Document:

fcel-ex106_37.htm

Exhibit 10.6

FUELCELL ENERGY, INC.
COMMON STOCK WARRANT

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT UNDER THE SECURITIES ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.  THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 8.

 

	
Warrant Issue Date: [_________]
	
 
	
Warrant to Purchase up to [_________] Shares 

	
 
	
 
	
of Common Stock

 

This certifies that, for value received, [__________________], or its registered and permitted assigns (the "Holder") is entitled, subject to the terms set forth herein, to purchase from FuelCell Energy, Inc., a Delaware corporation (the "Company"), up to [_________] shares of the Common Stock ("Common Stock") of the Company, as constituted on the Warrant Issue Date specified above (the “Warrant Issue Date”), at the Exercise Price per share of Common Stock. The Exercise Price and the number of shares of Common Stock issuable on exercise of this Warrant are subject to adjustment as provided below.  This Warrant is being issued to the Holder on the Warrant Issue Date as a requirement under the Credit Agreement by and among the Company, the Subsidiaries of the Company from time to time party thereto as Guarantors, the lenders from time to time party thereto and Orion Energy Partners Investment Agent, LLC, as administrative agent and collateral agent, dated as of October 31, 2019 (as amended and restated from time to time, the "Credit Agreement").  Terms not otherwise defined herein shall have the meaning set forth in the Credit Agreement (it being understood that if the Credit Agreement is not in effect at any time during the term of this Warrant, references herein to the Credit Agreement shall be to the Credit Agreement as if the Credit Agreement was in effect at such time).  

1.Term of Warrant.  Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time or from time to time, during the period (the "Term") commencing on the Warrant Issue Date and ending at 5:00 p.m., Eastern Time, on the date that is the eighth anniversary of the Warrant Issue Date. 

2.Shares Subject to Purchase.  The number of shares of Common Stock which this Warrant entitles the Holder to purchase shall be [_________] shares, subject to adjustment as provided in Section 11 hereof.

3.Exercise Price.  The Exercise Price shall be $[_____] per share of Common Stock, as adjusted from time to time pursuant to Section 11 hereof.

 

 

 

4.Exercise of Warrant. 

(a)Surrender and Payment.  The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part, at any time, or from time to time, during the Term hereof as described in Section 1 above by delivery of a Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder and, in the event that such exercise is an exercise in full of this Warrant, surrender of this Warrant, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company).  On the date of the delivery of any Notice of Exercise, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price multiplied by the number of shares of Common Stock as to which this Warrant is so exercised either (x) in cash or by certified check, wire transfer or other payment means acceptable to the Company or (y) in the event that the Holder has elected to make such exercise via Cashless Exercise as set forth in the Notice of Exercise, in the manner specified in Section 4(b) below.  Execution and delivery of a Notice of Exercise with respect to an exercise to purchase less than the maximum number of shares of Common Stock issuable hereunder shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase shares hereunder with respect to the remaining portion of this Warrant.  

(b)Cashless Exercise.  Notwithstanding anything contained herein to the contrary (other than Section 4(d) below), if at any time of exercise hereof a Registration Statement filed with the SEC by the Company is not effective (or the prospectus contained therein is not available for use) for the resale by the Holder of all of the shares of Common Stock then issuable hereunder, then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

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

	
                                     B

 

For purposes of the foregoing formula:

 

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

	
 
	
 

	
B
	
=       the quotient of (x) the sum of the VWAP of the Common Stock on each of the five (5) Trading Days ending at the close of business on the Principal Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y) five (5).

	
 
	
 

	
C
	
=       the Exercise Price then in effect for the applicable shares of Common Stock at the time of such exercise.

 

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If the shares of Common Stock are issued in a Cashless Exercise, the parties hereto acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, such shares of Common Stock take on the characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the Warrant Issue Date, it is intended that shares of Common Stock issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for such shares of Common Stock shall be deemed to have commenced, on the Warrant Issue Date.

(c)Effectiveness of Exercise.  This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of the Holder’s delivery of a Notice of Exercise and payment of the applicable Exercise Price (other than in the case of a Cashless Exercise pursuant to Section 4(b)) as provided herein, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within three (3) Trading Days thereafter (or such earlier date as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade of shares issuable upon such exercise), the Company, at its expense, shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise and shall deliver all instructions necessary to the Company’s transfer agent to permit the immediate transfer of such shares of Common Stock (the failure of the Company to deliver such certificates or instructions within such three Trading Day (or shorter) period is referred to herein as an “Exercise Failure”). The Company shall pay any and all transfer, stamp and similar taxes and fees which may be payable with respect to the issuance and delivery of shares of Common Stock upon exercise of this Warrant. In the event that this Warrant is exercised only in part, and the Holder tenders this Warrant for reissuance, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of shares for which this Warrant may then be exercised.  If an Exercise Failure occurs and on or after the expiration of the three Trading Day period referred to above (or such earlier date as required pursuant to the Exchange Act or other applicable law, rule or regulation for the settlement of a trade of shares issuable upon such exercise), the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such exercise that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Exercise Failure (a “Buy-In”), then, in addition to all other remedies available to the Holder, the Company shall, within three (3) Business Days after receipt of the Holder’s request and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to cause the issuance and delivery of such certificate (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock to 

 

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which the Holder is entitled upon the Holder’s exercise hereunder and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock so purchased multiplied by (y) the price at which the sell order giving rise to such purchase obligation was executed.  Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon the exercise of this Warrant as required pursuant to the terms hereof.

(d)Limitation on Exercises.  The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 4(d). For purposes of this Section 4(d) beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or its transfer agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 4(d), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Exercise Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number 

 

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of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the exercise or conversion of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 4(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

5.No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the fair market value of one share of Common Stock multiplied by such fraction.

6.Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

7.Rights of Stockholders.  Subject to Section 4(c), the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of 

 

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the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised as provided herein. 

8.Transfer of Warrant.  

(a)Warrant Register.  The Company will maintain a register (the "Warrant Register") containing the names and addresses of the Holder or Holders. Any Holder of this Warrant or any portion thereof may change such Holder's address as shown on the Warrant Register by written notice to the Company requesting such change. Any notice or written communication required or permitted to be given to the Holder may be delivered or given by mail to such Holder as shown on the Warrant Register and at the address shown on the Warrant Register. Until this Warrant is transferred on the Warrant Register of the Company, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.

(b)Warrant Agent.  The Company may, by written notice to the Holder, appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 8(a) above, issuing the Common Stock or other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the foregoing. Thereafter, any such registration, issuance, exchange, or replacement, as the case may be, shall be made at the office of such agent.

(c)Limitations on Transfer.  In no event may this Warrant be transferred or assigned without compliance with, or pursuant to an available exemption from, the Securities Act and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if such are requested by the Company; provided that no such representation letters or legal opinions shall be required in connection with any transfer of this Warrant (i) pursuant to an effective Registration Statement, (ii) to the Company, (iii) pursuant to Rule 144 (as promulgated under the Securities Act) (provided that the Holder provides the Company with reasonable assurances (in the form of a seller representation letter) that the Warrant may be sold pursuant to such rule) or Rule 144A (as promulgated under the Securities Act), or (iv) in connection transfer or assignment to an Affiliate of this Holder). Subject to the foregoing provisions, this Warrant may be transferred by the Holder executing an assignment in the form annexed hereto and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

(d)Exchange of Warrant Upon a Transfer.  On surrender of this Warrant for exchange, properly endorsed on the Assignment Form appended hereto and subject to the provisions of this Warrant with respect to compliance with the Act and with the limitations 

 

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on assignments and transfers contained in this Section 8, the Company at its expense shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of shares issuable upon exercise hereof.

9.Reservation of Stock.  The Company covenants that during the Term in which this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of this Warrant (without regard to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise of this Warrant) and, from time to time, will take all steps necessary to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant.  If, notwithstanding the foregoing, and not in limitation thereof, at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least a number of shares of Common Stock (the “Required Reserve Amount”) equal to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of this Warrant, in full (an “Authorized Share Failure”), then the Company shall promptly take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow Company to reserve the Required Reserve Amount under this Warrant. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than one hundred twenty (120) days after the occurrence of such Authorized Share Failure, the Company shall take all actions necessary under applicable law and stock exchange regulations (including obtaining all necessary consents and approvals of stockholders) to effect such increase in the number of authorized shares of Common Stock.  If, upon any exercise of this Warrant under Section 4, the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then unless the Holder elects to rescind such attempted exercise, the Holder may, in its discretion, require the Company, in lieu of delivering Common Stock in connection with such exercise and in full satisfaction of the Company’s obligations with respect to such exercise, to pay to the Holder within three (3) Business Days of the applicable attempted exercise, cash in an amount equal to the product of (i) the number of shares of Common Stock that the Company is unable to deliver pursuant to Section 4, multiplied by (ii) the highest Closing Sale Price of the Common Stock on any Trading Day during the period beginning on the date on which the Company has received the applicable Exercise Notice and ending on the date on which the Company makes the applicable cash payment.  The Company further covenants that all shares that may be issued upon the exercise of rights represented by this Warrant, all as set forth herein, will be duly authorized, validly issued, fully paid and nonassessable and shall be free from all preemptive rights, taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the exercise of this Warrant.

 

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10.Notices.

(a)Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall issue a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and number of shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant. 

(b)In case:

(i)the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

(ii)of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or

(iii)of any voluntary dissolution, liquidation or winding-up of the Company, 

then, and in each such case, the Company will mail or cause to be mailed to the Holder or Holders a notice specifying, as the case may be, (A) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (B) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be mailed at least 15 days prior to the date therein specified.

 

(c)All such notices, advices and communications shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery and (ii) in the case of mailing, on the fifth business day following the date of such mailing.

 

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11.Adjustments.  The Exercise Price and the number of shares purchasable hereunder are subject to adjustment from time to time as follows:

11.1Merger, Sale of Assets, etc. (other than a Change of Control).  If at any time while this Warrant, or any portion hereof, is outstanding and unexpired there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation in which the Company is not the surviving entity, or a reverse triangular merger in which the Company is the surviving entity but the shares of the Company's capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash, or otherwise, or (iii) a sale or transfer of the Company's properties and assets as, or substantially as, an entirety to any other person (any such event, in (i), (ii) and (iii), a "Fundamental Transaction"), then, except in the case of a Change of Control, as a part of such Fundamental Transaction, the successor corporation or entity shall assume in writing all of the obligations of the Company under this Warrant pursuant to written instrument substantially similar in form and substance to this Warrant such that the holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein, the number of shares of stock or other securities or property of the successor corporation or entity resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 11. Notwithstanding the foregoing, at the request of the Holder delivered at any time commencing on the earliest to occur of (A) the public disclosure of any Fundamental Transaction in which the successor corporation or entity is not a publicly traded entity whose common equity or ordinary shares, as the case may be, is quoted on or listed for trading on an Eligible Board or Market, (B) the consummation of any such Fundamental Transaction and (C) the Holder first becoming aware of any such Fundamental Transaction through the date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the successor corporation or entity (as the case may be shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective date of the Change of Control), an amount equal to (x) in the event that such payment date is on or prior to the second anniversary of the Warrant Issue Date, the Black Scholes Value of the remaining unexercised portion of this Warrant on the effective date of such Fundamental Transaction, payable in cash, or (y) in the event that such payment date is after the second anniversary of the Warrant Issue Date, an amount equal to (i) the product of the remaining number of shares of Common Stock issuable upon exercise of this Warrant times the consideration per share of Common Stock paid or payable to each holder of Common Stock in such Fundamental Transaction, minus (ii) the aggregate Exercise Price, payable in case.  The foregoing provisions of this Section 11.1 shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. 

 

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If the per share consideration payable to the holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.  Notwithstanding the foregoing, in the event of a Change of Control, at the request of the Holder delivered at any time commencing on the earliest to occur of (A) the public disclosure of any Change of Control, (B) the consummation of any Change of Control and (C) the Holder first becoming aware of any Change of Control through the date that is ninety (90) days after the public disclosure of the consummation of such Change of Control by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the successor corporation or entity (as the case may be) purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective date of the Change of Control), an amount equal to (x) in the event that such payment date is on or prior to the second anniversary of the Warrant Issue Date, the Black Scholes Value of the remaining unexercised portion of this Warrant on the effective date of such Change of Control, payable in cash or (y) in the event that such payment date is after the second anniversary of the Warrant Issue Date, an amount equal to (i) the product of the remaining number of shares of Common Stock issuable upon exercise of this Warrant times the consideration per share of Common Stock paid or payable to each holder of Common Stock in such Change of Control, minus (ii) the aggregate Exercise Price, payable in case.

11.2Reclassification, etc.  If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and unexpired, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 11.

11.3Split, Subdivision or Combination of Shares.  If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and unexpired, shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased in the case of a split or subdivision or proportionately increased in the case of a combination.

11.4Adjustments for Dividends in Stock or Other Securities or Property.  If while this Warrant, or any portion hereof, remains outstanding and unexpired, the holders of the securities as to which purchase rights under this Warrant exist at the time shall have 

 

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received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property (other than cash) of the Company by way of dividend, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities or property (other than cash) of the Company that such holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 11.

11.5Rights, Options and Warrants.  If while this Warrant, or any portion hereof, remains outstanding and unexpired, the Company distributes to substantially all of the holders of the securities as to which purchase rights under this Warrant exist at the time rights, options or warrants entitling such holders to subscribe for or purchase securities as to which purchase rights under this Warrant exist at the time at a price per share that is less than the average of the Closing Sale Prices per share of Common Stock for the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date such distribution is publicly announced, then the Exercise Price will be decreased based on the following formula:

 

Where:

	
EP0
	
=       the Exercise Price in effect immediately before the open of business on the ex-dividend date for such distribution

	
 
	
 

	
EP1
	
=       the Exercise Price in effect immediately after the open of business on such ex-dividend date

	
 
	
 

	
OS
	
=       the number of shares of Common Stock (or other securities as to which purchase rights under this Warrant exist at the time) outstanding immediately before the open of business on such ex-dividend date

	
 
	
 

	
X
	
=       the total number of shares of Common Stock (or other securities as to which purchase rights under this Warrant exist at the time) issuable pursuant to such rights, options or warrants

	
 
	
 

 

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Y
	
=       a number of shares of Common Stock (or other securities as to which purchase rights under this Warrant exist at the time) 

obtained by dividing (x) the aggregate price amount to exercise all such rights, options or warrants distributed by the Company by (y) the average of the Closing Sale Prices per share of Common Stock (or other securities as to which purchase rights under this Warrant exist at the time) for the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date such distribution is announced

 

For the avoidance of doubt, any adjustment to the Exercise Price made pursuant to this Section 11.5 will be made successively whenever any such rights, options or warrants are issued and, pursuant to the definition of EP1 above, will become effective immediately after the open of business on the ex-dividend date for the applicable distribution. To the extent that shares of Common Stock are not delivered after the expiration of such rights, options or warrants (including as a result of such rights, options or warrants not being exercised), the Exercise Price, if previously adjusted, will be readjusted effective as of such expiration date to the Exercise Price that would then be in effect had the decrease to the Exercise Price for such distribution been made on the basis of delivery of only the number of shares of Common Stock actually delivered upon exercise of such rights, option or warrants. To the extent such rights, options or warrants are not so distributed, the Exercise Price will be readjusted effective as of the date the Board of Directors of the Company determines not to distribute such rights, options or warrants, to the Exercise Price that would then be in effect had the ex-dividend date for the distribution of such rights, options or warrants not occurred.  For purposes of this Section 11.5, in determining whether any rights, options or warrants entitle holders of Common Stock to subscribe for or purchase shares of Common Stock at a price per share that is less than the average of the Closing Sale Prices per share of Common Stock for the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date of the distribution of such rights, options or warrants is announced, and in determining the aggregate price payable to exercise such rights, options or warrants, there will be taken into account any consideration the Company receives for such rights, options or warrants and any amount payable on exercise thereof, with the value of such consideration, if not cash, to be determined by the Board of Directors of the Company.  For the avoidance of doubt, in no event shall any adjustment to the Exercise Price be made pursuant to this Section 11.5 unless and until the distribution by the Company of the applicable rights, options or warrants.

11.6Number of Shares.  Simultaneously with any adjustment to the Exercise Price pursuant to Section 11.3 or 11.5 above, the number of shares of Common Stock that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of shares of Common Stock shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).

11.7Certificate as to Adjustments.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 11, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish 

 

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to each Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request, at any time, of any such Holder, furnish or cause to be furnished to such Holder a like certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property that at the time would be received upon the exercise of the Warrant.

11.6No Impairment.  The Company will not, by any voluntary action, by amendment of its respective certificate or articles of incorporation, bylaws or other governing document or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment.  Without limiting the generality of the foregoing or any other provision of this Warrant, the Company shall not increase, or take any action the result of which is to increase, the par value of any shares of Common Stock receivable upon exercise of this Warrant above the Exercise Price then in effect.

12.Registration.

(a)The Company shall use its commercially reasonable efforts to effect the registration, as soon as practicable after the Warrant Issue Date, but, in no event later than March 16, 2020, pursuant to Rule 415 of resales by the Holder of all shares of Common Stock issuable upon exercise of this Warrant on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) and shall maintain such registration at all times following the effective date of such Registration Statement until the earlier of (i) the date as of which the Holder may sell all of the shares of Common Stock issuable upon exercise of this Warrant without restriction pursuant to Rule 144 as promulgated under the Securities Act (including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as promulgated under the Securities Act or (ii) the date on which the Holder shall have sold all of the shares of Common Stock issuable upon exercise of this Warrant (the “Registration Period”).  The Holder consents to the disclosure of its name and its ownership of Warrants and Common Stock in such Registration Statement.

(b)The Company shall prepare and file with the SEC such amendments (including, without limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with each such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep each such Registration Statement effective at all times during the Registration Period for such Registration Statement, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company required to be covered by such Registration 

 

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Statement until such time as all of Common Stock issuable upon exercise of this Warrant shall have been disposed of in accordance with the intended methods of disposition by the Holder as set forth in such Registration Statement or the completion of the applicable Registration Period. In the case of amendments and supplements to any Registration Statement by reason of the Company filing a report on Form 10-Q or Form 10-K or any analogous report under the Exchange Act, the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on or prior to the third (3rd) Trading Day following the date on which the Exchange Act report is filed with the SEC which created the requirement for the Company to amend or supplement such Registration Statement.  Notwithstanding anything herein to the contrary, upon a good faith determination by a majority of the members of the board of directors of the Company that it is in the best interests of the Company to suspend the use of a Registration Statement, following the effectiveness of such Registration Statement (and the filings with any federal or state securities commissions), the Company, by written notice to the applicable Holders, may direct the applicable Holders to suspend sales of shares of Common Stock issuable upon exercise of this Warrant pursuant to a Registration Statement for such times as the Company reasonably may determine is necessary and advisable (but in no event for more than an aggregate of 90 days in any rolling 12 month period commencing on the Warrant Issue Date or more than 60 days in any rolling 90 day period).

(c)The Company shall use its commercially reasonable efforts, as it determines necessary, to promptly prepare a supplement or post-effective amendment to a Registration Statement or the related prospectus included therein or any document incorporated therein by reference or file any other required document so that such Registration Statement and the related prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d)If, for any reason (including, without limitation, by reason of the last sentence of Section 12 (b)), (i) a Registration Statement covering the resale of all of the shares of Common Stock issuable upon exercise of this Warrant on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) is not declared effective by the SEC on or before March 16, 2020 (an “Effectiveness Failure”) (it being understood that if on or prior to the fifth Business Day immediately following the effective date for such Registration Statement the Company shall not have filed a “final” prospectus for such Registration Statement with the SEC under Rule 424(b) (to the extent such a prospectus is either technically required by such rule or is otherwise required under applicable securities laws in order to permit the resale by the Holder of all of the shares of Common Stock issuable upon exercise of this Warrant), the Company shall be deemed to not have satisfied this clause (i) and such event shall be deemed to be an Effectiveness Failure), (ii) on any day after the effective date of a Registration Statement during the Registration Period sales of all of the shares of Common Stock cannot be made pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of the shares of 

 

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Common Stock on the applicable Trading Market, or a failure to register a sufficient number of shares of Common Stock or by reason of a stop order) or the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”), or (iii) if a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any reason, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Current Public Information Failure”) as a result of which any of the Holder is unable to sell all of the shares of Common Stock issuable upon exercise of this Warrant without restriction under Rule 144 (including, without limitation, volume restrictions), then, as partial relief (other than equity remedies) for the damages to any holder by reason of any such delay in, or reduction of, its ability to sell all of the shares of Common Stock issuable upon exercise of this Warrant (which remedy shall not be exclusive of any other remedies available in equity), the Company shall pay to the Holder an amount in cash equal to $25,000 on (1) the date of such Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable, and (2) on every thirty (30) day anniversary of (I) an Effectiveness Failure until such Effectiveness Failure is cured; (II) a Maintenance Failure until such Maintenance Failure is cured; and (III) a Current Public Information Failure until the earlier of (i) the date such Current Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144 (in each case, pro-rated for periods totaling less than thirty (30) days).  The payments to which a holder of Registrable Securities shall be entitled pursuant to this clause (d) are referred to herein as “Registration Delay Payments.”  In the event the Company fails to make Registration Delay Payments in a timely manner in accordance with the foregoing, such Registration Delay Payments shall bear interest at the rate of 1.0% per month (prorated for partial months) until paid in full.  

13.Representations and Warranties of the Holder. The Holder represents and warrants to the Company as of the Warrant Issue Date that:

(a)Understandings or Arrangements. The Holder is acquiring this Warrant and the shares of Common Stock issuable upon exercise of this Warrant as principal for its own account and has no direct or indirect arrangement or understanding with any other person to distribute, or regarding the distribution of, such securities (this representation and warranty not limiting the Holder’s right to sell the securities in compliance with applicable federal and state securities laws and the terms of this Warrant).

(b)Accredited Investor Status. At the time the Holder was offered this Warrant, it was, and as of the Warrant Issue Date it is, and on each date on which it exercises this Warrant, it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

(c)Experience. The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as 

 

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to be capable of evaluating the merits and risks of the prospective investment in this Warrant and the shares of Common Stock issuable upon exercise of this Warrant, and has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in this Warrant and the shares of Common Stock issuable upon exercise of this Warrant and, at the present time, is able to afford a complete loss of such investment.

(d)Access to Information. The Holder acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the merits and risks of investing in this Warrant and the shares of Common Stock issuable upon exercise of this Warrant; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 

14.Definitions.  As used herein, the following terms shall have the following meanings:

(a)“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Warrant Issue Date, directly or indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a “group” (as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder) together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

(b)“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg Financial Markets determined as of the day immediately following the first public announcement of the applicable Change of Control, or, if the Change of Control is not publicly announced, the date the Change of Control is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to 100%, (iii) the underlying price per share used in such calculation shall be the greater of (A) the sum of the price per share being offered in cash, if any, plus the per share value of any non-cash consideration, if any, being offered in such Change of Control and (B) the greater of (x) the last VWAP immediately prior to the public announcement of such Change 

 

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of Control and (y) (B) the highest Closing Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable Change of Control (or the consummation of the applicable Change of Control, if earlier) and ending on the Trading Day of the Holder’s request pursuant to Section 11.1, (iv) a zero cost of borrow and (v) a 360 day annualization factor.

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

(d)“Eligible Board or Market” means the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTCBB.

(e)“Principal Market” means the Eligible Board or Market on which the Common Stock is then traded.

(f)“Registration Statement” means a registration statement or registration statements of the Company filed under the Securities Act covering all shares of Common Stock issuable upon exercise of this Warrant (without regard to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise of this Warrant), including, in each case, the prospectus, amendments and supplements to such registration statement or prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement.

(g)“Trading Day” means (i) a day on which the Common Stock is traded on a Eligible Board or Market (other than the OTCBB), or (ii) if the Common Stock is not listed or quoted on a Eligible Board or Market (other than the OTCBB), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTCBB, or (iii) if the Common Stock is not listed or quoted on any Eligible Board or Market, a day on 

 

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which the Common Stock is quoted in the over-the-counter market as reported by the OTC Markets Group Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

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

15.Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws.

[remainder of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, FUELCELL ENERGY, INC. has caused this Warrant to be executed by its officer thereunto duly authorized.

 

Dated as of:                          , 2019

 

	
FUELCELL ENERGY, INC.

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

 

 

-19-

 

 

Dated as of:                         , 2019

 

Solely for purpose of making the representations and warranties set forth in Section 13 of this Warrant, [WARRANT HOLDER] has caused this Warrant to be executed by its officer thereunto duly authorized:

 

	
[WARRANT HOLDER]

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

 

 

 

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NOTICE OF EXERCISE

 

To:        FUELCELL ENERGY, INC.

 

(1)     The undersigned hereby elects to purchase _________ shares of Common Stock of FuelCell Energy, Inc., pursuant to the provisions of the attached Warrant.

 

(2)     The Holder intends that payment of the aggregate Exercise Price for such shares of Common Stock shall be made as follows:

 

□       a Cash Exercise with respect to _______________ shares of Common Stock; 

and/or

 

□       a Cashless Exercise with respect to _______________ shares of Common Stock.

 

(3)     Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

 

	
 

	
(Name)

 

(3)     Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below.

 

	
 
	
 
	
 

	
 
	
 
	
(Name)

	
 
	
 
	
 

	
 
	
 
	
 

	
(Date)
	
 
	
(Signature)

 

 

 

 

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ASSIGNMENT FORM

 

 

FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the Warrant with respect to the number of shares of Common Stock set forth below:

 

	
Name of Assignee
	
Address
	
No. of Shares

 

and does hereby irrevocably constitute and appoint _______________________ Attorney to make such transfer on the books of FuelCell Energy, Inc., maintained for the purpose, with full power of substitution in the premises.

 

	
Dated:
	
                                        
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Signature of Holderfcel-ex107_13.htm

Exhibit 10.7

 

October 31, 2019 

 

Orion Energy Credit Opportunities Fund II, L.P.

Orion Energy Credit Opportunities Fund II PV, L.P.

Orion Energy Credit Opportunities Fund II GPFA, L.P.

350 5th Ave #6740

New York, NY 10118

	
Attention: 
	
Gerrit Nicholas; Rui Viana; Mark Friedland; Timothy Mister; Sue Yang
	
 

	
Email:  
	
Gerrit@OrionEnergyPartners.com; Rui@OrionEnergyPartners.com; Mark@OrionEnergyPartners.com; Timothy@OrionEnergyPartners.com; Sue@OrionEnergyPartners.com
	
 

Re: Observer Right Agreement

 

Ladies and Gentlemen:

 

FuelCell Energy, Inc., a Delaware corporation (the “Borrower”), the Subsidiaries of the Borrower from time to time party hereto (each a “Guarantor”, and, collectively, together with the Borrower, the “Loan Parties”), Orion Energy Credit Opportunities Fund II, L.P., a Delaware limited partnership (“Main Fund”), Orion Energy Credit Opportunities Fund II PV, L.P., a Delaware limited partnership (“ECI Parallel Fund”) and Orion Energy Credit Opportunities Fund II GPFA, L.P., a Delaware limited partnership (“Family & Associates Fund,” and, together with Main Fund, ECI Parallel Fund, and their respective Affiliates, collectively, “Orion”) are entering into this letter agreement (this “Agreement”), in connection with (i) the Credit Agreement dated of even date herewith (the “Credit Agreement”), among the Borrower, the Guarantors, the lenders party thereto from time to time (collectively, the “Lenders”) and Orion Energy Partners Investment Agent, LLC, as administrative agent (“Agent”) and collateral agent, (ii) those certain Initial Funding Warrants dated as of even date herewith issued by the Borrower to each of the Orion Energy Warrant Holders, and (iii) to the extent issued on the Second Funding Date in accordance with the Credit Agreement, those certain Second Funding Warrants to be dated as of the Second Funding Date and to be issued by the Borrower to each of the Orion Energy Warrant Holders. The purpose of this Agreement is to permit Main Fund, ECI Parallel Fund and Family & Associates Fund to qualify the investment in the Loan Parties as a “venture capital investment” for purposes of the United States Department of Labor Regulation published at 29 C.F.R. Section 2510.3-101(c) under the Employee Retirement Income Security Act of 1974, as amended (the “Plan Asset Regulation”).  Capitalized terms used in this Agreement and not otherwise defined shall have the respective meanings set forth in the Credit Agreement (it being understood that if the Credit Agreement is not in effect at any time during the term of this Agreement, references herein to the Credit Agreement shall be to the Credit Agreement as if the Credit Agreement was in effect at such time).  In connection therewith, the parties hereby agree as follows:

 

 

 

1.Observer Right.  

(a)The Borrower hereby grants to each of Main Fund and Family & Associates Fund the right to have a representative (who shall initially be Gerrit Nicholas in the case of Main Fund and Rui Viana in the case of Family & Associates Fund) (each, a “Representative” and, together, the “Representatives”), which Representatives must, in all cases, meet the criteria for nomination as a director pursuant to the Borrower’s Nominating and Corporate Governance Committee Charter attached hereto as Annex A (other than paragraph 5 thereof to the extent related to the Representative’s representation of the Lenders) (the “Board Criteria”) to attend all formal meetings of the board of directors or similar governing body of the Borrower (the “Board”) and the audit committee thereof, in a nonvoting observer capacity and, in this respect, the Borrower shall give such Representatives copies of all notices, minutes, consents, and other materials that it provides to members of the Board or the audit committee thereof at the same time and in the same manner as provided to such members; provided, however, that such Representatives shall agree to hold in confidence and trust all information so provided; provided, further, that the Borrower reserves the right to reasonably withhold any information and to reasonably exclude such Representatives from any meeting or portion thereof if access to such information or attendance at such meeting could, in the reasonable belief of the Borrower, (i) cause the Borrower to lose the protection of attorney-client privilege, (ii) result in a conflict of interest (including, in the case of any threatened, pending or completed action, suit or proceeding involving Orion or the Lenders or the Orion Energy Warrant Holders under the Financing Documents or the Warrants or any proposed or pending transaction involving the Borrower, on the one hand, and Orion or the Lenders or the Orion Energy Warrant Holders, on the other hand), or (iii) result in the disclosure of trade secrets of the Borrower to such Representative (information described in clauses (i) through (iii), “Protected Information”).  Moreover, Orion and the Representatives agree that any information provided to the Representatives in their capacity as such is delivered “AS IS” and neither the Borrower nor the Loan Parties make, and they each expressly disclaim, any representation or warranty as to the accuracy or completeness thereof. Without limiting the foregoing, the Borrower shall have no liability to Orion, the Representatives or their respective Affiliates resulting from any use or reliance upon any information provided to the Representatives in their capacity as such.

(b)The Representatives may participate in discussions of matters brought before a quarterly meeting of the Board, but in no event shall either Representative (i) be deemed a member of the Board or the audit committee thereof or (ii) vote on or have the right to propose or offer any motions or resolutions to the Board. For the avoidance of doubt, the presence of one or both of the Representatives shall not be required for establishing a quorum at a meeting of the Board.

(c)The Borrower shall not remove or replace the Representative of Main Fund or the Representative of Family & Associates Fund as a nonvoting observer at any time without the prior written consent of Main Fund or Family & Associates Fund, respectively; provided, however, that the Borrower may remove any Representative who ceases to meet the Board Criteria.  Each Representative shall have the right to resign at any time by giving prior written notice thereof to the Borrower. Upon any such notice of resignation or any such removal, (i) Main Fund shall have the right to appoint a successor representative of Main Fund, and (ii) Family & Associates Fund shall have the right to appoint a successor representative of Family & Associates Fund; provided that such successor representative executes a counterpart to this Agreement and agrees to be bound by the terms hereof.  Any such successor representative shall thereupon succeed to 

2

 

and become vested with all the rights, powers, privileges and duties of the retiring or removed representative and the retiring or removed representative shall promptly take such actions, as may be necessary or appropriate in connection with the assignment to such successor representative of the rights hereunder, whereupon such retiring or removed representative shall be discharged from his or her duties and obligations hereunder. After any retiring or removed representative’s resignation or removal hereunder, the provisions of Section 6 of this Agreement shall inure to such representative’s benefit as to any actions taken or omitted to be taken by such representative while he or she was a representative hereunder.

(d)In the event that the Borrower may at any time in the future be governed, directly or indirectly, by a board of directors, board of managers or similar governing body of a person (other than or in addition to the Board), the rights set forth in clauses (a) and (b) above shall apply mutatis mutandis to such other board of directors, board of managers or similar governing body and similar committees thereof.

(e)Except as set forth in Section 6 hereof, the parties hereto acknowledge and agree that the Representatives shall not be entitled to reimbursement or compensation from the Borrower in connection with the activities performed by the Representatives under this Agreement.

(f)Orion agrees that it will, and will cause each Representative and each other person designated as a Representative upon the exercise of the rights granted to Main Fund, ECI Parallel Fund and Family & Associates Fund pursuant to Section 4 of this Agreement to comply with all written policies, procedures, processes, codes, rules, standards and guidelines applicable to Board members, including but not limited to the Borrower’s corporate governance guidelines, code of business conduct, and insider trading policy.

2.Books and Records; Financial Information.  Each of the Loan Parties hereby agrees, subject to the right of the Loan Parties to withhold Protected Information, that they shall provide each of the Representatives, with:

(a)the right to (i) visit and inspect the properties of the Loan Parties with five (5) business days’ prior notice and subject to the Loan Parties’ regular site access and security requirements; (ii) examine the books of account and records of the Loan Parties; and (iii) discuss the affairs, finances, and accounts of the Loan Parties with their respective executive officers, during normal business hours of the Loan Parties, in each case, as may be reasonably requested by Main Fund, ECI Parallel Fund or Family & Associates Fund; and

(b)as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Loan Parties, (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and certified by independent public accountants of recognized standing selected by the Borrower; provided that the Loan Parties shall be deemed to have complied with this requirement by filing same on the Electronic Data Gathering and Retrieval System (EDGAR) of the U.S. Securities and Exchange Commission; provided, however, that the Loan Parties shall not be in violation of this Agreement until Orion has notified the Loan Parties in writing describing the events which constitute such violation and then only if the Loan Parties shall have failed to cure such violation within sixty (60) days after the receipt of such written notice.

3

 

3.Consultation with Management.  The Loan Parties hereby agree that they shall make their appropriate executive officers available periodically, but at least quarterly, and at such other times as reasonably requested (in any event, with at least five (5) business days’ written notice unless waived by all relevant parties) by any of Main Fund, ECI Parallel Fund or Family & Associates Fund, for reasonable consultation with the Representatives, with respect to matters relating to the business and affairs of the Loan Parties; provided, however, that the Loan Parties shall not be in violation of this Agreement until Orion has notified the Loan Parties in writing describing the events which constitute such violation and then only if the Loan Parties shall have failed to cure such violation within sixty (60) days after the receipt of such written notice.  The parties acknowledge and agree that such consultations need not be in person and may be carried out by telephone or videoconference.  At the request of any or all of Main Fund, ECI Parallel Fund and Family & Associates Fund, the Loan Parties will provide such additional rights of consultation as Main Fund, ECI Parallel Fund or Family & Associates Fund may reasonably request in the event changes in applicable law require such changes in order for the investment in the Loan Parties to qualify as a “venture capital investment” for purposes of the Plan Asset Regulation.

4.VCOC Transferees.  

(a)In the event that Main Fund, ECI Parallel Fund or Family & Associates Fund transfers all or any portion of its investment in the Loan Parties to any other entity that is intended to qualify as a “venture capital operating company” under the Plan Asset Regulation (a “VCOC Transferee”), such VCOC Transferee shall be afforded the same rights as are afforded to Main Fund, ECI Parallel Fund and Family & Associates Fund, respectively, hereunder and shall be treated, for such purposes, as a third party beneficiary hereunder. Notwithstanding the foregoing, at no time shall the aggregate number of observers or Representatives under this Agreement exceed two (2) unless a higher number of observers or Representatives is consented to by the Borrower (which consent shall not be unreasonably withheld).

(b)It is the intention of Orion and the Loan Parties that all rights herein constitute direct contractual rights between Main Fund, ECI Parallel Fund and Family & Associates Fund, on the one hand, and each of the Loan Parties, on the other hand, and that such rights shall be independently enforceable by each of Main Fund, ECI Parallel Fund and Family & Associates Fund, consistent with each fund’s status as a “venture capital operating company” as defined in the Plan Asset Regulation. The Loan Parties hereby acknowledge and agree that each of Main Fund, ECI Parallel Fund and Family & Associates Fund shall have the right, in its sole discretion, to designate one or more individuals or other persons to exercise the rights granted to Main Fund, ECI Parallel Fund and Family & Associates Fund hereunder, subject to the requirement that any Representative must meet the Board Criteria and that, subject to clause (a) above, there may be no more than two (2) Representatives under this Agreement.  

5.Term.  The observer right set forth in Section 1 of this Agreement, the right to review books and records set forth in Section 2 of this Agreement, the right to consult with management set forth in Section 3 above and this Agreement as a whole shall automatically terminate on the later of the Discharge Date or the date that neither Orion nor any of its Affiliates own any interest in any of the Loan Parties (including any Warrant or any equity interest acquired upon the exercise of the Warrants); provided that Sections 6 and 7 of this Agreement shall survive such termination.      

4

 

6.Indemnity.  To the extent the provisions of Section 1 of this Agreement apply, each Loan Party hereby agrees to provide indemnification and advancement of expenses to the Representatives in accordance with the terms of the form of Indemnification Agreement attached hereto as Exhibit A.  For purposes of clarity, the parties agree and acknowledge that (i) each of the Representatives shall have no fiduciary duties or obligations to the Loan Parties and, under no circumstances, shall any indemnity and/or advancement contemplated by this Agreement be negated or otherwise impacted by any claim which alleges a breach of any such duties, (ii) subject to the obligations of non-use and confidentiality set forth in Sections 1(a) and 7 of this Agreement, nothing contained herein will restrict the ability of Orion or any of its Affiliates from time to time to engage in any business or investment activity or to acquire, develop or otherwise pursue business or investment opportunities for its own account, independently and without notice to, or regard for the interests of, the Loan Parties, including, without limitation, business or investment activities or opportunities that compete with or are otherwise contrary to the interests of the Loan Parties or their Affiliates or that the Loan Parties or their Affiliates might find advantageous or desirable to engage in, acquire, develop or otherwise pursue, and (iii) the foregoing rights to indemnification and advancement constitute third-party rights extended by the Loan Parties to the Representatives and do not constitute rights to indemnification or advancement of expenses as a result of a Representative serving as a director, officer, employee or agent of any Loan Party.

7.Confidentiality.  Orion agrees that it will, and will cause each Representative and each individual or other person exercising the rights granted to Main Fund, ECI Parallel Fund and Family & Associates Fund pursuant to Section 4 of this Agreement to, keep confidential any information obtained from the Loan Parties pursuant to the terms of this Agreement in accordance with the provisions of Section 10.11 of the Credit Agreement, which provisions are hereby incorporated by reference, mutatis mutandis, as if fully set forth herein.  Orion agrees that it shall be jointly and severally liable for any breach by a Representative or any individual or other person exercising the rights granted to Main Fund, ECI Parallel Fund and Family & Associates Fund pursuant to Section 4 of this Agreement of any of the terms (both stated herein and incorporated from the Credit Agreement) of this Section 7.

8.Miscellaneous.

(a)This Agreement shall be governed in accordance with the laws of the State of New York.

(b)This Agreement and the other Financing Documents to which any Loan Party is party constitutes the entire contract between and among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. 

(c)This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.

(d)This Agreement may only be waived, altered or amended by an instrument in writing duly executed by each of the parties hereto.

5

 

(e)EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(f)Any legal action or proceeding with respect to this Agreement shall, except as provided in clause (g) below, be brought in the courts of the State of New York, or of the United States District Court for the Southern District of New York, in each case, seated in the County of New York and, by execution and delivery of this Agreement, each party hereto hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  Each party hereto irrevocably consents to the service of process in the manner provided for notices in Section 10.01 of the Credit Agreement, which provisions are hereby incorporated by reference, mutatis mutandis, as if fully set forth herein. Each party hereto agrees that a judgment, after exhaustion of all available appeals, in any such action or proceeding shall be conclusive and binding upon it, and may be enforced in any other jurisdiction, including by a suit upon such judgment, a certified copy of which shall be conclusive evidence of the judgment.

(g)Each party hereto hereby irrevocably waives any objection that it may now have or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the Supreme Court of the State of New York or in the United States District Court for the Southern District of New York, in each case, seated in the County of New York and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(h)The parties hereto agree that a breach of any of the covenants contained in this Agreement may cause irreparable injury to the other parties hereto, that such other parties may not have an adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Agreement shall be specifically enforceable against the breaching party, and the parties hereto hereby waive and agree not to assert any defenses against an action for specific performance of such covenants.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

 

6

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

 

	
FUELCELL ENERGY, INC.

	
 
	
 

	
 
	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

	
FUELCELL ENERGY FINANCE II, LLC

	
 
	
 

	
 
	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

	
BAKERSFIELD FUEL CELL 1, LLC

	
 
	
 

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

 

 

 

 

 

	
CENTRAL CA FUEL CELL 2, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

	
YAPHANK FUEL CELL PARK, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

	
LONG BEACH TRIGEN, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

 

 

 

 

	
SAN BERNARDINO FUEL CELL, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

	
MONTVILLE FUEL CELL PARK, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

	
EASTERN CONNECTICUT FUEL CELL

	
PROPERTIES, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

 

 

 

 

	
CR FUEL CELL, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

	
BRT FUEL CELL, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

	
DERBY FUEL CELL, LLC

	
 
	
 

	
By:
	
FUELCELL ENERGY FINANCE II, LLC

	
Its:
	
Sole Member

	
 

	
By:
	
FuelCell Energy, Inc.

	
Its:
	
Sole Member

	
 

	
 

	
By:
	
/s/ Jason B. Few

	
Name:
	
Jason B. Few

	
Title:
	
President, Chief Executive Officer and Chief Commercial Officer

 

 

 

 

 

 

	
ACCEPTED AND AGREED TO:

	
 

	
ORION ENERGY CREDIT OPPORTUNITIES

	
FUND II, L.P., a Delaware limited partnership

	
 
	
 

	
By:
	
/s/ Gerrit Nicholas

	
Name:
	
Gerrit Nicholas

	
Title:
	
Managing Partner

 

 

	
ORION ENERGY CREDIT OPPORTUNITIES

	
FUND II PV, L.P., a Delaware limited partnership

	
 
	
 

	
By:
	
/s/ Gerrit Nicholas

	
Name:
	
Gerrit Nicholas

	
Title:
	
Managing Partner

 

 

 

	
ORION ENERGY CREDIT OPPORTUNITIES FUND II GPFA, L.P., a Delaware limited

	
partnership

	
 
	
 

	
By:
	
/s/ Gerrit Nicholas

	
Name:
	
Gerrit Nicholas

	
Title:
	
Managing Partner

 

 

[FuelCell - Observer Right Agreement]

 

 

Exhibit A

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of [______] between FuelCell Energy, Inc., a Delaware corporation (“FuelCell”), the Subsidiaries of FuelCell from time to time party hereto (collectively, together with FuelCell, each a “Company” and collectively, the “Companies”), Orion Energy Credit Opportunities Fund II, L.P., a Delaware limited partnership (“Main Fund”), Orion Energy Credit Opportunities Fund II PV, L.P., a Delaware limited partnership (“ECI Parallel Fund”), Orion Energy Credit Opportunities Fund II GPFA, L.P., a Delaware limited partnership (“Family & Associates Fund” and, together with Main Fund and ECI Parallel Fund, “Orion”), Orion Energy Credit Opportunities Fund II GP, L.P., a Delaware limited partnership (“GP”), Orion Energy Partners, L.P., a Delaware limited partnership (“Main Fund Management”), Gerrit Nicholas, an individual, in his capacity as a representative of Main Fund as a nonvoting observer to FuelCell’s Board of Directors or similar governing body (the “Board”), and Rui Viana, an individual, in his capacity as a representative of Family & Associates Fund as a nonvoting observer to the Board (together, in such capacity, the “Representatives,” and collectively with Main Fund, ECI Parallel Fund, Family & Associates Fund, GP, Main Fund Management, any replacement Representatives and their respective Affiliates, the “Indemnitees”).

WITNESSETH:

WHEREAS, highly competent persons have become more reluctant to serve companies as directors, managers, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board has determined that, in order to attract and retain qualified individuals, each Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving such Company from certain liabilities.  Although the furnishing of such insurance has been a customary and widespread practice among United States-based companies and other business enterprises, each Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions.  At the same time, directors, managers, officers, and other persons in service to companies and other business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against a Company or business enterprise itself. 

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

WHEREAS, the Board acknowledges the increased difficulty in attracting and retaining such persons and has determined that each Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

 

WHEREAS, it is reasonable, prudent and necessary for each Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve a Company free from undue concern that they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and is in furtherance of the certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other organization document of each Company (as the same may be amended from time to time in accordance with their terms, the “Charter Documents”), and shall not be deemed a substitute therefor, nor shall anything in this Agreement diminish or abrogate any rights of any Indemnitee thereunder; and

WHEREAS, the Indemnitees do not regard the protection available under the Charter Documents and insurance as adequate in the present circumstances, and may not be willing to enter into the transactions contemplated by (i) the Credit Agreement dated as of October 31, 2019 (the “Credit Agreement”), among the Companies, the lenders party thereto from time to time (collectively, the “Lenders”) and Orion Energy Partners Investment Agent, LLC, as administrative agent and collateral agent, (ii) those certain Initial Funding Warrants dated as of October 31, 2019 issued by the Borrower to each of the Orion Energy Warrant Holders, and (iii) to the extent issued on the Second Funding Date in accordance with the Credit Agreement, those certain Second Funding Warrants to be dated as of the Second Funding Date and to be issued by the Borrower to each of the Orion Energy Warrant Holders (collectively, the “Transactions”), or to permit the Representatives to serve in such capacity, in each case without adequate protection, and each Company desires the Indemnitees to enter into the Transactions and to cause the Representatives to serve in such capacity.  The Representatives are willing to serve in such capacity on the condition that they be so indemnified.

NOW, THEREFORE, in consideration of the Indemnitees’ agreement to enter into the Transactions and the Representatives’ agreement to serve in such capacity, the parties hereto agree as follows:

1.Indemnity of Indemnitees.  Subject to the terms and conditions hereof, each Company hereby agrees to hold harmless and indemnify each Indemnitee to the fullest extent permitted by law, as such may be amended from time to time.  In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a)Generally.  Each Indemnitee shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses (as hereinafter defined) actually and reasonably incurred by it or on its behalf if, by reason of a Representative’s status as such or service in such capacity, such Indemnitee is, or is threatened to be made, a party to or otherwise involved in any Proceeding (as hereinafter defined), REGARDLESS OF WHETHER ARISING FROM ANY ACT OR OMISSION WHICH CONSTITUTED THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE (WHETHER ACTIVE OR PASSIVE) OF SUCH INDEMNITEE; provided that the conduct of such Indemnitee in respect of the matters at issue did not constitute gross negligence, willful misconduct, bad faith, or a violation of law, and in the case of any criminal proceeding, such Indemnitee did not have reasonable cause to believe that the act or omission was unlawful.

 

 

(b)Certain Presumptions.  The termination of any Proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 1.  The termination of any Proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that an Indemnitee acted in a manner contrary to that specified in this Section 1.

(c)Third-Party Indemnification Rights.  For the avoidance of doubt, the rights to indemnification and advancement of expenses provided hereunder shall constitute third-party indemnification rights.

(d)Limitations.  Notwithstanding anything herein to the contrary, no Indemnitee hereunder shall be entitled to indemnification or advancement of expenses provided hereunder (i) by reason of being a director or officer of any Company pursuant to the terms of this Agreement or (ii) as a result of, in connection with or following a material breach of the Observer Right Agreement between the Company and Orion dated [of even date herewith].

2.Additional Indemnity.  In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, each Company shall and hereby does indemnify and hold harmless each Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by it or on its behalf if, by reason of a Representative’s status as such or service in such capacity, it is, or is threatened to be made, a party to or participant in any Proceeding, including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of such Indemnitee.  The only limitation that shall exist upon a Company’s obligations pursuant to this Agreement shall be that such Company shall not be obligated to make any payment to an Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof of this Agreement) to be unlawful.

3.Contribution.

(a)Whether or not the indemnification provided in Sections 1 and 2 of this Agreement is available, in respect of any threatened, pending or completed action, suit or proceeding in which a Company is jointly liable with an Indemnitee (or would be if joined in such action, suit or proceeding), such Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring such Indemnitee to contribute to such payment and such Company hereby waives and relinquishes any right of contribution it may have against such Indemnitee.  A Company shall not enter into any settlement of any action, suit or proceeding in which such Company is jointly liable with any Indemnitee (or would be if joined in such action, suit or proceeding) without the prior written consent of such Indemnitee unless such settlement provides for a full and final release of all claims asserted against such Indemnitee.

 

 

(b)Without diminishing or impairing the obligations of each Company set forth in the preceding subparagraph, if, for any reason, an Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which a Company is jointly liable with such Indemnitee (or would be if joined in such action, suit or proceeding), such Company shall, to the extent permitted by applicable law, contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by such Indemnitee in proportion to the relative benefits received by such Company and all officers, directors, managers or employees of such Company who are jointly liable with such Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and such Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of such Company and all officers, directors, managers or employees of such Company who are jointly liable with such Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and such Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the law may require to be considered.  The relative fault of each Company and all officers, directors, managers or employees of each Company who are jointly liable with such Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and such Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c)Each Company hereby agrees to fully indemnify and hold each Indemnitee harmless from any claims of contribution which may be brought by officers, directors, managers or employees of each Company who may be jointly liable with such Indemnitee.

(d)To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to an Indemnitee for any reason whatsoever, each Company, in lieu of indemnifying such Indemnitee, shall contribute to the amount incurred by such Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by each Company and such Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of each Company (and its directors, officers, managers, employees and agents) and such Indemnitee in connection with such event(s) and/or transaction(s).

4.Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the extent that any Indemnitee is, by reason of a Representative’s status as such or service in such capacity, a witness, or is made (or asked to) respond to discovery requests, in any Proceeding to which such Indemnitee is not a party, such Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by it or on its behalf in connection therewith.

 

 

5.Advancement of Expenses.  Notwithstanding any other provision of this Agreement, each Company shall advance all Expenses incurred by or on behalf of any Indemnitee in connection with any Proceeding by reason of a Representatives’ status as such or service within such capacity within thirty (30) days after the receipt by a Company of a statement or statements from such Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by such Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of such Indemnitee to repay any Expenses advanced if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified against such Expenses.  Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.

6.Procedures and Presumptions of Entitlement to Indemnification.  It is the intent of this Agreement to secure for each Indemnitee rights of indemnity that are as favorable as may be permitted under applicable law.  Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether an Indemnitee is entitled to indemnification under this Agreement:

(a)To obtain indemnification under this Agreement, an Indemnitee shall submit to a Company a written request, including therein or therewith such documentation and information as is reasonably available to such Indemnitee and is reasonably necessary to determine whether and to what extent such Indemnitee is entitled to indemnification. The Secretary of such Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that such Indemnitee has requested indemnification. Notwithstanding the foregoing, any delay or failure by an Indemnitee to provide such a request to a Company hereunder will not relieve such Company of any liability which it may have to such Indemnitee hereunder unless, and to the extent that, such delay or failure actually and materially prejudices the interests of such Company.  

(b)Upon written request by an Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to such Indemnitee’s entitlement thereto shall be made in the specific case by one of the following three methods, which shall be at the election of the Board (1) by a majority vote of the disinterested directors, even though less than a quorum, (2) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum, or (3) if there are no disinterested directors or if the disinterested directors so direct, by independent legal counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee.  For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought by such Indemnitee.  

(c)If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c).  The Independent Counsel shall be selected by the Board.  The applicable Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a 

 

 

proper and timely objection, the person so selected shall act as Independent Counsel.  If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit.  If, within twenty (20) days after submission by the applicable Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the applicable Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by such Indemnitee to such Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof.  The applicable Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and such Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.

(d)In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.  Neither the failure of a Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by a Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(e)Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the applicable Company, including financial statements, or on information supplied to a Representative in its capacity as such by the officers or directors of such Company in the course of their duties.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of a Company shall not be imputed to an Indemnitee for purposes of determining the right to indemnification under this Agreement.  

(f)If the person, persons or entity empowered or selected under this Section 6 to determine whether an Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the applicable Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and such Indemnitee shall be entitled to such indemnification absent (i) a misstatement by such Indemnitee of a material fact, or an omission of a material fact necessary to make such Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such sixty (60) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto.

 

 

(g)Each Indemnitee shall cooperate with the person, persons or entity making such determination with respect to such Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to such Indemnitee and reasonably necessary to such determination.  Any Independent Counsel or member of the Board, as the case may be, shall act reasonably and in good faith in making a determination regarding such Indemnitee’s entitlement to indemnification under this Agreement.  Any costs or expenses (including attorneys’ fees and disbursements) incurred by such Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the applicable Company and such Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(h)Notwithstanding any provision in this Agreement, a Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against an Indemnitee for which payment has actually been made to or on behalf of such Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; provided that the foregoing shall not affect the rights of such Indemnitee or the Fund Indemnitors set forth in Section 8(d).

7.Remedies of Indemnitee.

(a)In the event that (i) a determination is made pursuant to Section 6 of this Agreement that an Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by a Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by a Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that such Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, such Indemnitee shall be entitled to an adjudication in any court of competent jurisdiction, of such Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within one hundred eighty (180) days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). Each Company shall not oppose any Indemnitee’s right to seek any adjudication thereof.

(b)In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that an Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and such Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).

(c)If a determination shall have been made pursuant to Section 6(b) of this Agreement that an Indemnitee is entitled to indemnification, each Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7 absent (i) a misstatement by such Indemnitee of a material fact, or an omission of a material fact necessary to make such Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

 

(d)In the event that an Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of its rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the applicable Company, such Company shall pay on such Indemnitee’s behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 12 of this Agreement) actually and reasonably incurred by such Indemnitee in such judicial adjudication, regardless of whether such Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

(e)Each Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that each Company is bound by all the provisions of this Agreement.  The applicable Company shall indemnify each applicable Indemnitee against any and all Expenses and, if requested by any applicable Indemnitee, shall (within ten (10) days after receipt by a Company of a written request therefor) advance, to the extent not prohibited by law, such expenses to the applicable Indemnitee, which are incurred by such Indemnitee in connection with any action brought by such Indemnitee for indemnification or advance of Expenses from such Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by such Company, regardless of whether such Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(f)Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

8.Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

(a)The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which any Indemnitee may at any time be entitled, without duplication, under applicable law, Charter Documents, any other agreement, a vote of equityholders, a resolution of managers or otherwise, of any Company.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of any Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee prior to such amendment, alteration or repeal.  To the extent that a change in law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Charter Documents and this Agreement, it is the intent of the parties hereto that each Indemnitee shall enjoy by this Agreement the greater benefits, without duplication, so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise, but without duplication of payment or reimbursement.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

 

(b)To the extent that a Company maintains an insurance policy or policies providing liability insurance for directors, officers, managers, employees, or agents or fiduciaries of a Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of a Company, each Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, manager, employee, agent or fiduciary under such policy or policies; provided, however, that such coverage shall not be construed as evidence that the Indemnitee is a director, officer, manager, employee, agent or fiduciary of any Company or entitled to indemnification or advancement of expenses by reason of such Indemnitee’s status as any of the foregoing.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, a Company has director and officer liability insurance in effect, such Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. Each Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(c)In the event of any payment under this Agreement, the applicable Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable such Company to bring suit to enforce such rights. Notwithstanding the foregoing, in no event shall any Company be subrogated to any right of recovery an Indemnitee may have from any Orion Energy Partners entity or any insurer thereof.

(d)Each Company hereby acknowledges that the Indemnitees may have certain rights to indemnification, advancement of expenses and/or insurance provided by or on behalf of one or more Orion Energy Partners entities, including Main Fund, ECI Parallel Fund, Family & Associates Fund, Main Fund Management, or their respective affiliates (collectively, the “Fund Indemnitors”).  Notwithstanding anything to the contrary herein or otherwise, each Company hereby agrees, with respect to a claim for indemnification made against such Company hereunder and which is payable by such Company hereunder:

(i)that such Company is the indemnitor of first resort (i.e., that such Company’s obligations to the Indemnitees are primary and that any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Indemnitees are secondary),

(ii)that such Company will be required to advance the full amount of any reasonable expenses incurred by the Indemnitees and will be liable for the full amount of all liabilities, expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement or any other agreement between such Company and such Indemnitees, without regard to any rights such Indemnitees may have against the Fund Indemnitors, and

(iii)that such Company irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims for contribution, subrogation or any other recovery of any kind in respect thereof.  

 

 

(e)Notwithstanding anything to the contrary herein or otherwise, each Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of any Indemnitee with respect to any claim for which an Indemnitee has sought indemnification from a Company will affect the foregoing and the Fund Indemnitors will have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of each Indemnitee against a Company.  Each Company and each Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Agreement.

9.Duration of Agreement.  All agreements and obligations of each Company contained herein shall continue for so long as there is any Representative or any replacement thereof serving in such capacity, and shall continue thereafter so long as any Indemnitee shall be subject to any Proceeding by reason of Representative’s status as such or service in such capacity , whether or not any Representative is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of a Company, and including any transferee of an interest of any Orion Energy Partners entity), assigns, spouses, heirs, executors and personal and legal representatives.

10.Security.  To the extent requested by an Indemnitee and approved by a Company, each Company may at any time and from time to time provide security to an Indemnitee for such Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.  Any such security, once provided to an Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

11.Enforcement.

(a)Each Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce the Indemnitees to enter into the Transactions and to induce the Representatives to serve in such capacity in connection with the Transactions, and each Company acknowledges that each Indemnitee is relying upon this Agreement in entering into the Transactions and permitting the Representatives to serve as such. 

(b)This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

12.Definitions.  For purposes of this Agreement:

(a)“Expenses” shall include all losses, claims, damages, liabilities, joint or several, reasonable and documented attorneys’ fees and legal expenses, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a 

 

 

Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and all federal, state, local or foreign taxes imposed on any Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent.  Expenses, however, shall not include amounts paid in settlement by an Indemnitee or the amount of judgments or fines against an Indemnitee.

(b)“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) a Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either a Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The applicable Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(c)“Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of a Company or otherwise and whether civil, criminal, administrative or investigative, in which an Indemnitee was, is or will be involved as a party or otherwise, by reason of a Representative’s status as such or service in such capacity, but excluding (i) one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce its rights under this Agreement, (ii) one brought by a Company against an Indemnitee in connection with the Transactions, the Observer Right Agreement (as defined below) or any other agreement, document, instrument, transaction or other action related thereto.

13.Severability.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.  Without limiting the generality of the foregoing, this Agreement is intended to confer upon each Indemnitee indemnification rights to the fullest extent permitted by applicable laws.  In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

14.Modification and Waiver.  No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by each Company and GP.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

 

15.Notice By Indemnitee.  Indemnitee agrees promptly to notify the applicable Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder.  The failure to so notify the applicable Company shall not relieve such Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

16.Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent:

(a)To any Indemnitee at the following address:

Orion Energy Credit Opportunities Fund II, L.P. 

Orion Energy Credit Opportunities Fund II PV, L.P.

Orion Energy Credit Opportunities Fund II GPFA, L.P.

350 5th Ave #6740

New York, NY 10118

 

	
Attention:
	
 
	
Gerrit Nicholas; Rui Viana; Mark Friedland; Timothy Mister; Sue Yang

	
Email:
	
 
	
Gerrit@OrionEnergyPartners.com;

	
 
	
 
	
Rui@OrionEnergyPartners.com;

	
 
	
 
	
Mark@OrionEnergyPartners.com;

	
 
	
 
	
Timothy@OrionEnergyPartners.com;

	
 
	
 
	
Sue@OrionEnergyPartners.com

 

with a copy to:

Greenberg Traurig, LLP
200 Park Avenue

New York, NY 10166
Attention:  Todd Bowen
Phone:  212-801-2299

Email: bowent@gtlaw.com

 

 

(b)To a Company at:

FuelCell Energy, Inc.

3 Great Pasture Road
Danbury, CT 06810
Attention: Jason Few
Email:jfew@fce.com

 

with a copy to:

 

FuelCell Energy, Inc.

3 Great Pasture Road
Danbury, CT 06810
Attention: Jennifer Arasimowicz, General Counsel
Email:jarasimowicz@fce.com

 

or to such other address as may have been furnished to Indemnitee by a Company or to a Company by Indemnitee, as the case may be.

17.Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.  This Agreement may also be executed and delivered by electronic signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

18.Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

19.Governing Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Each Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably [name] [address] as its agent in the State of Delaware as such party's agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

20.Observer Rights Agreement.  The provisions of Section 8 of that certain Observer Right Agreement dated as of October 31, 2019 among the Companies and certain of the Indemnitees party hereto (the “Observer Right Agreement”) are hereby incorporated by reference, mutatis mutandis, as if fully set forth herein.  

[SIGNATURE PAGE TO FOLLOW]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

 

	
COMPANIES:

	
 

	
FUELCELL ENERGY, INC.

	
 

	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

	
 

 

	
[OTHER LOAN PARTIES]

	
 

	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

	
 

 

	
INDEMNITEES:

	
 

	
 

	
Gerrit Nicholas

	
 

	
 

	
 

	
Rui Viana

	
 

 

	
ORION ENERGY CREDIT OPPORTUNITIES

	
FUND II, L.P., a Delaware limited partnership

	
 

	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

	
 

 

 

 

 

	
ORION ENERGY CREDIT OPPORTUNITIES

	
FUND II PV, L.P., a Delaware limited partnership

	
 

	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

	
 

 

	
ORION ENERGY CREDIT OPPORTUNITIES

	
FUND II GPFA, L.P., a Delaware limited partnership

	
 

	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

	
 

 

	
ORION ENERGY CREDIT OPPORTUNITIES

	
FUND II GP, L.P., a Delaware limited partnership

	
 

	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

	
 

 

	
ORION ENERGY PARTNERS, L.P., a Delaware

	
limited partnership

	
 

	
 

	
By:
	
 

	
Name:
	
 

	
Title:

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