation with any Person which results in the holders of the
voting securities of FCE outstanding immediately prior thereto (other than the
acquirer, its “affiliates” and “associates” (as such terms are used in the
Securities Exchange Act of 1934)) ceasing to represent at least fifty percent
(50%) of the combined voting power of the surviving entity (or, if applicable,
its parent company) immediately after such merger or consolidation;

 

b)

any Major Competitor is or becomes the beneficial owner by purchasing directly
from FCE, voting securities representing ten percent (10%) or greater than the
actual voting power of any such entity;

 

c)

the sale to any Major Competitor of all or substantially all of the business of
FCE to which this Agreement relates (whether by merger, consolidation, sale of
stock, sale of assets or other similar transaction);

 

d)

any Person (which shall not be any trustee or other fiduciary holding securities
under an employee benefit plan of such Person, or any corporation owned directly
or indirectly by the stockholders of such Person, in substantially the same
proportion as their ownership of stock of such Person), together with any of
such Person’s “affiliates” or “associates”, as such terms are used in the
Securities Exchange Act of 1934, becoming the beneficial owner of fifty percent
(50%) or more of the combined voting power of the outstanding securities of FCE
or by contract or otherwise having the right to control the board of directors
or equivalent governing body of FCE or the ability to cause the direction of
management of FCE (or, if applicable, its parent company);

 

e)

the approval by such entity’s board of directors or shareholders of any
reorganization or transaction that would cause any of the situations described
in clauses (a) through (d) to occur; or

 

f)

the approval by the board of directors or other governing body or the
shareholders or other equity holders of FCE of any plan or proposal for its
liquidation or dissolution.

The occurrence or non-occurrence of a Change in Control does not alter or limit
section 14.01 of this Agreement.

“Confidential Background Information” means, collectively, any and all
Background Information that a Party is required to keep confidential pursuant to
the terms and conditions of this Agreement.    

“Confidential Information” means, collectively, any and all Confidential Program
Information, Confidential Background Information, and any other types of
information, that a Party is required to keep confidential pursuant to the terms
and conditions of this Agreement.  

“Confidential Program Information” means, collectively, any and all Program
Information that FCE is required to keep confidential pursuant to the terms and
conditions of this Agreement.

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“Cure Period” means a period commencing on the date the defaulting Party
receives the written notice of breach or default from the non-defaulting Party
pursuant to Paragraph 12.03 and continuing until thirty (30) calendar days
thereafter; provided, however, that if prior to the expiration of this period
the defaulting Party provides the non-defaulting Party with written evidence
that the breach or default cannot reasonably be cured within such period and the
defaulting Party has promptly commenced and is diligently pursuing efforts to
cure the breach or default, then the Cure Period shall continue as long as such
diligent efforts to cure continue, but not beyond the date that is sixty (60)
days after the expiration of the initial thirty (30) calendar day Cure Period.

“Definition Agreement” means the agreement between the Parties effective as of
October 31, 2019, bearing ExxonMobil Document No. LAW-2019-3850.

“Disclosing Party” means the Party that discloses, directly or indirectly,
information or other materials to the Receiving Party hereunder.

“Direct Costs” means reimbursable costs, approved in advance by the Steering
Committee, which are (i) operational expenditures of FCE associated with the
Program not included in the FTE Cost, including subcontractors, (ii) material or
capital expenditures of FCE associated with the Program; and (iii) approved FCE
travel costs to attend SC meetings or conferences, and use of contractors in
furtherance of a Project.  

“Effective Date” means October 31, 2019.

“Exclusivity and Technology Access Fee” is defined in Paragraph 10.02 (Up-front
Exclusivity and Technology Access Fee Payment).  

“ExxonMobil” is defined in the preamble.

“ExxonMobil Background Information” means Background Information that: (a) was
developed or acquired by ExxonMobil independently of a Project, and (b) is
provided by ExxonMobil for use in a Project under this Agreement. ExxonMobil
Background Information does not include Program Information.

“ExxonMobil Background Sample” means a non-commercial sample of material,
component, device, or the like that:  (a) was developed or acquired by
ExxonMobil independently of the Project, and (b) is provided by ExxonMobil for
use in a Project under this Agreement. ExxonMobil Background Samples does not
include Program Samples.

“FCE” is defined in the preamble.

“FCE Background Information” means Background Information that: (a) was
developed or acquired by FCE independently of a Project, and (b) is provided by
FCE for use in a Project under this Agreement. FCE Background Information does
not include Program Information.

“FCE Background Sample” means a non-commercial sample of material, component,
device, or the like that: (a) was developed or acquired by FCE independently of
a Project, and (b) is provided by FCE for use in a Project under this Agreement.
FCE Background Samples does not include Program Samples.

“FTE” means a full-time employee of FCE or an equivalent thereof, dedicated to
the conduct of the Program based on a total of one thousand eight hundred and
fifty-six (1,856) hours per year of direct project work per year. FTEs will
include engineers, scientists, and any other functions mutually agreed to by the
Steering Committee. Non-devoted personnel (e.g., FCE’s Board of Directors,
management, secretarial, administrative, human resources, finance, purchasing,
shipping and receiving, information technology specialists, lawyers, cleaning
and food service personnel) are not FTEs. Individuals may be counted as
fractional FTEs by using the individual’s total hours of work for FCE on the
Program (as opposed to total hours of work) as the numerator and 1,856 as the
denominator. For clarity, the phrase “direct project work” means the applicable
person is engaged in activities contemplated to be performed by Project
Description and excludes time incurred by a person on indirect work-related
functions, such as time spent on management, training, general meetings,
workplace events, completing time cards, and similar administrative functions,
except for attendance at Steering Committee meetings.

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“FTE Costs” means the product of the FTE Rate and the hours worked of the total
number of FTEs.  

“FTE Rate” means the hourly amount agreed to by the Parties per FTE.  As of the
Effective Date, the FTE Rate for scientists and engineers is three-hundred and
twenty-seven United States dollars ($327.00 USD) and the FTE Rate for all other
FTEs is one-hundred and ninety-four United States dollars ($194.00
USD).  Increases in the FTE Rate must be approved by the Steering Committee.   

“Generation 1 Technology” is defined in the Definition Agreement.

“Generation 2 Technology” is defined in the Definition Agreement.

“Gross Negligence” means any act or failure to act (whether sole, joint or
concurrent) which seriously and substantially deviates from a diligent course of
action or which is in reckless disregard of or indifference to the harmful
consequences.  

“Hydrogen Applications” means applications in which the MCFCs are used solely
for hydrogen generation in combination with power generation or combined heat
and power generation.

“Initial Payment” is defined in Paragraph 10.01(b) (Project Costs).

“Inlet CO2 Concentration” means CO2 concentration in the cathode inlet measured
at room temperature conditions (about 23oC) via gas chromatography, as
calibrated according to conventional methods.

“Inlet O2 Concentration” means O2 concentration in the cathode inlet measured at
room temperature conditions (about 23oC) via gas chromatography, as calibrated
according to conventional methods.

“Inlet Water Concentration” means water concentration in the cathode inlet
measured at room temperature conditions (about 23oC) via gas chromatography, as
calibrated according to conventional methods.

“8th Inning Invoice” is defined in Paragraph 10.01(d) (Project Costs).

“9th Inning Invoice” is defined in Paragraph 10.01(d) (Project Costs).

“License Agreement” means the agreement between the Parties effective June 11,
2019 entitled License Agreement bearing ExxonMobil Document No. LAW-2019-3245.

“Major Competitor” means a company with a market capitalization in excess of
fifty billion United States dollars ($50 billion USD) and whose principal
business involves exploration for, and/or production of, crude oil and/or
natural gas, manufacture of petroleum products and/or transportation and/or sale
of crude oil, natural gas, and/or petroleum products.

“Memorandum of Understanding” means the non-binding agreement between ExxonMobil
and FCE effective August 26, 2019.

“Milestone 1” is defined in the Definition Agreement.

“Milestone 2” is defined in the Definition Agreement.

“Milestone Payments” is defined in Paragraph 10.03 (Milestone Payments).

“Molten Carbon Fuel Cells” or “MCFCs” means a powerplant system including MCFC
Stacks and Balance of Plant based on a fuel cell that comprises an electrolyte,
an anode, and a cathode wherein the electrolyte comprises one or more carbonate
salts that are molten (liquid) at operating temperatures. An “MCFC Stack” is a
set of fuel cells connected electrically in series, arranged vertically or
horizontally, that share common ducting for the cathode and anode streams. The
ducting is considered part of the MCFC Stack. Further, the MCFC Stack may
include “Reformer Units”, which are non-electrochemical units that catalytically
reform the anode feed to H2 and CO, but do so without producing any electricity.
“Balance of Plant” or “BOP” means all other equipment besides the MCFC Stack
that is required to operate the MCFC as a stand-alone device, i.e., not in CO2
capture mode or in H2/syngas generation mode. For power generation this can
include the dc-to-ac power conversion, fuel and water processing, air supply,
and heat exchange equipment.

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“Non-Affiliated Third Party” means a third party who is not Party or an
Affiliate of a Party.

“Non-Disclosure Agreement” means the agreement between the Parties effective
December 7, 2018 entitled Mutual Non-Disclosure Agreement bearing ExxonMobil
Document No. EM11762.

“Party” and “Parties” is defined in the preamble.  

“Person” means any trust, natural person, firm or partnership, company,
corporation, or other entity that is given, or is recognized as having, legal
personality by the law of any jurisdiction, country, state or territory,
unincorporated body and association (including joint venture and consortium),
any emanation of a sovereign state or government, whether national, provincial,
local or otherwise, any international organization or body (whether or not
having legal personality), and any other juridical entity, in each case wherever
resident, domiciled, incorporated or formed, and more than one of the foregoing
acting as a group.

“Policies” are defined in Paragraph 17.01 (Business Standards).

“Potential Decay Rate” is defined in the Definition Agreement.

“Power Applications” means applications in which the MCFCs are solely used for
power generation, combined heat and power generation, or both.

“Power Density” means the product of the average cell or stack current density
and the average cell potential.

“Prior JDA” means the agreement between the Parties effective April 30, 2016
entitled Joint Development Agreement bearing ExxonMobil Document No. EM09080.

“Prior JDA Background Information” means Background Information as defined in
the Prior JDA.

“Prior JDA Project Patents” means Project Patents as defined in the Prior JDA,
which by definition are jointly-owned by the Parties.

“Prior JDA Project Results” means Project Results as defined in the Prior JDA,
which by definition are jointly-owned by the Parties.

“Project(s)” is defined in Paragraphs 2.01 (Program / Projects).

“Project Description” is defined in Paragraph 2.01 (Program / Projects).

“Program” is defined in Paragraph 2.01 (Program / Projects).

“Program Information” means all information and associated copyrights, whether
or not patentable, that is conceived, created, developed or acquired in or for
the Program during the Term of the Agreement from any source (including from any
employee of either Party or its Affiliates, or from any Party’s or its
Affiliates’ contractors or consultants, whether alone or jointly with one or
more others) in the course of and as a result of working directly on the
Program. Program Information shall be owned by ExxonMobil and its Affiliates.

Program Information specifically includes Program Inventions and Program
Samples.  Program Information also includes improvements to either Party’s
Background Information conceived, created, developed or acquired in or for the
Program and resulting directly from activities performed in the course of and as
a result of working directly on the Program.  

“Program Inventions” means Program Information that is characterized as
inventions, discoveries, or improvements (whether patentable or not) that are
conceived, created, developed, or acquired by or on behalf a Party or its
Affiliates during the Term of this Agreement and one (1) year thereafter, and in
the course of and as a result of working directly on the Program. Program
Inventions shall also include Project Inventions (as defined in the Prior JDA)
that have not been filed with any national, regional, or international patent
body or organization by the Effective Date of this Agreement. Program Inventions
shall be owned by ExxonMobil and its Affiliates.

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“Program Patents” means all patents and patent applications (including
continuations, continuations-in-part, or divisions thereof, any patent resulting
therefrom, and reissues, re-exams or extensions thereof, and revisions thereof
arising from oppositions, inter or ex partes proceedings, or other patent office
or judicial proceedings) filed with any national, regional, or international
patent body or organization after the Effective Date of this Agreement, that are
based upon and/or claim one or more features of Program Inventions. Program
Patents shall be owned by ExxonMobil and its Affiliates.

“Program Results” means, collectively Program Information, Program Patents, and
copyrightable works resulting from the Program.

“Program Sample” means a sample of material, component, device, or the like that
is developed during the Term of this Agreement, in the course of and as a result
of working directly on the Program.

“Receiving Party” means the Party that receives, directly or indirectly,
information or other materials from the Disclosing Party.

“Research Costs” means Direct Costs plus FTE Costs.

“Scope” is defined in the preamble.

“Steering Committee” or “SC” is defined in Paragraph 3.01 (Steering Committee).

“Sample” means collectively FCE Background Sample, ExxonMobil Background Sample,
and Program Sample.

“Technical Manager” is defined in Paragraph 3.02 (Technical Managers).  

“Term” or “Term of this Agreement” is defined in Paragraph 12.01 (Term).

“Total Research Cost” is defined in Paragraph 10.01(a) (Project Costs).

“Willful Misconduct” means an intentional disregard of good and prudent
standards of performance or of any of the substantive terms of this Agreement.

“Work” means any activities of any kind, including but not limited to, research
and development, pilot plant, manufacture testing, demonstration, or commercial
development/deployment.

 

 

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APPENDIX B – SAMPLE PROJECT DESCRIPTION FORMAT

PROJECT DESCRIPTION No. ____

Project Name: __________________

LAW-2019-3608

FCE Agreement No. :____________

Date:  ________________________

Receiving Company Name & Address

Attention: ______________________

 

Dear ______________,

This Project Description No. [NUMBER] is issued pursuant to the Joint
Development Agreement, effective [EFFECTIVE DATE] between ExxonMobil Research
and Engineering Company (“ExxonMobil”) and FuelCell Energy, Inc. (“FCE”),
bearing ExxonMobil Agreement No. LAW-2019-3608 (“Agreement”).  Each Party’s
activities hereunder will be conducted in accordance with and subject to the
terms and conditions of the Agreement.  The specific terms which will apply to
this Project are described below.

 

1.

PROJECT DESCRIPTION/OBJECTIVES:

_________________

 

2.

TIME SCHEDULE:

Commencement Date: ____________

Completion Date: ________________

 

3.

STEERING COMMITTEE MEMBERS / TECHNICAL MANAGERS:

FCE: ______________________

ExxonMobil: __________________________

 

4.

PROJECT BUDGET

 

Task

1A

1B

1C

….

 

 

 

 

 

Number of FTEs

 

 

 

 

FTE Cost

 

 

 

 

Direct Costs

 

 

 

 

TOTAL

 

 

 

 

 

 

5.

DELIVERABLES:

____________________

 

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If the foregoing is satisfactory, please have a duly authorized representative
of your company sign duplicate originals of this Project Description and return
both to for counter-execution on behalf of our company.  A fully-executed
original will be returned for your files.  

 

Very truly yours,

 

EXXONMOBIL RESEARCH AND ENGINEERING COMPANY

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

ACCEPTED AND AGREED TO:

 

FUELCELL ENERGY, INC.

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

 

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