EXECUTION COPY

FuelCell Energy, Inc.
 
100,000 Shares of 5% Series B Cumulative Convertible Perpetual Preferred Stock
 
(Liquidation Preference $1000 per share)* 
 
REGISTRATION RIGHTS AGREEMENT
 
November 17, 2004
 
Citigroup Global Markets Inc.
As Representative of the Initial Purchasers
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
 
FuelCell Energy, Inc., a corporation organized under the laws of the State of
Delaware (the “Company”) proposes to issue and sell to certain purchasers (the
“Initial Purchasers”), for whom you (the “Representative”) are acting as
representative, 100,000 Shares of 5% Series B Cumulative Convertible Perpetual
Preferred Stock (Liquidation Preference $1,000 per share) (the “Preferred
Stock”), of the Company (the “Firm Securities”). The Company also proposes to
grant to the Initial Purchasers an option to purchase up to 35,000 additional
shares of Preferred Stock (the “Option Securities” and, together with the Firm
Securities, the “Securities”), upon the terms set forth in the Purchase
Agreement between the Company and the Representative dated November 11, 2004
(the “Purchase Agreement”) relating to the initial placement (the “Initial
Placement”) of the Securities. To induce the Initial Purchasers to enter into
the Purchase Agreement and to satisfy a condition to your obligations
thereunder, the Company agrees with you for your benefit and the benefit of the
holders from time to time of the Securities (including the Initial Purchasers)
(each a “Holder” and, collectively, the “Holders”), as follows:
 
1.  Definitions. Capitalized terms used herein without definition shall have
their respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
 
“Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
 
“Affiliate” shall have the meaning specified in Rule 405 under the Act and the
terms “controlling” and “controlled” shall have meanings correlative thereto.
 

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*   Plus an option to purchase up to 35,000 shares of the Preferred Stock of the
Company.

       

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“Broker-Dealer” shall mean any broker or dealer registered as such under the
Exchange Act.
 
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.
 
“Certificate of Designation” shall mean the Certificate of Designation relating
to the Securities, dated as of November 16, 2004, signed by the Company and duly
filed with the Secretary of State of the State of Delaware.
 
“Closing Date” shall mean the date of the first issuance of the Securities.
 
“Commission” shall mean the Securities and Exchange Commission.
 
“Deferral Period” shall have the meaning indicated in Section 3(i) hereof.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
 
“Final Memorandum” shall mean the offering memorandum, dated November 11, 2004,
relating to the Securities, including any and all exhibits thereto and any
information incorporated by reference therein as of such date.
 
“Holder” shall have the meaning set forth in the preamble hereto.
 
“Initial Placement” shall have the meaning set forth in the preamble hereto.
 
“Initial Purchasers” shall have the meaning set forth in the preamble hereto.
 
“Losses” shall have the meaning set forth in Section 5(d) hereof.
 
“Majority Holders” shall mean, on any date, Holders of a majority of the
Registrable Securities registered under a Registration Statement. For purposes
of determining the “Majority Holders,” each share of Preferred Stock that is a
Registrable Security shall initially be equivalent to 85.1064 shares of common
stock. Such ratio shall be adjusted, from time to time, in accordance with the
terms of the Securities.
 
“Managing Underwriters” shall mean the investment banker or investment bankers
and manager or managers that administer an underwritten offering, if any,
conducted pursuant to Section 6 hereof.
 
“NASD Rules” shall mean the Conduct Rules and the By-Laws of the National
Association of Securities Dealers, Inc.
 
“Notice and Questionnaire” shall mean a written notice delivered to the Company
substantially in the form attached as Annex A to the Final Memorandum.

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“Notice Holder” shall mean, on any date, any Holder of Registrable Securities
that has delivered a Notice and Questionnaire to the Company on or prior to such
date.
 
“Prospectus” shall mean a prospectus included in the Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement, and all amendments and supplements thereto, including
any and all exhibits thereto and any information incorporated by reference
therein.
 
“Purchase Agreement” shall have the meaning set forth in the preamble hereto.
 
“Registrable Securities” shall mean Securities and the Underlying Common Stock
until such securities have been converted or exchanged and, at all times
subsequent to any such conversion or exchange, any securities into or for which
such securities have been converted or exchanged, and any security issued with
respect thereto upon any stock dividend, split, merger or similar event until,
in the case of any such security, the earliest of (i) its effective registration
under the Securities Act and resale in accordance with the Registration
Statement covering it, (ii) expiration of the holding period that would be
applicable thereto under Rule 144(k) were it not held by an Affiliate of the
Company, or (iii) its sale to the public pursuant to Rule 144.
 
“Registration Default Damages” shall have the meaning set forth in Section 7
hereof.
 
“Securities” shall have the meaning set forth in the preamble hereto.
 
“Shelf Registration Period” shall have the meaning set forth in Section 2(c)
hereof.
 
“Shelf Registration Statement” shall mean one or more “shelf” registration
statements of the Company pursuant to the provisions of Section 2 hereof which
cover some or all of the Registrable Securities on an appropriate form under
Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration statements,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein. 
 
“Transfer Agency Agreement” shall mean the Preferred Stock Transfer Agency
Agreement between the Company and Continental Stock Transfer & Trust Company
dated as of November 17, 2004.
 
“Underlying Common Stock” means the Common Stock into which the Securities are
convertible or issued upon any such conversion.
 
“Underwriter” shall mean any underwriter of Registrable Securities in connection
with an offering thereof under the Shelf Registration Statement.

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2.  Shelf Registration. (a) The Company shall as promptly as practicable (but in
no event more than 90 days after the Closing Date) file with the Commission a
Shelf Registration Statement providing for the registration of, and the sale on
a continuous or delayed basis by the Holders of, all of the Registrable
Securities, from time to time in accordance with the methods of distribution
elected by such Holders, pursuant to Rule 415 under the Act or any similar rule
that may be adopted by the Commission.
 
(b)  The Company shall use its best efforts to cause the Shelf Registration
Statement to become or be declared effective under the Act no later than 180
days after the Closing Date.
 
(c)  The Company shall use its best efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended as required by the
Act, in order to permit the Prospectus forming part thereof to be usable by
Holders for a period (the “Shelf Registration Period”)  from the date the Shelf
Registration Statement is declared effective by the Commission until the earlier
of (i) the second anniversary thereof or (ii) the date upon which there are no
Registrable Securities outstanding. The Company shall be deemed not to have used
its best efforts to keep the Shelf Registration Statement effective during the
Shelf Registration Period if it voluntarily takes any action that would result
in Holders of Registrable Securities not being able to offer and sell such
Registrable Securities at any time during the Shelf Registration Period,
unless such action is (x) required by applicable law or otherwise undertaken by
the Company in good faith and for valid business reasons (not including
avoidance of the Company’s obligations hereunder), including the acquisition or
divestiture of assets, and (y) permitted by Section 3(i) hereof.
 
(d)  The Company shall cause the Shelf Registration Statement and the related
Prospectus and any amendment or supplement thereto, as of the effective date of
the Shelf Registration Statement or such amendment or supplement, (i) to comply
in all material respects with the applicable requirements of the Act; and (ii)
not to contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
 
(e)  Each Holder of Registrable Securities agrees to deliver a Notice and
Questionnaire to the Company at least five Business Days prior to any
distribution by it of Registrable Securities under the Shelf Registration
Statement provided, however that if the Company is required to amend the shelf
registration statement to include any Holder of Registrable Securities, as
provided for below, such Holder will not distribute its securities under the
Shelf Registration Statement until such amendment has become effective. From and
after the date the Shelf Registration Statement is declared effective, the
Company shall, as promptly as is practicable after the date a Notice and
Questionnaire is delivered, and in any event within five Business Days after
such date, (i) if required by applicable law, file with the Commission a
post-effective amendment to the Shelf Registration Statement or prepare and, if
required by applicable law, file a supplement to the related Prospectus or a
amendment or supplement to any document incorporated therein by reference or
file any other required document so that the Holder delivering such Notice and
Questionnaire is named as a selling holder in the Shelf Registration Statement
and the related Prospectus and so that such Holder is permitted to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use best efforts to cause such post-effective
amendment to be declared effective

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under the Act as promptly as is practicable provided, however, that once the
Shelf Registration Statement has been declared effective, and until such time as
the Company is eligible to file a shelf registration statement on Form S-3 under
the Act, the Company will not be required to amend the shelf registration
statement to include any Holder of Registrable Securities more than once every
60 days; (ii) provide such Holder copies of any documents filed pursuant to
Section 2(e)(i) hereof; and (iii) notify such Holder as promptly as practicable
after the effectiveness under the Act of any post-effective amendment filed
pursuant to Section 2(e)(i) hereof; provided, that if such Notice and
Questionnaire is delivered during a Deferral Period, the Company shall so inform
the Holder delivering such Notice and Questionnaire and shall take the actions
set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral
Period in accordance with Section 3(i) hereof. Notwithstanding anything
contained herein to the contrary, the Company shall be under no obligation to
name any Holder that is not a Notice Holder as a selling holder in the Shelf
Registration Statement or related Prospectus; provided , however, that any
Holder that becomes a Notice Holder pursuant to the provisions of this Section
2(e) (whether or not such Holder was a Notice Holder at the time the Shelf
Registration Statement was declared effective) shall be named as a selling
holder in the Shelf Registration Statement or related Prospectus in accordance
with the requirements of this Section 2(e).
 
(f)     Notwithstanding anything contained in Section 2(e) to the contrary, each
Holder of Registrable Securities agrees that once the Shelf Registration
Statement has been declared effective, and until such time as the Company is
eligible to file a shelf registration statement on Form S-3 under the Act, it
will not distribute its securities under the Shelf Registration Statement until
they are registered and acknowledges that the Company will not be required to
amend the shelf registration statement to include any Holder of Registrable
Securities more than once every 60 days.
 
(g)    Within five Business Days of becoming eligible, the Company shall give
written notice to the Representative, each of the Initial Purchasers and each
Holder, in the manner provided for in Section 10, of its eligibility to file a
shelf registration statement on Form S-3 under the Act.
 
3.  Registration Procedures.  The following provisions shall apply in connection
with the Shelf Registration Statement.
 
(a)  The Company shall:
 
(i)  use its best efforts to furnish to the Representative and to counsel for
the Notice Holders, within a reasonable time prior to the filing thereof with
the Commission, a copy of the Shelf Registration Statement and each amendment
thereof and each amendment or supplement, if any, to the Prospectus included
therein (including all documents incorporated by reference therein after the
initial filing) and shall use its best efforts to reflect in each such document,
when so filed with the Commission, such comments as the Representative
reasonably proposes; and

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(ii)  include information regarding the Notice Holders and the methods of
distribution they have elected for their Registrable Securities provided to the
Company in Notices and Questionnaires as necessary to permit such distribution
by the methods specified therein. 
 
(b)  The Company shall ensure that:
 
(i)  the Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto complies
in all material respects with the Act; and
 
(ii)  the Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
 
(c)  The Company shall advise the Representative, the Notice Holders and any
underwriter that has provided in writing to the Company a telephone or facsimile
number and address for notices, and confirm such advice by notice in writing
(which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an
instruction to suspend the use of the Prospectus until the Company shall have
remedied the basis for such suspension):
 
(i)  when the Shelf Registration Statement and any amendment thereto has been
filed with the Commission and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
 
(ii)  of any request by the Commission for any amendment or supplement to the
Shelf Registration Statement or the Prospectus or for additional information;
 
(iii)  of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or the institution or
threatening of any proceeding for that purpose;
 
(iv)  of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities included therein
for sale in any jurisdiction or the institution or threatening of any proceeding
for such purpose; and
 
(v)  of the happening of any event that requires any change in the Shelf
Registration Statement or the Prospectus so that, as of such date, they (A) do
not contain any untrue statement of a material fact and (B) do not omit to state
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
 
(d)  The Company shall use its best efforts to prevent the issuance of any order
suspending the effectiveness of the Shelf Registration Statement or the
qualification of the securities therein for sale in any jurisdiction and, if
issued, to obtain as soon as possible the withdrawal thereof.

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(e)  The Company shall furnish to each Notice Holder, without charge, at least
one copy of the Shelf Registration Statement and any post-effective amendment
thereto, including all material incorporated therein by reference, and, if a
Notice Holder so requests in writing, all exhibits thereto (including exhibits
incorporated by reference therein).
 
(f)  During the Shelf Registration Period, the Company shall promptly deliver to
each Initial Purchaser, each Notice Holder, and any sales or placement agents or
underwriters acting on their behalf, without charge, as many copies of the
Prospectus (including any preliminary Prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as any such
person may reasonably request. The Company consents to the use of the Prospectus
or any amendment or supplement thereto by each of the foregoing in connection
with the offering and sale of the Registrable Securities.
 
(g)  Prior to any offering of Registrable Securities pursuant to the Shelf
Registration Statement, the Company shall arrange for the qualification of the
Registrable Securities for sale under the laws of such jurisdictions as any
Notice Holder shall reasonably request and shall maintain such qualification in
effect so long as required; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not then so
qualified or to take any action that would subject it to service of process in
suits , other than those arising out of the Initial Placement or any offering
pursuant to the Shelf Registration Statement, in any jurisdiction where it is
not then so subject.
 
(h)  Upon the occurrence of any event contemplated by subsections (c)(ii)
through (v) above, the Company shall promptly (or within the time period
provided for by Section 3(i) hereof, if applicable) prepare a post-effective
amendment to the Shelf Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to Initial Purchasers of the securities included therein,
the Prospectus will not include an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. 
 
(i)  Upon the occurrence or existence of any pending corporate development or
any other material event (including without limit, the filing of an annual
report on Form 10-K under the Securities Act) that, in the reasonable judgment
of the Company, makes it appropriate to suspend the availability of the Shelf
Registration Statement and the related Prospectus, the Company shall give notice
(without notice of the nature or details of such events) to the Notice Holders
that the availability of the Shelf Registration is suspended and, upon actual
receipt of any such notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to the Shelf Registration until such Notice
Holder’s receipt of copies of the supplemented or amended Prospectus provided
for in Section 3(i) hereof, or until it is advised in writing by the Company
that the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The period during which the availability of the Shelf
Registration and any Prospectus is suspended (the “Deferral Period”) shall not
exceed 45 days in any three-month period or 90 days in any twelve-month period.

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(j)  Not later than the effective date of the Shelf Registration Statement, the
Company shall provide a CUSIP number for the Registrable Securities registered
under the Shelf Registration Statement and provide printed certificates for such
Registrable Securities, free of any restrictive legends , in a form eligible for
deposit with The Depository Trust Company.
 
(k)  The Company shall comply with all applicable rules and regulations of the
Commission and shall make generally available to its security holders an
earnings statement satisfying the provisions of Section 11(a) of the Act as soon
as practicable after the effective date of the Shelf Registration Statement and
in any event no later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month of the
Company’s first fiscal quarter commencing after the effective date of the Shelf
Registration Statement.
 
(l)  The Company may require each Holder of Registrable Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such Registrable
Securities as the Company may from time to time reasonably require for inclusion
in the Shelf Registration Statement.  The Company may exclude from the Shelf
Registration Statement the Registrable Securities of any Holder that
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
 
(m)  The Company shall enter into customary agreements (including, if requested,
an underwriting agreement in customary form) and take all other appropriate
actions in order to expedite or facilitate the registration or the disposition
of the Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures no less favorable than those set forth in Section 5 hereof.
 
(n)  The Company shall:
 
(i)  make reasonably available for inspection by the Holders of Registrable
Securities to be registered thereunder, any underwriter participating in any
disposition pursuant to the Shelf Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such underwriter all
relevant financial and other records and pertinent corporate documents of the
Company and its subsidiaries;
 
(ii)  cause the Company’s officers, directors, employees, accountants and
auditors to supply all relevant information reasonably requested by the Holders
or any such underwriter, attorney, accountant or agent in connection with any
the Shelf Registration Statement as is customary for similar due diligence
examinations;
 
(iii)  upon request, make such representations and warranties to the Holders of
Registrable Securities registered thereunder and the underwriters, if any, in
form, substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings and covering matters including, but not limited
to, those set forth in the Purchase Agreement;

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(iv)  obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any) addressed to each selling
Holder and the underwriters, if any, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such Holders and underwriters;
 
(v)  upon request, obtain “comfort” letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Shelf Registration
Statement), addressed to each selling Holder of Registrable Securities
registered thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in “comfort” letters in
connection with primary underwritten offerings; and
 
(vi)  deliver such documents and certificates as may be reasonably requested by
the Majority Holders or the Managing Underwriters, if any, including those to
evidence compliance with Section 3(i) hereof and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company.
 
(o)  The actions set forth in clauses (iii), (iv), (v) and (vi) of this
paragraph (n) shall be performed at (A) the effectiveness of the Shelf
Registration Statement and each post-effective amendment thereto; and (B) each
closing under any underwriting or similar agreement as and to the extent
required thereunder.
 
(p)  In the event that any Broker-Dealer shall underwrite any Registrable
Securities or participate as a member of an underwriting syndicate or selling
group or “assist in the distribution” (within the meaning of the NASD Rules)
thereof, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such Broker-Dealer in complying
with the NASD Rules.
 
(q)  The Company shall use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by the Shelf
Registration Statement.
 
4.  Registration Expenses. The Company shall bear all expenses incurred in
connection with the performance of its obligations under Sections 2 and 3 hereof
and shall reimburse the Holders for the reasonable fees and disbursements of one
firm or counsel which shall initially be Cleary, Gottlieb, Steen & Hamilton, but
which may be another nationally recognized law firm experienced in securities
matters designated by the Majority Holders to act as counsel for the Holders in
connection therewith. 

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5.  Indemnification and Contribution. (a)  The Company agrees to indemnify and
hold harmless each Holder of Registrable Securities  covered by the Shelf
Registration Statement, each Initial Purchaser, the directors, officers,
employees, Affiliates and agents of each such Holder or Initial Purchaser and
each person who controls any such Holder or Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other f ederal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Shelf Registration Statement as originally filed or in any
amendment thereof, or in any preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
preliminary Prospectus or the Prospectus, in the light of the circumstances
under which they were made) not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the party claiming indemnification specifically for inclusion therein.
This indemnity agreement shall be in addition to any liability that the Company
may otherwise have.
 
The Company also agrees to indemnify as provided in this Section 5(a) or
contribute as provided in Section 5(d) hereof to Losses of each underwriter, if
any, of Registrable Securities registered under the Shelf Registration
Statement, its directors, officers, employees, Affiliates or agents and each
person who controls such underwriter on substantially the same basis as that of
the indemnification of the Initial Purchasers and the selling Holders provided
in this paragraph (a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 3(n)
hereof.
 
(b)  Each Holder of securities covered by the Shelf Registration Statement
(including each Initial Purchaser that is a Holder, in such capacity) severally
and not jointly agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Shelf Registration Statement and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
each such Holder, but only with reference to written information relating to
such Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement shall be acknowledged by each Notice Holder that is not an
Initial Purchaser in such Notice Holder’s Notice and Questionnaire and shall be
in addition to any liability that any such Notice Holder may otherwise have.

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(c)  Promptly after receipt by an indemnified party under this Section 5 or
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel (including
local counsel) of the indemnifying party’s choice at the indemnifying party’s
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
 
(d)  In the event that the indemnity provided in paragraph (a) or (b) of this
Section 5 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party shall have a joint
and several obligation to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending loss, claim, liability, damage or
action) (collectively “Losses”) to which such indemnified party may be subject
in such proportion as is appropriate to reflect the relative benefits received
by such indemnifying party, on the one hand, and such indemnified party, on the
other hand, from the Initial Placement and the Shelf Registration Statement
which resulted in such Losses; provided, however, that in no case shall any
Initial Purchaser be responsible, in the aggregate, for any amount in excess of
the purchase discount or commission applicable to such Registrable Security, as
set forth in the Final Memorandum, nor shall any underwriter be responsible for
any amount in excess of the underwriting discount or commission applicable to
the securities purchased by such underwriter under the Shelf

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Registration Statement which resulted in such Losses. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the Initial Placement (before deducting expenses) as set forth in
t he Final Memorandum. Benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and commissions as set forth
on the cover page of the Final Memorandum, and benefits received by any other
Holders shall be deemed to be equal to the value of receiving Registrable
Securities registered under the Act. Benefits received by any underwriter shall
be deemed to be equal to the total underwriting discounts and commissions, as
set forth on the cover page of the Prospectus forming a part of the Shelf
Registration Statement which resulted in such Losses. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information provided by the indemnifying party,
on the one hand, or by the indemnified party, on the other hand, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The parties agree that
it would not be just and equitable if contribution were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5, each person who controls a Holder within the meaning of either
the Act or the Exchange Act and each director, officer, employee and agent of
such Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Shelf
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
 
(e)  The provisions of this Section 5 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the
Company or any of the indemnified persons referred to in this Section 5 , and
shall survive the sale by a Holder of securities covered by the Shelf
Registration Statement.
 
6.  Underwritten Registrations. (a) If any of the Registrable Securities covered
by the Shelf Registration Statement are to be sold in an underwritten offering,
the Managing Underwriters shall be selected by the Majority Holders.
 
(b)  No person may participate in any underwritten offering pursuant to the
Shelf Registration Statement unless such person (i) agrees to sell such person’s
Registrable Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements; and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

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7.  Registration Defaults. If any of the following events shall occur, then the
Company shall pay liquidated damages (the “Registration Default Damages”) to the
Holders of Registrable Securities in respect of the Securities as follows:
 
(a)  if the Shelf Registration Statement is not filed with the Commission on or
prior to the 90th day following the Closing Date, then commencing on the 91st
day after the Closing Date, Registration Default Damages shall accrue on the
Securities and shall be computed by increasing the applicable dividend rate of
the Preferred Stock for the relevant period by 0.25% per year for the first 90
days from and including such 91st day after the Closing Date and .50% per annum
thereafter (it being understood that Registration Default Damages shall not
exceed 0.50%);
 
(b)  if the Shelf Registration Statement is not declared effective by the
Commission on or prior to the 180th day following the Closing Date, then
commencing on the 181st day after the Closing Date, Registration Default Damages
shall accrue on the Securities and shall be computed by increasing the
applicable dividend rate of the Preferred Stock for the relevant period by 0.25%
per year for the first 90 days from and including such 181st day after the
Closing Date and .50% per annum thereafter (it being understood that
Registration Default Damages shall not exceed 0.50%); or
 
(c)  if the Shelf Registration Statement has been declared effective but ceases
to be effective (other than pursuant to Section 3(i) hereof) at any time during
the Shelf Registration Period, then commencing on the day the Shelf Registration
Statement ceases to be effective, Registration Default Damages shall accrue on
the Securities and shall be computed by increasing the applicable dividend rate
of the Preferred Stock for the relevant period by 0.25% per year for the first
90 days from and including such date on which the Shelf Registration Statement
ceases to be effective and .50% per annum thereafter (it being understood that
Registration Default Damages shall not exceed 0.50%); or
 
(d)  if the aggregate duration of Deferral Periods in any period exceeds the
number of days permitted in respect of such period pursuant to Section 3(i)
hereof, then commencing on the day the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted in respect of such period,
Registration Default Damages shall accrue on the Securities and shall be
computed by increasing the applicable dividend rate of the Preferred Stock for
the relevant period by 0.25% per year for the first 90 days from and including
such date, and .50% per annum thereafter (it being understood that Registration
Default Damages shall not exceed 0.50%);
 
provided, however, that (1) upon the filing of the Shelf Registration Statement
(in the case of paragraph (a) above), (2) upon the effectiveness of the Shelf
Registration Statement (in the case of paragraph (b) above), (3) upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of paragraph (c) above), or (4) upon the termination of
the Deferral Period that caused the limit on the aggregate duration of Deferral
Periods in a period set forth in Section 3(i) to be exceeded (in the case of
paragraph (d) above), Registration Default Damages shall cease to accrue.

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Registration Default Damages will be payable to the holders entitled thereto, in
the manner provided for the payment of dividends in the certificate of
designation.
 
(e) No Registration Default Damages will accrue or be payable on the Underlying
Common Stock. Registration Default Damages that have accrued on the Securities
will be cancelled upon conversion of the Preferred Stock into the Underlying
Common Stock.
 
8.  No Inconsistent Agreements. Except to the extent registration rights
agreements with Marubeni Corporation and Enbridge, Inc., dated as of June 15,
2001 and November 4, 2003, respectively, may limit the ability of the Company to
file a Shelf Registration Statement within the time periods provided for in this
Agreement,  the Company has not entered into, and agrees not to enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or that otherwise conflicts with the provisions
hereof.
 
9.  Amendments and Waivers. The provisions of this Agreement may not be amended,
qualified, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of the Holders of a majority of the Registrable Securities
 outstanding; provided that, with respect to any matter that directly or
indirectly affects the rights of any Initial Purchaser hereunder, the Company
shall obtain the written consent of each such Initial Purchaser against which
such amendment, qualification, supplement, waiver or consent is to be
effective; provided, further, that no amendment, qualification, supplement,
waiver or consent with respect to Section 8 hereof shall be effective as against
any Holder of Registered Securities unless consented to in writing by such
Holder; and provided, further , that the provisions of this Article 10 may not
be amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Initial Purchasers and each Holder.
 
10.  Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail, telex,
telecopier or air courier guaranteeing overnight delivery:
 
(a)  if to a Holder, at the most current address given by such Holder to the
Company in accordance with the provisions of the Notice and Questionnaire, which
address initially is, with respect to each Holder, the address of such Holder
maintained by the Registrar under the Transfer Agent Agreement;
 
(b)  if to the Initial Purchasers or the Representative, initially at the
address or addresses set forth in the Purchase Agreement; and
 
(c)  if to the Company, initially at its address set forth in the Purchase
Agreement.
 
All such notices and communications shall be deemed to have been duly given when
received.
 
The Initial Purchasers or the Company by notice to the other parties may
designate additional or different addresses for subsequent notices or
communications.

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11.  Remedies. Each Holder, in addition to being entitled to exercise all rights
provided to it herein, pursuant to the terms of the Securities or in the
Purchase Agreement or granted by law, including recovery of liquidated or other
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive in any action for specific
performance the defense that a remedy at law would be adequate.
 
12.  Successors. This Agreement shall inure to the benefit of and be binding
upon the parties hereto, their respective successors and assigns, including,
without the need for an express assignment or any consent by the Company
thereto, subsequent Holders of Registrable Securities, and the indemnified
persons referred to in Section 5 hereof. The Company hereby agrees to extend the
benefits of this Agreement to any Holder of Registrable Securities, and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
 
13.  Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
 
14.  Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
 
15.  Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York. The parties hereto each hereby
waive any right to trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement.
 
16.  Severability. In the event that any one of more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
 
17.  Securities Held by the Company, etc. Whenever the consent or approval of
Holders of a specified number of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its Affiliates (other than
subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Registrable
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
 

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
 
Very truly yours,
 
FuelCell Energy, Inc.
 

  By: __________________________

 
Name:
 
Title: 
 
The foregoing Agreement is hereby confirmed and
 
accepted as of the date first above written.
 
Citigroup Global Markets Inc.

By ____________________

 
Name:
 
Title:
 
For themselves and the other several
Initial Purchasers named in Schedule I
to the Purchase Agreement

       

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