Document:

Exhibit  10.1

Exhibit 10.1

[Execution Copy]

 

STACK TECHNOLOGY TRANSFER AND LICENSE AGREEMENT (“STTA”)

dated as of October 27, 2009

between

FUELCELL ENERGY, INC.

and

POSCO POWER

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

 

 

 

 

	 	 	 	 	 
	I. DEFINITIONS
	 	 	5	 
	II. LICENSE GRANT
	 	 	10	 
	2.1 FCE Technology License
	 	 	10	 
	2.2 Distribution Rights
	 	 	11	 
	2.3 POSCO Technology License
	 	 	11	 
	2.4 License to POSCO Power Upon Expiration of the Term
	 	 	12	 
	2.5 License to FCE Upon Expiration of the Term
	 	 	12	 
	2.6 Use of “FCE” Trademarks
	 	 	12	 
	2.7 Transfer of Technical Data
	 	 	12	 
	2.8 Joint Committee(s)
	 	 	13	 
	2.9 Manufacturing in Korea
	 	 	13	 
	2.10 Regular Exchange of Technical Data
	 	 	14	 
	2.11 New product development and Improvements
	 	 	14	 
	III. OWNERSHIP OF INTELLECTUAL PROPERTY
	 	 	14	 
	3.1 Ownership of FCE Technology
	 	 	14	 
	3.2 Ownership of POSCO Technology
	 	 	14	 
	3.3 Joint Ownership
	 	 	14	 
	IV. ROYALTIES
	 	 	14	 
	4.1 Royalty Payments
	 	 	14	 
	4.2 No Other
Royalties, Payments, Etc.
	 	 	15	 
	4.3 Royalty Report
	 	 	15	 
	4.4 Royalty Determination Firm
	 	 	16	 
	V. CUSTOMER RESPONSIBILITY
	 	 	16	 
	5.1 End User Warranty
	 	 	16	 
	VI. GOVERNMENT REGULATIONS
	 	 	16	 
	6.1 POSCO Power Obligations
	 	 	16	 
	6.2 FCE Obligations
	 	 	16	 

 

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	6.3 DOE Approval
	 	 	16	 
	VII. REPRESENTATIONS AND WARRANTIES
	 	 	17	 
	7.1 Representations and Warranties of FCE
	 	 	17	 
	7.2 Representations and Warranties of POSCO Power
	 	 	18	 
	VIII. TERM
	 	 	19	 
	8.1 Term
	 	 	19	 
	8.2 Extension
	 	 	19	 
	IX. TERMINATION
	 	 	19	 
	9.1 Termination by Mutual Agreement
	 	 	19	 
	9.2 FCE Termination by Material Breach of POSCO Power
	 	 	19	 
	9.3 POSCO Power Termination by Material Breach of FCE
	 	 	20	 
	9.4 Return of FCE Technology
	 	 	21	 
	9.5 Return of POSCO Technology
	 	 	21	 
	9.6 Survival
	 	 	21	 
	X. INDEMNIFICATION
	 	 	21	 
	10.1 POSCO Power Obligations
	 	 	21	 
	10.2 FCE Obligations
	 	 	22	 
	10.3 Limitation of Damage
	 	 	23	 
	XI. CONFIDENTIAL INFORMATION
	 	 	23	 
	11.1 POSCO Power Obligations
	 	 	23	 
	11.2 POSCO Affiliate
	 	 	24	 
	11.3 FCE and POSCO Power Obligations
	 	 	24	 
	XII. NOTICES
	 	 	24	 
	XIII. ENTIRE AGREEMENT
	 	 	25	 
	XIV. APPLICABLE LAW AND ARBITRATION
	 	 	25	 
	14.1 Governing Law
	 	 	25	 
	14.2 Efforts to Resolve by Mutual Agreement
	 	 	25	 

 

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	14.3 ICC Arbitration
	 	 	25	 
	14.4 Waiver of Jury Trial
	 	 	26	 
	XV. MISCELLANEOUS
	 	 	26	 
	15.1 Amendment
	 	 	26	 
	15.2 Severability
	 	 	26	 
	15.3 Government Information
	 	 	26	 
	15.4 Independent Contractors
	 	 	26	 
	15.5 Assignment
	 	 	27	 
	15.6 No Third Party Beneficiary
	 	 	27	 
	15.7 Headings
	 	 	27	 
	15.8 Right to Injunction; Specific Performance
	 	 	27	 
	15.9 Force Majeure
	 	 	27	 
	XVI. SALES TARGETS AND EXCLUSIVITY
	 	 	28	 
	16.1 Sales Targets
	 	 	28	 

	 	 	 
	Exhibits:
	 	 
	 
	 	 	 
	Exhibit A:

	 	Form of STTP
	Exhibit B:

	 	Form of DOE Approval
	Exhibit C:

	 	List of FCE Patents
	Exhibit D:

	 	Sales Targets
	 
	 	 
	Schedules:
	 	 
	 
	 	 
	Schedule A:

	 	POSCO Affiliates
	Schedule B:

	 	Non-Exclusive Territory
	Schedule C:

	 	FCE Previously Granted Distribution Rights

 

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THIS STACK TECHNOLOGY TRANSFER AND LICENSE AGREEMENT (this “Agreement”) is made and entered
into this 27th day of October, 2009, by and between FUELCELL ENERGY, INC., a Delaware corporation
having a place of business at 3 Great Pasture Rd., Danbury, CT 06813, U.S.A. (“FCE”) and POSCO
POWER, a Korean corporation having a place of business at Posteel Tower 20th floor, 735-3,
Yeoksam-dong, Gangnam-gu, Seoul 135-080, Korea (“POSCO Power”).

RECITALS:

A. POSCO Power and FCE are parties to a series of agreements identified as follows
(collectively, the “Transaction Agreements”):

(i) the Technology Transfer, Distribution and Licensing Agreement for the transfer of Balance
of Plant technology (the “Technology Transfer Agreement” or “TTA”) and the Alliance Agreement (the
“Alliance Agreement” or “AA”), both executed as of February 7, 2007;

(ii) the Technology Transfer Program (“TTP”) executed as of July 11, 2007;

(iii) the Contract for the Supply of DFC Plants and DFC Modules from FCE to POSCO Power (
“2008 Purchase Contract”) executed as of April 22, 2008;

(iv) the Contract for the Supply of DFC Modules and DFC Components from FCE to POSCO Power (
“2009 Purchase Contract”) executed as of June 9, 2009; and

(v) the Securities Purchase Agreement by and between FCE and POSCO Power (the “2009 Securities
Purchase Agreement”) executed as of June 9, 2009.

B. FCE has developed technology for the assembly of Fuel Cell Stack Modules from Repeating
Components, Module Components and Non-Repeating Components (“Module Assembly”) for use in high
temperature Molten Carbonate Fuel Cell (“MCFC”) power plants known as the “Direct FuelCell®”
(DFC®), and is developing new DFC based products currently designated by FCE as “DFC/T®”,
“DFC-ERG®” and “DFC/H2®”.

C. FCE wishes to grant a license of the FCE Technology (defined below) to POSCO Power and/or
POSCO Affiliates and transfer the FCE Technology and provide technical assistance and support to
POSCO Power. POSCO Power wishes to accept such a license and receive the FCE Technology, technical
assistance and support, all in accordance with the terms of this Agreement and the other
Transaction Agreements (defined below), as applicable.

D. POSCO Power, together with the POSCO Affiliates (defined below), wishes to engage in Fuel
Cell Stack Module Assembly, Conditioning, Diagnosis and Repairing of such Fuel Cell Stack Module in
Korea under license from FCE, and to continue in the

 

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commercialization of the DFC technologies in the Korean Market (defined below) and in the
Non-Exclusive Territory (defined below).

E. POSCO Power wishes to grant a license of the POSCO Technology (defined below) to FCE for
the purpose of allowing FCE to further improve and modify the Fuel Cell Stack Module technologies
developed by FCE, in accordance with the terms of this Agreement and the other Transaction
Agreements, as applicable.

F. The Parties acknowledge and agree that Fuel Cell Stack Module Manufacturing in Korea
(defined below) under the license granted herein by FCE may achieve, among other things, cost
reduction, product improvement, lead time improvement and service quality improvement. It is thus
intended that POSCO Power will engage, directly or indirectly through one or more POSCO Affiliates
or independent third parties, in Fuel Cell Stack Module Manufacturing in Korea on terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth below
and intending to be legally bound, the parties agree as follows:

I. DEFINITIONS

As used in this Agreement, the following terms shall have the following respective meanings
which are intended to define the scope of this Agreement:

“Additional Term” shall have the meaning set forth in Section 8.2.

“Applicable Laws” shall mean all applicable laws, treaties, ordinances, judgments,
decrees, injunctions, writs, orders, rules, regulations, interpretations and permits of any
Governmental Authority.

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

“DFC” shall mean FCE’s proprietary MCFC.

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

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

 

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“DFC Module Kit” shall mean a set of components comprised of Module Components, NRC,
and RC, which are manufactured wholly by FCE, in sufficient quantity for the subsequent assembly
and conditioning by POSCO Power of a complete Fuel Cell Stack Module.

“DFC Power Plant” shall mean the MCFC power plant comprising the Fuel Cell Stack
Module and the BOP, and shall specifically exclude items of equipment such as foundations,
structures, enclosures, transmission/distribution lines and interconnections, fuel lines, fuel
preparation and clean-up equipment water drainage/removal, computer hardware and software and any
other items related to the foregoing.

“DOE Approval” shall mean the necessary consent or approval from the U.S. Department
of Energy, in form substantially similar to the form of DOE Approval set forth in Exhibit B
attached hereto.

“Effective Date” shall mean the date upon which all the obligations of FCE set forth
in Section 6.3 have been satisfied or waived.

“Fuel Cell Stack” shall be comprised of RC and NRC as defined herein below.

“Fuel Cell Stack Module” shall mean the Module Components and the Fuel Cell Stack.

“Fuel Cell Stack Module Manufacturing in Korea” shall mean the engagement by POSCO
Power, directly or indirectly through one or more POSCO Affiliates or independent third parties, to
manufacture certain components of Module Component and NRC (as defined below) under the condition
as set forth in Section 2.9.

“FCE Products” shall mean DFC Power Plants currently designated DFC300MA, DFC1500MA,
DFC1500B and DFC3000 with introductory ratings of 300 kW, 1.2 MW, 1.4 MW and 2.8 MW, respectively,
and modifications and improvements thereof, regardless of how designated by FCE, which are made
available, or in the future may be made available, for commercial use or sale by FCE during the
Term.

“FCE Know-How” shall mean all technical information, know-how, inventions (whether
patented or not), trade secrets, and other technical, engineering and design information and data,
as available and/or in then current use by FCE, whether included as part of the DFC Manual or not,
including all information provided by third parties to FCE, related to the Module Assembly Process,
Module Conditioning Process, and the Module Repair Process; the Module Assembly Facility Data,
Module Conditioning Facility Data, and the Module Repair Facility Data; the Module Components; and
the NRC. It is understood that FCE Know-How shall not include: (i) information and data relating to
machines or processes used in the manufacture of RC materials, parts, and components; (ii)
information and data relating to design, manufacture and materials used for the RC; and (iii)
information and data which is subject to restriction on disclosure by a third party, provided,
however, that FCE shall exercise commercially reasonable good faith efforts to obtain the consent
needed to make such information available to POSCO Power. It is

 

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further understood that FCE Know-How shall not include such information which relates to “New
DFC Based Products”.

“FCE Patents” shall mean the letters patents, and any applications for letters patent
which have a “Convention Date” under the International Convention for the Protection of Industrial
Property prior to the earlier of the expiration or termination date of this Agreement and which are
owned or acquired by FCE or in which FCE has or acquires a licensable interest (including without
limitation any U.S. or non-U.S. patents and patent applications that are counterparts thereof,
and/or any divisions, continuations, continuations-in-part or reissues, reexaminations, renewals,
substitutions, extensions, supplementary protection certificates in respect thereof) and which
relate to the technology being licensed hereunder to POSCO Power as listed in Exhibit C attached
hereto.

“FCE Technology” shall mean FCE Patents and FCE Know-How.

“Force Majeure” shall mean unforeseen circumstances beyond the reasonable control and
without the fault or negligence of either Party and which such Party is unable to prevent or
provide against by the exercise of reasonable diligence including, but not limited to, acts of God,
any acts or omissions of any civil or military authority, earthquakes, strikes or other labor
disturbances, wars (declared or undeclared), terrorist and similar criminal acts, epidemics, civil
unrest and riots.

“Governmental Authority” shall mean any supranational, national, federal, state,
municipal or local government or quasi-governmental or regulatory authority (including a national
securities exchange or other self-regulatory body), agency, court, commission or other similar
entity, domestic or foreign.

“Governmental Order” shall mean any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental Authority.

“Initial Term” shall have the meaning set forth in Section 8.1.

“Korean Market” shall mean the Republic of Korea.

“Korean Company” shall include any corporation, company or entity established under
the laws of the Republic of Korea, including any Subsidiary thereof, wherever located or
established, other than POSCO Power and POSCO Affiliates.

“MCFC” shall mean molten carbonate fuel cell.

“Module Assembly Facility Data” shall mean engineering and design information and
data, as available and/or in then current use by FCE, including but not limited to the
construction, operation and maintenance of facilities, equipment, and tooling to perform Module
Assembly Processes.

 “Module Assembly Process” shall mean engineering and design information and data,
inventions, trade secrets, know-how, work instructions, and related information as

 

7

 

available and/or in then current use by FCE, including but not limited to the assembly of Fuel
Cell Stack Modules from RC, NRC, and Module Components as well as information and know-how related
to quality assurance and quality control (QA/QC) for the assembly process.

“Module Components” shall mean parts and components of the Fuel Cell Stack Module
other than Fuel Cell Stack, necessary to assemble a Fuel Cell Stack Module, including but not
limited to the catalytic oxidizer, mixer/eductor, stack enclosure vessel, enclosure insulation,
flex hoses and instrumentation tubing.

“Module Conditioning Facility Data” shall mean engineering and design information and
data, as available and/or in then current use by FCE, including but not limited to the
construction, operation and maintenance of facilities, equipment, and tooling to perform Module
Conditioning Processes.

“Module Conditioning Process” shall mean the first heat treatment process following
the complete assembly of Fuel Cell Stack Module, through which the initial product tests and
quality checks are performed.

“Module Repair Facility Data” shall mean engineering and design information and data,
as available and/or in then current use by FCE, including but not limited to the construction,
operation and maintenance of facilities, equipment, and tooling to perform Module Repair Processes.

“Module Repair Process” shall mean all processes including tear-down, diagnosis,
testing, replacing, repairing and conditioning of a malfunctioning Fuel Cell Stack Module,
excluding those portions of the diagnosis and repair process which relate to RC, to place such Fuel
Cell Stack Module in a re-operable condition.

“New DFC-Based Products” shall mean, as currently designated by FCE, the DFC/T®, the
DFC/H2®, the DFC-ERG®, and any modifications and derivation in whole or in part of thereof,
regardless of designation.

“New DFC-Based Technology” shall mean all technical information, know-how, inventions
(whether patented or not) or trade secrets, which relate to the New DFC-Based Products.

“New Joint Products” shall mean products which are unique and distinct from the New
DFC Based Products and New DFC-Based Technology, and for which FCE has not, as of the Effective
Date of the STTA, commenced initial concept development, analysis or product development
activities; for example, fuel cell technology for on-site application, industrial back-up power
application, and marine application.

“Non-Exclusive Territory” shall mean the jurisdictions set forth in Schedule B hereto,
it being understood and agreed that additional jurisdictions may be added, as mutually agreed by
the Parties from time to time.

 

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“Non-Repeating Components” or “NRC” means parts and components necessary for the
assembly of the Fuel Cell Stack other than RC, including but not limited to supporting hardware,
manifolds, instrumentation, assembly and compression hardware.

“Party” shall mean FCE or POSCO Power, or when used in the plural, FCE and POSCO
Power.

“Person” shall mean any natural person, firm, partnership, association, corporation,
company, joint venture, trust, business trust, Governmental Authority or other entity.

“POSCO Affiliate” shall mean each of those entities controlled by, or under common
control with, POSCO Power, which may receive all or part of the FCE Technology in connection with
this Agreement, and which are listed in Schedule A, it being understood and agreed that additional
entities may be added as mutually agreed by the Parties.

“POSCO Modules” shall mean Fuel Cell Stack Modules manufactured by POSCO under license
from FCE.

“POSCO Module Net Sales” shall mean the revenues generated from the sales by POSCO
Power or POSCO Affiliate of the POSCO Modules; less the POSCO Module Net Sales Adjustments, all
determined in accordance with Section 4.1(c) below.

“POSCO Module Net Sales Adjustments” shall include the cost of DFC Components, DFC
Module Kit, or any components or parts of the POSCO Modules, purchased by POSCO Power and/or any
POSCO Affiliate from FCE and POSCO Products and POSCO Parts that (a) are manufactured using the
proprietary technology, engineering and design, know-how and inventions of POSCO Power and/or any
POSCO Affiliate, and (b) do not use or contain any FCE Technology and the following items incurred
in normal, bona fide, commercial transactions to the extent to which they are actually paid and
expressly included in the gross invoice price: (i) sales returned; (ii) sales discounts; (iii)
duties and taxes on sales; (iv) transportation insurance premiums; (v) packing expenses on sales;
(vi) transport expenses on sales.

Further, sales and purchases by and between POSCO Power and POSCO Affiliate to effect the
sales of POSCO Modules, to customers shall be excluded only to the extent such POSCO Modules are
not put into use or operation by such POSCO Affiliate. If such POSCO Modules are subsequently
resold to third parties, such subsequent sale to the third party shall be included.

In addition, the Parties recognize and agree that there should not be any duplicate royalties
counting for any single transaction by calculating royalties under the previous TTA and this STTA,
thus, any royalty calculation resulting from the Net Sales of POSCO Module under this STTA shall be
taken into account with the calculation of the royalties resulting from the Net Sales of DFC Power
Plants, POSCO Products and/or POSCO Parts under the TTA.

 

9

 

“POSCO Parts” shall mean any parts or components of POSCO Products.

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

“POSCO Technology” shall mean all inventions, know-how, trade secrets, data or
information arising or developed independently, during the Term, by POSCO Power and POSCO
Affiliates and (i) by any employee of POSCO Power or POSCO Affiliate or (ii) by POSCO Power or
POSCO Affiliate vendors, subcontractors, consultants or suppliers (but only to the extent that
POSCO Power or POSCO Affiliate has obtained rights thereto), derived from or based on the FCE
Technology, including, without limitation, technical information, know-how, inventions (whether
patented or not), trade secrets, and other technical, engineering and design information and data,
detailed drawings, bill of material, system analytical models, system operating software,
manufacturing plant data, vendor qualification and selection procedures, and quality assurance
procedures.

“Repeating Components” or “RC” shall consist of discrete fuel cell packages composed
of active fuel cell components, which include but are not limited to anodes, cathodes, current
collector plates, and matrices.

“Royalty Determination Firm” shall have the meaning set forth in Section 4.4.

“Stack Technology Transfer and License Agreement” or “STTA” shall mean this
Agreement.

“Stack Technology Transfer Protocol” or “STTP” shall mean that certain document
containing the detailed terms and schedules relating to the transfer by FCE of FCE Technology,
including the scope of assistance and support provided, to POSCO Power and POSCO Affiliates, as
applicable, it being understood and agreed that, the STTP shall become part of this Agreement, as
Exhibit A hereto.

“Subsidiary” shall mean, with respect to any Person (for the purposes of this
definition, the “parent”), any other Person (other than a natural person), whether incorporated or
unincorporated, of which at least a majority of the securities or ownership interests having by
their terms ordinary voting power to elect a majority of the board of directors or other persons
performing similar functions is directly or indirectly owned by the parent or by one or more of its
respective Subsidiaries or by the parent and any one or more of its respective Subsidiaries.

“Term” shall have the meaning set forth in Section 8.1.

II. LICENSE GRANT

2.1 FCE Technology License.

(a) During the Term, and subject to the terms of this Agreement, FCE hereby grants to POSCO
Power:

 

10

 

(i) an exclusive right and license to use the FCE Technology to construct, assemble,
manufacture, use, sell, import, maintain, service and/or repair POSCO Modules in the Korean Market;

(ii) a right and license to use the FCE Technology to sell, export, maintain, service and/or
repair POSCO Modules in the Non-Exclusive Territory; and

(iii) an exclusive right and license to have manufactured and assembled in the Korean Market,
POSCO Modules by POSCO Affiliates in Korea, subject to the execution by POSCO Affiliates of
confidentiality agreements substantially similar to the terms and conditions set forth in
Article XI of this Agreement.

(b) For the avoidance of doubt, the foregoing license consists of a right and license to use
the FCE Know-How, and a right and license under the FCE Patents which cover the FCE Know-How, which
are now owned or which may hereafter be acquired by, or granted to FCE and under which FCE has or
may acquire the right to grant such a right and license.

(c) At the request of POSCO Power, and upon consent by FCE, which consent shall not be
unreasonably withheld, FCE shall designate any POSCO Affiliate indicated by POSCO Power as an
additional licensee under this Agreement.

2.2 Distribution Rights. FCE hereby grants to POSCO Power or any POSCO Affiliate, as
applicable, a non-exclusive right to distribute, sell, maintain, export/import, service and/or
repair Fuel Cell Stack Modules and FCE Products in the Korean Market and in the Non-Exclusive
Territory during the Term, subject to certain distribution rights previously granted by FCE to
other third parties; provided, however, that during the Term, FCE shall (i) not grant any new
distribution rights for FCE Products for the Korean Market; (ii) in any way extend the term of any
distribution rights granted to any third parties prior to the date hereof with respect to the
Korean Market upon expiration or termination thereof; or (iii) not sell the FCE Products in the
Korean Market or to any third party (except as permitted in the Alliance Agreement) which, in its
reasonable judgment after due inquiry, may have an intention to re-sell the same in the Korean
Market. A list of all distribution rights granted by FCE prior to the date hereof is set forth in
Schedule C attached hereto.

2.3 POSCO Technology License. POSCO Power hereby grants to FCE a non-exclusive,
non-assignable, non-sublicensable and paid-up license to use POSCO Technology during the Term and
to manufacture, have manufactured and sell FCE Products that incorporate POSCO Technology by giving
prior notice to POSCO Power. Notwithstanding the foregoing, the Parties agree that FCE may
sub-license the POSCO Technology to a third party for the sole purpose of further developing and
improving the FCE Technology, with prior written consent of POSCO Power, provided that any
such development or improvement shall be transferred to POSCO Power and that the third party shall
not use or commercialize the POSCO Technology, without the prior written consent of POSCO Power,
which consent shall be given at POSCO Power’s sole discretion.

 

11

 

2.4 License to POSCO Power Upon Expiration of the Term. Upon expiration of the Term,
FCE hereby agrees to continue and extend the grant and license, on a non-exclusive basis, to POSCO
Power of all rights set forth under Section 2.1 of this Agreement, subject to the payment by POSCO
Power to FCE of royalties to be mutually determined by the Parties upon such expiration through
commercially reasonable good faith efforts; provided, that in the absence of an agreed
royalty determination within the sixty (60) day period immediately following the initial request by
either Party to determine the royalties, the Parties will submit to binding determination in
accordance with Section 4.4. Such determination shall take into account any compensation owed by
FCE to third parties.

2.5 License to FCE Upon Expiration of the Term. Upon expiration of the Term, POSCO
Power hereby agrees to continue granting to FCE on a non-exclusive basis all rights set forth under
Section 2.3 of this Agreement, subject to the payment by FCE to POSCO Power of royalties to be
mutually determined by the Parties upon such expiration through commercially reasonable good faith
efforts, taking into consideration the contribution of each Party to the POSCO Technology;
provided, that in the absence of an agreed royalty determination within the sixty (60) day
period immediately following the initial request by either Party to determine the royalties, the
Parties will submit to binding determination in accordance with Section 4.4.

2.6 Use of “FCE” Trademarks. During the Term, FCE grants POSCO Power the right to
use “FCE” marks, in connection with the labeling, advertising or sale of POSCO Modules that POSCO
Modules made by it are “manufactured under license of FUELCELL ENERGY, INC., U.S.A.”, or any other
similar statement, to the extent that such is, in fact, the case. In addition, FCE hereby grants
to POSCO Power a non-exclusive fully paid-up license and right to use, consistent with the terms of
this Agreement, any and all trademarks and trade names owned by FCE and subject to appropriate
provisions concerning protection of trademarks and trade names, including quality control.

2.7 Transfer of Technical Data. FCE hereby agrees to provide POSCO Power, upon
completion of payment obligations described in Section 4.1(a) hereunder, technical data and other
information existing in documented form as of the Effective Date, relating to the FCE Know-How in
accordance with the terms of the STTP. FCE hereby agrees that it will supply or cause to be
supplied to POSCO Power and POSCO Affiliates, as applicable, free of any charges, except as
indicated in the STTP, full up-to-date information, to the extent available in documented form of
FCE Technology in a form (e.g., drawings, standard operating procedures, blueprints, written
memoranda, training of employees or personal consultation) or non-documented form via oral or other
visual forms in a commercially reasonable manner and form that will satisfactorily and
expeditiously accomplish the transfer of FCE Know-How to POSCO Power. FCE will supply all such
information in a reasonably usable form and in the English language. In the event that POSCO Power
requests, in writing, that FCE supply such information in a technical form that differs from the
technical form in which FCE has previously supplied or offered to supply it, then POSCO Power
agrees to reimburse FCE the actual costs and expenses incurred by FCE; provided,
however, that POSCO Power will not be required to

 

12

 

pay the costs of obtaining any such information if it is already available to FCE in the form
requested by POSCO Power. At its sole discretion, POSCO Power may transfer to POSCO Affiliates the
technical data described in this Section, for the purpose, and subject to limitations, set forth in
Section 2.1(a)(iii) above.

2.8 Joint Committee(s). The Parties shall form one or more joint committee(s)
consisting of at least two members selected from time to time by each of FCE and POSCO Power, for
the purposes of: (i) developing a plan for Fuel Cell Stack Module Manufacturing in Korea, as
indicated in Section 2.9 below (hereafter the “Localization Plan”), (ii) developing a joint
development plan and strategy with respect to the New Joint Products, New DFC-Based Technology and
New DFC-Based Products (hereinafter the “Joint Development Plan”), and (iii) developing a plan for
executing the technology transfer in accordance to the STTP (hereinafter the “STTP Transfer Plan”),
and (iv) such other matters as the Parties mutually agree.

(a) The Localization Plan shall include, but not be limited to: (i) plan for qualification of
local vendors following FCE standard vendor qualification procedures in effect from time to time;
(ii) fabrication of first article prototype POSCO Module(s); and (iii) a detailed plan to
demonstrate the quality of components and manufacturing processes incorporated in the Localization
Plan.

(b) The Joint Development Plan shall include, but not limited to: (i) plan for Parties to
jointly develop and commercialize New Joint Products, New DFC-Based Technologies and New DFC-Based
Products in Korea and other countries.

(c) The STTP Transfer Plan shall include, but not limited to the plans to: (i) draft and
finalize the initial STTP draft to be completed by the execution date of this Agreement, (ii)
monitor the transfer progress in view of the STTP as jointly deemed necessary, (iii) modify or
update the STTP, and (iv) assist and function as the communication channel between the Parties.

2.9 Manufacturing in Korea. POSCO Power may engage one or more POSCO Affiliates and
independent third parties to perform Fuel Cell Stack Module Manufacturing in Korea upon completion
of the transfer of the Module Component and NRC technology, subject to completion of the activities
described in Sections 2.9(a) and 2.9(b) hereunder.

(a) Within 60 days of the earlier of May 31, 2011 or the completion of the Fuel Cell Stack
Module prototype manufacturing as defined in the STTP, and prior to commencing local manufacturing
of NRC and Module Components for sale to end use customers, the Parties shall work in good faith
and in a commercially reasonable manner and agree on a localization schedule and the level of
adjustment to the royalty set forth in Section 4.1(b) herein (or other form of compensation, as
mutually agreed by the Parties), which shall be based on, among other things, market conditions,
cost of local manufacturing, and the availability of qualified vendors.

 

13

 

(b) The Parties acknowledge and agree that the quality of the components and manufacturing
processes incorporated in Fuel Cell Stack Module Manufacturing in Korea is critical to the success
of the continued commercialization of the DFC technologies in the Korean Market. Thus, the Parties
agree that any Fuel Cell Stack Module Manufacturing in Korea by POSCO Power or any independent
third party designated by POSCO Power shall be subject to the prior consent of FCE as to the
satisfaction of FCE’s standard vendor qualification policies and procedures in effect at the time.

2.10 Regular Exchange of Technical Data. During the Term, the Parties shall exchange
on a regular basis certain reasonably available technical data in connection with the performance
of this Agreement, in accordance with the terms of the STTP.

2.11 New product development and Improvements. FCE acknowledges that POSCO Power will
be making efforts to develop new products and improve the FCE Technology and agrees to provide
POSCO Power with technical and related information reasonably necessary and to the extent
reasonably available to FCE for such new product development and improvement efforts. POSCO Power
acknowledges and agrees that any such new product development and improvements shall be subject to
quality review and consent by FCE (which consent shall not be unreasonably withheld) before they
are incorporated into Fuel Cell Stack Modules.

III. OWNERSHIP OF INTELLECTUAL PROPERTY

3.1 Ownership of FCE Technology. POSCO Power acknowledges that all FCE Technology in
and relating to the FCE Products, whether developed by or for FCE prior to or after the Effective
Date of this Agreement, is and shall remain the property of FCE or its third party licensors.

3.2 Ownership of POSCO Technology. All inventions, know-how, trade secrets, data or
information made, invented, conceived, created or otherwise developed by POSCO Power and POSCO
Affiliates, as applicable, and their employees, derived or resulting from the FCE Technology shall
be considered POSCO Technology and shall be the sole property of POSCO Power or POSCO Affiliates,
as applicable. For the avoidance of doubt, it is understood and agreed that nothing contained
herein shall convey ownership to POSCO of any FCE Technology from which such POSCO Technology is
derived.

3.3 Joint Ownership. All inventions, know-how, trade secrets, data or information
which results from joint development by the Parties hereto shall be jointly owned by the Parties.
The Parties hereby agree to cooperate in good faith in the filing of any and all patent
applications in all jurisdictions.

IV. ROYALTIES

4.1 Royalty Payments.

In consideration of the license of FCE Technology granted herein, POSCO Power agrees to pay to
FCE the following royalty payments:

 

14

 

(a) An up-front royalty payment in the amount of USD $10 million (the “Upfront Payment”) shall
be paid in full on the Effective Date of this Agreement. For the avoidance of doubt, POSCO Power
shall be responsible for payment of withholding taxes or other payments.

(b) A royalty of 4.1% of the POSCO Module Net Sales, which is subject to adjustment as set
forth in Section 2.9(a), during the Initial Term. The royalty payment shall be paid by POSCO Power
in cash. The royalty payment shall be paid semi-annually and within forty-five (45) days of June
30 and December 31 of each year.

(c) The Parties acknowledge that although the Royalty set forth above in Section 4.1(b)(i)
shall be applicable, it may be difficult to ascertain the royalties in certain transactions. Such
transactions may include, but are not limited to, transactions in which the POSCO Modules are
leased, loaned, bartered or exchanged for goods or services, transferred to a third party or any
entity affiliated or closely associated with POSCO Power at a price other than market price or on
terms other than in an arm’s length, or otherwise put into use by POSCO Power or POSCO Affiliates.
POSCO Power agrees to notify FCE within five (5) days after entering into such arrangements, and
the Parties shall subsequently use commercially reasonable good faith efforts to establish
guidelines for determining the royalties for such transactions within sixty (60) days from the date
such notice is received, taking into consideration the principles of the Korean GAAP and U.S. GAAP
and incorporating the principles of best accounting practices. If the Parties failed to reach
agreement, the Parties agree to abide by the procedures set forth in Section 4.4.

4.2 No Other Royalties, Payments, Etc. The Parties acknowledge and agree that, other
than the Upfront Payment and the Royalty, and certain reasonable travel, per diem, and related
expenses to be reimbursed pursuant to the STTP, POSCO Power or any POSCO Affiliates shall not be
liable for any fees, royalties, expenses or payments in connection with the license rights granted
herein or the use by POSCO Power or POSCO Affiliates of the FCE Technology under this Agreement.

4.3 Royalty Report.

(a) Regular Reports. When rendering payment of the foregoing royalties, POSCO Power
shall provide FCE with a written report showing the calculation of the royalty, the number of
products to which the royalty is applicable. At its expense, FCE may, by its designated
independent public accountants, audit the royalty amounts reported by POSCO Power no more than once
a year. To the extent any sales are made by any POSCO Affiliates, POSCO Power agrees to furnish to
FCE copies of relevant books and records of the POSCO Affiliates for the sole purpose of such audit
by FCE.

(b) Final Report. POSCO Power shall deliver a written report to FCE within sixty (60)
days of the termination or expiration of this Agreement, containing information relevant to the
calculation of the royalties due under this Agreement; provided that such report shall
include the Net Sales of POSCO Modules that are sold and on order by POSCO Power on or prior to
the date of termination or expiration and not previously

 

15

 

reported to FCE, and such other information as may be necessary to determine the royalties due
hereunder.

4.4 Royalty Determination Firm. The Parties agree that in case of any dispute with
respect to the determination of royalty pursuant to Sections 2.3, 2.4, 4.1(c), 9.2 and 9.3, any
such determination shall be determined by an internationally recognized independent accounting firm
jointly selected and paid for by the Parties (“Royalty Determination Firm”). If the Parties
dispute the royalty amount determined by the Royalty Determination Firm, then the disputing Party
has the right at its own expense to retain another internationally recognized independent
accounting firm; and in such event, the determination of the royalty shall be the average of the
two determinations, provided that, that the average of the two determinations shall not exceed by
more than 10% of the difference between the royalty amount determined by the Royalty Determination
Firm and the royalty amount determined by the independent determination firm.

V. CUSTOMER RESPONSIBILITY

5.1 End User Warranty. For POSCO Modules assembled by POSCO Power and/or POSCO
Affiliates from DFC Components supplied by FCE, POSCO Power shall be responsible to the end user
for warranty, performance guarantees and service obligations related to the POSCO Modules. FCE
shall have no obligations under the service agreements which POSCO Power may execute with end users
for POSCO Modules, beyond the performance guarantees and warranties contained in the purchase
contracts for such products executed between POSCO Power and FCE.

VI. GOVERNMENT REGULATIONS

6.1 POSCO Power Obligations. POSCO Power hereby agrees to comply with the U.S.
Department of Commerce Export Administration Regulations concerning exportation and re-exportation
of technical data (including computer software), direct products thereof or any components
purchased hereunder to any countries or territories. POSCO Power hereby gives FCE the assurance
required by the U.S. Department of Commerce Export Administration Regulations with respect to the
U.S. origin technical information furnished by FCE hereunder and the direct product of such
technical information.

6.2 FCE Obligations. FCE hereby agrees to comply with the U.S. Department of
Commerce Export Administration Regulations concerning exportation and re-exportation of technical
data (including computer software), direct products thereof or any components purchased hereunder
to any countries or territories. FCE hereby gives POSCO Power the assurance required by the U.S.
Department of Commerce Export Administration Regulations with respect to the U.S. origin technical
information furnished by FCE hereunder and the direct product of such technical information.

6.3 DOE Approval. FCE shall use its best efforts to obtain all necessary consent or
approval from the U.S. Department of Energy, in form substantially similar to the form of DOE
Approval set forth in Exhibit B attached hereto.

 

16

 

VII. REPRESENTATIONS AND WARRANTIES

7.1 Representations and Warranties of FCE. FCE represents and warrants to POSCO
Power that as of the date hereof and as of the Effective Date:

(a) It has all requisite right, power and authority, to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions contemplated hereby;

(b) The execution, delivery and performance by FCE of this Agreement, and the consummation by
FCE of the transactions contemplated hereby, have been duly and validly authorized by all necessary
corporate action on the part of FCE and no other corporate actions or proceedings on the part of
FCE are necessary to authorize this Agreement and the transactions contemplated hereby. Assuming
due authorization, execution and delivery of this Agreement by POSCO Power hereto, this Agreement
constitutes a legal, valid and binding obligation of FCE enforceable against it in accordance with
its terms;

(c) The execution, delivery and performance by FCE of this Agreement, and the consummation by
FCE of the transactions contemplated hereby do not (i) violate any Applicable Law; (ii) violate or
conflict with any contract or agreement to which FCE is a party; (iii) violate any Governmental
Order; (iv) require the approval, consent or permission of any Governmental Authority having
authority over FCE except for the DOE Approval; or (v) violate FCE’s organizational documents;

(d) Neither FCE or any of its Subsidiaries nor any director, officer, agent, employee or
other Person acting on behalf of FCE or its Subsidiaries has, in the course of its actions for, or
on behalf of, FCE or any of its Subsidiaries (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of in any material respect any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made or received
any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to or
from any foreign or domestic government official or employee;

(e) POSCO Power’s contemplated use of the FCE Technology under this Agreement does not
infringe and is not being infringed upon by any valid rights of any third party, including but not
limited to patent rights, copyrights, trademarks or other intellectual property rights owned or
controlled by third parties in any country;

(f) The FCE Technology furnished to POSCO Power and POSCO Affiliates pursuant to this
Agreement will correspond to the FCE Technology used by FCE in the manufacture of FCE Products. If
any FCE Technology provided hereunder does not meet this requirement and POSCO Power notifies FCE,
FCE shall correct the discrepancy at its own expense, by furnishing corrected FCE Technology; and

 

17

 

(g) FCE Power Plants using FCE Technology are designed with commercially reasonable safety
precautions and FCE participates in on-going safety certification programs for its plants, such as
CSA.

(h) FCE recognizes and acknowledges that maintaining the scope of protection on the FCE
Technology in the Territory is critical to the success of the continued commercialization of POSCO
Modules in Korea. Thus, FCE represents and warrants that it has been and it shall continue to take
commercially reasonable defensive and offensive measures to protect FCE Technology against
encroachment by any third parties.

7.2 Representations and Warranties of POSCO Power. POSCO Power represents and
warrants to FCE that as of the date hereof and as of the Effective Date:

(a) It has all requisite right, power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions contemplated hereby;

(b) The execution, delivery and performance by POSCO Power of this Agreement, and the
consummation by POSCO Power of the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of POSCO Power and no other corporate
actions or proceedings on the part of POSCO Power are necessary to authorize this Agreement, and
the transactions contemplated hereby. Assuming due authorization, execution and delivery of this
Agreement by FCE hereto and thereto, this Agreement constitutes a legal, valid and binding
obligation of POSCO Power enforceable against it in accordance with its terms;

(c) The execution, delivery and performance by POSCO Power of this Agreement, and the
consummation by POSCO Power of the transactions contemplated hereby, do not: (i) violate any
Applicable Law; (ii) violate or conflict with any Contract to which POSCO Power is a party; (iii)
violate any Governmental Order; (iv) require the approval, consent or permission of any
Governmental Authority having authority over POSCO Power except for the DOE Approval; or (v)
violate POSCO Power’s organizational documents; and

(d) Neither POSCO Power or any of its Subsidiaries nor any director, officer, agent, employee
or other Person acting on behalf of POSCO Power or its Subsidiaries has, in the course of its
actions for, or on behalf of, POSCO Power or any of its Subsidiaries (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in violation of in any material
respect any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
or received any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to or from any foreign or domestic government official or employee; and

(e) All work to be performed by POSCO Power in its manufacture, assembly and test activities
hereunder shall be performed in accordance with drawings, manufacturing

 

18

 

practices, instructions and quality plans as furnished by FCE or as mutually agreed upon by
the parties.

VIII. TERM

8.1 Term. The initial term of this Agreement (the “Initial Term”) shall
commence on the Effective Date and shall continue, unless earlier terminated in accordance with the
provisions set forth herein or in any Transaction Agreement, for a period of ten (10) years from
the Effective Date.

8.2 Extension. The Initial Term may be extended for additional terms (each,
“Additional Term”, and, together with the Initial Term, the “Term”), each for a
period of five (5) years, by mutual agreement on terms mutually agreed upon by the Parties. This
Agreement shall be extended only if the other Transaction Agreements are extended for the same
period.

IX. TERMINATION

9.1 Termination by Mutual Agreement. This Agreement may be terminated, without any
further obligation or liability by mutual written agreement of the Parties.

9.2 FCE Termination by Material Breach of POSCO Power.

(a) Notwithstanding anything to the contrary contained herein or in any other Transaction
Agreements, in the event POSCO Power materially breaches any representation or warranty or
materially fails to perform any obligation or undertaking to be performed by it under this
Agreement or any other Agreement between the Parties and such material breach or failure is not
cured within sixty (60) days after notice from FCE specifying the nature of the breach, then, FCE
shall have the right to terminate this Agreement after complying with the procedures set forth in
Article XIV below.

(b) FCE Remedy. In the event that FCE terminates this Agreement pursuant to Section
9.2(a):

(i) FCE may retain all POSCO Technology, including all copies and summaries thereof,
furnished by POSCO Power prior to such termination;

(ii) FCE shall have a non-exclusive perpetual license and right to use the POSCO Technology
to manufacture and sell the FCE Products, only to the extent that FCE Products incorporate POSCO
Technology, under all patents of all countries under which POSCO Power or POSCO Affiliates, as
applicable, during the Term, has or may acquire the right to grant such licenses, provided
that any sublicensing or resale to any Korean Company by FCE shall be subject to POSCO Power’s
consent in its sole discretion, and provided, further, that the foregoing license
shall be subject to the payment by FCE to POSCO Power of royalties to be mutually determined by the
Parties in a commercially reasonable good faith manner, it being understood and agreed that
if the Parties are

 

19

 

unable to reach agreement within sixty (60) days following the initial request of FCE, the
royalties determined pursuant to Section 4.4 above shall be final and binding upon the Parties;

(iii) POSCO further agrees that POSCO shall, at the request of FCE, continue to supply POSCO
Modules to FCE, if such are in production, on terms and conditions to be mutually agreed upon by
the Parties in good faith; and

(iv) POSCO Power, on its own behalf and on behalf of POSCO Affiliates, shall pay FCE all
royalty amounts then due and owing as of the date of termination and all reimbursement amounts then
due and owing as of the date of termination and actual damages.

The foregoing provisions of this Section 9.2 represent the sole and exclusive remedy of FCE in the
event of a material breach by POSCO Power.

9.3 POSCO Power Termination by Material Breach of FCE.

(a) In the event FCE materially breaches any representation or warranty or materially fails to
perform any obligation or undertaking to be performed by it under this Agreement and any other
Transaction Agreements and such material breach or failure is not cured within sixty (60) days
after notice from POSCO Power specifying the nature of the breach, then, POSCO Power shall have the
right to terminate this Agreement after complying with the procedures set forth in Article
XIV below (except as noted below in Section 9.3(b)(i)).

(b) POSCO Power Remedy. In the event that POSCO Power terminates this Agreement
pursuant to Section 9.3(a) above:

(i) FCE shall pay to POSCO Power actual damages, plus, if the FCE Technology has not been
fully transferred to POSCO Power, as scheduled in the STTP, FCE shall promptly and in a
commercially reasonable manner transfer to POSCO Power all of the remaining FCE Technology, and
further acknowledge and agree that POSCO Power shall be entitled to seek and obtain from FCE the
specific performance of FCE’s obligations under this section in the U.S. District Court for the
Southern District of New York, or in the event that court lacks jurisdiction, in any competent
court in the State of New York, if FCE fails to transfer the FCE Technology to POSCO Power, as set
forth in the STTP;

(ii) POSCO Power may retain all FCE Technology, including all copies and summaries thereof,
furnished by FCE prior to such termination;

(iii) POSCO Power shall have a non-exclusive perpetual license and right in and of the FCE
Technology to construct, assemble, manufacture, use, sell, import, maintain, service, reconfigure
and/or repair the POSCO Modules in the Korean Market and to sell, maintain, service, reconfigure
and/or repair the POSCO Modules in the Non-Exclusive Territory; and provided, further, that the
foregoing license shall be subject to the payment by POSCO Power to FCE of royalties to be mutually
determined by the Parties in a commercially reasonable good faith manner, it being understood and
agreed that if the

 

20

 

Parties are unable to reach agreement within sixty (60) days following the initial request of
FCE, the royalties determined pursuant to Section 4.4 above shall be final and binding upon the
Parties; and

(iv) FCE further agrees that FCE shall, at the request of POSCO Power, continue to supply DFC
Components on reasonable terms and conditions to be mutually agreed upon by the Parties in good
faith.

The foregoing provisions of this Section 9.3 represent the sole and exclusive remedy of POSCO Power
in the event of a material breach by FCE. For the purpose of Section 9.3(b)(i) above, the Parties
hereto consent to the jurisdiction of such court in respect of any action or proceeding thereunder.

9.4 Return of FCE Technology. In the event this Agreement is terminated pursuant to
Section 9.1 or Section 9.2 above, POSCO Power shall return to FCE all FCE Know-How, including all
copies and summaries thereof, furnished by FCE prior to such termination and shall not be permitted
to make any further use of such FCE Technology.

9.5 Return of POSCO Technology. In the event this Agreement is terminated pursuant
to Section 9.1 or Section 9.3 above, FCE shall return to POSCO Power all POSCO Technology including
all copies and summaries thereof, furnished by FCE prior to such termination and shall not be
permitted to make any further use of such POSCO Technology.

9.6 Survival. Upon expiration or termination of this Agreement as provided herein,
or by operation of law or otherwise, all rights granted and all obligations undertaken hereunder
shall terminate forthwith except the following provisions:

(a) Upon expiration of the Term, Sections 2.4 (‘License to POSCO Power Upon Expiration of the
Term’), 2.5 (‘License to FCE Upon Expiration of the Term,) and 4.4 (‘Royalty Determination Firm’)
and Articles III (‘Ownership of Intellectual Property’), IX (‘Termination’), X (‘Indemnification’),
XI (‘Confidential Information’), XII (‘Notices’) and XIII (‘Entire Agreement’); and

(b) Upon termination of this Agreement, Section 4.4 (‘Royalty Determination Firm’), Articles
III (‘Ownership of Intellectual Property’), IX (‘Termination’), X (‘Indemnification’), XI
(‘Confidential Information’), XII (‘Notices’) and XIII (‘Entire Agreement’) and the full STTP.

X. INDEMNIFICATION

10.1 POSCO Power Obligations. POSCO Power shall indemnify and hold harmless FCE and
its affiliates, officers, directors, members, employees and agents, against any and all judgments,
damages, liabilities, costs and losses of any kind (including reasonable attorneys’ and experts’
fees) (collectively, “Losses”) that arise out of or relate to (i) any breach by POSCO Power of its
representations or warranties or covenants under this Agreement, (ii) any claim, action or
proceeding that arises from defects caused by the manufacture by POSCO Power or POSCO Affiliates of
POSCO

 

21

 

Modules, or (iii) any claim, action or proceeding that arises from defects caused by the
servicing by POSCO Power or POSCO Affiliates of the FCE Products; provided,
however, that FCE must promptly notify POSCO Power in writing of any such claim, action or
proceeding (but the failure to do so shall not relieve POSCO Power of any liability hereunder
except to the extent that POSCO Power has been materially prejudiced therefrom). POSCO Power may
elect, by written notice to FCE within ten (10) days after receiving notice of such claim, action
or proceeding to assume the defense thereof with counsel acceptable to FCE. If POSCO Power does
not so elect to assume such defense or disputes its indemnity obligation with respect to such
claim, action or proceeding, or if FCE reasonably believes that there are conflicts of interest
between FCE and POSCO Power or that additional defenses are available to FCE with respect to such
defense, then FCE shall retain its own counsel to defend such claim, action or proceeding, at POSCO
Power’s defense. POSCO Power shall reimburse FCE for expenses as these are incurred under this
Section. FCE shall have the right, at its own expense, to participate in the defense of any claim,
action or proceeding against which it is indemnified hereunder; provided, however,
that FCE shall have no right to control the defense, consent to judgment or agree to settle any
such claim, action or proceeding without the written consent of POSCO Power unless FCE waives its
right to indemnity hereunder. POSCO Power, in the defense of any such claim, action or proceeding,
except with the written consent of FCE, shall not consent to entry of any judgment or enter into
any settlement which (i) does not include, as an unconditional term, the grant by the claimant to
FCE of a release of all liabilities in respect of such claims or (ii) otherwise adversely affects
the rights of FCE.

10.2 FCE Obligations. FCE shall indemnify and hold harmless POSCO Power and its
affiliates, officers, directors, members, employees and agents, against any and all judgments,
damages, liabilities, costs and losses of any kind (including reasonable attorneys’ and experts’
fees) (collectively, “Losses”) that arise out of or relate to (i) any breach by FCE of its
representations, warranties, covenants or agreements under this Agreement (it being understood
and agreed that any indemnity with respect to the FCE Products shall be governed by a separate
purchase order contract), (ii) any claim, action or proceeding that arises from or relates to the
servicing by FCE of POSCO Modules or FCE Products, (iii) any claim, action or proceeding that
arises from any licensor of FCE or any third party, in or relating to the FCE Technology (it
being understood and agreed that this obligation includes an obligation to take all necessary
steps to ensure the continued use by POSCO Power of the FCE Technology, without interruption),
provided, however, that POSCO Power must promptly notify FCE in writing of any such
claim, action or proceeding (but the failure to do so shall not relieve FCE of any liability
hereunder except to the extent that FCE has been materially prejudiced therefrom). FCE may elect,
by written notice to POSCO Power within ten (10) days after receiving notice of such claim, action
or proceeding to assume the defense thereof with counsel acceptable to POSCO Power. If FCE does
not so elect to assume such defense or disputes is indemnity obligation with respect to such claim,
action or proceeding, or if POSCO Power reasonably believes that there are conflicts of interest
between FCE and POSCO Power or that additional defenses are available to POSCO Power with respect
to such defense, then POSCO Power shall retain its own counsel to defend such claim, action or
proceeding, at FCE’s defense. FCE shall reimburse POSCO Power for expenses as these

 

22

 

are incurred under this Section. POSCO Power shall have the right, at its own expense, to
participate in the defense of any claim, action or proceeding against which it is indemnified
hereunder; provided, however, that POSCO Power shall have no right to control the
defense, consent to judgment or agree to settle any such claim, action or proceeding without the
written consent of FCE unless POSCO Power waives its right to indemnity hereunder. FCE, in the
defense of any such claim, action or proceeding, except with the written consent of POSCO Power,
shall not consent to entry of any judgment or enter into any settlement which (i) does not include,
as an unconditional term, the grant by the claimant to POSCO Power of a release of all liabilities
in respect of such claims or (ii) otherwise adversely affects the rights of POSCO Power.

10.3 Limitation of Damage. In no event, whether as a result of breach of contract,
warranty, tort (including negligence), strict liability, indemnity, or otherwise, shall either
Party or its subcontractors or suppliers be liable to the other Party for loss of profit or
revenues, loss of use of the DFC Power Plant or any associated equipment, cost of capital, cost of
substitute equipment, facilities, services or replacement power, downtime costs, claims of the
indemnified Party’s customers for such damages, or for any special, consequential, incidental,
indirect or exemplary damages.

XI. CONFIDENTIAL INFORMATION

11.1 POSCO Power Obligations. All written information marked “proprietary” or
“confidential” (or if oral, subsequently reduced to a writing so marked and delivered to the
receiving Party within thirty (30) days of its oral disclosure) which FCE discloses to POSCO Power
as a result of the provisions of this Agreement, whether contained in blueprints, drawings, written
reports, letters or memoranda, process descriptions, operating procedures and other written data,
shall be treated as confidential unless (a) such information shall have been in the possession
POSCO Power prior to its receipt from the FCE, (b) such information is or becomes part of the
public knowledge or literature through no fault of POSCO Power, or (c) such information shall
otherwise become available to POSCO Power from a source other than FCE, said source not being
violative of any obligation of secrecy with respect to such information. Information which is so
considered to be confidential shall be held by POSCO Power for its sole benefit and used only in
accordance with this Agreement; provided that POSCO Power may share proprietary or
confidential information with POSCO Affiliates for the purpose set forth in Section 2.1(a)(iii)
above; and, further provided, that POSCO Power shall cause POSCO Affiliates to restrict the
use so as to be consistent with the terms of this Agreement and to restrict disclosure to its
employees, on a need-to-know basis, of any confidential or proprietary information shared with
POSCO Affiliates. POSCO Power shall use all reasonable efforts to prevent the use of all or any
part of such confidential information belonging to FCE in any other connection or the transmission
thereof to third parties unless and until it has first obtained the written consent of FCE
specifically authorizing such use or transmission. The Parties understand that information may be
provided which is subject to a confidentiality agreement with a third Party. The Parties agree that
such information shall be held in confidence in accordance with the terms of the third Party
confidentiality agreement. No Party shall be obligated to divulge third party confidential
information to the other Party. POSCO Power shall require, as a

 

23

 

condition precedent to any agreement for any FCE Product or POSCO Product sale, lease, or
other similar transaction, that the purchaser, lessor or customer for such transaction must agree
to accept the terms of this paragraph, including the requirement for any subsequent purchaser to
accept the terms of this paragraph. Any breach of the confidentiality provisions of this paragraph
may be considered material breach of this agreement by the non-breaching Party.

11.2 POSCO Affiliate. The Parties agree that each POSCO Affiliate shall enter into a
confidentiality agreement with POSCO Power containing the terms that are substantially similar to
the confidentiality provision set forth above.

11.3 FCE and POSCO Power Obligations. All obligations under this article shall apply
mutatis mutandis to the Parties.

XII. NOTICES

All notices pursuant to this Agreement shall be in writing and will be deemed to have been
duly given if delivered personally or by internationally recognized courier service, or by
facsimile to the parties at the addresses set forth below.

if to FCE, to:

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, CT 06813

Facsimile: (203) 825-6079

Attention: Ben Toby

with copy to:

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, CT 06813

Facsimile: (203) 825-6069

Attention: Ross Levine

if to POSCO Power, to:

POSCO Power

POSTEEL Tower 20th Fl. 735-3

Yeoksam-dong, Gangnam-gu

Seoul, 135-080 KOREA

Attention: Taehyoung (TH) Kim

All notices under this Agreement that are addressed as provided in this Section (i) if
delivered personally or by internationally recognized courier service, will be deemed given upon
delivery or (ii) if delivered by facsimile, will be deemed given when confirmed. Either Party from
time to time may change its address or designee for

 

24

 

notification purposes by giving the other Party notice of the new address or designee and the
date upon which such change will become effective.

XIII. ENTIRE AGREEMENT

This Agreement, including any Exhibits and Schedules attached hereto, and any other
Transaction Agreements which are incorporated into this Agreement by this reference, constitute the
full and complete statement of the agreement of the Parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and understandings, whether written
or oral, between the Parties with respect to the subject matter hereof. There are no
representations, understandings or agreements relating to this Agreement that are not fully
expressed in this Agreement other than those representations, understandings or agreements
contained in the other Transaction Agreements. To the extent there is any inconsistency between
this Agreement and any other Transaction Agreements, the provisions of this Agreement shall
prevail.

XIV. APPLICABLE LAW AND ARBITRATION

14.1 Governing Law. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of New York, U.S.A., without giving effect to any choice of
law rules that may require the application of the laws of another jurisdiction.

14.2 Efforts to Resolve by Mutual Agreement. Any dispute, action, claim or
controversy of any kind arising from or in connection with this Agreement or the relationship of
the Parties under this Agreement (the “Dispute”) whether based on contract, tort, common law,
equity, statute, regulation, order or otherwise, shall be resolved as follows:

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

(ii) Formal proceedings for the resolution of a Dispute may not be commenced until the later
of (i) the Parties concluding in good faith that amicable resolution through continued negotiation
of the matter does not appear likely; or (ii) the expiration of a sixty (60) day period immediately
following the initial request by either Party to resolve the Dispute; provided,
however, that this Section 14.2 will not be construed to prevent a Party from instituting
formal proceedings earlier to avoid the expiration of any applicable limitations period, to
preserve a superior position with respect to other creditors or to seek temporary or preliminary
injunctive relief.

14.3 ICC Arbitration. If the Parties are unable to resolve any Dispute pursuant
Section 14.2 above and except as otherwise specified in Section 9.3(b)(i), the Dispute shall be
finally settled under the Rules of Arbitration (the “Rules”) of the International Chamber of
Commerce (“ICC”) by three (3) arbitrators designated by the Parties. Each

 

25

 

Party shall designate one arbitrator. The third arbitrator shall be designated by the two
arbitrators designated by the Parties. If either Party fails to designate an arbitrator within
thirty (30) days after the filing of the Dispute with the ICC, such arbitrator shall be appointed
in the manner prescribed by the Rules. An arbitration proceeding hereunder shall be conducted in
London, U.K., and shall be conducted in the English language. The decision or award of the
arbitrators shall be in writing and is final and binding on both Parties. The arbitration panel
shall award the prevailing Party its attorneys’ fees and costs, arbitration administrative fees,
panel member fees and costs, and any other costs associated with the arbitration, the enforcement
of any arbitration award and the costs and attorney’s fees involved in obtaining specific
performance of an award; provided, however, that if the claims or defenses are
granted in part and rejected in part, the arbitration panel shall proportionately allocate between
the Parties those arbitration expenses in accordance with the outcomes; provided,
further, that the attorney’s fees and costs of enforcing a specific performance arbitral
award shall always be paid by the non-enforcing Party, unless the applicable action was determined
to be without merit by final, non-appealable decision. The arbitration panel may only award
damages as provided for under the terms of this Agreement and in no event may punitive,
consequential and special damages (or as otherwise specified in this Agreement, including, without
limitation, Section 10.3) be awarded. In the event of any conflict between the Rules and any
provision of this Agreement, this Agreement shall govern.

14.4 Waiver of Jury Trial. The Parties hereto hereby irrevocably waive, to the
fullest extent permitted by Applicable Law, any and all right to trial by jury in any legal
proceeding arising out of or relating to Section 9.3(b)(i).

XV. MISCELLANEOUS

15.1 Amendment. This Agreement may not be modified or amended except by a writing
duly signed by the authorized representatives of both Parties.

15.2 Severability. In the event any one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect, said provision(s) shall be
deemed severed and deleted here from and the validity, legality and/or enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby.

15.3 Government Information. Nothing in this Agreement shall authorize the
disclosure of, or access to, classified or restricted information, material or know-how of the
Government of the United States of America to persons not authorized or licensed to disclose or
receive such classified or restricted information.

15.4 Independent Contractors. The Parties are independent contractors, and nothing
contained in this Agreement shall be construed as (a) giving either Party the power to direct and
control the day-to-day activities of the other, (b) constituting either Party as a partner, a joint
venture, a co-owner or a fiduciary of the other or (c) creating any other form of legal association
that would impose liability on one Party for the act or

 

26

 

failure to act of the other or as providing either Party with the right, power or authority
(express or implied) to create any duty or obligation of the other.

15.5 Assignment. This Agreement will be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. Neither Party may, nor will it have
the power to, assign this Agreement, or any part hereof, without the prior written consent of the
other Party, and any such unauthorized assignment shall be null and void, except that the Parties
acknowledge and agree that POSCO Power may, without the consent of FCE assign its rights and
obligations to any entity controlled by POSCO Power or a POSCO Affiliate, provided that POSCO Power
remains liable for the obligations set forth in this Agreement and in other Transaction Documents
to which it is a Party. In the event of any other assignment of this Agreement by either Party,
the assignee shall assume, in writing (in form and substance reasonably satisfactory to the other
Party), the rights and obligations of the assigning Party under this Agreement.

15.6 No Third Party Beneficiary. Except as expressly contemplated herein, this
Agreement shall be binding upon and inure solely to the benefit of each Party hereto and nothing in
this Agreement is intended to confer upon any other person or entity any rights or remedies of any
nature whatsoever under or by reason of this Agreement.

15.7 Headings. The headings preceding the text of Articles and Sections included in
this Agreement and the headings to Exhibits and Schedules attached to this Agreement are for
convenience only and shall not be deemed part of this Agreement or be given any effect in
interpreting this Agreement.

15.8 Right to Injunction; Specific Performance. The Parties further acknowledge and
agree that POSCO Power will suffer irreparable harm, which is not compensable by monetary damage in
the event the FCE Technology has not been fully transferred to POSCO Power at the time of the
termination of this Agreement due to a material breach by FCE hereunder. Accordingly, the Parties
agree that POSCO Power shall be entitled to an injunction or injunctions to enforce specifically
the transfer of the FCE Technology to POSCO Power in accordance with Section 9.3(b)(i) above. The
Parties further acknowledge and agree that each Party will suffer irreparable harm, which is not
compensable by monetary damage, in the event the other breaches its obligations under Article XI.
Accordingly, in the event of a breach by one Party of such obligations, the other shall be entitled
to injunction or injunctions to enforce and remedy such breach in addition to all other remedies
available at law or in equity.

15.9 Force Majeure. Neither Party shall be liable to the other for a failure to
perform any of its obligations under this Agreement, except for payment obligations under this
Agreement, during any period in which such performance is delayed due to a Force Majeure, and if
such Party notifies the other of the delay; provided, however, that in the event a period
of Force Majeure restricts a Party’s performance for greater than 120 days, the non-restricted
Party may terminate this Agreement without further cause and without liability for such
termination. The date of delivery shall be extended for a period equal to the period of a delay due
to Force Majeure, in addition to any additional time as may be reasonably necessary to overcome the
effect of such excusable delay; provided, 

 

27

 

further, that the Party seeking relief under this Section 15.9 shall promptly notify
the other of the Force Majeure event, the anticipated resolution of such event, the actual
resolution of such event and the actual impact on its obligations hereunder.

XVI. SALES TARGETS AND EXCLUSIVITY

16.1 Sales Targets. The Parties acknowledge that this Agreement is based on, among other
things, the business plan as to the sales expectations set forth in Exhibit D attached hereto.

(a) In the event the cumulative sales of Fuel Cell Stack Modules in the Korean Market as of
December 31, 2013, have not reached the target figure of 112 MW as set forth in Exhibit D, the
Parties shall undertake a performance review in good faith and in a commercially reasonable manner
to determine the feasibility and desirability of the continuation of the exclusivity set forth in
Sections 2.1(a)(i) and 2.2 hereunder, as well as the Korean Market exclusivity provisions set forth
elsewhere in the Transaction Agreements. The performance review shall take into consideration,
among other things, past performance, market conditions, business prospects, profitability, bona
fide efforts by the Parties, quality issues affecting marketability and future plans. In the event
that after discussions in good faith the Parties are not able to agree, disputes shall be resolved
through Sections 14.2 and 14.3 above. The decision or award of the arbitrators pursuant to Section
14.3 shall be final and binding on both Parties.

(b)(i) It is acknowledged and agreed by POSCO Power that during the term of this Agreement,
POSCO Power shall make commercially reasonable efforts to commercialize the technology licensed
hereunder in the Korean Market; and

(ii) it is acknowledged and agreed by FCE that during the term of this Agreement, FCE shall
make commercially reasonable efforts to improve and enhance the DFC technology to maintain market
competitiveness.

The Parties shall undertake subsequent performance review(s) from time to time on dates to be
mutually agreed by the parties, starting January 1, 2014, but no more than once in two (2) year
intervals during the term of this Agreement. The performance review shall take into consideration,
among other things, past performance, market conditions, business prospects, profitability, bona
fide efforts by the Parties, quality issues affecting marketability and future plans. In the event
that after discussions in good faith the Parties are not able to agree, disputes shall be resolved
through Sections 14.2 and 14.3 above. The decision or award of the arbitrators pursuant to Section
14.3 shall be final and binding on both Parties.

 

28

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in a manner binding upon
them by their duly authorized officers as of the date first above written.

	 	 	 	 	 
	 	FUELCELL ENERGY, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	POSCO POWER

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

29

 

EXHIBIT A (STTP)

STACK TECHNOLOGY TRANSFER PROGRAM

THIS  STACK TECHNOLOGY
TRANSFER PROGRAM (“STTP”) is made and entered into this 27th day
of October, 2009, to be effective on the Effective Date of the STTA as defined below, by and
between FUELCELL ENERGY, INC., a Delaware corporation having a place of business at 3 Great Pasture
Rd., Danbury, CT 06813, U.S.A. (“FCE”) and POSCO Power, a Korean corporation having a place of
business at Posteel Tower 20th floor, 735-3, Yeoksam-dong, Gangnam-gu, Seoul 135-080, Korea (“POSCO
Power”). FCE and POSCO Power may be referred to hereunder as the “Parties.”

This STTP is made and entered into by the Parties pursuant to the Stack Technology Transfer
Agreement (“STTA”) dated October 26, 2009, and is made part of the STTA. The purpose of this STTP
is to describe the transfer by FCE to POSCO Power of the FCE Technology which shall have the
meaning set forth in the STTA.

POSCO Power and FCE are parties to the following agreements (collectively the “Existing
Agreements”): (i) the Technology Transfer, Distribution and Licensing Agreement for the transfer of
Balance of Plant technology (the “Technology Transfer Agreement” or “TTA”) and the Alliance
Agreement (the “Alliance Agreement” or “AA”), both executed as of February 7, 2007; (ii) the
Technology Transfer Program (“TTP”) executed as of July 11, 2007; (iii) the Contract for the Supply
of DFC Plants and DFC Modules from FCE to POSCO Power (“2008 Purchase Contract”) executed as of
April 22, 2008; (iv) the Contract for the Supply of DFC Modules and DFC Components from FCE to
POSCO Power (“2009 Purchase Contract”) executed as of June 9, 2009; and (v) the Securities Purchase
Agreement by and between FCE and POSCO Power (the “2009 Securities Purchase Agreement”) executed as
of June 9, 2009.

Capitalized terms used herein, but not defined herein, shall have the meanings given to them
in the Existing Agreements.

Section 1. Technology to be transferred by STTP

FCE shall transfer the following technologies, know-how and information to POSCO Power and POSCO
Affiliates in accordance with the schedule set forth in Section 3 of this STTP:

	 	1.1.	 	Manufacturing Process Information (see Exhibit “B” for a complete list of
documentation)

 

30

 

	 	1.1.1.	 	Module Assembly Process Information

	 	1.1.1.1.	 	General Facility Recommendations

	 	1.1.1.2.	 	Stacking

	 	1.1.1.3.	 	Manifolding

	 	1.1.1.4.	 	Final Module Assembly

	 	1.1.1.5.	 	Instrumentation

	 	1.1.1.6.	 	Standard Tooling used throughout Module Assembly Facility

	 	1.1.2.	 	Module Conditioning Process Information

	 	1.1.2.1.	 	MW Module Conditioning

	 	1.1.2.2.	 	Sub-MW Module Conditioning

	 	1.1.3.	 	Module Teardown and Repair Process Information

	 	1.2.	 	Non-Repeating Component and Module Component Design Documentation (see Exhibit “C”)

	 	1.3.	 	Design Documentation for Conditioning Facilities (see Exhibit “D”)

	 	1.3.1.	 	MW Conditioning Facility

	 	1.3.2.	 	Sub-MW Conditioning Facility

Section 2. Method for the Technology Transfer

2.1 Personnel

Each of FCE and POSCO Power/POSCO Affiliate will appoint a dedicated Program Manager to serve as
the primary point of interface between POSCO Power/POSCO Affiliate and FCE. FCE will also support
the program with management and expertise gathered from its manufacturing department and related
departments to successfully execute this STTP.

2.2 Mechanism for the Transfer of Technology

Information will be transferred using a web-based portal as described in Exhibit “B”. FCE will
notify POSCO Power as soon as practicable when any changes to the information have been made by
FCE, and will post such modified information on the web portal for downloading by POSCO Power/POSCO
Affiliate.

A procedure for managing changes to the NRC or module component designs that affect fabrication,
assembly or conditioning shall be implemented and maintained by both parties mutually. FCE will
notify POSCO Power of impacts due to changes made to the RC that affect module assembly,
conditioning or repair and transfer revised procedures. In addition, a procedure for managing the
as-built configuration (the “Module Build-Book system” described in Exhibit “B”) of the modules assembled at the POSCO facility shall be
implemented and maintained by both parties mutually.

 

31

 

2.3 Training

2.3.1 Certification Training Program for Module Assembly and Conditioning

FCE shall develop a Certification Training Programs for Module Assembly and Conditioning, which
shall be offered to POSCO Power and/or POSCO Affiliate consistent with the scope and timing of the
technology transfer program described hereunder. The Certification Training Program for Module
Assembly shall include training in the procedures for stacking, manifolding, final module assembly,
instrumentation installation and teardown. The Certification Training Program for Module
Conditioning shall include training in the procedures for conditioning of finished stack modules
prior to their shipment to customer sites. POSCO Power agrees to undertake the training program
designed by FCE, and FCE agrees to confer certified status on employees of POSCO Power and/or POSCO
Affiliate who successfully complete the training. Additionally, POSCO Power and/or POSCO Affiliate
agrees to undergo periodic refresher training by FCE to maintain the certification status of all
personnel who are to be employed in the assembly, conditioning and teardown of fuel cell stack
modules as determined by the Joint Committee.

2.3.2 Co-Work and On-the-Job Training (“OJT”)

POSCO Power/POSCO Affiliate may obtain the FCE Technology through co-work and OJT by mutual
agreement or as defined by the certification training programs. This training will take place on a
continuous basis, at FCE’s facilities in the U.S., at POSCO Power/POSCO Affiliate’s facilities in
Korea, and via remote communications.

2.3.3 Organization and Personnel Recommendations

FCE will provide a recommended organizational structure, job descriptions and required background
experience for each position. FCE will specify which job descriptions need certification, including
the duration of the certification, per paragraph 2.3.1.

2.4 Meetings

2.4.1 Regular Meetings

Regular meetings will take place as required. Following is a brief description of the various
types of meetings which shall be scheduled:

	 	a.	 	Program Reviews are conducted to ensure that milestones have been met in accordance
with the requirements as defined in Exhibit “A”.

 

32

 

	 	b.	 	Facility Design Reviews are technical reviews of manufacturing facilities, and they
are conducted to ensure best practices in manufacturing are captured prior to commencing
construction activities. FCE proposes both preliminary and final Facility Design Reviews.

2.4.2 Ad Hoc Meetings

Ad Hoc meetings beyond the above regular meetings will take place on an as-needed basis by mutual
agreement.

Section 3. Schedule 

The schedule for the transfer of technology between FCE and POSCO Power and/or POSCO Affiliate is
provided in Exhibit “A” of this STTP.

Section 4. Costs

FCE shall use commercially reasonable efforts to make available technical consultation and
assistance in connection with POSCO Power/POSCO Affiliate’s activities under this STTP without
additional charge, provided, however, that FCE shall not be obligated to provide such assistance in
excess of 500 or TBD man-days for the duration of the STTA. Additional man-days beyond 500 or TBD
man-days may be provided by FCE subject to availability of personnel. Payments from POSCO Power to
FCE for additional man-days beyond 500 or TBD man-days, if any, shall be based upon mutually
agreeable terms and conditions. For the purposes of this section, a “man-day” shall be defined as
eight (8) working hours, and a “man-year” shall be defined as 1,920 working hours.

Tracking. FCE shall continually track the number of man-days consumed, and the number of
man-days remaining. FCE shall provide on a quarterly basis a Work Progress Summary outlining
activities and deliverables completed or ongoing from the prior reporting period, as well as a
summary of the number of man-hours remaining.

Documented travel and living expenses for FCE personnel during visits to POSCO Power/POSCO
Affiliate facilities in Korea or other locations, when carried out pursuant to this STTP or at the
request of POSCO Power or POSCO Affiliate, shall be borne by POSCO Power or POSCO Affiliate, or if
paid by FCE, shall be reimbursed to FCE. The payment standard for traveling expenses by FCE’s
personnel is provided as Attachment 1 to this STTP. Changes to the payment standard as provided in
Attachment 1 shall be by mutual agreement.

Section 5. Quality Plans

 

33

 

Current quality methodologies for Module Assembly and Conditioning will be transferred as listed in
Section 1. Both parties will work together to develop and exchange future improved quality
assurance methodologies for Module Assembly and Conditioning.

Quality information for the repeating components to be transferred will be of three categories: (1)
processes that POSCO Power can duplicate to ensure the component meets the quality requirements,
for example, visual inspection criteria; (2) quantitative information that FCE has measured that
shows the component meets the quality requirements, for example, package and matrix dimensions; (3)
certification of detailed specifications that FCE has measured but cannot transfer that ensures the
component meets the quality requirements. The details of these three levels will be developed by
the Joint Committee.

Section 6. Module Repair

Both parties will work together to diagnose and repair modules with performance issues in the field
or in the POSCO Power Module facility. FCE will also provide diagnosis and repair experience for
POSCO Power/POSCO Affiliate personnel at the POSCO Teardown Facility. Also, both parties will work
together to develop and share future improved module repair methodologies.

Section 7. Access to Data

For every module produced, POSCO Power will grant access to and/or transfer all data listed below
to FCE:

	 	a.	 	Module stacking and assembly manufacturing process measurements, inspection findings,
quality data and in-process pictures via the Module Build Book;

	 	b.	 	Fabricated NRC and Module component quality data per the protocols for inspection of
the incoming parts;

	 	c.	 	Module conditioning data through the PI data system;

	 	d.	 	Commercial power-plant field operation data from the EBOP, MBOP and Module for the
life of the module through the PI data system.

 

34

 

Section 8. Quality Audits

From time to time, to ensure that POSCO Power is working in accordance to FCE’s specifications,
upon mutual agreement as to reasonable time and condition, FCE may inspect: (1) POSCO Power’s
module during its manufacture, including stack assembly, module assembly, conditioning, repair and
storage; (2) POSCO Power’s training records of personnel involved in assembling, conditioning, and
storing the fuel-cell modules, as well as work instructions and other training material developed
by POSCO Power for the production of fuel-cell modules; and (3) POSCO Power’s tooling and tooling
documentation used to produce fuel-cell modules.

Section 9. Obligation to Exercise Best Good Faith Efforts

Consistent with the objectives of the Alliance Agreement, the Parties shall use the best good faith
efforts to cooperate with each other to effectuate the transactions contemplated by the STTA and
this STTP.

Section 10. Action Plans for Technology Transfer Program

Detailed action plans for this STTP is attached hereto an Exhibit “A” and made part hereof.

11. Joint Development Program

POSCO Power and FCE acknowledge and agree to participate in a program of joint product development
(hereafter “Joint Development Program”) as described in this section. The particular
characteristics of the Joint Development Program shall be subject to mutual agreement of the
parties. It is anticipated that the Joint Development Program shall include one or both of the
following components: (a) the adaptation of New DFC-Based Products and New DFC-Based Technology for
the Korean Market, and/or (b) the joint development of New Joint Products.

A. Development Group. Consistent with the requirements of Section 2.8(b) of the STTA,
POSCO Power and FCE shall identify and designate sufficient business, financial and technical
personnel and resources to form a joint committee development planning group (hereafter
“Development Group”) that shall meet, either in person or via teleconference, at mutually
acceptable intervals for the planning and execution of the Joint Development Program.

B. Marketability Evaluation. Product development plans which are to be considered for
development under the Joint Development Program (hereafter “Plans”) shall consider and incorporate,
but not be limited to, the following components: (i) initial technical, economic and market
analysis to establish required product attributes; (ii) product performance criteria (e.g. power
output rating, efficiency, fuel type and quality, use of waste heat, etc.); (iii) pricing targets;
(iv) product development schedule including start-

 

35

 

up dates, interim milestones, and completion dates; (v) quality plans, including but not limited to
testing and acceptance criteria; (vi) market size; and (vii) explicit identification of projects
that will be considered New Joint Products. The foregoing criteria shall be used to guide the
Parties in the selection and allocation of resources to the execution of Plans. The Parties further
agree and acknowledge that Joint Development Program relates only to the development of product(s),
and that all terms relating to the purchase, sale, distribution, and marketing of product(s), among
other terms, shall be governed by the Transaction Agreements or by separate purchase agreement(s).

C. Cooperative Efforts of the Parties. The Parties agree to undertake the Joint Development
Program activities in a spirit of partnership, and shall strive to foster dialog and mutual
cooperation to achieve efficient and expeditious outcomes, and maximize the chances of success. In
addition, consistent with the requirements of Section 2.11 of the STTA, each Party agrees to
provide the other Party with technical and related information reasonably necessary and to the
extent reasonably available to carry out their respective responsibilities under the Joint
Development Program.

D. Resource Allocation and Development Costs. Each party agrees to bear its own costs
incurred in the Joint Development Program, except as specifically provided for in a separate
instrument. The Parties acknowledge and agree that each Party’s participation in the Joint
Development Program shall be determined based upon the availability of its own technical personnel
and financial resources, at the sole discretion of each individual participating Party. Further,
the contribution of each party in terms of intellectual property shall be duly considered,
alongside consideration of the level of effort in personnel and resources contributed to the Joint
Development Program, when determining joint ownership of resulting intellectual property.

E. POSCO Power will be granted access to the following information for existing designs transferred
under the BOP TTP.

	 	•	 	Gas Compositions at each position (A/I, A/O, C/I, C/O)

	 	•	 	Temperatures at each position

	 	•	 	Pressures at each position (or pressure drop)

	 	•	 	Stack performance (I-V curve, fuel and oxidant utilization)

	 	•	 	Stack operating windows (in terms of temperature, gas flow rate, pressure, ramp
up/down rate and limiting factor, vibration resisting limit, humidity, salinity)

	 	•	 	Information about simulation/pre-post processing tools (CAD, FEA, CFD) for easier
information exchange in case of JDP

F. For C1400 and C350 module designs, FCE will transfer available model results describing
uniformity or variation of gas flow rates, pressures, and temperatures.

 

36

 

Both parties hereto acknowledge that the foregoing Sections accurately represent the understanding
and agreement of the parties regarding technology transfer by FCE to POSCO Power/POSCO Affiliates.

	 	 	 	 	 	 	 	 	 	 	 
	Dated: October 27, 2009	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Fuel Cell Energy, Inc. 	 	 	 	POSCO Power	 	 
	 
	 	 	 	 	 	 	 	 
	 
By:	 	 	 	 
By:	 	 

 

37

 

List of Exhibits and Attachments

LIST OF EXHIBITS

			
	Exhibit “A”	 	Action Plans for Technology Transfer Program

			
	Exhibit “B”	 	Manufacturing Technology to be transferred by STTP

			
	Exhibit “C”	 	Design Documentation to be transferred by STTP

			
	Exhibit “D”	 	Conditioning Facility Design Documentation to be transferred by STTP

LIST OF ATTACHMENTS

			
	Attachment 1	 	Payment Standard for Traveling Expenses by FCE’s Supervisors

			
	Attachment 2	 	Target Schedule for Technology Transfer

 

38

 

EXHIBIT “A”

ACTION PLAN

FOR STACK TECHNOLOGY TRANSFER PROGRAM

The purpose of this Action Plan for Stack Technology Transfer Program (the “Action Plan”) is
to describe general understanding and background relating to the technology transfer by FCE to
POSCO Power/POSCO Affiliate and to set forth a detail action plan and an outline of the timing for
the technology transfer.

1 Technology to be Transferred

FCE shall transfer to POSCO Power the technology, information, and know-how described in Section 1
of the STTP.

2 Schedule

A target schedule for the transfer of technology described in Section 1 this STTP is shown in
Attachment 2. The target schedule is subject to modification by the Joint Committee.

 

39

 

Exhibit “B”

16.2 Manufacturing Technology to be transferred by STTP

FCE shall transfer the following technologies, know-how and information to POSCO Power and POSCO
Affiliates in accordance with the schedule set forth in Section 3 of this STTP.

	1.1.1	 	Module Assembly Process Information

	 	1.1.1.1	 	Facility

*

	 	1.1.1.1	 	Stacking

*

	 	1.1.1.3	 	Manifolding

*

	 	1.1.1.4	 	Final Module Assembly

*

	 	1.1.1.5	 	Instrumentation

*

	 	1.1.1.5	 	Standard Tooling used throughout Module Assembly Facility

*

	1.1.2	 	Module Conditioning Process Information

*

	1.1.3	 	Module Teardown and Repair Process Information

*

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

 

40

 

Exhibit “C”

Design Documentation to be transferred by STTP

FCE shall transfer the following technologies, know-how and information to POSCO Power and POSCO
Affiliates in accordance with the schedule set forth in Section 3 of this STTP.

C1400 Documentation

* 

Exhibit “D”

16.3 Conditioning Facility Design Documentation to be transferred by STTP

FCE shall transfer the following technologies, know-how and information to POSCO Power and POSCO
Affiliates in accordance with the schedule set forth in Section 3 of this STTP.

* 

Attachment 1

Payment Standard for Traveling Expenses by FCE’s Personnel

1. SCOPE

The present standard shall apply to the standard for traveling expenses by officers or employees of
FuelCell Energy, Inc. (“FCE”) for the purposes of transfer of fuel cell stack module assembly
technology or construction of manufacturing plant in Korea at POSCO Power or POSCO Affiliate’s
request.

2. PAYMENT STANDARD

	 	1)	 	Transportation, food, and lodging expenses shall be paid for the traveling personnel
except for the amount corresponding to purposes other than the affairs involving POSCO Power
or POSCO Affiliate.

	 	2)	 	Transportation expenses shall mean airfare in principle, but in the event no airlines in
Korea or other reasons not permitting air travel exist, railroad, automobile, or passage
fare will be paid for the traveling personnel.

	 	3)	 	The standard payment rate for transportation expenses shall follow Schedule A.

	 	4)	 	Traveling personnel’s food and lodging expenses shall be paid by the number of days spent
for the business trip in case of food expenses and the number of days requiring lodging in
case of lodging expenses in accordance with Schedule B. In the case of business trip by air
travel, however, lodging and food expenses shall be paid only in the cases requiring lodging
due to events beyond one’s control.

	 	5)	 	Food and lodging expenses as specified in Schedule B shall be paid as much as the actual
expenses within the range specified in Schedule B. Receipts or proof of expenses must be
produced for the reimbursement.

	 	6)	 	Officers shall mean the employees whose title is Vice President or higher at FCE

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

 

41

 

Schedule A: Transportation Expenses

(Unit : U$)

	 	 	 	 	 	 	 
	 

	 	Airfare
	 	 
	Item	 	Domestic
	 	International	 	Railroad / Auto / Passage Fare
	Officer

	 	Business Class
	 	Business Class
	 	Actual Expense
	 
	 	 	 	 	 	 
	Employee

	 	Economy Class
	 	Business Class	 	 

	Note) 1)	 	In the event that no reservation for the designated class above can be made, the
designated class can be changed to higher or lower class.

Schedule B: Traveling Expenses

(Unit : U$)

	 	 	 	 	 	 	 	 	 
	Item
	 	Food Expenses (Actual Expense)	 	Lodging (Actual Expenses)
	Officer
	 	Actual Expense	 	Actual Expense (Standard Room)
	 
	 	 	 	 	 	 	 	 
	Employee
	 	80	 	 	 	140	 	 

	Note)	 	Food and lodging expenses for the employees shall be paid as much as the actual expenses
within the limit shown above (receipt or proof of expenses is required).

3. PAYMENT METHOD

1) Transportation expenses and traveling expenses shall be calculated in units of one month in
principle, and FCE shall bill POSCO Power or POSCO Affiliate for the expenses, accompanied by the
proof thereof (original or copy).

2) “POSCO Power or POSCO Affiliate” shall write up and send to FCE the statement of payment based
on the bill sent by FCE and directly pay the corresponding amount in US dollars along with the
statement of payment by applying the first basic rate of foreign exchange (USD) as of the date the
bill is paid.

	 	�	 	Payment Date : 30 days within the date on the bill issued by FCE

	 	‚	 	Payment Method : wire transfer to a bank account designated by FCE

 

42

 

Attachment 2

Target Schedule for Technology Transfer

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2009	 	2010	 	2011
	 	 	 	 	11	 	12	 	1	 	2	 	3	 	4	 	5	 	6	 	7	 	8	 	9	 	10	 	11	 	12	 	1	 	2	 	3
	Infrastructure	 	Factory and Facility	 	Joint Committee:

 Factory Design and
Ground-breaking	 	Factory Construction and Equipments order	 	Equipments installation
and test	 	 	 	 	 	Ceremony for the

completion	 	 	 	 	 	 	 	 
	 	Personnel	 	FCE Recommendation
of organization	 	 	1st Employment	 	 	 	 	 	 	2nd Employment	 	 	 	 	 	 	 	 	 	 
	 	System	 	 	 	 	 	 	 	 	 	 	Study of FCE process control system	 	PP system set-up for process control	 	 	 	 	 	 	 	 	 	 
	Process	 	Assembly	 	 	 	 	 	Preview of Process	 	 	 	 	 	1st OJT in Torrington	 	2nd OJT in Torrington	 	 	 	3rd OJT in Pohang	 	 	 	 	 	 
	 	Conditioning	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1st OJT in Danbury	 	 	 	 	 	2nd OJT in Pohang	 	 	 	 
	 	Teardown	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1st OJT in Pohang (or Danbury) at available module	 	 	 	 
	 	Documents	 	Documents transfer and Review	 	Translation of all tech. and education materials in Korean	 	Study of documents	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Components	 	NRC	 	Documents transfer and Review	 	Q&A in Danbury	 	FCE NRC vendor tour	 	Study of documents and tech.
transfer	 	Korea vendor Qualifying	 	 	 	Prototype Module w/ localized NRC

 

 

 

EXHIBIT B (U.S. DOE APPROVAL)

October 23, 2009

Mr. R. D. Brdar

President and Chief Executive Officer

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, CT 06813

	Subject:	 	Approval of Transfer of Fuel Cell Technology

Cooperative Agreement DE-FC21-95MC31184

Gentleman:

In accordance with my delegated authority, I accept the “adequate recognition” as set forth
in your letter dated October 19, 2009 and October 23, 2009. I hereby approve your request to
transfer fuel cell technology from FuelCell Energy, Inc. (FCE) to POSCO of South Korea in
accordance with the following conditions identified. FCE will transfer fuel cell stack
assembly and conditioning know-how, as well as design drawings and data related to
“non-repeating” components of the fuel cell stack module (i.e. components other than the core
fuel cell technology). Non-repeating components include stack supporting hardware enclosures,
insulation, and piping, but exclude the core fuel cell component designs, materials, and
manufacturing processes, as well as designs and manufacturing processes related to FCE’s
proprietary direct internal reforming technology. Under the proposed new agreement, FCE would
continue to manufacture the core fuel cell units in Connecticut, and ship them to POSCO Power
in South Korea.

The Adequate Recognition consists of two parts:

a) Increase Cost Share for Phase II of the Office of Fossil Energy Coal Based Fuel Cell
Program from $5.2 million to $6.2 million (+ $1 million).

b) The increase in U. S. manufacturing of “core fuel cell components” directly related
to the increased sales outside the U. S.

This approval is provided pursuant to Cooperative Agreement DE-FC21-95MC31184 between FCE
and NETL.

	 	 	 
	 

	 	Sincerely,
	 

	 	
	 

	 	Carl O. Bauer
	 

	 	Director

	 	 	 	 	 	 	 	 	 	 	 	 	 
	626 Cochrans Mill Road, P.O. Box 10940, Pittsburgh, PA 15236

	wayne.surdoval@netl.doe.gov@netl.doe.gov
	 	•
	 	Voice (412) 386-6002
	 	•
	 	Fax (412) 386-4822
	 	•
	 	www.netl.doe.gov

 

 

 

EXHIBIT C (LIST OF PATENTS)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	FCE File No.	 	U.S. PAT. NO.	 	TITLE	 	Country	 	Issued	 	Expires
	 
	B429-086

	 	 	7,494,736	 	 	Dielectric Frame Assembly and Fuel Cell Manifold
	 	U.S.
	 	2/24/2009
	 	2/25/2027
	B429-057 CIP

	 	 	7,393,605	 	 	Fuel Cell End Unit with Integrated Heat Exchanger
	 	U.S.
	 	7/1/2008
	 	5/18/2026
	B429-051

	 	 	7,323,270	 	 	Modular Fuel Cell Stack Assembly
	 	U.S.
	 	1/29/2008
	 	12/1/2025
	B429-083

	 	 	7,294,427	 	 	Manifold Gasket Accommodating Differential Movement of Fuel Cell Stack
	 	U.S.
	 	11/13/2007
	 	7/12/2025
	B429-085

	 	 	7,276,304	 	 	Fuel Cell System Including a Unit for Electrical Isolation of a Fuel Cell Stack From a Manifold Assembly and Method Therefor
	 	U.S.
	 	10/2/2007
	 	6/20/2025
	B429-057

	 	 	7,070,874	 	 	Fuel Cell End Unit with Integrated Heat Exchanger
	 	U.S.
	 	7/4/2006
	 	12/24/2022
	B429-046

	 	 	6,902,840	 	 	Fuel Cell System with Mixer/Eductor
	 	U.S.
	 	6/7/2005
	 	7/2/2022
	 

	 	ZL03815646.6
	 	 	 	China	 	 	 	 
	 

	 	 	4146427	 	 	 	 	Japan	 	 	 	 
	B429-058

	 	 	6,964,825	 	 	Compliant Manifold Gasket
	 	U.S.
	 	11/15/2005
	 	7/24/2023
	 

	 	 	770810	 	 	 	 	Korea
	 	10/22/2007	 	 
	B429-048

	 	 	6,887,611	 	 	Flexible Fuel Cell Gas Manifolds
	 	U.S.
	 	5/3/2005
	 	10/3/2022
	 

	 	 	4317132	 	 	 	 	Japan
	 	5/29/2009	 	 
	B429-054

	 	 	6,797,425	 	 	Fuel Cell Stack Compressive Loading System
	 	U.S.
	 	9/28/2004
	 	12/24/2022
	 

	 	ZL03825719.X
	 	 	 	China
	 	8/15/2007	 	 
	 

	 	 	4153491	 	 	 	 	Japan
	 	7/11/2008	 	 
	 

	 	 	1 590 846	 	 	 	 	EPO
	 	3/11/2009	 	 
	 

	 	 	603 26 650.0-08	 	 	 	Germany
	 	3/11/2009	 	 
	B429-043

	 	 	6,531,237	 	 	Manifold and Sealing Assembly for Fuel Cell Stack
	 	U.S.
	 	3/11/2003
	 	3/1/2021
	 

	 	ZL02805816.X
	 	 	 	China
	 	3/21/2007	 	 
	 

	 	 	4318667	 	 	 	 	India
	 	5/29/2009	 	 
	B429-040

	 	 	6,514,636	 	 	Ultra-Smooth Dielectric Members for Liquid Electrolyte Fuel Cells
	 	U.S.
	 	2/4/2003
	 	12/13/2020
	 

	 	ZL01820569.0
	 	 	 	China
	 	2/7/2007	 	 
	 

	 	 	216427	 	 	 	 	India
	 	9/19/2005	 	 
	B429-038

	 	 	6,461,756	 	 	Retention System for Fuel Cell Stack Manifolds
	 	U.S.
	 	10/8/2002
	 	8/21/2020
	 

	 	ZL01813533.1
	 	 	 	China
	 	1/18/2006	 	 
	 

	 	 	196,113	 	 	 	 	India
	 	9/19/2005	 	 
	 

	 	 	3736765	 	 	 	 	Japan
	 	11/4/2005	 	 
	B429-035

	 	 	6,410,161	 	 	Metal-Ceramic Joint Assembly
	 	U.S.
	 	6/25/2002
	 	4/15/2019
	B429-041

	 	 	6,413,665	 	 	Fuel Cell Stack Compression System
	 	U.S.
	 	7/2/2002
	 	8/31/2020
	 

	 	ZL01814724.0
	 	 	 	China
	 	10/5/2005	 	 
	 

	 	 	196,112	 	 	 	 	India
	 	9/19/2005	 	 
	40128

	 	 	5,110,692	 	 	Gasket for Molten Carbonate Fuel Cell
	 	U.S.
	 	5/5/1992
	 	8/20/2010
	 

	 	 	0472152	 	 	 	 	EPO
	 	5/24/1995	 	 
	 

	 	 	P69109971.5	 	 	 	 	Germany
	 	5/24/1995	 	 

	 	 	 	 	 
	Note:	 	1.	 	U.S. Patents and foreign counterparts (if any) are grouped together.

	 
	 	 	2.	 	Expiration dates are the same for U.S. and foreign counterpart patents.

 

 

 

EXHIBIT D ( SALES TARGETS)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Business Plan	 	 	Sales Target (50%)	 	 	Cumulative	 
	Year	 	(MW)	 	 	(MW)	 	 	(MW)	 
	 
	 	 	 	 	 	 	 	 
	Pre-2011
	 	 	—	 	 	 	—	 	 	 	69.0	 
	2011
	 	 	*	 	 	 	*	 	 	 	*	 
	2012
	 	 	*	 	 	 	*	 	 	 	*	 
	2013
	 	 	*	 	 	 	*	 	 	 	112.0	 
	2014
	 	 	*	 	 	 	*	 	 	 	*	 
	2015
	 	 	*	 	 	 	*	 	 	 	*	 
	2016
	 	 	*	 	 	 	*	 	 	 	*	 
	2017
	 	 	*	 	 	 	*	 	 	 	*	 
	2018
	 	 	*	 	 	 	*	 	 	 	*	 
	2019
	 	 	*	 	 	 	*	 	 	 	*	 
	2020
	 	 	*	 	 	 	*	 	 	 	568.0	 

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

 

 

 

SCHEDULE A (POSCO Affiliates)

POSCO Affiliates shall include the following companies:

POSCO, a Korean corporation having a place of business at 1 Goedong-dong, Nam-gu, Pohang, Kyungbuk
790-704, Korea

POSCON, a Korean corporation having a place of business at 606 Ho-dong Nam-gu, Pohang, Kyungbuk
790-719, Korea

POSMEC, a Korean corporation having a place of business at 322-4 Janghung-dong Nam-gu, Pohang,
Kyungbuk 790-714, Korea

POSCO E&C, a Korean corporation having a place of business at 568-1 Goedong-dong Nam-gu, Pohang,
Kyungbuk 790-704, Korea

POSTEEL, a Korean corporation having a place of business at 735-3 Posteel Tower Yeoksam-dong
Gangnam-gu Seoul 135-080, Korea

 

 

 

SCHEDULE B (Non-Exclusive Territory)

The Non-Exclusive Territory shall include all countries and jurisdictions, except as noted
below:

	 	 	 
	Western Europe	 	Eastern Europe
	Andorra

	 	Albania
	Austria

	 	Bulgaria
	Belgium

	 	Czech Republic
	Cyprus

	 	Slovakia
	Denmark

	 	Hungary
	Federal Republic of Germany

	 	Poland
	Finland

	 	Romania
	France

	 	All states of the former USSR
	Great Britain and including, but not limited to
Northern Ireland CIS (Commonwealth of Independent States)
	Greece
	 	 
	Greenland

	 	Yugoslavia
	Ireland

	 	Slovenia
	Iceland

	 	Croatia
	Italy
	 	 
	Liechtenstein
	 	 
	Luxembourg

	 	Asia
	Malta

	 	Japan
	Monaco
	 	 
	Netherlands
	 	 
	Norway
	 	 
	Portugal
	 	 
	San Marino
	 	 
	Spain
	 	 
	Sweden
	 	 
	Switzerland
	 	 
	The Vatican State
	 	 
	 
	 	 
	Middle East
	 	 
	Bahrain

	 	Yemen, Arab Rep.
	Iran

	 	Yemen, Peoples Rep.
	Iraq

	 	United Arab Emirates (UAE)
	Israel
	 	 
	Jordan
	 	 
	Kuwait
	 	 
	Lebanon
	 	 
	Oman
	 	 
	Qatar
	 	 
	Saudi-Arabia
	 	 
	Syria
	 	 
	Turkey
	 	 
	 
	 	 
	North America
	 	 
	United States
	 	 
	Canada
	 	 
	Mexico
	 	 

 

 

 

SCHEDULE C (FCE Previously Granted Distribution Rights)

	 	 	 	 	 	 	 	 	 
	Distributor	 	Type of Agreement	 	Effective Date	 	Expiration	 	Rights in Korea
	BOC Limited (Linde Group)

	 	Market Development Agreement (“MDA”)
	 	11/2/2006
	 	11/1/2009
	 	Yes
	Caterpillar Inc.

	 	Purchase and Marketing Agreement
	 	4/26/2002
	 	4/25/2012
	 	Yes
	Marubeni (Japan)

	 	Alliance Agreement
	 	6/15/2001
	 	6/14/2011
	 	Rights in Korea Waived by Agreement
	MTU CFC Solution, GmbH

	 	Cell License
	 	12/15/1999
	 	12/14/2009
	 	No
	MTU CFC Solution, GmbH

	 	BOP Cross-License
	 	7/16/1998
	 	7/15/2008
	 	No
	 
	 	 	 	 	 	 	 	 
	Pfister Energy

	 	MDA
	 	6/26/08
	 	6/26/2010
	 	No
	American Wind Power & Hydrogen

	 	MDA
	 	1/2/08
	 	1/2/10
	 	No
	 
	 	 	 	 	 	 	 	 
	Enbridge

	 	MDA
	 	11/4/03
	 	10/31/10
	 	No
	 
	 	 	 	 	 	 	 	 
	Logan Energy

	 	MDA
	 	10/28/08
	 	10/27/10
	 	No
	 
	 	 	 	 	 	 	 	 
	Powerhouse Energy

	 	MDA
	 	11/1/07
	 	11/1/09
	 	No
	 
	 	 	 	 	 	 	 	 
	PPL Energy

	 	Distributor Agreement
	 	9/21/00
	 	12/31/10
	 	No
	Western Energy Marketers

	 	MDA
	 	11/8/07
	 	11/7/10
	 	NoExhibit 10.2

Exhibit 10.2

Execution Version

CONTRACT

FOR THE SUPPLY OF DFC® MODULES AND DFC® COMPONENTS

FROM FUELCELL ENERGY INC. (SELLER)

TO POSCO POWER (BUYER)

JUNE 9, 2009

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

 

 

 

PURCHASE AND SALE CONTRACT

This PURCHASE AND SALE CONTRACT (the “Contract”) is made and entered into this 9th day
of June, 2009, by and between POSCO Power Corporation, a corporation duly organized and existing
under the laws of the Republic of Korea having a place of business at Posteel Tower 20th
floor, 735-3, Yeoksam-dong, Gangnam-gu, Seoul 135-080, Korea (hereinafter referred to as “POSCO
Power” or the “Buyer”) and FuelCell Energy, Inc., a corporation duly organized and existing under
the laws of the State of Delaware, U.S.A., with its principal office at 3 Great Pasture Rd.,
Danbury, Connecticut, U.S.A. (hereinafter referred to as “FCE” or the “Seller”).

Each of the parties acknowledges and agrees that all aspects of the performance by the parties
under the terms of this Contract, and all other dealings between the parties in connection
therewith, shall be governed by the principle of good faith and fair dealing. Further, each party
agrees that it will perform its functions under this Contract in cooperation with the other party
and in accordance with prevailing industry standards.

RECITALS:

WHEREAS, POSCO Power and FCE are parties to the Technology Transfer, Distribution and Licensing
Agreement (the “TTA”) and the Alliance Agreement (the “AA”), both executed as of February 7, 2007;

WHEREAS, POSCO Power and FCE are additionally parties to the Technology Transfer Program (“TTP”)
executed as of July 11, 2007;

WHEREAS, POSCO Power and FCE are additionally parties to the Contract for the Supply of DFC Plants
and DFC Modules from FuelCell Energy Inc. to POSCO Power (referred to hereunder as the “2008
Purchase Contract”) executed as of April 22, 2008;

WHEREAS, POSCO Power and FCE intend to enter into a new technology transfer agreement under which
FCE will grant a license to POSCO Power for the assembly and conditioning of DFC Modules
incorporating DFC Components (referred to hereunder as the “Module Assembly Technology Transfer
Agreement” or “MATTA”);

WHEREAS, POSCO Power and FCE additionally intend to execute a new technology transfer protocol
agreement describing detailed procedures for compliance with the terms of the MATTA (referred to
hereunder as the “Module Assembly Technology Transfer Program or MATTP”);

WHEREAS, the Buyer desires to purchase DFC Modules and DFC Components as described hereunder from
the Seller for the purpose of integration with Balance of Plant to be procured by the Buyer, either
from Seller or from independent third party vendors, for subsequent operation of the resulting
Plants, or for resale of the Plants to Third Party Owners, and associated installation the Plants
and the Equipment at the Site; and

WHEREAS, the Seller desires to sell the DFC Modules and DFC Components to the Buyer, and to provide
technical advisory services and other support services to the Buyer, in accordance with the terms
and conditions herein set forth; and

WHEREAS, the Seller and the Buyers acknowledge and agree that the Buyer may, without assuming any
obligations set forth in this Agreement and the other Transaction Agreements, assign its rights and
obligations to NewCo (which has the meaning assigned in the AA), subject to the requirements of
section

CONFIDENTIAL

 

 

 

17.1 hereunder. In the event of any other assignment of this Agreement by either party, the
assignee shall assume, in writing (in form and substance reasonably satisfactory to the other
party), the rights and obligations of the assigning party under this Agreement.

Now, THEREFORE, in view of the foregoing premises and in consideration of the mutual covenants and
undertakings hereinafter provided, the parties hereto agree as follows:

1. DEFINITIONS

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

1.1
“Balance of Plant” or “BOP” shall have the meaning assigned in the TTA.

1.2
“Balance of Plant Skid” or “BOP Skid” means structural skid(s) with all BOP
components for the Power Plant with the exception of the Fuel Cell Module.

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

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

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

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

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

1.8 “Commissioning Discontinuance” means the conditions that commissioning cannot be
proceeded to the next step due to improper conditions of the POSCO Plant itself and the POSCO Plant
operation.

1.9 “Delivery at Site” means delivery of the Plant and the Equipment, including all
drawings and other documents provided by the Seller at the Site pursuant to Article 8.1.2 of this
Contract.

CONFIDENTIAL

 

 

 

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

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

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

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

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

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

1.16 “Equipment” means the DFC Modules, Repeating Components, Non-Repeating Components, and
any machinery, equipment, apparatus, instruments, ship loose items, materials and other items which
are supplied by Seller pursuant to this Contract.

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

1.18 “EXW” or “Ex Works” shall have the meaning assigned as published by the
United Nations Commission on International Trade Law in the “International Commercial Terms
(INCOTERMS 2000) “ as amended, except as may be otherwise provided herein.

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

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

1.21 “DFC Module Components” or “DFC Components” shall mean one set of RC and NRC
components necessary for the assembly of one complete DFC Module.

CONFIDENTIAL

 

 

 

1.22 “Service Agreement” means a long term service agreement in respect of the Plant
between Seller and the Buyer or, in the case the Plant is resold to the Third Party Owner, among
Seller, Buyer (or its designee) and the Third Party Buyer.

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

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

1.25
“Non-Repeating Components” or “NRC” means parts and components of the DFC Modules
other than RC, necessary to assemble a DFC Module.

1.26 “POSCO Affiliate” shall have the meaning assigned in the AA.

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

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

1.29 “Pre-Shipment Tests” shall mean the testing procedures to be carried prior to delivery
from FCE facilities, as indicated in Article 9 hereunder.

1.30
“Repeating Components” or “RC” shall consist of discrete fuel cell packages assembled
from active components, excluding NRC, which are necessary for the assembly of DFC Modules.

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

1.32 “Site Technical Advisory Services” means the services to be performed by the Site
Technical Advisors in connection with the installation, erection, commissioning and acceptance test
of the Equipment in accordance with Article 5 hereof.

1.33 “Site Technical Advisors” means the persons authorized by the Seller to perform the
Seller’s obligations regarding the Site Technical Advisory Services under the Contract.

1.34 “Target Date” means, the day on which, in accordance with the construction schedule,
the POSCO Plant/Facilities are to be put into initial operation.

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

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

2. EFFECTIVE DATE OF CONTRACT

The Contract shall become fully effective and binding upon both parties hereto on the date (the
“Effective Date”) this Contract is executed by their duly authorized representatives.

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3. SCOPE OF CONTRACT

3.1 The division of responsibility between Seller, Buyer and POSCO Affiliate for the manufacture,
testing, and warranty of the DFC Plants and POSCO Plants for which equipment shall be supplied
under to this Agreement, shall be as described in this section.

Manufacturing Category 3 (MC-3): Shall be as described in the 2008 Purchase Contract.

Manufacturing Category 4 (MC-4): Seller Supplies DFC Module Components, Buyer and/or POSCO
Affiliate assembles DFC Module Components into DFC Modules under separate license from Seller,
POSCO Affiliate supplies BOP. In this stage Buyer and/or POSCO Affiliate will establish a facility
in Korea for stack assembly and conditioning activities to complete the manufacture of DFC Modules
using DFC Module Components and technical assistance provided by Seller.

3.2 [Reserved]

3.3 Responsibilities of the Parties Under Manufacturing Category 3 (“MC-3”) shall be as described
in section 3.3 of the 2008 Purchase Contract.

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

3.4.1 The Seller agrees to sell the DFC Components as set forth in Annex A hereunder, and the Buyer
agrees to purchase and take delivery of the DFC Components according to the schedule indicated in
Annex A. In addition, the Seller shall provide the following materials, parts, documents, supplies,
assistance, support and advisory services as specifically set forth herein:

	 	A.	 	Design, engineer, and manufacture the DFC Components, in the quantities and shipped to
Buyer according to the schedule indicated in Annex A, conforming to the DFC Components
Specifications provided in Appendix B;

	 	B.	 	Transfer technology and provide technical assistance in accordance with the MATTA and the
MATTP for the assembly and conditioning of DFC Modules using DFC Components purchased from
Seller;

3.4.2 As a prerequisite of Seller’s guarantees under Paragraphs 3.4.4 and 3.4.5 hereunder, all work
performed by Buyer in the procurement of BOP components and in the assembly and test of DFC Modules
shall be performed in accordance with Seller drawings, manufacturing practices, instructions and
quality plans; and all variations therefor which may have an impact on performance shall be subject
to prior written approval by Seller. Failure to strictly adhere to the above requirement shall void
Seller’s warranties.

3.4.3 During all stages of manufacture of DFC Modules by Buyer, Seller shall have the right to have
its technical representative(s) present at Buyer’s Plant for the purpose of inspecting the
materials used and the work performed by Buyer. The Seller technical representative(s) shall have
the right to reject and require correction of any work and procedures which do not meet Seller
quality standards. The performance of the aforesaid functions by the Seller technical
representative(s) shall in no way relieve Buyer of its obligations under this Agreement.

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3.4.4 With respect to DFC Components provided to Buyer by Seller under this Agreement, Seller shall
be responsible to Buyer as set forth hereunder. In the event that the results of tests made under
conditions to be agreed upon in advance between Seller and Buyer indicate that any DFC Components
manufactured and assembled into a complete DFC Module by Buyer under this Agreement, fails to
perform as stipulated by Seller in Appendix B, and if any such failure is due solely to the
improper performance of components supplied by Seller, then Seller’s sole responsibility to Buyer,
and Buyer’s sole remedy, shall be as set forth in the performance guarantee described in section
9.2, and the warranty referred to in Article 10.

3.4.5 With respect to each DFC Module assembled by Buyer incorporating DFC Components manufactured
by Seller, and consistent with the provisions of section 7.1(vi) of the TTA, Seller shall be
responsible to Buyer as set forth hereunder. In the event that the results of tests made under
conditions to be agreed upon in advance between Seller and Buyer indicate that any DFC Module fails
to achieve the performance levels indicated by the DFC Module Specifications provided in Appendix A
of this Contract, and if any such failure is due solely to incorrect drawings or data furnished and
specified to Buyer by Seller, then Seller’s sole responsibility to Buyer, and Buyer’s sole remedy,
shall be to furnish corrected drawings or data to Buyer, and to consult with Buyer with respect to
correcting the performance of the DFC Module. In the event that the Parties are not able to agree
as to the cause of failures, then the procedures outlined in Article 15 hereunder shall apply.

3.4.6 In no event shall Seller’s liability under this Article exceed the price of the DFC
Components paid by Buyer to Seller for the POSCO Plant involved.

3.4.7 Seller’s Responsibility Under End User Long Term Service Agreements.

	 	A.	 	DFC Modules Manufactured by Seller: Seller’s obligations for complete DFC Modules
manufactured by Seller shall be as described in the 2008 Purchase Contract.

	 	B.	 	DFC Modules Assembled by Buyer from DFC Components Supplied by Seller: For DFC
Modules assembled by Buyer and/or POSCO Affiliate from DFC Components supplied by Seller,
Buyer shall be responsible to the end user for warranty, performance guarantees, and service
obligations related to the DFC Modules. Seller shall have no obligations under the service
agreements which Buyer may execute with end users, beyond the performance guarantee
described in section 9.2, and the warranty referred to in Article 10.

3.5 General Conditions

3.5.1 The Parties may change the designation of manufacturing categories shown in Annex A, by
mutual agreement, up to the time of material purchasing.

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

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

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

3.5.6 Buyer shall be responsible for establishing the POSCO Plant Specifications and the POSCO
Plant Manuals. Buyer agrees that the POSCO Plant Specifications and Manuals shall use as a guide
the DFC Specifications and Manuals. Buyer additionally agrees that the POSCO Plant Specifications
and Manuals shall not exceed the performance levels established in the DFC Specifications and
Manuals, nor shall such POSCO Plant Specifications and Manuals allow operating conditions any less
stringent than contained in the DFC Specifications and Manuals, without the prior written approval
of Seller.

4. CONTRACT PRICE AND PAYMENT TERMS

4.1 The Contract Total Price set forth in Annex A covers the Scope of Contract set forth in
Article 3 above.

4.2 Expected Output. The expected MW output rating for the DFC Modules and DFC
Components to be sold to Buyer under this Contract is shown in Annex A. Seller expects to introduce
new technology resulting in an increase in power output per Module from 1.2 MW to 1.4 MW beginning
with shipments commencing in 2009. In the event that the increase in power output from 1.2 MW to
1.4 MW is not achieved according to the anticipated schedule, Seller and Buyer agree that the
pricing indicated in Annex A will be adjusted proportionally to reflect the increase or the
shortfall in output.

4.3 Payment Terms

4.3.1 Initial Downpayment. Buyer agrees to make a downpayment to Seller in the amount of
10% of the Contract Total Price indicated in Annex A, which shall be received by Seller within 30
days after the Effective Date.

4.3.2 Payments for DFC Modules and DFC Components sold to Buyer as indicated in Annex A, shall be
made by the Buyer to the Seller in accordance with the following schedule:

	 	A.	 	The first payment in the amount of ten percent (10%) of the price of individual DFC
Modules or DFC Components shall be allocated from the Initial Downpayment.

	 	B.	 	The second payment in the amount of twenty percent (20%) of the price of individual DFC
Modules or DFC Components shall be invoiced at time of Seller’s actual material order, but
no sooner than five(5) months after the Effective Date of this Contract.

	 	C.	 	The third payment in the amount of twenty percent (20%) of the price of individual DFC
Modules or DFC Components shall be invoiced twelve (12) weeks prior to EXW shipment date.

	 	D.	 	The fourth payment in the amount of twenty-five percent (25%) of the price of
individual DFC Modules or DFC Components shall be invoiced four (4) weeks prior to EXW
shipment date.

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

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

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5. TECHNICAL ADVISORY SERVICES

5.1 Buyer acknowledges that technical advisory services provided by the Seller are not
included in the price indicated in Annex A. Seller agrees to provide a reasonable amount of such
services at the request of Buyer, subject to payment by Buyer at Seller’s then current per diem
rates, and otherwise subject to the provisions of the MATTA.

6. DELIVERY; TITLE TRANSFER; INSPECTION

6.1 Delivery.

6.1.1 Shipment Terms for the Equipment. Seller agrees to supply, and Buyer agrees to purchase,
the Equipment in the quantities and prices as indicated in Annex A hereunder, on the basis of EXW
Seller’s Delivery Sites. For the avoidance of doubt, Seller shall be responsible for crating and/or
otherwise preparing the Equipment for shipment in compliance with Article 7 of this Contract; and
the cost for preparing the Equipment for such shipment is included in the pricing as indicated in
Annex A hereunder.

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

6.1.3 Designation of Seller’s Delivery Sites. Seller agrees to notify Buyer within 60 days
after the Effective Date of this Contract, of the Seller’s Delivery Sites for the Equipment. The
Seller’s Delivery Sites shall not exceed four (4) physical locations (including the location(s) in
FuelCell Energy Site in Connecticut). Any and all deliverables to the Buyer shall be shipped to
such four (4) locations at Seller’s expense. After the execution of this Contract, the parties
shall negotiate in good faith to minimize any inland shipping expenses and ensure the quality of
the Equipment during the inland shipping.

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

6.1.5 Partial shipments shall be permitted.

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

6.1.7 Liquidated Damages for Delayed Delivery. In the event the EXW delivery date of
the Equipment is delayed more than 30 days beyond the EXW shipment dates indicated in Annex A,
solely through the fault of the Seller, and unless the parties mutually agreed to an extension
thereto, the Buyer is entitled to claim liquidated damages per day of delay in an amount equivalent
to 0.15% of the price for the delayed Equipment. Such liquidated damages shall not exceed five
percent (5%) of the price of the affected unit(s). In the event that the liquidated damages under
this section reach 5% of the price of the affected unit(s), Buyer shall have recourse to Article
16.4 below. Prior to implementing the provisions of Article 16.4 pursuant to this section, Buyer
agrees that it shall discuss with Seller alternate remedies in good faith.

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6.3 Communication

6.3.1 The Seller shall provide to the Buyer, by facsimile or email, the information necessary
for the Buyer’s vessel arrangement and necessary insurance pursuant to Article 6.6 at least 40 days
prior to each shipment, including the name of Equipment, the approximate number of packages, total
weight and measurement, the loading date, the loading port and other pertinent information
(including information for customs clearance and inland transportation). The Buyer shall inform, by
email or telefacsimile, the Seller of the status of vessel arrangement seven (7) days prior to the
date of shipping.

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

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

6.5 Inspection; Rejection

6.5.1 The Seller or its designated representative shall inspect the Equipment at the loading
port for quality assurance. The Buyer will have the right to be present at the time of such
inspection, and the Seller shall provide Buyer with reasonable prior notice of any such inspection.

6.5.2 The Buyer may reject from any shipment any Equipment which is defective or deficient, or
which does not otherwise conform to the Specifications.

6.6 Insurance. Seller shall bear the cost of insuring the Equipment prior to the time that
it passes the ship’s rail in the loading port. Buyer shall bear the cost of insuring the Equipment
from the time that it passes the ship’s rail in the loading port.

7. PACKING

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

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

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

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

	 	A.	 	For: POSCO Power;

	 
	 	B.	 	Contract number or name of Contract;

	 
	 	C.	 	Port of destination;

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

	 
	 	E.	 	Commodity description;

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

	 
	 	G.	 	Shipper’s marks;

	 
	 	H.	 	Origin of the Equipment/Port of Export;

	 
	 	I.	 	Caution marks, if necessary; and

	 
	 	J.	 	Shipping mark.

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

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

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

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

	 	•	 	Regulated Areas : All countries.

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

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

ISPM 15 mark

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

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

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

	 	•	 	Non-compliance Measures

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

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

8. DRAWINGS AND DOCUMENTS

The Seller shall provide to the Buyer:

	 	A.	 	In the case of manufacturing category MC-4, appropriate drawings, reports,
guidelines, manuals, programs, software, and data which are described in the MATTA and
the MATTP for assembly of the DFC Components into DFC Modules;

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

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

9. PERFORMANCE GUARANTEES AND ACCEPTANCE TESTS

9.1 Standard Pre-Shipment Factory Inspection and Testing Procedures

9.1.1 Pre-Shipment Factory Test Procedures for DFC Modules. The Seller agrees to
provide 30 days advance written notice to Buyer for pre-shipment testing of Modules to be shipped
to Buyer pursuant to this Contract. The Seller also agrees to provide written procedures
documenting the Seller’s standard pre-shipment factory test for DFC Modules.

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The Seller shall conduct normal and standard tests of all materials and the workmanship of all
DFC Modules to be supplied under this Contract in accordance with Seller’s standard pre-shipment
factory test for DFC Modules. Seller shall prepare a Test Report documenting results of the
standard pre-shipment factory test for DFC Modules, documenting pass/fail status for each Module as
compared with standard acceptance test criteria. The Engineer shall be entitled, at all reasonable
times, to witness the Test and to inspect the procedures and results of the Test for the Modules to
be supplied under the Contract, and to inspect the packing and marking of such Equipment. The
Engineer(s) have the right to reject the failed DFC Stack Module as per the test results. One copy
of the Test Report for each Module provided pursuant to this contract shall be supplied to Buyer
prior to shipment. A standard form of the Test Report is included hereunder as Appendix C. Such
inspection, examination or testing, if made, shall not relieve the Seller from any obligations
under the Contract.

9.1.2 Pre-Shipment Factory Inspection Procedures for DFC Components. The Seller agrees
to provide 30 days advance written notice to Buyer for pre-shipment inspection of Repeating
Components to be shipped to Buyer pursuant to this Contract. The parties shall negotiate in good
faith to agree on the standard pre-shipment factory inspection procedures for DFC Components which
will be included in the MATTA.

The Seller shall conduct normal and standard inspections of all materials and the workmanship
of all DFC Components to be supplied under this Contract in accordance with the standard
pre-shipment factory inspection procedures for DFC Components. Seller shall prepare an Inspection
Report documenting results of the standard pre-shipment factory inspections for DFC Components.
One copy of the Inspection Report for each set of DFC Components provided pursuant to this contract
shall be supplied to Buyer prior to shipment. A standard form of the Inspection Report is included
hereunder as Appendix D. Such inspection, examination or testing, if made, shall not relieve the
Seller from any obligations under the Contract.

9.2 Performance Guarantee for DFC Modules and DFC Components

9.2.1 The guaranteed power output and efficiency for the POSCO Plant final acceptance test at the
customer site (“FA Test”) shall be set forth in the POSCO Plant Specifications. If after repeated
FA Tests over a period of six (6) months from the first FA Test, the POSCO Plant fails to achieve
the guaranteed power output and/or efficiency set forth in the POSCO Plant Specifications, for
causes solely attributable to the DFC Module or the DFC Components provided by Seller, but achieves
at least 95% of the guaranteed power output and/or efficiency, the Contract Price for the DFC
Module or DFC Components shall be reduced to reflect the shortfall in either the power output or
the efficiency proportionally, whichever shortfall amount is higher.

9.2.2 Liquidated Damage. In the event the POSCO Plant fails to achieve at least 95% of the
guaranteed power output and/or efficiency solely due to the fault of the DFC Module or DFC
Components after repeated FA tests, Seller shall notify Buyer in writing of the reason for such
failure. If the reason is solely attributable to causes related to DFC Module or DFC Components
provided by Seller, then Seller shall have a period of six (6) months from the first FA test to
take necessary corrective actions and repeat the FA test to achieve greater than 95% of the
guaranteed power output and/or efficiency. If at the end of such time period 95% of the guaranteed
power output and/or efficiency is still not achieved, then Buyer shall have recourse to Article
16.1 below.

9.2.3 Additional Liquidated Damage Applicable Only to DFC Modules Wholly Manufactured by
Seller. In the event that during the commissioning period, excluding the FA test, the
commissioning of the POSCO Plant is discontinued due to causes solely attributable to defects of
DFC Modules wholly

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manufactured by Seller, the Buyer is entitled to claim liquidated damages per day of Commissioning
Discontinuances in an amount equivalent to 0.15% of the price for the total Equipment (e.g in case
of 2.4 MW plant, the total equipment is two DFC Modules) provided by Seller. The total amount of
liquidated damages payable by Seller to Buyer under this paragraph shall not exceed five percent
(5%) of the price of the total Equipment. In the event of Commissioning Discontinuance caused by
the defects of DFC Modules wholly manufactured by Seller, Seller should exercise commercially
reasonable efforts to eliminate the defects at Seller’s own cost; and Buyer shall support Seller to
eliminate defects in the most efficient manner. Seller shall provide Buyer with action plans, root
causes and corrective actions before and after taking actions.

10. WARRANTIES

10.1 Warranties Against Defects, Etc. The Seller warrants, for a period of eighteen (18)
months from the date of EXW shipment, or twelve (12) months from the date of first operation at the
installation site, whichever occurs first, that (i) the DFC Modules and DFC Components to be
delivered hereunder shall be free from defects in material and workmanship; and (ii) the DFC
Modules and DFC Components conform to the DFC Module Specifications and DFC Component
Specifications and other requirements set forth in this Contract. If the DFC Modules experience
reduction in power output below 90% of rating, averaged over any consecutive 30-day period during
the warranty period, for causes solely attributable to Seller, Seller shall use its reasonable best
efforts to take corrective actions as provided by the warranty provisions hereunder, to increase
the average power output above 90% of rating.

10.2 Remedies for Breach of Warranties Against Defects, Etc.

10.2.1 If any DFC Modules or DFC Components delivered do not meet the warranties set forth in
Article 10.1 during the warranty period, the Buyer shall promptly notify the Seller in writing.
The Seller shall, at its own expense and cost, correct the defects by: (i) repairing the defective
parts of the Equipment, (ii) replacing the defective parts if repair is impossible; or (iii)
providing an equitable adjustment of the Contract Price. For the avoidance of doubt, the Seller
shall bear all costs and expenses incurred in connection with any of the above corrective measures,
including customs clearance at a Korean port, inland transportation from the port to the Site and
field labor.

10.2.2 If the Seller does not commence the correction of such defects within 30 days from the
date of receipt of notice from the Buyer, and Seller’s acceptance of such notice, or does not
complete the said correction with reasonable diligence and within a reasonable time, the Buyer may,
at its option, correct the defects at the Seller’s risk and expense. The Seller shall reimburse the
expense incurred by the Buyer for remedy of such defects within thirty (30) days from the date of
receipt of the Buyer’s invoice.

10.3 Downtime Warranty. If a complete DFC Module wholly manufactured by Seller is forced to
continuously or intermittently decrease power output below 50% of the power output at final
acceptance (“Downtime”), and if such Downtime is due to causes solely attributable to Seller, then
Seller shall be subject to liquidated damages as outlined in this section.

	 	(A)	 	In the event that the cumulative number of days of Downtime for the DFC Module
exceeds forty-five (45) days during the warranty period, Seller shall pay to Buyer an
amount of zero point one percent (0.1%) of the applicable individual unit price as
indicated in Annex A, for each day of such Downtime exceeding forty-five days as
liquidated damages. Liquidated damages for Downtime pursuant to this section shall not
exceed ten percent (10%) of the applicable individual unit price as indicated in Annex
A. Seller agrees to pay such liquidated damages within thirty (30) days after receiving
Buyer’s invoice reflecting such claims. Buyer

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	 	 	 	agrees that the Liquidated damages shall not be duplicated with the Liquidated damages
of the Performance Guarantee of LTSA. During the Warranty period, only the Liquidated
damages of Downtime shall be applied.

	 	(B)	 	Any Downtime attributable in part or in full to the following causes shall not
be considered as Downtime attributable to Seller: (i) corrections, modifications and
repairs undertaken pursuant to Seller’s maintenance obligations; (ii) causes not
attribute to Seller which delay commencement or execution of corrective measures; (iii)
causes which cannot clearly be identified or proven by the Parties; (iv) failure of the
Third Party Owner to comply with the Specifications, Manuals, or with the conditions of
the warranty; or outage time wholly or partially due to causes beyond the reasonable
control of the Seller.

10.4 General Warranty Provisions

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

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

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

10.5 The Seller does not warrant the DFC Module or DFC Components or any repaired or replacement
parts against normal wear and tear including that due to expected degradation in accordance with
the Module Specifications, environment or operation, including excessive operation at peak
capability, frequent starting/stopping, type of fuel, or erosion, corrosion or material deposits
from fluids. The warranties and remedies set forth herein are further conditioned upon (i) the
proper storage, installation, operation, and maintenance of the Module and conformance with the
Module Specifications and instruction manuals (including revisions thereto) provided by the Seller
and/or its subcontractors; (ii) the proper operation and maintenance of the POSCO Plant in
accordance with the POSCO Plant Manuals, or in the absence of such POSCO Plant Manuals, the DFC
Plant Manuals as applicable; and (iii) repair or modification pursuant to Seller’s instructions or
approval. Buyer shall keep proper records of operation and maintenance during the warranty period.
These records shall be kept in the form of logsheets and copies shall be submitted to Seller upon
its request. Seller does not warrant any equipment or services of others designated by Buyer where
such equipment or services are not normally supplied by Seller.

10.6 The Seller shall have no obligation to correct, repair and/or replace the DFC Plants, DFC
Modules, DFC Components, or any Equipment to the extent a defect or non-conformance is the result
of improper assembly, installation or damage resulting from the Buyer’s failure to comply with the
Specifications, instructions and documentation regarding installation, operation and maintenance of
the Module.

10.7 Changes, modifications or alterations by the Buyer or its vendors, suppliers, employees or
agents, to the Buyer Plant or its components provided herein, without the written approval of
Seller, shall void all

CONFIDENTIAL

 

 

 

Seller’s obligations and warranties hereunder, and may void third party equipment certifications,
including safety, environmental and interconnection.

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

11. LIMITATION OF LIABILITY

11.1 Each party (Indemnitor) agrees to indemnify and hold harmless the other party (Indemnitee)
from and against any and all losses, obligations, liabilities, damages, claims which may be
asserted against or sustained or incurred by the Indemnitee arising out of or related to any breach
of any of the representations, warranties, agreements and covenants made by Indemnitor in this
Contract; any bodily injury or death suffered by anyone; any property damage of any third parties;
or any wrongful and negligent act of Indemnitor that occurs under this Contract, in an amount not
to exceed such plant’s Contract Price; provided, any claim under Section 15.1 shall not be subject
to any such limitations set forth in this Article 13.1. In no event, whether as a result of breach
of contract, warranty, tort (including negligence), strict liability, indemnity, or otherwise,
shall either party or its subcontractors or suppliers be liable to the other party for loss of
profit or revenues, loss of use of the Plant or any associated equipment, cost of capital, cost of
substitute equipment, facilities, services or replacement power, claims of Indemnitor’s customers
for such damages, or for any special, consequential, incidental, indirect or exemplary damages.

If Seller furnishes Buyer with advice or assistance concerning any products, systems or work which
is not specifically required by the Specification, the furnishing of such advice or assistance will
not subject Seller to any liability, whether in contract, indemnity, warranty, tort (including
negligence), strict liability or otherwise.

11.2 If Buyer transfers title to the Facilities to a third party, Buyer shall obligate such third
party to be bound by the provisions of this Article to the same extent as Buyer is obligated. In
the event Buyer cannot obtain the foregoing for Seller, Buyer shall indemnify, defend and hold
Seller harmless from and against any and all claims described in the preceding paragraphs of this
Article made by any such third party against Seller.

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

12. COSTS AND CHARGES

12.1 In case the repair, making good, replacement or modification is required hereunder, the Seller
shall at its own expense make available at the Site the replacement parts necessary for the
performance of the above.

CONFIDENTIAL

 

 

 

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

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

13. PATENTS, INTELLECTUAL PROPERTY AND CONFIDENTIALITY

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

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

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

13.4 Intellectual property and confidentiality

A. Terms and conditions for ownership of intellectual property will be according to Article
III of the TTA.

B. Use of Confidential Information. Confidential Information may be exchanged between the
parties in accordance with Article XI of the TTA.

C. FCE Fuel Cell Stack Module Integrity. The provisions of Section 2.6(e) of the AA shall
apply to all Fuel Cell Stack Modules provided hereunder.

14. FORCE MAJEURE

14.1 Should either party be prevented wholly or in part from fulfilling any of its obligations
under the Contract for reasons of force majeure, such obligation shall be suspended to the extent
and for as long as such obligation is affected by Force Majeure and the party claiming under this
Article shall be entitled to

CONFIDENTIAL

 

 

 

such extension of time to fulfill such obligation as may be reasonably necessary in view of
circumstances, subject to the provisions of notifying the other by fax or email of the date when
such delay commenced, and reasons therefore within a reasonable period. The party so affected
shall try to use its commercially reasonable efforts to avoid or remove such causes of the force
majeure, and to complete performance of its obligations under the Contract with the reasonable
promptness whenever such causes are removed.

14.2 If, after ninety (90) days from the date of giving the aforesaid notice, the notifying party
shall still be prevented, for the reasons beyond its control, from continuing to perform its
obligations under the Contract, then either party shall be entitled to terminate this Contract,
without any liability to each other.

14.3 In the event of change in the Contract and/or termination of the Contract under Article 16.3
hereof, the Buyer and the Seller shall agree upon the costs to be borne by either party.

15. DISPUTES AND ARBITRATION

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

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

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

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

CONFIDENTIAL

 

 

 

16. TERMINATION AND ASSURANCE

16.1 Termination by Breach

16.1.1 If either the Buyer or the Seller should substantially breach the provisions of this
Contract, which breach is not cured within sixty (60) days following receipt from the other party
of notice of such breach, the other party may, at its sole discretion, immediately terminate this
Contract by providing written notice of the party in breach. In addition, if there exist
reasonable grounds to doubt either the Buyer’s or the Seller’s ability to perform its obligations
under this Contract in full, then the other party shall have the right to demand assurances for
adequate performance. If no such assurances are provided within sixty (60) days of the request,
then the party demanding assurances may terminate this Contract on written notice to the other
party.

16.1.2 In the event of a payment-related material breach of this Contract by Buyer which extends
longer than thirty (30) days after the date payment is due, then Seller may, at its option and
subject to stay pending the outcome of any dispute resolution proceeding initiated pursuant to the
Article entitled “Disputes and Arbitration” hereunder, either (i) stop work, terminate the Contract
for breach and initiate suit for collection of outstanding balances; or (ii) stop work, invoice
Buyer in advance for all remaining payments due under this Contract, and continue performance of
this Contract upon receipt of such payments from Buyer, with appropriate schedule adjustments
needed for any delay;

16.2 The Buyer may terminate all or part of this Contract (or cancel any purchase orders) in the
event the parties, in their exercise of good faith and commercially reasonable efforts, fail to
enter into the MATTA within 60 days from the date hereof, unless such 60-day period is extended by
mutual agreement. In the event of termination (or cancellation) under this Section 16.2:

	 	(A)	 	Buyer acknowledges and agrees that the Initial Downpayment described in section
4.3.1 hereunder shall be non-refundable;

	 	(B)	 	Seller acknowledges and agrees that in the event that only part of the Contract
is terminated (or cancelled) pursuant to Section 16.2, the Initial Downpayment may be
used to set off any payments required for any portion of the Contract that is not
terminated (or cancelled) by the Buyer; and

	 	(C)	 	Seller further agrees that with the exception of the Initial Payment as
described in this Section, the Buyer shall not be liable for any costs incurred by the
Seller or any other payments required under this Contract.

16.3 When termination of the Contract due to the breach attributable to the Seller becomes
effective, Seller shall be responsible for direct costs and non-cancelable commitments (if
any) related to installation and assembly of the Module into a complete Plant, which is
incurred by Buyer prior to the date of termination. Buyer shall take all reasonable steps to
minimize termination costs. In no event, however, shall Seller be obligated to pay Buyer any
amount in excess of the total estimated costs up to the time of termination to support the
work.

16.4 In the event that the liquidated damage due to the delay in delivery of any Module(s) or any
Equipment under Article 6.1.4 has reached the maximum amount, then the Buyer may terminate
this Contract upon at least thirty (30) days’ written notice to Seller. In full discharge of
any obligations to Buyer in respect of this Contract and such termination, Seller shall refund
to Buyer all payments theretofore made to Seller. Buyer shall take all reasonable steps to
minimize Seller’s expenses and shall cooperate with Seller.

CONFIDENTIAL

 

 

 

17. ASSIGNMENT AND SUB-CONTRACTING

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

18. TAXES AND DUTIES

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

18.2 The Buyer shall pay and bear all the taxes, charges, customs, duties and tariffs for the
purchase or import of the Modules assessed or imposed on the Buyer by the government or other
competent authorities of the Republic of Korea in relation to the Contract.

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

18.4 The Buyer shall bear and pay any kind of taxes, charges and/or commissions (fees) levied on
the Seller by Korean Tax Authority in relation to the Modules and/or materials and related services
of the Seller. The Buyer shall bear any and all import duties and related taxes imposed by the
Korean Government on the imported Modules and/or Materials, and it shall be responsible for any and
all matters relating to customs clearance.

19. GOVERNING LAW

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

20. LOCAL LAW COMPLIANCE

20.1 Local Law Compliance

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

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

20.1.3. The Buyer shall be responsible for obtaining all the permits, licenses and
authorizations required by the applicable Korean governmental authorities to perform its
obligations under this Contract. The parties acknowledge and agree that the FCE Technology (as the
term is defined in the TTA) is a new generating technology, with codes and standards still under
development; therefore, securing the applicable permits and other authorizations may require
significant interaction with and education of the applicable Korean regulatory authorities. The
Seller agrees to provide commercially reasonable cooperation to Korean regulatory authorities
pursuant to this section.

CONFIDENTIAL

 

 

 

21. ADDITION AND AMENDMENT

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

22. NOTICE

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

For the Buyer:

Commercial Matters

Mr. Tae-Hyoung Kim

Dept. Manager

Strategic Planning Department

POSCO Power

Posteel Tower 20th floor, 735-3, Yeoksam-dong

Gangnam-gu, Seoul 135-080, Korea

phone 82-2-3469-5950

facsimile 82-2-3469-5959

tahykim@poscopower.co.kr

Technical Matters

Mr. Ki Suk Chung

Dept. Manager / Ph. D.

Research & Development Department

POSCO Power

Posteel Tower 20th floor, 735-3, Yeoksam-dong

Gangnam-gu, Seoul 135-080, Korea

phone 82-2-3469-5966

facsimile 82-2-3469-5959

kisukch@poscopower.co.kr

For the Seller:

Mr. Ross Levine, Esq.

Director of Contracts

FuelCell Energy Inc.

3 Great Pasture Road

Danbury, CT 06813

phone 203 825 6000

facsimile: 203 825 6100

rlevine@fce.com

CONFIDENTIAL

 

 

 

23. ENTIRE AGREEMENT

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

24. PUBLICITY

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

25. CONSEQUENTIAL DAMAGES

In no event shall either Party be liable to the other for any incidental, indirect, special or
consequential damages, however caused, and based on any theory of liability, arising out of or
related to the performance of this Contract.

26. INSURANCE

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

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

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

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

27. COUNTERPARTS

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

28. SEVERABILITY

In case any one or more of the provisions contained in this Contract is adjudged to be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby, except to the
extent necessary to avoid an unjust or inequitable result.

29. WAIVER

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

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

	 	 	 	 	 	 	 
	POSCO Power Corporation

	 	 	 	FuelCell Energy, Inc.	 	 
	 
	 	 	 	 	 	 
	 

Soung-Sik Cho

	 	 	 	 

R. Daniel Brdar
	 	 
	President & CEO

	 	 	 	President & CEO	 	 
	POSCO Power Corporation

	 	 	 	FuelCell Energy, Inc.	 	 

CONFIDENTIAL

 

 

 

ANNEX A

Equipment Description, Contract Price and Delivery Schedule

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	EXW Delivery	 	EWX Price	 	EWX Price
	Item #	 	Description	 	Date	 	(USD per kW)	 	(USD)
	1
	 	DFC Module (1.4MW)	 	01-Jan-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2
	 	DFC Module (1.4MW)	 	01-Jan-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3
	 	DFC Module (1.4MW)	 	01-Mar-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4
	 	DFC Module (1.4MW)	 	01-Mar-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5
	 	DFC Module (1.4MW)	 	01-Mar-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6
	 	DFC Module (1.4MW)	 	01-Apr-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7
	 	DFC Module (1.4MW)	 	01-Apr-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	8
	 	DFC Module (1.4MW)	 	01-Jun-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	9
	 	DFC Module (1.4MW)	 	01-Jun-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10
	 	DFC Module (1.4MW)	 	01-Jun-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11
	 	DFC Components Kit (1.4MW)	 	01-Aug-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12
	 	DFC Components Kit (1.4MW)	 	01-Aug-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	13
	 	DFC Components Kit (1.4MW)	 	01-Sep-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	14
	 	DFC Components Kit (1.4MW)	 	01-Sep-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15
	 	DFC Components Kit (1.4MW)	 	01-Oct-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16
	 	DFC Components Kit (1.4MW)	 	01-Oct-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	17
	 	DFC Components Kit (1.4MW)	 	01-Nov-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	18
	 	DFC Components Kit (1.4MW)	 	01-Nov-10	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	19
	 	DFC Components Kit (1.4MW)	 	01-Jan-11	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	20
	 	DFC Components Kit (1.4MW)	 	01-Jan-11	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	21
	 	DFC Components Kit (1.4MW)	 	01-Feb-11	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	22
	 	DFC Components Kit (1.4MW)	 	01-Feb-11	 	 	*	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Contract Total

    Price:	 	$	58,209,200.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

APPENDIX A

Specifications for DFC® Stack Modules

C1400 Stack Module Specification

1.0 Introduction

This specification document describes the interfaces and functional operation of the C1400 Direct FuelCell ® (DFC®)
stack module. The C1400 stack module is comprised of four DFC stack modules, and the associated enclosure and process
and electrical connections. *

2.0 Scope

This document describes one C1400 module. The specification provides preliminary dimensional and interface data that
can be used for planning and design. Final drawings will be provided as part of formal project data submittal.

3.0 Specifications

3.1 Dimensions and Weights

*

3.2 Mechanical Interfaces

*

3.3 Civil Interfaces

*

Figure 1

Module Foundation Bolt Details from FCE Drawing 12-01

Preliminary, For Planning and Design. Final drawing to be issued during project data submittals

3.4 Electrical and Control Interfaces

*

3.5 Performance Specification

Table 1 summarizes the projected output from the stack module at rated load.

*

Table 1

Nominal Stack Module Output at Rated Load

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

 

1

 

*

Table 2 (to be modified)

Fuel and Air Gas Flows Needed to Produce Specified DC Output

*

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

 

2

 

Table 3

Contaminant Limits for Fuel and Air Process Streams

*

3.6 Stack Module Life

*

Table 4

Life Impacts of Stack Operation Transients

*

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

 

3

 

APPENDIX B

Specifications for DFC® Components

C1400 Stack Module Kit Scope Specification

1.0 Introduction

This specification describes scope of supply for Direct FuelCell stack module component kits, which will be used in the
assembly of C1400 stack modules.

2.0 Scope

This document describes the component kit for one C1400 module.

3.0 Specifications

3.1 Dimensions and Weights

*

3.2 Component and subassembly listing.

*

APPENDIX C

Standard Pre-Shipment Factory Test Report for DFC® Modules

*

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

 

4

 

APPENDIX D

Standard Pre-Shipment Factory Inspection Report for DFC® Components

*

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

 

5

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