Exhibit 10.3

 

EXECUTION VERSION

 

GUARANTY AGREEMENT

 

GUARANTY AGREEMENT (this “Guaranty”), dated as of December 21, 2018, is made by
FUELCELL ENERGY, INC., a Delaware corporation (“Guarantor”), in favor of
GENERATE LENDING, LLC, a Delaware limited liability company (“Lender”).

 

A.           Pursuant to that certain Construction Loan Agreement, dated as of
December 21, 2018, by and among FUELCELL ENERGY FINANCE II, LLC, a Connecticut
limited liability company (“Borrower”), BAKERSFIELD FUEL CELL 1, LLC, a Delaware
limited liability company (“Bakersfield”), BRT FUEL CELL, LLC, a New York
limited liability company (“BRT”), CR FUEL CELL, LLC, a New York limited
liability company (“CR”), YAPHANK FUEL CELL PARK, LLC, a New York limited
liability company (“Yaphank”), HOMESTEAD FUEL CELL 1, LLC, a Connecticut limited
liability company (“Homestead”), DERBY FUEL CELL, LLC, a Connecticut limited
liability company (“Derby”, and collectively with Bakersfield, BRT, CR, Yaphank
and Homestead, each, an “Initial Project Company Guarantor”, and together, the
“Initial Project Company Guarantors”), the other Loan Parties party thereto from
time to time, and Lender (as amended, amended and restated, supplemented, or
otherwise modified from time to time, the “Loan Agreement”), Lender has agreed
to make certain loans and other financial accommodations to Borrower.

 

B.           The Lender is not willing to make the Loan, or otherwise extend
credit, to Borrower unless Guarantor unconditionally guarantees payment and
performance to the Lender of the Guaranteed Obligations pursuant to the terms
and conditions herein agreed.

 

C.           Guarantor directly or indirectly owns all of the ownership
interests of Borrower and each Initial Project Company Guarantor, is financially
interested in their respective affairs, and expects to derive financial benefits
from the loans and other financial accommodations to be provided by Lender to
the Borrower under or in connection with the Loan Agreement.

 

D.           This Guaranty is required pursuant to the terms of the Loan
Agreement.

 

NOW THEREFORE, in consideration of the foregoing, in order to induce Lender to
enter into and make loans and other financial accommodations to Borrower under
the Loan Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, Guarantor hereby agrees as
follows:

 

ARTICLE I

DEFINITIONS

 

As used in this Guaranty, capitalized terms not otherwise defined herein have
the meanings defined for them in the Loan Agreement.

 

ARTICLE II

INDEMNITIES AND GUARANTIES

 

Section 1. Guaranty. Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to Lender the punctual payment and performance of the
Obligations of the Borrower and the other Loan Parties to the Lender arising
under or in connection with Sections 2.3(h) and 2.3(i) of the Loan Agreement,
including without limitation the payment of all sums now owing or which may in
the future be owing by Borrower or any other Loan Party under such Sections of
the Loan Agreement, as and when the same are due and payable, and whether for
principal, interest, fees, expenses, indemnification or otherwise (all of the
foregoing being the “Guaranteed Obligations”). The Guaranteed Obligations
include, without limitation, interest accruing after the commencement of a
proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at
the rate or rates provided in the Loan Documents. This Guaranty is a guaranty of
payment and not of collection only. Lender shall not be required to exhaust any
right or remedy or take any action against Borrower, any other Loan Party or any
other guarantor, person or entity or any collateral. Guarantor agrees that, as
between Guarantor and Lender, the Guaranteed Obligations may be declared to be
due and payable for the purposes of this Guaranty notwithstanding any stay,
injunction or other prohibition which may prevent, delay or vitiate any
declaration regarding Borrower or any other Loan Party and that in the event of
a declaration or attempted declaration, the Guaranteed Obligations shall
immediately become due and payable by Guarantor for the purposes of this
Guaranty.

 

 

 

 

Section 2.  Guaranty Absolute. Guarantor guarantees that the Guaranteed
Obligations shall be paid strictly in accordance with the terms of the Loan
Documents. The liability of Guarantor under this Guaranty is absolute and
unconditional irrespective of: (a) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Loan Documents or
Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from any of the terms of any Loan Document or Guaranteed Obligation,
including any increase or decrease in the rate of interest thereon; (b) any
release or amendment or waiver of, or consent to departure from, or failure to
act by Lender with respect to, any other guaranty or support document, or any
exchange, release or non-perfection of, or failure to act by Lender with respect
to, any collateral, for all or any of the Loan Documents or Guaranteed
Obligations, or the release of Borrower or any other Loan Party from its
respective obligations under the Loan Documents; (c) any present or future law,
regulation or order of any jurisdiction (whether of right or in fact) or of any
agency thereof purporting to reduce, amend, restructure or otherwise affect any
term of any Loan Document or Guaranteed Obligation; (d) any change in the
corporate existence, structure, or ownership of Borrower or any other Loan Party
or the liquidation or dissolution of Borrower or any other Loan Party; (e)
without being limited by the foregoing, any lack of validity or enforceability
of any Loan Document or Guaranteed Obligation; and (f) any other setoff,
recoupment, defense or counterclaim whatsoever (in any case, whether based on
contract, tort or any other theory) with respect to the Loan Documents or the
transactions contemplated thereby which might constitute a legal or equitable
defense available to, or discharge of, Borrower, any other Loan Party or a
guarantor.

 

Section 3.  Guaranty Irrevocable. This Guaranty is a continuing guaranty of all
Guaranteed Obligations now or hereafter existing under the Loan Agreement and
shall remain in full force and effect until all Guaranteed Obligations and other
amounts payable under this Guaranty are paid in full in cash and any Commitments
of the Lender with respect to the Guaranteed Obligations are terminated.

 

Section 4.  Reinstatement. Notwithstanding Section 3 of this Guaranty, this
Guaranty shall continue in full force and effect or be revived, as the case may
be, if at any time any payment by or on behalf of the Borrower or the Guarantor
is made, in respect to the Guaranteed Obligations is rescinded or must otherwise
be returned by Lender on the insolvency, bankruptcy or reorganization of
Borrower or any other Loan Party or otherwise, all as though the payment had not
been made.

 

Section 5.  Subrogation. The Guarantor shall not exercise any right of
subrogation or similar rights with respect to any payments it makes under this
Guaranty until all the Guaranteed Obligations have been paid in full and any
Commitments with respect to the Guaranteed Obligations are terminated. If any
amounts are paid to the Guarantor in violation of the foregoing limitation, then
such amounts shall be held in trust for the benefit of Lender, and shall
forthwith be paid to Lender to reduce the amount of the Guaranteed Obligations,
whether matured or unmatured. If Guarantor makes payment to Lender, of all or
any part of the Guaranteed Obligations and all the Guaranteed Obligations are
paid in full and the Loan Documents are no longer in effect, Lender shall, at
Guarantor’s request, execute and deliver to Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to Guarantor of an interest in the Guaranteed
Obligations resulting from the payment.

 

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Section 6.   Subordination. Without limiting Lender’s rights under any other
agreement, until the Obligations are indefeasibly paid in full, any liabilities
owed by Borrower or any other Loan Party to Guarantor in connection with any
extension of credit or financial accommodation by Guarantor to or for the
account of Borrower or any other Loan Party, including but not limited to
interest accruing at the agreed contract rate after the commencement of a
bankruptcy or similar proceeding, are hereby subordinated to the Guaranteed
Obligations, and such liabilities of Borrower or such Loan Party, as applicable,
to Guarantor, if Lender so requests, shall be collected, enforced and received
by Guarantor as trustee for Lender and shall be paid over to Lender on account
of the Guaranteed Obligations but without reducing or affecting in any manner
the liability of Guarantor under the other provisions of this Guaranty.

 

Section 7.  Certain Taxes. The Guarantor further agrees that all payments to be
made hereunder shall be made without setoff or counterclaim and free and clear
of, and without deduction for, any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings or restrictions or conditions of any nature
whatsoever now or hereafter imposed, levied, collected, withheld or assessed by
any country or by any political subdivision or taxing authority thereof or
therein (“Taxes”). If any Taxes are required to be withheld from any amounts
payable to Lender hereunder, the amounts so payable to Lender shall be increased
to the extent necessary to yield to Lender (after payment of all Taxes) the
amounts payable hereunder in the full amounts so to be paid. Whenever any Tax is
paid by Guarantor, as promptly as possible thereafter, Guarantor shall send
Lender an official receipt showing payment thereof, together with such
additional documentary evidence as may be required from time to time by Lender.

 

Section 8.   Representations and Warranties. Guarantor represents and warrants
that: (a) this Guaranty (i) has been authorized by all necessary action; (ii)
does not violate any agreement, instrument, law, regulation or order applicable
to Guarantor; (iii) does not require the consent or approval of any person or
entity, including but not limited to any governmental authority, or any filing
or registration of any kind; and (iv) is the legal, valid and binding obligation
of Guarantor enforceable against Guarantor in accordance with its terms, except
to the extent that enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors’ rights generally; and (b)
in executing and delivering this Guaranty, Guarantor has (i) without reliance on
Lender or any information received from Lender and based upon such documents and
information it deems appropriate, made an independent investigation of the
transactions contemplated hereby and Borrower and the other Loan Parties and
their respective business, assets, operations, prospects and condition,
financial or otherwise, and any circumstances which may bear upon such
transactions, the Borrower or any other Loan Party or the obligations and risks
undertaken herein with respect to the Guaranteed Obligations; (ii) adequate
means to obtain from Borrower and each other Loan Party on a continuing basis
information concerning Borrower and each other Loan Party; (iii) has full and
complete access to the Loan Documents and any other documents executed in
connection with the Loan Documents; and (iv) not relied and will not rely upon
any representations or warranties of Lender not embodied herein or any acts
heretofore or hereafter taken by Lender (including but not limited to any review
by Lender of the affairs of Borrower or any other Loan Party).

 

Section 9.   Affirmative Covenant. Guarantor shall (i) maintain its existence as
a corporation in good standing under the laws of the State of Delaware and good
standing in each other jurisdiction where it is required to be so qualified,
authorized or in good standing, except where the failure to so qualify or be in
good standing would not reasonably be expected to result in a Material Adverse
Effect and (ii) cause to be done all things necessary to preserve and keep in
full force and effect its existence and rights, to conduct its business in a
prudent manner, to maintain in full force and effect, and renew from time to
time, its franchises, permits, licenses, patents, and trademarks that are
necessary to operate its business.

 

Section 10.  [RESERVED.]

 

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Section 11.  Remedies.

 

(a)          Upon the occurrence of any Project Company Event of Default which
continues beyond the applicable period of grace provided for in the Loan
Agreement, Lender shall be entitled, in addition to exercising any remedies set
forth in this Guaranty or otherwise available at law or in equity, to accelerate
Guarantor’s obligations hereunder with respect to the Project Company
Guarantor(s) and the related Approved Project(s) to which such Project Company
Event of Default relate.

 

(b)          Upon the occurrence of any Facility Event of Default which
continues beyond the applicable period of grace provided for in the Loan
Agreement, Lender shall be entitled, in addition to exercising any remedies set
forth in this Guaranty or otherwise available at law or in equity, to accelerate
all of the Guarantor’s obligations hereunder.

 

(c)          The remedies provided in this Guaranty are cumulative and not
exclusive of any remedies provided by law.

 

Section 12.  Setoff. Guarantor agrees that, in addition to (and without
limitation of) any right of setoff, banker’s lien or counterclaim Lender may
otherwise have, Lender shall be entitled, at its option, to offset balances
(general or special, time or demand, provisional or final) held by it for the
account of Guarantor, against any amount payable by Guarantor under this
Guaranty which is not paid when due (regardless of whether such balances are
then due to Guarantor).

 

Section 13.  Formalities. Guarantor waives presentment, demand, notice of
dishonor, protest, notice of acceptance of this Guaranty or incurrence of any
Guaranteed Obligation and any other formality with respect to any of the
Guaranteed Obligations or this Guaranty.

 

Section 14.  Amendments and Waivers. No amendment or waiver of any provision of
this Guaranty, nor consent to any departure by Guarantor therefrom, shall be
effective unless it is in writing and signed by Lender, and then the waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of Lender to exercise, and no
delay in exercising, any right under this Guaranty shall operate as a waiver or
preclude any other or further exercise thereof or the exercise of any other
right.

 

Section 15.  Expenses. Guarantor shall reimburse Lender on demand for all costs,
expenses and charges (including without limitation fees and charges of legal
counsel for Lender) incurred by Lender in connection with the enforcement of
this Guaranty. The obligations of Guarantor under this Section 15 shall survive
the termination of this Guaranty.

 

Section 16.  Assignment. This Guaranty shall be binding on, and shall inure to
the benefit of Guarantor, Lender and their respective successors and assigns;
provided that Guarantor may not assign or transfer its rights or obligations
under this Guaranty. Without limiting the generality of the foregoing, Lender
may assign, sell participations in or otherwise transfer its rights under the
Loan Documents pursuant to the terms thereof to any other person or entity, and
the other person or entity shall then become vested with all the rights granted
to Lender in this Guaranty or otherwise.

 

Section 17.  Captions. The headings and captions in this Guaranty are for
convenience only and shall not affect the interpretation or construction of this
Guaranty.

 

Section 18.  Notices. All notices or communications by any party relating to
this Guaranty shall be in writing and shall be personally delivered or sent by a
recognized overnight delivery service, certified mail, postage prepaid, return
receipt requested, electronic mail, or by fax to Guarantor or to Lender, as the
case may be, at its addresses set forth below:

 

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  If to the Guarantor: FuelCell Energy, Inc.     3 Great Pasture Road    
Danbury, Connecticut 06810     Attn: Legal Department     Facsimile:  (203)
825-6069     Email: jarasimowicz@fce.com         If to the Lender: Generate
Lending, LLC     555 De Haro Street, Suite 300     San Francisco, CA 94107    
Attn: Notices     Email: notices@generatecapital.com           With a copy to:  
        Justin Boose, Esquire     Troutman Sanders LLP     875 Third Avenue    
New York, NY 10022     Facsimile:  212-704-5922     Email:
Justin.boose@troutman.com

 

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

 

Section 19.  Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)          This Guaranty and any claims, controversy, dispute or cause of
action (whether in contract or tort or otherwise) based upon, arising out of or
relating to this Guaranty and the transactions contemplated hereby and thereby
shall be construed in accordance with and be governed by the law (without giving
effect to the conflict of law principles thereof) of the State of New York.

 

(b)          Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the jurisdiction of the STATE AND FEDERAL COURTS OF
THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE
COURT FROM ANY THEREOF, in any action or proceeding arising out of or relating
to this Guaranty or the transactions contemplated hereby or thereby, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such courts or, to the
extent permitted by applicable law, such appellate court. Each of Guarantor and,
by its acceptance hereof, Lender, agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that the Lender may otherwise
have to bring any action or proceeding relating to this Guaranty against the
Guarantor or its properties in the courts of any jurisdiction.

 

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(c)          Guarantor irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
described in subsection (b) of this Section and brought in any court referred to
in subsection (b) of this Section. Each of the parties hereto irrevocably
waives, to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

(d)          Guarantor irrevocably consents to the service of process in the
manner provided for notices in Section 18 herein. Nothing in this Guaranty will
affect the right of Guarantor or Lender to serve process in any other manner
permitted by law.

 

Section 20.  WAIVER OF JURY TRIAL. EACH OF GUARANTOR AND, BY ITS ACCEPTANCE
HEREOF, LENDER, HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
OF GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, LENDER, (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 21. Integration; Effectiveness. This Guaranty alone sets forth the
entire understanding of Guarantor and Lender relating to the guarantee of the
Guaranteed Obligations and constitutes the entire contract between the parties
relating to the subject matter hereof and supersedes any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. This Guaranty shall become effective when it shall have been executed
and delivered by Guarantor to Lender. Delivery of an executed signature page of
this Guaranty by PDF, telecopy, or other electronic means shall be effective as
delivery of a manually executed signature page of this Guaranty.

 

[Remainder of page intentionally blank; signature page follows.]

 

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IN WITNESS WHEREOF, Guarantor has caused this Guaranty Agreement to be duly
executed and delivered by its duly authorized officer as of the date first above
written.

 

  FUELCELL ENERGY, INC.       By:   /s/ Michael S. Bishop   Name: Michael S.
Bishop   Title: Senior Vice President & Chief Financial Officer

 

Guaranty agreement

Signature page