SERIES D WARRANT


 


THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 1(a) OF THIS WARRANT.


 


FuelCell Energy, Inc.


 


Series D Warrant To Purchase
Common Stock


 


Warrant No.: [___]


 


Date of Issuance: May [_],
2017 (“Issuance Date”)


 


FuelCell Energy, Inc.,
a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [_____________________], the registered holder hereof or its permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at
the Exercise Price (as defined below) then in effect, upon exercise of this Series D Warrant to Purchase Common Stock (including
any Series D Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below),
[_________________ ([________])] (subject to adjustment as provided herein) fully paid and non-assessable shares
of Common Stock (as defined below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant
Number”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 18. This Warrant is one of the Series D Warrants to Purchase Common Stock (all such Series D Warrants, the “Registered
Warrants”) issued pursuant to (i) that certain Underwriting Agreement, dated as of April [__], 2017
(the “Subscription Date”) by and between the Company and Oppenheimer & Co., Inc. and (ii) the Company's
Registration Statement on Form S-3 (File number 333-215530) (the “Registration Statement”).


 


1.             EXERCISE OF WARRANT.


 


(a)              
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations
set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise
Date”), in whole or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in
the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder's election to exercise
this Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to
the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant
Shares as to which this Warrant was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer
of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant
to a Cashless


 






      


    


    

 


Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant
in order to effect an exercise hereunder nor shall any ink original signature guarantee (or other type of guarantee or notarization)
with respect to any Exercise Notice be required. Execution and delivery of an Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares
in accordance with the terms hereof. On or before the first (1st) Trading Day following the date on which the Company
has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of
receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company's transfer
agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process
such Exercise Notice in accordance with the terms herein. On or before the third (3rd) Trading Day following the date
on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable
law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company
shall (i) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to
such exercise to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system, or
(ii) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable
overnight courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its
designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such exercise. The Company
shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of
Warrant Shares via DTC, if any, including without limitation for same day processing. Upon delivery of an Exercise Notice, the
Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date
of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection
with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for
exercise is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the
Company by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than
three (3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant
(in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately
prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No
fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common
Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except
in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company's failure to deliver
Warrant Shares to the Holder on or prior to the later of (A) three (3) Trading Days after receipt of the applicable Exercise Notice
(or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a
trade of such Warrant Shares initiated on the applicable Exercise Date) and (B) one (1) Trading Day after the Company's receipt
of the Aggregate Exercise Price (or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Deadline”)
shall not be deemed to be a breach of this Warrant. From the Issuance Date through and including the Expiration Date, the Company
shall maintain a transfer agent that participates in the DTC's Fast Automated Securities Transfer Program.


 






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(b)              
Exercise Price. For purposes of this Warrant, “Exercise Price” means $[___], subject to
adjustment as provided herein.


 


(c)              
Company's Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or
prior to the Share Delivery Deadline, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, to issue and deliver to the Holder (or its designee) a certificate for the number of Warrant Shares to which
the Holder is entitled and register such Warrant Shares on the Company's share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, to credit the balance account of the Holder or the Holder's designee with
DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder's exercise of this Warrant (as the case may
be) or (II) if the Registration Statement (or prospectus contained therein) covering the issuance of the Warrant Shares that are
the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the issuance of such
Unavailable Warrant Shares and the Company fails to promptly (x) so notify the Holder that the Warrant Shares are Unavailable
Warrant Shares and that the Holder must avail itself of a Cashless Exercise or (y) deliver the Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal At Custodian system (the
event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together
with the event described in clause (I) above, a “Delivery Failure”), and if on or after such Share Delivery
Deadline or during the pendency of a Notice Failure the Holder purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common Stock issuable
upon such exercise that the Holder is entitled to receive from the Company (a “Buy-In”), then, in addition to
all other remedies available to the Holder, the Company shall, within three (3) Business Days after the Holder's request and in
the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without
limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point
the Company's obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance
account of such Holder or such Holder's designee, as applicable, with DTC for the number of Warrant Shares to which the Holder
is entitled upon the Holder's exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii)
promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates


 






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representing such Warrant Shares
or credit the balance account of such Holder or such Holder's designee, as applicable, with DTC for the number of Warrant Shares
to which the Holder is entitled upon the Holder's exercise hereunder (as the case may be) and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant Shares multiplied by (B) the price
at which the sell order giving rise to such purchase obligation was executed (the “Buy-In Payment Amount”).
Nothing shall limit the Holder's right to pursue any other remedies available to it hereunder, at law or in equity, including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of
this Warrant as required pursuant to the terms hereof. Notwithstanding anything herein to the contrary, at any time a registration
statement (which may be the Registration Statement) is not available for the issuance of the Warrant Shares that are subject to
an Exercise Notice, all exercises of this Warrant shall be deemed to have been made as a Cashless Exercise (and any Aggregate Exercise
Price paid to the Company in cash with respect thereto shall be promptly returned to the Holder in connection therewith). Additionally,
(i) if the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Share
Delivery Deadline, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of
Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue)
for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise
and (ii) (A) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by
the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain
and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise
Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to make any payments that have
accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which
may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice
is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted
an Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already
delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of
notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be,
any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise
Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless
Exercise.


 


(d)              
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below),
if at the time of exercise hereof the Registration Statement is not effective (or the prospectus contained therein is not available
for use) for the issuance of all of the Warrant Shares, then the Holder shall exercise this Warrant in whole or in part and, in
lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate
Exercise Price, elect instead to receive upon such exercise the “Net Number” of Warrant Shares determined according
to the following formula (a “Cashless Exercise”):


 



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Net Number = (A x B) - (A x C)

                                                                      B


 


For purposes of the
foregoing formula:


 


A= the total number of shares with
respect to which this Warrant is then being exercised.


 


B = as applicable: (i) the Closing
Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the Bid Price
of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is
executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant
to Section 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the
date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a)
hereof after the close of “regular trading hours” on such Trading Day.


 


C = the
Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.


 


If the Warrant Shares
are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, the
Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated
under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise
shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued. The Company agrees not to take any position contrary to this Section 1(d).


 


(e)              
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of
the number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number
of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.


 


(f)               
Limitations on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder
shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any
such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such


 






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exercise, the
Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes
of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution
Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being
made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion
of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes
or convertible preferred stock or warrants, including other Registered Warrants) beneficially owned by the Holder or any other
Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f).
For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For
purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant
without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice
by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported
Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number
of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder
in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise
cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the
Holder must notify the Company of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number
of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable,
the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time,
upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or
by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder
and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number
of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which
the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess
Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote
or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null
and void, the Company shall


 






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return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of
a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as
specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first
(61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and
the other Attribution Parties and not to any other holder of Registered Warrants that is not an Attribution Party of the Holder.
For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage
shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1)
of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to
the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the
intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor
holder of this Warrant.


 


(g)           
Reservation of Shares.


 


(i)                
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved
for issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company's obligation to issue shares of Common Stock under the Registered Warrants then
outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at
no time shall the number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally
in connection with any exercise or redemption of Registered Warrants or such other event covered by Section 2(b) below. The Required
Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among
the holders of the Registered Warrants based on the number of shares of Common Stock issuable upon exercise of Registered Warrants
then held by each holder (without regard to any limitations on exercise) (the “Authorized Share Allocation”).
In the event that a holder shall sell or otherwise transfer any of such holder's Registered Warrants, each transferee shall be
allocated a pro rata portion of such holder's Authorized Share Allocation. Any shares of Common Stock reserved and allocated to
any Person which ceases to hold any Registered Warrants shall be allocated to the remaining holders of Registered Warrants, pro
rata based on the number of shares of Common Stock issuable upon exercise of the Registered Warrants then held by such holders
(without regard to any limitations on exercise).


 






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(ii)             
Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any
time while any of the Registered Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for all the Registered Warrants then outstanding.
Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend
to the stockholders that they approve such proposal. In the event that the Company is prohibited from issuing shares of Common
Stock upon an exercise of this Warrant due to the failure by the Company to have sufficient shares of Common Stock available out
of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization
Failure Shares”), in lieu of delivering such Authorization Failure Shares to the Holder, the Company shall pay cash in
exchange for the cancellation of such portion of this Warrant exercisable into such Authorization Failure Shares at a price equal
to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of
the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Exercise Notice
with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment under this
Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount, brokerage
commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith.


 


2.            ADJUSTMENT OF EXERCISE
PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant
are subject to adjustment from time to time as set forth in this Section 2.


  


(a)              
Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.


 


(b)              
Stock Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any
time on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common
Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation
of such Exercise Price shall be adjusted appropriately to reflect such event.


 



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(c)              
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(b),
the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be
the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).


 


(d)              
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest
1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance
or sale of Common Stock.


 


3.              RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare or make
any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property,
options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Warrant,
then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would
have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this
Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum
Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that to the extent that the Holder's right to participate in any such Distribution would result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the
Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent
Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).


 



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4.             PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


(a)              
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to
any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such
Purchase Rights (provided, however, that to the extent that the Holder's right to participate in any such Purchase
Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such
excess) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times,
if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase
Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).


 


(b)              
Fundamental Transactions. Subject to Section 4(c) below, the Company shall not enter into or be party to a Fundamental
Transaction unless the Successor Entity assumes by operation of law or, if such assumption would not happen by operation of law,
in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b)
pursuant to written agreements including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation,
which is exercisable for a corresponding number of shares of capital stock (or, if applicable, cash or assets provided in consideration
for the Company's Common Stock in such Fundamental Transaction) equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (or, if applicable, cash
or assets provided in consideration for the Company's Common Stock in such Fundamental Transaction) (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock,
such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Subject to Section 4(c) below, upon
the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from


 






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and
after the date of the applicable Fundamental Transaction, the provisions of this Warrant referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
Subject to Section 4(c) below, upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still
issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of
this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of
the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the
applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant.
Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery
of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of
this Warrant. Subject to Section 4(c) below, prior to the consummation of each Fundamental Transaction pursuant to which holders
of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter
have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction
but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable
upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to
receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the
preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.


 


(c)              
Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the
Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y)
the consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through
the date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company
pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase
this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.
Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to the later
of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation of such Fundamental Transaction.


 


(d)              
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).


 






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5.           NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale
of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the
par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect,
and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant. Notwithstanding anything herein to the
contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to exercise this
Warrant in full for any reason (other than pursuant to restrictions set forth in Section 1(f) hereof), the Company shall use its
best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary
to permit such exercise into shares of Common Stock.


 


6.           WARRANT HOLDER NOT
DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder
of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate
action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.


 


7.             REISSUANCE OF WARRANTS.


 


(a)              
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)),
registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the
Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in
accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
If this Warrant is being transferred in part, in no event may it be transferred to any transferee in an amount representing the
right to purchase less than the lesser of (i) 100,000 Warrant Shares and (ii) the number of Warrant Shares remaining issuable upon
exercise of such Warrant.


 



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(b)              
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form (but without the obligation to post a bond) and, in the case of mutilation,
upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.


 


(c)              
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate
the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided,
however, no warrants for fractional shares of Common Stock shall be given.


 


(d)              
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such
new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares
of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is
the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.


 


8.             NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing,
(i) if delivered (a) from within the domestic United States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or facsimile or electronic mail or (b) from outside the United States, by International
Federal Express, or facsimile or electronic mail, and (ii) will be deemed given (A) if delivered by first-class registered or
certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally recognized overnight carrier,
one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business Days after so mailed,
(D) if delivered by facsimile, upon electronic confirmation of receipt of such facsimile and (E) if delivered by electronic mail,
when sent as long as the sender has not received an automated notice that the electronic mail has been rejected, and will be delivered
and addressed as follows:


 






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		(i)	if to the Company, to:



FuelCell Energy

3 Great Pasture Road

Danbury, CT 06810

Attention: Corporate Counsel

Facsimile: (203) 825-6069






Email: jarasimowicz@fce.com


 


		(ii)	if to the Holder, at such address or other contact information delivered by the Holder to the Company
or as is on the books and records of the Company.



 


The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise
in accordance with the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment
of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of
such adjustment(s), (ii) at least ten Trading Days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances
or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property made to all,
or substantially all, holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to
or in conjunction with such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation
of any Fundamental Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any of its subsidiaries, the Company shall simultaneously file such notice with the SEC pursuant
to a Current Report on Form 8-K. If the Company or any of its subsidiaries provides material non-public information to the Holder
that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public
information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company,
any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty
to any of the foregoing not to trade on the basis of, such material non-public information. It is expressly understood and agreed
that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged
by the Company.


 


9.                  AMENDMENT AND WAIVER. The Company
may from time to time supplement or amend this Warrant and the Registered Warrants with the prior written consent of holders of
the Registered Warrants exercisable for a majority of the shares of Common Stock then issuable upon exercise of the Registered
Warrants then outstanding; provided, however, that no consent shall be required for any amendment pursuant to Section
2(a); and provided further, that the consent of the Holder shall be required for any amendment of this Warrant that
would (i) increase the Exercise Price or decrease the number of


 






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shares of Common Stock purchasable upon exercise of the Warrant,
except that such consent shall not be required for any adjustment to the Exercise Price or the number of shares of Common Stock
purchasable if made pursuant to the provisions hereof, (ii) alter the Company's obligation to issue Warrant Shares upon exercise
of the Warrant (other than pursuant to adjustments otherwise provided for in this Warrant), (iii) shorten the term of this Warrant,
or (iv) treat the Holder differently in an adverse way from any other holders of the Registered Warrants. Except as otherwise
provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent
of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving
party.


 


10.          SEVERABILITY. If any provision
of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in
good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect
of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


11.         
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.
The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to the Company at the address set forth in Section 8 and agrees that such service shall
constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on
any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 



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12.           CONSTRUCTION; HEADINGS. This
Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the
drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation
of, this Warrant.


 


13.            DISPUTE
RESOLUTION.


 


(a)            Submission to Dispute Resolution.


 


(i)                
In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, the VWAP, the Black Scholes
Value or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without
limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall
submit the dispute to the other party via facsimile or electronic mail (A) if by the Company, within two (2) Business Days after
the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of
the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating
to such Exercise Price, such Closing Sale Price, such Bid Price, such VWAP, such Black Scholes Value or such fair market value
or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time after the second (2nd)
Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or
the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable investment bank to resolve
such dispute.


 


(ii)             
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 13 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m., New York time, by the fifth (5th) Business Day immediately
following the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the
documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required
Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver
all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the
Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither
the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).


 



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(iii)           
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The
fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank's resolution of such dispute
shall be final and binding upon all parties absent manifest error.


 


(b)            Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 13 constitutes an agreement to
arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under §
7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply
for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 13, (ii) the
terms of this Warrant shall serve as the basis for the selected investment bank's resolution of the applicable dispute, such investment
bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment
bank determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving
such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Warrant, (iii) the
Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 13 to
any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth
in this Section 13 and (iv) nothing in this Section 13 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 13).


 


14.          REMEDIES, CHARACTERIZATION,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any
failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments,
exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as
expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any
such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder
of this Warrant shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary
and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity
of proving actual damages and without posting a bond or other security. The Company shall provide all information and documentation
to the Holder that is requested by the Holder to enable the Holder to confirm the Company's compliance with the terms and conditions
of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for
shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for
any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or
its agent on its behalf.


 



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15.           PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands
of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise
takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy,
reorganization, receivership of the Company or other proceedings affecting Company creditors' rights and involving a claim under
this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection
with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys' fees and disbursements.


 


16.         
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.


 


17.         
WARRANT AGENT. The Company shall serve as warrant agent under this Warrant.


 


18.         
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


  


(a)              
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.


 


(b)              
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.


 


(c)              
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls,
is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the
election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.


 


(d)              
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment
vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly
or indirectly managed or advised by the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or
indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group
together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common
Stock would or could be aggregated with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the 1934
Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum
Percentage.


 



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(e)              
“Bid Price” means, for any security as of the particular time of determination, the bid price for such
security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not
the principal securities exchange or trading market for such security, the bid price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or
if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security
by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported
in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the
Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid
Price of such security as of such time of determination shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during such period.


 


(f)               
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg determined as of the day immediately following the first public announcement
of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental
Transaction is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to
the greater of 100% and the 100-day volatility obtained from the HVT function on Bloomberg as of the day immediately following
the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced,
the date the Fundamental Transaction is consummated, (iii) the underlying price per share used in such calculation shall be the
highest VWAP during the five (5) Trading Days prior to the closing of the Fundamental Transaction, (iv) a zero cost of borrow and
(v) a 360 day annualization factor.


 


(g)              
“Bloomberg” means Bloomberg, L.P.


 


(h)              
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain closed.


 


(i)                
“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security
on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and
does not designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as
reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded
as reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security
by Bloomberg, the average of the ask prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall
be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.


 






     19 


    


    

 


(j)                
“Common Stock” means (i) the Company's shares of common stock, $0.0001 par value per share, and
(ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.


 


(k)              
“Convertible Securities” means any stock or other security (other than Options) that is at any time and
under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any shares of Common Stock.


 


(l)                
“Eligible Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the
Nasdaq Capital Market or the Principal Market.


 


(m)            
“Expiration Date” means the date that is the first anniversary of the Issuance Date or, if such date
falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.


 


(n)              
 “Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company (on a consolidated basis with its subsidiaries) to one or more
Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its
Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted
by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common
Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common
Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase,
tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50%
of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding
shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock
held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase
agreement or other business combination were not


 






     20 


    


    

 


outstanding; or (z) such number of shares of Common Stock such that the Subject
Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or
indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity
individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer,
exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization,
spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of
either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least
50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities
as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other
equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction
requiring other shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the
Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents,
the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.


 


(o)              
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined
in Rule 13d-5 thereunder.


 


(p)              
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.


 


(q)              
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person
and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.


 


(r)               
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.


 


(s)               
“Principal Market” means the Nasdaq Global Market.


 






     21 


    


    

 


(t)                
“SEC” means the United States Securities and Exchange Commission or the successor thereto.


 


(u)              
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person,
Persons or Group.


 


(v)              
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.


 


(w)            
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations
relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.


 


(x)              
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security
on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set
to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and
ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported
for such security by Bloomberg for such hours, the average of the highest closing Bid Price and the lowest closing ask price of
any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink
Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures
in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination,
recapitalization or other similar transaction during such period.


 


[signature page follows]


 



     22 


    


    

 





IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.


 











	 	FUELCELL ENERGY, INC.
	 	 	 
		By:	
	 	 	Name:
	 	 	Title:








 






     23 


    


    

 





EXHIBIT A


 


EXERCISE
NOTICE


 


TO BE EXECUTED
BY THE REGISTERED HOLDER TO

EXERCISE THIS Series D WARRANT TO PURCHASE COMMON STOCK


 


FUELCELL
ENERGY, INC. 


 


The undersigned holder
hereby elects to exercise the Series D Warrant to Purchase Common Stock No. [_______] (the “Warrant”)
of FuelCell Energy, Inc., a Delaware corporation (the “Company”) as specified below. Capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in the Warrant.


 


1.       Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:


 


		☐	a “Cash Exercise” with respect to [_________________]
Warrant Shares; and/or



 


		☐	a “Cashless Exercise” with respect to [_________________]
Warrant Shares (solely to the extent such exercise is eligible to be consummated pursuant to a Cashless Exercise pursuant to the
terms and conditions set forth in the Warrant).



 


In the event that the
Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at [___] [a.m.][p.m.]
on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was
$[_______].


 


2.       Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum
of $[_______]to the Company in accordance with the terms of the Warrant.


 


3.       Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, [_______]
shares of Common Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder,
or for its benefit, as follows:


 


☐       Check
here if requesting delivery as a certificate to the following name and to the following address:


 


	                Issue to:	 
	 	 
	 	 


			






 



     A-1 


    


    

 








☐
       Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:


 




	                DTC Participant:	 
	                DTC Number:	 
	               Account Number:	 
	 	 
	 	 	 


	
        Date: [_______________], [___]

         

        __________________________________

Name of Registered Holder

         

	
        By: _______________________________

        Name:

        Title:

        

        

         

        Tax ID: ____________________________

         

        Facsimile __________________________

         

        E-mail Address:
_____________________

         



 






     A-2 


    


    

 


EXHIBIT B


 


ACKNOWLEDGMENT


 


The
Company hereby acknowledges this Exercise Notice and hereby directs [_________________] to issue the above indicated
number of shares of Common Stock in accordance with the Transfer Agent Instructions dated [____________],
2017, from the Company and acknowledged and agreed to by [_________________].


 











	 	FUELCELL ENERGY, INC.
	 	 	 
		By:	
	 	 	Name:
	 	 	Title:



 


B-1