Document:

Exhibit 10.1

Exhibit 10.1

[Execution Copy]

 

ALLIANCE AGREEMENT

dated as of February 7, 2007

between

FUELCELL ENERGY, INC.

and

POSCO POWER

 

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

 

 

	 	 	 	 	 
	ARTICLE I
	 	 	 	 
	DEFINITIONS
	 	 	2	 
	SECTION 1.1. Certain Definitions
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	THE ALLIANCE
	 	 	5	 
	SECTION 2.1. Alliance Scope
	 	 	5	 
	SECTION 2.2. License and Distribution Rights
	 	 	6	 
	SECTION 2.3. Additional Agreements
	 	 	6	 
	SECTION 2.4. Mutual Covenants
	 	 	6	 
	SECTION 2.5. FCE Obligations
	 	 	7	 
	SECTION 2.6. POSCO Power Obligations
	 	 	8	 
	SECTION 2.7. Fuel Cell Stack Module Order Requirements
	 	 	9	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	10	 
	SECTION 3.1. Representations and Warranties of FCE
	 	 	10	 
	SECTION 3.2. Representations and Warranties of POSCO Power
	 	 	11	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	CERTAIN COVENANTS
	 	 	12	 
	SECTION 4.1. Post-Execution Covenants
	 	 	12	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	TERM AND TERMINATION
	 	 	13	 
	SECTION 5.1. Term
	 	 	13	 
	SECTION 5.2. Extension
	 	 	13	 
	SECTION 5.3. Termination
	 	 	13	 
	SECTION 5.4. Effect of Termination; Survival
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	DISPUTES AND ARBITRATION
	 	 	14	 
	SECTION 6.1. Efforts to Resolve by Mutual Agreement
	 	 	14	 
	SECTION 6.2. Arbitration
	 	 	15	 
	SECTION 6.3. Limitation on Recoverable Damages
	 	 	15	 
	SECTION 6.4. Specific Performance
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	CONFIDENTIALITY
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	INDEMNIFICATION
	 	 	16	 
	SECTION 8.1. Claims
	 	 	16	 
	SECTION 8.2. Indemnification by POSCO
	 	 	16	 
	SECTION 8.3. Indemnification by FCE
	 	 	17	 
	SECTION 8.4. Indemnification Procedure
	 	 	17	 
	 
	 	 	 	 

 

 

 

	 	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	17	 
	SECTION 9.1. Certain Expenses
	 	 	17	 
	SECTION 9.2. Independent Contractors
	 	 	17	 
	SECTION 9.3. Entire Agreement
	 	 	18	 
	SECTION 9.4. Amendments; Waiver
	 	 	18	 
	SECTION 9.5. Binding Nature; Assignment
	 	 	18	 
	SECTION 9.6. No Third Party Beneficiaries
	 	 	18	 
	SECTION 9.7. Notices
	 	 	18	 
	SECTION 9.8. Publicity
	 	 	19	 
	SECTION 9.9. Use of Name
	 	 	20	 
	SECTION 9.10. Severability
	 	 	20	 
	SECTION 9.11. Governing Law
	 	 	20	 
	SECTION 9.12. Counterparts
	 	 	20	 
	 
	 	 	 	 

	 	 	 
	Exhibits
	 	 
	 
	Exhibit A:

	 	Securities Purchase Agreement
	Exhibit B:

	 	Technology Transfer, License and Distribution Agreement
	Exhibit C:

	 	Form of DOE Approval
	Exhibit D:

	 	Form of MTU Consent
	Exhibit E:

	 	Form of Marubeni Settlement
	 
	Schedules
	 	 
	 
	Schedule A:

	 	POSCO Affiliates
	Schedule B:

	 	Non-Exclusive Territory

 

 

 

ALLIANCE AGREEMENT

THIS ALLIANCE AGREEMENT (this “Agreement”), dated as of February 7, 2007, is made and
entered into by and between FUELCELL ENERGY, INC., a Delaware corporation having a place of
business at 3 Great Pasture Rd., Danbury, Connecticut 06813, U.S.A. (“FCE”) and POSCO
POWER, a Korean corporation having a place of business at Dacom Building 10th Floor, 706-1
Yeoksam-dong, Kangnam-gu, Seoul 135-987, Korea (“POSCO Power”).

RECITALS:

A. FCE manufactures and sells, directly and indirectly through a third party distributor, the
FCE Products throughout the world.

B. POSCO Power and FCE have determined that it is in their best interest to have POSCO Power
to sell, import, distribute, maintain, service and/or repair the FCE Products in the Korean Market
and in the Non-Exclusive Territory, in accordance with the terms and conditions of the Technology
Transfer Agreement.

C. FCE desires to provide POSCO Power with, and POSCO Power desires to obtain, all relevant
technology and “know-how” and licenses and other assistance necessary for POSCO Power and POSCO
Affiliates to construct, assemble, manufacture, use, sell, import, distribute, maintain, service
and/or repair the POSCO Products and POSCO Parts, all in accordance with the terms and conditions
of the Technology Transfer Agreement.

D. FCE and POSCO Power also have determined that it is mutually beneficial for FCE to issue
and sell, and POSCO Power to purchase, such number of shares of the common stock of FCE in an
amount equal to US$29,000,000, in accordance with the terms of the Securities Purchase Agreement.

E. In order to effectuate the purpose of this Agreement, POSCO Power intends to use
commercially reasonable efforts to establish a company in Korea, which will be a Subsidiary of
POSCO Power (“NewCo”), to construct, assemble, manufacture, use, sell import, distribute,
maintain, service and/or repair the POSCO Products and POSCO Parts within two years from the
Effective Date.

F. In connection with the transactions contemplated in this Agreement, FCE and POSCO entered
into the Memorandum of Agreement on January 10, 2007.

G. Simultaneously herewith, the parties hereto have entered into the Securities Purchase
Agreement and the Technology Transfer Agreement.

 

1

 

ARTICLE I

DEFINITIONS

SECTION 1.1. Certain Definitions.

As used in this Agreement, the capitalized terms set forth below shall have the following
respective meanings:

“Additional Term” shall have the meaning set forth in Section 5.2.

“Agreement” shall mean this Alliance Agreement, as it may be amended, modified or
supplemented from time to time in accordance with its terms.

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

“BOP” shall have the meaning set forth in the Technology Transfer Agreement.

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

“Contract” shall mean any contract, lease, sales order, purchase order, agreement,
indenture, mortgage, note, bond, warrant or instrument.

“Customer” shall mean any Person (wherever located) who has contracted with POSCO
Power for the purchase of electric power pursuant to a power supply agreement
or the purchase or lease of a DFC Power Plant.

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

“Dispute” shall have the meaning set forth in Section 6.1.

“DFC Power Plant” shall have the meaning set forth in the Technology Transfer
Agreement.

“DOE Approval” shall have the meaning set forth in Section 4.1(a).

“Effective Date” shall mean the date that is no later than thirty (30) days from the
date hereof on which all the obligations of FCE set forth in Section 4.1(a), (b)
and (f) have been satisfied or waived.

“Facility” shall mean the site at which the DFC Power Plant will be installed and
operated by the end user.

“FCE” shall have the meaning set forth in the preamble.

“FCE Products” shall have the meaning set forth in the Technology Transfer
Agreement.

 

2

 

“FCE Technology” shall have the meaning set forth in the Technology Transfer
Agreement.

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

“Fuel Cell Stack Module” shall have the meaning set forth in the Technology Transfer
Agreement.

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

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

“ICC” shall have the meaning set forth in Section 6.2.

“Indemnified Party” shall have the meaning set forth in Section 8.4.

“Indemnifying Party” shall have the meaning set forth in Section 8.4.

“Initial Term” shall have the meaning set forth in Section 5.1.

“Korean Company” shall have the meaning set forth in the Technology Transfer
Agreement.

“Korean Market” shall have the meaning set forth in the Technology Transfer Agreement.

“Legal Proceeding” shall mean any judicial, administrative or arbitral action, suit or
proceeding (whether public or private and whether civil, criminal or administrative) by or before
any court or other Governmental Authority.

“Long Term Service Agreement” or “LTSA” shall have the meaning set forth in the
Technology Transfer Agreement.

“Marubeni” shall mean Marubeni Corporation, a Japanese corporation having its
principal office at 4-2 Ohtemachi-I-Chome, Dhiyoda-ku, Tokyo, Japan.

“Marubeni Distribution Right” shall have the meaning set forth in Section 4.1(f).

“Marubeni Settlement” shall have the meaning set forth in Section 4.1(f).

 

3

 

“Memorandum of Agreement” shall mean that certain Memorandum of Agreement dated
January 10, 2007 between FCE and POSCO.

“MTU” shall mean MTU CFC SOLUTIONS, GmbH, a German limited liability entity.

“MTU Consent” shall have the meaning set forth in Section 4.1(b).

“MTU-FCE BOP License” shall mean the license agreement between MTU and FCE dated July
16, 1998, for the cross licensing of certain balance of plant technology.

“NewCo” shall have the meaning set forth in the Recitals.

“NewCo Stock” shall have the meaning set forth in Section 2.5(g).

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

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

“New POSCO Parts” shall mean any parts or components of the New POSCO Products other
than the Fuel Cell Stack Module.

“New POSCO Products” shall mean any products, regardless of designation, which is the
same as, or modification or derivation in whole or in part of the New DFC Based-Products.

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

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

“POSCO Affiliate” shall have the meaning set forth in the Technology Transfer
Agreement, a list of which is set forth in Schedule A attached hereto.

“POSCO Power Facility Completion Date” shall have the meaning set forth in Section
2.6(a).

“POSCO Power Facility” shall mean the factory constructed by POSCO Power at which
POSCO Parts are manufactured and POSCO Products are assembled.

“POSCO Technology” shall have the meaning set forth in the Technology Transfer
Agreement.

 

4

 

“Purchase Order” shall have the meaning set forth in the Technology Transfer
Agreement.

“Rules” shall have the meaning set forth in Section 6.2.

“SEC Documents” shall mean any and all reports required to be filed by FCE under the
U.S. Securities Act of 1933 and Exchange Act of 1934, as amended, including all exhibits and
financial statements and other documents incorporated by reference therein.

“Securities Purchase Agreement” shall mean that certain Securities Purchase Agreement
dated as of the date hereof between FCE and POSCO, in the form attached hereto as Exhibit A.

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

“Technology Transfer Agreement” shall mean that certain Technology Transfer, License
and Distribution Agreement dated as of the date hereof between FCE and POSCO, in the form attached
hereto as Exhibit B.

“Technology Transfer Program” or “TTP” shall have the meaning set forth in the
Technology Transfer Agreement.

“Term” shall have the meaning set forth in Section 5.2.

“Transaction Agreements” shall mean this Agreement, the Securities Purchase Agreement
and the Technology Transfer Agreement, and any other documents or agreements to effectuate the
transactions contemplated herein.

ARTICLE II

THE ALLIANCE

SECTION 2.1. Alliance Scope. The scope of this Alliance Agreement shall be limited to
the FCE Products and FCE Technology, except to the extent the New DFC-Based Products and the New
DFC-Based Technology are addressed in Section 2.2(b). Each party shall have the right to
pursue any opportunities that are not in conflict with or expressly subject to the provisions of
this Agreement in the same manner in which it has previously pursued such opportunities or in any
other manner in such party’s own discretion, including, without limitation, entering into a
partnership, alliance, distribution or other sales and marketing arrangements with any third party.

 

5

 

SECTION 2.2. License and Distribution Rights.

(a) FCE Technology; FCE Products, POSCO Parts and POSCO Products. FCE, in
consideration of payments and other amounts payable as specified in this Agreement and the
other Transaction Agreements, agrees to grant to POSCO Power, and POSCO Power agrees to accept,
certain licenses and distribution rights with respect to the FCE Technology, FCE Products, POSCO
Parts and POSCO Products, it being understood and agreed that FCE shall not, during the
Term, grant any right or license in or relating to the FCE Technology or FCE Products to any other
Korean Companies, or grant any new distribution rights in respect of the Korean Market or renew any
existing distribution rights in respect of the Korean Market, all in accordance with, and subject
to, the terms and conditions of the Technology Transfer Agreement

(b) New DFC-Based Technology and New DFC-Based Products. FCE agrees that it (i) will
provide to POSCO Power the New DFC-Based Technology during the Term and (ii) will grant to POSCO
Power certain exclusive and non-exclusive distribution rights with respect to, and licenses to use
the New DFC-Based Technology for POSCO Power and/or POSCO Affiliates to construct, assemble,
manufacture, sell, use, import, distribute, maintain, service and/or repair, the New DFC-Based
Products in the Korean Market and to sell, use, import, distribute, maintain, service and/or repair
the New DFC-Based Products in the Non-Exclusive Territory, when such technology is developed and
such products and parts are commercialized by FCE, on terms and conditions, including compensation,
to be mutually agreed in a separate agreement, using their commercially reasonable good faith
efforts, it being understood and agreed that FCE will not grant any right or license in or
relating to the New DFC-Based Technology and New DFC-Based Products to any other Korean Company
during the Term, as long as POSCO Power is using commercially reasonable efforts to actively and
diligently commercialize the New DFC-Based Technology in the Korean Market.

(c) POSCO Power agrees that it will grant to FCE certain licenses and rights with respect to
the POSCO Technology developed by POSCO Power or any POSCO Affiliate, in accordance with and
subject to the terms and conditions of the Technology Transfer Agreement, and on terms and
conditions, including compensation, to be mutually agreed in a separate agreement using their
commercially reasonable good faith efforts.

SECTION 2.3. Additional Agreements. Simultaneously with the execution of this
Agreement, and subject to the terms hereof, the parties shall enter into the Technology Transfer
Agreement and the Securities Purchase Agreement, and, within sixty (60) days of thereof, the
parties shall use commercially reasonable efforts to finalize the terms and conditions of the
Technology Transfer Program, LTSA and the Purchase Order. In addition, from time to time, the
parties shall use commercially reasonable efforts to enter into any other agreements, as needed, to
effectuate the purposes of this Agreement.

SECTION 2.4. Mutual Covenants.

(a) Cooperation; Alliance Management. The parties shall use commercially reasonable
good faith efforts to cooperate with each other to effectuate the transactions contemplated by this
Agreement and any other Transaction Agreements. In order to ensure such cooperation, each of the
parties shall designate at least two representatives
for the purpose of coordinating the implementation and performance of this Agreement and the
other Transaction Agreements. The representatives shall meet on a quarterly basis and on an as
needed basis at the request of either party.

 

6

 

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

(c) Reputation. Each of the parties agrees to conduct its respective businesses
prudently and in a manner that does not attract unfavorable publicity, a negative reputation in the
energy industry or enforcement activity by a Governmental Authority having jurisdiction over POSCO
Power or FCE, which in each case would be reasonably expected to have a material adverse effect on
the transactions contemplated herein.

(d) Compliance. Each of the parties shall comply with all Applicable Laws relating to
its activities contemplated by this Agreement and the other Transaction Agreements. In performing
their respective obligations under this Agreement and the other Transaction Agreements, neither
party shall be required to undertake any activity that would violate any Applicable Laws. In
addition, each of the parties shall, at its own cost and expense, obtain and maintain any and all
licenses and registrations, and cause each of its employees to obtain any and all licenses and
registrations, that are necessary or, in such party’s reasonable discretion, desirable in the
performance of the services to be provided by such party pursuant to this Agreement and the other
Transaction Agreements.

SECTION 2.5. FCE Obligations.

(a) Technical Assistance, Advertising and Marketing. FCE shall provide commercially
reasonable good faith technical assistance and support in connection with POSCO Power’s performance
of the transactions contemplated hereby in accordance with the terms and conditions of the
Technology Transfer Agreement, including the Technology Transfer Program. FCE shall, at its own
cost, provide commercially reasonable good faith support to POSCO Power’s marketing and sales
activities, including, but not limited to, supplying information to POSCO Power for POSCO Power to
prepare general marketing materials.

(b) FCE Product Literature and Marketing Materials. FCE shall provide POSCO Power
with (i) appropriate instructions regarding the use of the FCE Products, including, but not limited
to, warning labels, disclaimers of warranty and any other related documentation, (ii) available
literature, data, price lists, promotional materials, or any other similar materials regarding the
FCE Products, (iii) documents to manufacture, install, service and repair the FCE Products, POSCO
Products and POSCO Parts in accordance with the terms and conditions of the Technology Transfer
Agreement, including the Technology Transfer Program and (iv) (A) preventative maintenance
procedures for the FCE Products, (B) suggested and necessary repair parts and (C) estimated prices
and replacements schedules for standard wear and tear items, in
accordance with the terms and conditions of the Technology Transfer Agreement, including the
Technology Transfer Program. Any materials provided in accordance with this Section 2.5(b) shall be
in the English language. POSCO Power shall have the right to reproduce the materials and, where
appropriate, translate such materials into other languages.

 

7

 

(c) Referrals. FCE agrees to refer to POSCO Power all demonstration projects or
orders from any Korean company for FCE Products to be sited in the Korean Market.

(d) Inspection and Testing. FCE shall provide from time to time to POSCO Power the
acceptance criteria that must be met or exceeded at either the FCE factory and at each Facility
before POSCO Power and/or its Customers will be deemed to have accepted delivery of the relevant
FCE Product.

(e) Construction and Installation Duties. FCE shall advise POSCO Power with respect
to the determination and design of site requirements, permitting, grid interface and controlled
designs, BOP, installation, start-up services, training and data collection for DFC Power Plants.

(f) Performance Standards. Each Purchase Order will set forth the design
specifications for the FCE Products ordered thereby.

(g) Transfer of NewCo Stock. In the event FCE desires to transfer to any third party
all or any portion of the capital stock of NewCo (the “NewCo Stock”) received as royalties pursuant
to the Technology Transfer Agreement, FCE shall deliver to POSCO Power within thirty (30) days
prior to the proposed date of transfer a written notice setting forth the price and any other
relevant terms of its proposed transfer of such NewCo Stock. POSCO Power shall then be entitled to
purchase all or any portion of such NewCo Stock proposed to be transferred on the same terms and
conditions set forth in the notice provided by FCE, by delivering notice to FCE within fifteen (15)
days of notice from FCE of such proposed transfer. To the extent that any portion of the NewCo
Stock is not purchased pursuant to the terms in this clause, the proposed transfer may proceed so
long as such transfer is effected in accordance with Applicable Law, and, in which case, POSCO
Power shall provide commercially reasonable assistance to FCE to effect the sale of NewCo Stock.

SECTION 2.6. POSCO Power Obligations.

(a) Completion of POSCO Power Facility. POSCO Power shall use its commercially
reasonable efforts to complete the construction of the POSCO Power Facility within two (2) years of
the Effective Date (the “POSCO Power Facility Completion Date”); provided,
however, that the failure by POSCO Power to complete such construction by the POSCO Power
Facility Completion Date shall not be considered a material breach or failure of this Agreement
(including Article IV) or any other Transaction Agreement.

(b) Manufacturing, Marketing and Sale of FCE Products. POSCO Power shall, at its sole
expense, use its commercially reasonable good faith efforts to manufacture, promote, market,
distribute, sell or otherwise commercialize the BOP technology in the Korean Market and distribute,
sell, or otherwise commercialize the BOP technology in the Non-Exclusive Territory, in accordance
with the terms of this Agreement and the other Transaction Agreements. POSCO Power shall comply
with all FCE Product quality measures provided by FCE to POSCO Power from time to time.

 

8

 

(c) Marketing Plan. POSCO Power, at its sole expense, agrees to develop a marketing
plan to advertise, promote and publicize the FCE Products in the Korean Market.

(d) Service Capability. POSCO Power has, or within 36 months of the Effective Date
will develop, the necessary skills and capability to provide service for the FCE Products, POSCO
Products and POSCO Parts to the Customers. Without limiting the foregoing and solely by way of
example, such skills shall include the ability to perform, consistent with its commercial
reasonable efforts, the following services: applications engineering, balance of plant service,
power plant operations and control, installation services, troubleshooting, and maintenance
services. The skills described in this section shall not include the performance of service within
the Fuel Cell Stack Module, which shall be performed by FCE.

(e) FCE Fuel Cell Stack Module Integrity. POSCO Power shall not, and shall not permit
its employees, subcontractors, Facility operators, site owners or agents, or those of its
affiliates or Subsidiaries to, open any Fuel Cell Stack Modules or otherwise attempt to view the
interiors of the Fuel Cell Stack Module without the prior written permission of FCE. Any violation
of this section shall be deemed a material breach of the confidentiality provisions set forth
herein and void all warranties contained in the related Purchase Order. POSCO Power may open a Fuel
Cell Stack Module or allow a Fuel Cell Stack Module to be opened if there occurs an emergency
condition, at POSCO Power’s reasonable judgment, involving the Fuel Cell Stack Module that imperils
human life or threatens substantial property damage or bodily harm. If POSCO Power opens a Fuel
Cell Stack Module or allows a Fuel Cell Stack Module to be opened pursuant to this Section, POSCO
Power shall limit such intrusion into the Fuel Cell Stack Module as narrowly as possible, and treat
any information learned thereby as confidential information in accordance with this Agreement.
POSCO Power shall require, as a condition precedent to any agreement with respect to the sale,
lease or such similar transaction of any FCE Product or POSCO Product, the purchaser, lessor,
customer or any such party of such transaction to agree to accept the terms of this clause (e) and
to agree to require any subsequent purchaser, lessor, customer or such similar party thereof to
accept the terms hereof.

SECTION 2.7. Fuel Cell Stack Module Order Requirements.

(a) Order Requirements. During the Term of this Agreement, POSCO Power agrees to purchase from
FCE, and FCE agrees to sell to POSCO, Fuel Cell Stack Modules that are capable of producing certain
specified megawatts (on a cumulative basis) as follows (for the purpose of this section, the term
“Year” means the 12-month period ending in each year on the anniversary of the Effective Date):

	 	 	 	 	 
	Year	 	Total Megawatts (cumulative)	 
	 
	 	 	 	 

 

9

 

(b) Price. The parties acknowledge and agree that the price and terms of each order
shall be negotiated separately in a commercially reasonable good faith manner, subject to the
pricing guidelines agreed to by the parties pursuant to Section 4.1 (c) below.

(c) Joint Review. Notwithstanding any provision to the contrary herein, any failure
by POSCO Power to purchase the Fuel Cell Stack Modules, as set forth in Section 2.7 shall not
constitute a material breach of this Agreement. The parties shall undertake a joint performance
review at the end of years 3 and 5 from the Effective Date to determine the desirability of
continuation of this Agreement, in the event the cumulative order requirements set forth in Section
2.7 were not met.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1. Representations and Warranties of FCE. FCE represents and warrants to
POSCO that as of the date hereof, and as of the Effective Date:

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

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

(c) The execution, delivery and performance by FCE of this Agreement and the other Transaction
Agreements, and the consummation by FCE of the transactions contemplated hereby and thereby, do
not: (i) violate any Applicable Law; (ii) violate or conflict with any Contract to which FCE is a
party, including, but not limited to, any Contract with Marubeni and MTU, upon receipt of the
Marubeni Settlement and MTU Consent; (iii) violate any Governmental Order; (iv) require the
approval, consent or permission of any Governmental Authority having authority over FCE, other than
the DOE Approval (as hereinafter defined); or (v) violate FCE’s organizational documents;

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

 

10

 

(e) To FCE’s knowledge, there is no pending or threatened any suit, action or proceeding (i)
by any Governmental Authority challenging the transactions contemplated herein or in the other
Transaction Agreements by FCE, seeking to restrain or prohibit the consummation of the transactions
contemplated hereby or thereby, or (ii) by any Person which has not been disclosed in the SEC
Documents; and

(f) As of their respective dates, the financial statements set forth in the SEC Documents
fairly present in all material respects the consolidated financial position of FCE as of the dates
thereof and, since October 31, 2006, and except as noted in the SEC Documents, FCE’s business has
been operated in the ordinary course of business and there has not been any event or condition that
would reasonably be expected to result, individually or in the aggregate, in a material adverse
event.

SECTION 3.2. Representations and Warranties of POSCO Power. POSCO Power represents
and warrants to FCE that, as of the date hereof and as of the Effective Date:

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

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

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

 

11

 

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

(e) To POSCO Power’s knowledge, there is no pending or threatened any suit, action or
proceeding by any Governmental Authority challenging the transactions contemplated herein or in the
other Transaction Agreements by POSCO Power, seeking to restrain or prohibit the consummation of
the transactions contemplated hereby or thereby.

ARTICLE IV

CERTAIN COVENANTS

SECTION 4.1. Post-Execution Covenants.

(a) DOE Approval. FCE shall use its reasonable best efforts to obtain all necessary
consent or approval from the U.S. Department of Energy, in form substantially similar to the form
of DOE Approval set forth in Exhibit C attached hereto (the “DOE Approval”) .

(b) MTU Consent. FCE shall use its reasonable best efforts to obtain the consent,
approval and/or agreement, in form substantially similar to the form of consent set forth in
Exhibit D attached hereto (the “MTU Consent”).

(c) Form of Purchase Order and LTSA; Accounting. Within sixty (60) days of the
Effective Date, the parties shall use commercially reasonable good faith efforts to finalize (i)
the terms and conditions of the LTSA and the Purchase Order, (ii) the pricing guidelines of the
Fuel Cell Stack Modules and/or FCE Products and (iii) certain accounting issues relating to, and
the components or items that comprise, the Net Sales.

(d) Technology Transfer Program. The parties shall use commercially reasonable good
faith efforts to negotiate, prepare and finalize the terms and conditions of the Technology
Transfer Program within sixty (60) days of the date hereof.

(e) Closing of Securities Purchase Agreement. The parties shall use commercially
reasonable good faith efforts to effect the closing of the Securities Purchase Agreement as soon as
practicable, but no earlier than the Effective Date.

(f) Marubeni Settlement. The parties shall use their reasonable best efforts to secure
a waiver from Marubeni, pursuant to which Marubeni waives its distribution rights in the Korean
Market, in form substantially similar to the form of waiver set forth in Exhibit E attached
hereto (“Marubeni Settlement”). POSCO Power hereby agrees to comply with the provisions in
the Marubeni Settlement to the extent applicable to POSCO Power.

 

12

 

ARTICLE V

TERM ANDTERMINATION

SECTION 5.1. Term. The initial term of this Agreement (the “Initial Term”)
shall commence on the Effective Date and shall continue, unless earlier terminated in accordance
with the provisions set forth herein, for a period of ten (10) years from the date hereof.

SECTION 5.2. Extension. The Initial Term may be extended for additional terms, each
for a period of three (3) years, as mutually agreed (each such additional term referred to herein
as the “Additional Term”; together with the Initial Term, the “Term”); provided,
that the first Additional Term shall be on terms and conditions no less favorable to POSCO Power
than those set forth in this Agreement and the other Transaction Agreements; provided,
further, that any Additional Term after the first Additional Term shall be on terms and
conditions as mutually agreed upon by the parties. This Agreement shall be extended only if the
other Transaction Agreements other than the Securities Purchase Agreement are extended for the same
period.

SECTION 5.3. Termination. This Agreement may be terminated:

(a) by mutual written agreement of FCE and POSCO Power;

(b) by either party (i) if the parties fail to agree to the continuation of this Agreement as
set forth in Section 2.7(c); (ii) if the terms and conditions set forth in Section
4.1(a), (b) and (f) have not been satisfied (or waived in writing by POSCO
Power) by April 7, 2007; or (iii) if a change in any Applicable Law would materially and adversely
affect any rights or obligations of any party and the parties in their exercise of commercially
reasonable good faith efforts, failed to agree to an appropriate modification or an amendment of
the terms and conditions of this Agreement, after complying with the procedures set forth in
Section 6.1 below.

(c) (i) by FCE, by written notice to POSCO Power, if (A) POSCO Power shall have materially
breached or failed to perform any of its representations, warranties, covenants or agreements of,
or an event of default has occurred under, this Agreement or any of the other Transaction
Agreements and (B) such breach, failure or default is not fully cured within sixty (60) days after
receiving notice thereof; provided, however, that the parties acknowledge and agree that the
failure by POSCO Power to meet the order requirements set forth in Section 2.7(a) shall not
be deemed to be a material breach or failure of this Agreement or any other Transaction Agreements;
or

(ii) by POSCO Power, by written notice to FCE, if (A) FCE shall have materially breached or
failed to perform any of its representations, warranties, covenants or agreements of, or an event
of default has occurred under, this Agreement or any of the other Transaction Agreements, and (B)
such breach, failure or default is not fully cured within sixty (60) days after receiving notice
thereof.

The parties acknowledge and agree that any decision on the part of either party to terminate this
Agreement shall be subject to the procedures set forth in Article VI.

 

13

 

SECTION 5.4. Effect of Termination; Survival.

(a) Upon any termination of this Agreement pursuant to Section 5.3(a) or (b)
hereof, all further obligations of the parties hereunder shall terminate without any further
liability of either party, except as provided in this Section 5.4(a). Each party, if so
requested by the other party, will re-deliver promptly every document furnished to it by the other
party in connection with the transactions contemplated hereby, whether obtained before or after the
execution of this Agreement, and any copies thereof which may have been made.

(b) Upon any termination of this Agreement due to a material breach or failure to perform any
of the representations, warranties, covenants or agreements of this Agreement or the Technology
Transfer Agreement pursuant to Section 5.3(c)(i) hereof, the parties hereby agree that the
remedies set forth in Article IX of the Technology Transfer Agreement shall govern.

(c) Upon any termination of this Agreement due to a material breach or failure to perform any
of the representations, warranties, covenants or agreements of this Agreement or the Technology
Transfer Agreement pursuant to Section 5.3(c)(ii), the parties hereby agree that the
remedies set forth in Article IX of the Technology Transfer Agreement shall govern.

(d) No termination under this Agreement shall limit or otherwise affect the other rights and
remedies of either party arising prior to the termination.

(e) Upon the expiration or termination of this Agreement for any reason, the provisions of
this Section 5.4, Section 6.2, and Articles VII, VIII and
IX shall survive indefinitely.

(f) For the avoidance of doubt, the parties hereto acknowledge and agree that, except as
provided in this Section 5.4(b) and (c), the remedies set forth in any other
Transaction Agreements shall govern, as applicable.

ARTICLE VI

DISPUTES AND ARBITRATION

SECTION 6.1. Efforts to Resolve by Mutual Agreement.

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

(a) Upon written request of either FCE or POSCO Power, the parties shall meet and attempt to
resolve any such Dispute. Such meetings may take place via teleconference or videoconference.

(b) The parties shall meet as often as the parties reasonably deem necessary to discuss the
problem in an effort to resolve the Dispute without the necessity of any formal proceeding.

 

14

 

(c) Formal proceedings for the resolution of a Dispute may not be commenced until the earlier
of (i) the Parties concluding in good faith that amicable resolution through continued negotiation
of the matter does not appear likely; or (ii) the expiration of a sixty (60) day period immediately
following the initial request by either party to resolve the Dispute; provided,
however, that this Section 6.1 will not be construed to prevent a party from
instituting formal proceedings earlier to avoid the expiration of any applicable limitations
period, to preserve a superior position with respect to other creditors or to seek temporary or
preliminary injunctive relief.

SECTION 6.2. Arbitration. If the Parties are unable to resolve any Dispute, pursuant
to Section 6.1 above and except as otherwise specified in Section 6.4, the Dispute shall be
finally settled under the Rules of Arbitration (the “Rules”) of the International Chamber
of Commerce (“ICC”) by three (3) arbitrators designated by the parties. Each party shall
designate one arbitrator. The third arbitrator shall be designated by the two arbitrators
designated by the parties. If either party fails to designate an arbitrator within thirty (30) days
after the filing of the Dispute with the ICC, such arbitrator shall be appointed in the manner
prescribed by the Rules. An arbitration proceeding hereunder shall be conducted in London, U.K.,
and shall be conducted in the English language. The decision or award of the arbitrators shall be
in writing and is final and binding on both parties. The arbitration panel shall award the
prevailing party its attorneys’ fees and costs, arbitration administrative fees, panel member fees
and costs, and any other costs associated with the arbitration; provided, however,
that if the claims or defenses are granted in part and rejected in part, the arbitration panel
shall proportionately allocate between the parties those arbitration expenses in accordance with
the outcomes. The arbitration panel may only award damages as provided for under the terms of this
Agreement and in no event may punitive, consequential and special damages (or as otherwise
specified in this Agreement, including, without limitation, Section 6.3) be awarded. In the
event of any conflict between the Rules and any provision of this Agreement, this Agreement shall
govern.

SECTION 6.3. Limitation on Recoverable Damages. In no event shall the measure of
damages payable by either party under or in connection with this Agreement or the transactions or
arrangements contemplated hereby include, nor will either party be liable for, any amounts for loss
of income, profit or savings or indirect, incidental, consequential, exemplary, punitive or special
damages of any party, including third parties, whether or not foreseeable, even if such party has
been advised of the possibility of such damages in advance, and all such damages are expressly
disclaimed. Notwithstanding anything contained herein to the contrary, the parties hereto shall be
entitled to seek specific performance or injunctive relief in connection with any material breach
by another party of its obligations under this Agreement.

SECTION 6.4. Specific Performance. The parties acknowledge and agree that the FCE
Technology is unique and further acknowledge and agree that POSCO Power will suffer irreparable
harm, which is not compensable by monetary damage, in the event the FCE Technology has not been
fully transferred to POSCO Power at the time of the termination of this agreement due to a material
breach by FCE of this Agreement.
Accordingly, the parties agree that POSCO Power shall be entitled to an injunction or
injunctions to enforce specifically the transfer of the FCE Technology to POSCO Power in accordance
with Article IX of the
Technology Transfer Agreement, in addition to any other remedy to which it may be entitled under
this Agreement.

 

15

 

ARTICLE VII

CONFIDENTIALITY

This confidentiality provision supplements, but does not replace, the confidentiality
provisions of the other Transaction Agreements. As used in this Agreement, the term “confidential
information” means any and all trade secrets and other confidential information and know-how
related directly or indirectly to a party’s business or its products and services, which is not
covered by the confidentiality provisions of other Transaction Agreements. Each party shall hold
each other’s confidential information in confidence and shall not use or disclose any confidential
information, or permit any person to examine or copy any confidential information, regardless of
the manner in which such party gained access to it, except as necessary for the performance of its
obligations under this Agreement, including, without limitation, to such party’s legal advisors,
financial advisors and accountants. Each party’s obligation of confidentiality with respect to
confidential information supplied by the other hereunder shall not include or extend to information
which: (i) at the date such information is disclosed to the recipient is generally known by or
available to the public; (ii) after such information is disclosed to the recipient becomes
generally known or available to the public, through no fault of the recipient; (iii) becomes
available or is known to the recipient prior to the time of it being disclosed to the recipient as
evidenced by the written records of the recipient and was not received directly or indirectly from
the provider; (iv) became or becomes available to the recipient from an independent third party who
is not bound by a confidentiality agreement with the provider; or (v) is required to be disclosed
by the recipient to a third party in response to a subpoena or order of a court or an
administrative agency, provided that the recipient shall inform the provider promptly so that the
provider shall have an opportunity to seek a protective order and the recipient shall not interfere
with the provider’s lawful efforts to obtain said protective order. POSCO Power shall use best
efforts to require, as a condition precedent to any agreement with respect to the sale, lease or
such similar transaction of any FCE Product or POSCO Product, the purchaser, lessor, customer or
any such party of such transaction (x) to agree and (y) to use such party’s good faith efforts to
cause any subsequent purchaser, lessor, customer or such similar party thereof, in each case, to be
bound to confidentiality obligations substantially similar to the terms hereof.

ARTICLE VIII

INDEMNIFICATION

SECTION 8.1. Claims. This indemnification provision supplements, but does not
replace, the indemnification provisions of the other Transaction Agreements. For purposes of this
Agreement, “Claim” shall mean any liability, claim, suit, demand, loss, damage, judgment, and
expense (including reasonable attorneys’ fees and costs and the cost of settlement), that is not
covered by the indemnification provisions of other Transaction Agreements.

SECTION 8.2. Indemnification by POSCO. POSCO Power shall indemnify, defend, and hold
harmless FCE and its representatives, successors and permitted assigns from and against any and all
Claims made or threatened by any third party and all related losses, expenses,
damages, costs and liabilities, including reasonable attorneys’ fees and expenses incurred in
investigation or defense of such claims (“Damages”), to the extent such Damages relate to or arise
out of (i) any breach of or any inaccuracy in any representation or warranty made by POSCO Power in
this Agreement or (ii) any breach of or failure by POSCO Power to perform or comply with any of its
covenants or agreements contained in this Agreement.

 

16

 

SECTION 8.3. Indemnification by FCE. FCE shall indemnify, defend, and hold harmless
POSCO Power and its representatives, successors and permitted assigns from and against any and all
Claims made or threatened by any third party and all related Damages, to the extent such Damages
relate to or arise out of (i) any breach of or any inaccuracy in any representation or warranty
made by FCE in this Agreement or (ii) any breach of or failure by FCE to perform or comply with any
of its covenants or agreements contained in this Agreement.

SECTION 8.4. Indemnification Procedure. In the event a Claim by a third party for
which indemnification may be available under this Agreement is made or filed against a party, the
party against which the claim, suit or proceeding is made (the “Indemnified Party”), shall
promptly notify the other party (the “Indemnifying Party”) in writing of the claim, suit or
proceeding. The Indemnifying Party, within thirty (30) days, or such shorter period as is required
to avoid any prejudice in the claim, suit or proceeding, after the notice, may elect to defend,
compromise, or settle the third party claim, suit or proceeding at its expense. In any third party
claim, suit or proceeding which the Indemnifying Party has elected to defend, compromise or settle,
the Indemnifying Party shall not after the election be responsible for the expenses, including
counsel fees, of the Indemnified Party but the Indemnified Party may participate therein and retain
counsel at its own expense. In any third party claim, suit or proceeding the defense of which the
Indemnifying Party shall have assumed, the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the consent of the
Indemnifying Party and the Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement affecting the Indemnified Party to the extent that the judgment or
settlement involves more than the payment of money without the written consent of the Indemnified
Party. The Indemnified Party shall provide to the Indemnifying Party all information, assistance
and authority reasonably requested in order to evaluate any third party claim, suit or proceeding
and effect any defense, compromise or settlement.

ARTICLE IX

MISCELLANEOUS

SECTION 9.1. Certain Expenses. Except as expressly provided in this Agreement, each
party shall bear and pay its own costs and expenses incurred in connection with the performance by
such party of its obligations hereunder.

SECTION 9.2. Independent Contractors. The parties are independent contractors, and
nothing contained in this Agreement shall be construed as (a) giving either party the
power to direct and control the day-to-day activities of the other, (b) constituting either
party as a partner, a joint venture, a co-owner or a fiduciary of the other or (c) creating any
other form of legal association that would impose liability on one party for the act or failure to
act of the other or as providing either party with the right, power or authority (express or
implied) to create any duty
or obligation of the other.

 

17

 

SECTION 9.3. Entire Agreement. This Agreement, the Technology Transfer Agreement and
the Securities Purchase Agreement, including any Exhibits and Schedules attached hereto and
thereto, and any other Transaction Documents which are incorporated into this Agreement by this
reference, constitute the full and complete statement of the agreement of the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous agreements and
understandings, whether written or oral, between the parties with respect to the subject matter
hereof. There are no representations, understandings or agreements relating to this Agreement that
are not fully expressed in this Agreement other than those representations, understandings or
agreements contained in the other Transaction Agreements.

SECTION 9.4. Amendments; Waiver. Any changes or modifications to this Agreement may
not be made orally, but only by a written amendment executed and delivered by both parties. Any
terms and conditions varying from this Agreement on any notification from either party are not
binding on the other unless specifically accepted in writing by the other. A delay or omission by
either party to exercise any right or power under this Agreement will not be construed to be a
waiver thereof. No waiver of any breach of any provision of this Agreement will constitute a waiver
of any prior, concurrent or subsequent breach of the same or any other provision hereof.

SECTION 9.5. Binding Nature; Assignment. This Agreement will be binding upon and inure
to the benefit of the parties and their respective successors and permitted assigns. Neither party
may, nor will it have the power to, assign this Agreement, or any part hereof, without the prior
written consent of the other party, except that the parties acknowledge and agree that POSCO Power
may, without assuming any obligations set forth in this Agreement and the other Transaction
Agreements, assign its rights and obligations to NewCo without consent of FCE. In the event of any
other assignment of this Agreement by either party, the assignee shall assume, in writing (in form
and substance reasonably satisfactory to the other party), the rights and obligations of the
assigning party under this Agreement.

SECTION 9.6. No Third Party Beneficiaries. Except as expressly contemplated herein,
this Agreement shall be binding upon and inure solely to the benefit of each party hereto and
nothing in this Agreement is intended to confer upon any other person or entity any rights or
remedies of any nature whatsoever under or by reason of this Agreement.

SECTION 9.7. Notices. All notices pursuant to this Agreement shall be in writing and
will be deemed to have been duly given if delivered personally or by internationally recognized
courier service, or by facsimile to the parties at the addresses set forth below.

 

18

 

if to FCE, to:

FuelCell Energy, Inc. 

3 Great Pasture Road 

Danbury, CT 06813

Facsimile: (203) 825-6079

Attention: Ben Toby

with copy to:

FuelCell Energy, Inc. 

3 Great Pasture Road 

Danbury, CT 06813

Facsimile: (203) 825-6069

Attention: Ross Levine

if to POSCO Power, to:

POSCO Power

Dacom Building 10th Floor 

706-1 Yeoksam-dong, Kangnam-gu 

Seoul 135-987, Korea 

Facsimile: 011-82-2-3457-1960

Attention: Taehyoung (TH) Kim

with copy to:

POSCO 

POSCO Center

892 Daechi 4-Dong, Gangnam-Gu 

Seoul, 135-777, Korea 

Facsimile: 011-82-2-3457-1972

Attention: Bong-han “Stephen” Kim, Esq.

All notices under this Agreement that are addressed as provided in this Section 9.7,
(i) if delivered personally or by internationally recognized courier service, will be deemed given
upon delivery or (ii) if delivered by facsimile, will be deemed given when confirmed. Either party
from time to time may change its address or designee for notification purposes by giving the other
party notice of the new address or designee and the date upon which such change will become
effective.

SECTION 9.8. Publicity. The parties shall cooperate with each other in releasing
information concerning this Agreement, the other Transaction Agreements and the transactions
contemplated hereby and thereby. No press releases or other public announcements concerning the
transactions contemplated by this Agreement shall be made by any party without prior consultation
with, and agreement of, the other party,
except for any legally required communication by any party and then only with prior
consultation with the other party.

 

19

 

SECTION 9.9. Use of Name. Except as expressly provided in this Agreement or the other
Transaction Agreements, neither party may use the trade names, trademarks, service marks or other
similar proprietary rights of the other party without the written consent of such other party.
Notwithstanding any authorized use by the other party, the trade names, trademarks, services marks
and other similar proprietary rights of a party shall remain the property of such party.

SECTION 9.10. Severability. If any provision of this Agreement or the application of
any such provision to any Person or circumstance, shall be declared judicially to be invalid,
unenforceable or void (including, without limitation, such decision shall not have the effect of
invalidating or voiding the remainder of this Agreement, and it is the intent and agreement of the
parties that this Agreement shall be deemed amended by modifying such provision to the extent
necessary to render it valid, legal and enforceable while preserving its intent or, if such
modification is not possible, by substituting therefore another provision that is legal and
enforceable and that achieves the same objective.

SECTION 9.11. Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York, without giving effect to any choice
of law rules that may require the application of the laws of another jurisdiction.

SECTION 9.12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute one agreement binding on the parties, notwithstanding that both parties are not
signatories to the original or the same counterpart.

 

20

 

IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date
first above written.

	 	 	 	 	 
	 	
FUELCELL ENERGY, INC.

 	 
	 	By:  	/s/ Robert Daniel Brdar
 	 
	 	 	Name:  	Robert Daniel Brdar 	 
	 	 	Title:  	President CEO and Chairman 	 
	 	

POSCO POWER

 	 
	 	By:  	/s/
Seung-Woo Lee
 	 
	 	 	Name:  	Seung-Woo Lee 	 
	 	 	Title:  	Persident & CEO 	 

Alliance Agreement

 

 

 

EXHIBIT A 

Securities Purchase Agreement 

 

 

 

EXHIBIT B 

Technology Transfer, License and Distribution Agreement 

 

 

 

EXHIBIT C 

Form of DOE Approval 

 

 

 

EXHIBIT D 

Form of MTU Consent 

 

 

 

EXHIBIT E 

Form of Marubeni Settlement 

 

 

 

SCHEDULE A 

POSCO Affiliates 

POSCO Affiliates shall include the following companies:

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

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

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

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

 

 

 

SCHEDULE B 

Non-Exclusive Territory 

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

Western Europe

Andorra

Austria

Belgium

Cyprus

Denmark

Federal Republic of Germany

Finland

France

Great Britain and including, but not limited to

Northern Ireland CIS (Commonwealth of Independent States)

Greece

Greenland

Ireland

Iceland

Italy

Liechtenstein

Luxembourg

Malta

Monaco

Netherlands

Norway

Portugal

San Marino

Spain

Sweden

Switzerland

The Vatican State

Eastern Europe

Albania

Bulgaria

Czech Republic

Slovakia

Hungary

Poland

Romania

All states of the former USSR

Yugoslavia

Slovenia

Croatia

Asia

Japan

Middle
East

Bahrain

Iran

Iraq

Israel

Jordan

Kuwait

Lebanon

Oman

Qatar

Saudi-Arabia

Syria

Turkey

Yemen, Arab Rep.

Yemen, Peoples Rep.

United Arab Emirates (UAE)

North America

United States

Canada

MexicoExhibit 10.2

Exhibit 10.2

[Execution Copy]

 

TECHNOLOGY TRANSFER, LICENSE AND DISTRIBUTION AGREEMENT

dated as of February 7, 2007

between

FUELCELL ENERGY, INC.

and

POSCO POWER

 

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

 

 

	 	 	 	 	 
	I. DEFINITIONS
	 	 	2	 
	II. LICENSE GRANT
	 	 	6	 
	2.1 FCE Technology License
	 	 	6	 
	2.2 Distribution Rights
	 	 	7	 
	2.3 POSCO Technology License
	 	 	7	 
	2.4 License to POSCO Power Upon Expiration of the Term
	 	 	8	 
	2.5 License to FCE Upon Expiration of the Term
	 	 	8	 
	2.6 Use of “FCE” Trademarks
	 	 	8	 
	2.7 Transfer of Technical Data
	 	 	9	 
	2.8 Regular Exchange of Technical Data
	 	 	9	 
	III. OWNERSHIP OF INTELLECTUAL PROPERTY
	 	 	9	 
	3.1 Ownership of FCE Technology
	 	 	9	 
	3.2 Ownership of POSCO Technology
	 	 	9	 
	3.3 Joint Development
	 	 	9	 
	IV. ROYALTIES
	 	 	9	 
	4.1 Royalty Payments
	 	 	9	 
	4.2 Minimum Annual Royalty
	 	 	11	 
	4.3 No Other Royalties, Payments, Etc.
	 	 	11	 
	4.4 Royalty Report
	 	 	11	 
	4.5 Royalty Determination Firm
	 	 	12	 
	V. SERVICE RESPONSIBILITY AND TRAINING
	 	 	12	 
	5.1 POSCO Power Service Responsibility
	 	 	12	 
	5.2 FCE Service Responsibility
	 	 	12	 
	5.3 Long Term Service
	 	 	12	 
	5.4 FCE Training
	 	 	13	 

 

i

 

	 	 	 	 	 
	VI. GOVERNMENT REGULATIONS
	 	 	13	 
	6.1 POSCO Power Obligations
	 	 	13	 
	6.2 FCE Obligations
	 	 	13	 
	VII. REPRESENTATIONS AND WARRANTIES
	 	 	13	 
	7.1 Representations and Warranties of FCE
	 	 	13	 
	7.2 Representations and Warranties of POSCO Power
	 	 	14	 
	VIII. TERM
	 	 	15	 
	8.1 Term
	 	 	15	 
	8.2 Extension
	 	 	15	 
	IX. TERMINATION
	 	 	16	 
	9.1 Termination by Mutual Agreement
	 	 	16	 
	9.2 FCE Termination by Material Breach of POSCO Power
	 	 	16	 
	9.3 POSCO Power Termination by Material Breach of FCE
	 	 	17	 
	9.4 Return of FCE Technology
	 	 	17	 
	9.5 Return of POSCO Technology
	 	 	18	 
	9.6 Survival
	 	 	18	 
	X. INDEMNIFICATION
	 	 	18	 
	10.1 POSCO Power Obligations
	 	 	18	 
	10.2 FCE Obligations
	 	 	19	 
	10.3 Limitation of Damage
	 	 	20	 
	XI. CONFIDENTIAL INFORMATION
	 	 	20	 
	11.1 POSCO Power Obligations
	 	 	20	 
	11.2 POSCO Affiliate
	 	 	20	 
	11.3 FCE and POSCO Power Obligations
	 	 	20	 
	XII. NOTICES
	 	 	21	 
	XIII. ENTIRE AGREEMENT
	 	 	22	 

 

ii

 

	 	 	 	 	 
	XIV. APPLICABLE LAW AND ARBITRATION
	 	 	22	 
	14.1 Governing Law
	 	 	22	 
	14.2 Efforts to Resolve by Mutual Agreement
	 	 	22	 
	14.3 ICC Arbitration
	 	 	23	 
	14.4 Waiver of Jury Trial
	 	 	23	 
	XV. MISCELLANEOUS
	 	 	23	 
	15.1 Amendment
	 	 	23	 
	15.2 Severability
	 	 	23	 
	15.3 Government Information
	 	 	23	 
	15.4 Independent Contractors
	 	 	23	 
	15.5 Assignment
	 	 	24	 
	15.6 No Third Party Beneficiary
	 	 	24	 
	15.7 Headings
	 	 	24	 
	15.8 Right to Injunction; Specific Performance
	 	 	24	 
	15.9 Force Majeure
	 	 	24	 
	15.10 Marubeni; MTU
	 	 	24	 

Exhibits:

	 	 	 
	Exhibit A:

	 	Form of TTP
	Exhibit B:

	 	Form of LTSA
	Exhibit C:

	 	Form of Purchase Order

Schedules:

	 	 	 
	Schedule A:

	 	POSCO Affiliates
	Schedule B:

	 	Non-Exclusive Territory
	Schedule C:

	 	FCE Previously Granted Distribution Rights

 

iii

 

THIS TECHNOLOGY TRANSFER, LICENSE AND DISTRIBUTION AGREEMENT (this “Agreement”) is made and
entered into this 7th day of February, 2007, by and between FUELCELL ENERGY, INC., a Delaware
corporation having a place of business at 3 Great Pasture Rd., Danbury, CT 06813, U.S.A. (“FCE”)
and POSCO POWER, a Korean corporation having a place of business at Dacom Building 10th
Fl., 706-1 Yeoksam-dong, Kangnam-gu, Seoul 135-987, Korea (“POSCO Power”).

RECITALS:

A. FCE has developed “Balance of Plant” (defined below) technologies for high temperature fuel
cells used for the generation of electric power including technology for a Molten Carbonate Fuel
Cell (“MCFC”) known as the “Direct FuelCell®” (DFC®) and is developing new DFC based products
currently designated by FCE as “DFC/T®” and “DFC/H2”.

B. POSCO Power, together with the POSCO Affiliates (defined below), wishes to develop and
commercialize the BOP technologies in the Korean Market (defined below) and in the Non-Exclusive
Territory (defined below).

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

D. FCE also wishes to transfer to POSCO Power the New DFC-Based Technology (defined in the
Alliance Agreement) during the Term (defined below) of this Agreement and grant a license of the
New DFC-Based Technology, when FCE commercializes the New DFC-Based Products, under a separate
agreement, which the Parties shall negotiate in good faith and shall contain commercially
reasonable terms, as outlined in the Alliance Agreement.

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

F. Simultaneously herewith, the parties have entered into the Alliance Agreement (defined
below) and Securities Purchase Agreement (defined below), both dated as of the date first written
above.

 

1

 

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

I. DEFINITIONS

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

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

“Alliance Agreement” shall mean that certain Alliance Agreement dated as of the date
hereof between FCE and POSCO Power.

“Applicable Laws” shall have the meaning set forth in the Alliance Agreement.

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

“DFC” shall mean FCE’s proprietary MCFC.

“DFC Power Plant” shall mean the products designed and produced by FCE or its
subcontractors, from time to time, comprising the Fuel Cell Stack Module and the BOP, and shall
specifically exclude items of equipment such as foundations, structures, enclosures,
transmission/distribution lines and interconnections, fuel lines, fuel preparation and clean-up
equipment water drainage/removal, computer hardware and software and any other items related to the
foregoing.

“DOE Approval” shall have the meaning set forth in the Alliance Agreement.

“Effective Date” shall have the meaning set forth in the Alliance Agreement.

“Fuel Cell Stack Module” shall mean those components manufactured by FCE, which
comprise the fuel cell stack itself, including the stack enclosure vessel, the fuel cell stack and
its supporting hardware, including individual fuel cells and cell assemblies, anodes, cathodes,
current collector plates, matrixes, manifolds, instrumentation, assembly and compression hardware
and/or the stack enclosure vessel.

“FCE Facility” shall mean the FCE facility located at 3 Great Pasture Rd, Danbury CT
06813.

“FCE Know-How” shall mean: (a) All technical information, know-how, inventions
(whether patented or not), trade secrets, and other technical, engineering and design information
and data, including without limitation, BOP system engineering design, data, detailed drawings,
bill of material, system analytical models, system operating software, manufacturing plant data,
vendor qualification and selection procedures, and quality assurance, pre-shipment testing, all as
available and in then current use by FCE, including all information provided by third parties to
FCE, (i) to manufacture BOP components; (ii) to assemble such components with Fuel Cell Stack
Modules to form complete DFC Power Plants; and (iii) make all necessary assembly
checks and/or tests on complete DFC Power Plants. It is understood that FCE Know-How shall not
include such information which relates to “New DFC Based Products” (as defined below); and

 

2

 

(b) Any information which FCE and POSCO Power believe is necessary for POSCO Power to (x)
support its customers, (y) to prepare proposals as contemplated herein, and (z) to prepare required
engineering documentation.

Notwithstanding the above, it is understood that the term “FCE Know-How” does not include: (i)
information and data relating to machines or processes used in the manufacture of BOP materials,
parts, and components; (ii) information and data, other than purchase specifications, on
commercially available parts and components designed or manufactured by third parties; (iii)
information and data relating to the economic, financial and marketing aspects of FCE’s operations;
(iv) all information and data relating to design, manufacture and materials used for the Fuel Cell
Stack Module, except to the extent any such information needed by POSCO Power to assemble, service
and repair the FCE Products, POSCO Products and POSCO Parts; and (v) information and data which is
subject to restriction on disclosure by a third party, provided, however, that FCE shall exercise
commercially reasonable good faith efforts to obtain the consent needed to make such information
available to POSCO Power.

“FCE Patents” shall mean the letters patents, and any applications for letters patent
which have a “Convention Date” under the International Convention for the Protection of Industrial
Property prior to the earlier of the expiration or termination date of this Agreement and which are
owned or acquired by FCE or in which FCE has or acquires a licensable interest (including without
limitation any U.S. or non-U.S. patents and patent applications that are counterparts thereof,
and/or any divisions, continuations, continuations-in-part or reissues, reexaminations, renewals,
substitutions, extensions, supplementary protection certificates in respect thereof) and which
relate to BOPs. It is understood that FCE Patents shall not mean patents which relate to New
DFC-Based Products.

“FCE Products” shall mean DFC Power Plants currently designated DFC300MA, DFC1500 and
DFC3000 with introductory ratings of 300 kW, 1.2 MW and 2.4 MW, respectively and modifications and
improvements thereof, regardless of how designated by FCE, which are made available, or in the
future may be made available, for commercial use or sale by FCE during the Term.

“FCE Technology” shall mean FCE Patents and FCE Know-How, excluding any improvements
or developments made by MTU after the Effective Date which may be furnished or licensed to FCE.

“Governmental Authority” shall have the meaning set forth in the Alliance Agreement.

“Governmental Order” shall have the meaning set forth in the Alliance Agreement.

 

3

 

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

“Korean Market” shall mean the Republic of Korea.

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

“LTSA” shall mean a form of a long term service contract attached hereto as Exhibit B
to be mutually agreed upon by the Parties pursuant to Section 4.1(c) of the Alliance Agreement,
which form shall be used as a guide in preparing and finalizing the terms and conditions of each
long term service contract.

“Marubeni Settlement” shall have the meaning set forth in the Alliance Agreement.

“MTU” shall mean MTU CFC SOLUTIONS GmbH, a German limited liability entity.

“MTU Consent” shall have the meaning set forth in the Alliance Agreement.

“Net Sales” shall mean the revenues generated from the sales by POSCO Power or POSCO
Affiliate of the DFC Power Plants, POSCO Products and/or POSCO Parts, as applicable, excluding
those POSCO Products and/or POSCO Parts that (a) are manufactured using the proprietary technology,
engineering and design, know-how and inventions of POSCO Power and/or any POSCO Affiliate, and (b)
do not use or contain any FCE Technology; less the Net Sales Adjustments, all determined in
accordance with Korean GAAP and as set forth in Section 4.1(d) below.

“Net Sales Adjustments” shall include the cost of Fuel Cell Stack Modules or any components
thereof or parts of the DFC Power Plants, POSCO Products and POSCO Parts purchased by POSCO Power
and/or any POSCO Affiliate from FCE and the following items incurred in normal, bona fide,
commercial transactions to the extent to which they are actually paid and expressly included in the
gross invoice price: (i) sales returned; (ii) sales discounts; (iii) duties and taxes on sales;
(iv) transportation insurance premiums; (v) packing expenses on sales; (vi) transport expenses on
sales. Further, sales and purchases by and between POSCO Power and POSCO Affiliate to effect the
sales of POSCO Products and POSCO Parts to customers shall be excluded only to the extent such
POSCO Products or POSCO Parts are not put into use or operation by such POSCO Affiliate. If such
POSCO Products or POSCO Parts are subsequently resold to third parties, such subsequent sale to the
third party shall be included.

“NewCo” shall have the meaning set forth in the Alliance Agreement.

“New DFC-Based Products” shall have the meaning set forth in the Alliance Agreement.

 

4

 

“New DFC-Based Technology” shall have the meaning set forth in the Alliance Agreement.

“New POSCO Parts” shall have the meaning set forth in the Alliance Agreement.

“New POSCO Products” shall have the meaning set forth in the Alliance Agreement.

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

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

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

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

“POSCO Parts” shall mean any parts or components of POSCO Products other than the Fuel
Cell Stack Module.

“POSCO Power Facility” shall mean the factory constructed by POSCO Power at which
POSCO Parts are manufactured and POSCO Products are assembled.

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

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

 

5

 

“Purchase Order” shall mean a form of purchase order contract attached hereto as
Exhibit C to be mutually agreed upon by the Parties pursuant to Section 4.1(c) of the
Alliance Agreement, which form shall be used as a guide in preparing and finalizing the terms and
conditions of each purchase order contract.

“Royalty Determination Firm” shall have the meaning set forth in Section 4.5.

“Securities Purchase Agreement” shall mean that certain Securities Purchase Agreement
dated as of the date hereof between FCE and POSCO Power.

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

“Technology Transfer Program” or “TTP” shall mean that certain document containing the
detailed terms and schedules relating to the transfer by FCE of FCE Technology, including the scope
of assistance and support provided, to POSCO Power and POSCO Affiliates, as applicable, it being
understood and agreed that, the TTP shall become part of this Agreement, as Exhibit A hereto, once
the terms and conditions of which are mutually agreed upon pursuant to Section 4.1(d) of the
Alliance Agreement.

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

“Transaction Agreements” shall have the meaning set forth in the Alliance Agreement.

II. LICENSE GRANT

2.1 FCE Technology License.

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

(i) to use the FCE Technology to construct, assemble, manufacture, use, sell, import,
maintain, service and/or repair POSCO Parts and POSCO Products in the Korean Market;
provided, however, that during the Term, FCE shall not (A) grant any right or
license to any Korean Company to use the FCE Technology or (B) in any way extend the term of that
portion of the right or license granted to any third party prior to the date hereof, which permits
the use of the FCE Technology by any third party to do any of the above in the Korean Market;

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

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

 

6

 

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

(c) The license granted by FCE to POSCO Power under this Section 2.1 includes a sublicense of
FCE’s rights under any and all licenses to FCE Technology pursuant to which such FCE Technology has
been licensed to FCE (each a “Third Party License”; collectively, the “Third Party Licenses”),
including, without limitation, that certain license agreement, dated July 16, 1998, by and between
MTU and FCE. FCE shall be responsible for complying with all the terms and conditions of each
Third Party License for which the licensee thereunder is responsible, including, without
limitation, any such terms and conditions thereof relating to the payment of any royalties,
milestones and the like by the licensee thereunder.

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

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

2.3 POSCO Technology License. POSCO Power hereby grants to FCE a non-exclusive paid-up
license to manufacture, use and sell POSCO Technology during the Term; provided,
however, that the FCE Products incorporate POSCO Technology under all patents of all
countries under which POSCO Power during the Term, has or may acquire, the right to grant such
licenses, and provided, further, that any sublicensing or resale by FCE of POSCO
Technology to any Korean Company shall be subject to POSCO Power’s sole discretion. The Parties
agree that FCE may transfer the POSCO Technology to a third party (other than MTU) for the sole
purpose of further developing and improving the FCE Technology, provided that any such
development or improvement shall be transferred to POSCO Power and that the third party shall not
use or commercialize the POSCO Technology in the Korean Market, without the prior written consent of
POSCO Power, which consent shall be given at POSCO Power’s sole discretion.

 

7

 

2.4 License to POSCO Power Upon Expiration of the Term. Upon expiration of the Term,
FCE hereby agrees to continue and extend the grant and license, on a non-exclusive basis, to POSCO
Power of all rights set forth under Sections 2.1 and 2.2 of this Agreement, subject to the payment
by POSCO Power to FCE of royalties to be mutually determined by the Parties upon such expiration
through commercially reasonable good faith efforts; provided, that in the absence of an agreed
royalty determination within the sixty (60) day period immediately following the initial request by
either Party to determine the royalties, the parties will submit to binding determination in
accordance with Section 4.5. Such determination shall take into account any compensation owed by
FCE to third parties.

2.5 License to FCE Upon Expiration of the Term. Upon expiration of the Term, POSCO
Power hereby agrees to continue granting to FCE on a non-exclusive basis all rights set forth under
Section 2.3 of this Agreement, subject to the payment by FCE to POSCO Power of royalties to be
mutually determined by the Parties upon such expiration through commercially reasonable good faith
efforts, taking into consideration the contribution of each Party to the POSCO Technology;
provided, that in the absence of an agreed royalty determination within the sixty (60) day period
immediately following the initial request by either Party to determine the royalties, the parties
will submit to binding determination in accordance with Section 4.5.

2.6 Use of “FCE” Trademarks. During the Term, FCE grants POSCO Power the right to use
“FCE” marks, in connection with the labeling, advertising or sale of POSCO Products and POSCO Parts
that POSCO Products and POSCO Parts made by it are “manufactured under license of FUELCELL ENERGY,
INC., U.S.A.”, or any other similar statement, to the extent that such is, in fact, the case. In
addition, FCE hereby grants to POSCO Power a non-exclusive fully paid-up license and right to use,
consistent with the terms of this Agreement, any and all trademarks and trade names owned by FCE
and subject to appropriate provisions concerning protection of trademarks and trade names,
including quality control. Further, POSCO Power agrees to co-brand with FCE the DFC Power Plants
that POSCO Power may sell hereunder, by adding to the trademarks or brands affixed by POSCO Power
to those DFC Power Plants the phrase “powered by FuelCell Energy”, or in any other mutually
agreeable wording or form.

 

8

 

2.7 Transfer of Technical Data. FCE hereby agrees to provide POSCO Power, technical
data and other information relating to the FCE Know-How in accordance with the terms of the TTP.
FCE hereby agrees that it will supply or cause to be supplied to POSCO Power and POSCO Affiliates,
as applicable, free of any charges, except as indicated in the TTP, full up-to-date information, to
the extent available in documented form and in use at FCE, to FCE Technology in a form (e.g.,
drawings, standard operating procedures, blueprints, written memoranda, training of employees or
personal consultation) that will satisfactorily and expeditiously accomplish the transfer of FCE
Know-How to POSCO Power. FCE will supply all such information in a reasonably
usable form and in the English language. In the event that POSCO Power requests, in writing, that
FCE supply such information in a technical form that differs from the technical form in which FCE
has previously supplied or offered to supply it, then POSCO Power agrees to reimburse FCE the
actual costs and expenses incurred by FCE; provided, however, that POSCO Power will not be required
to pay the costs of obtaining any such information if it is already available to FCE in the form
requested by POSCO Power. At its sole discretion, POSCO Power may transfer to POSCO Affiliates the
technical data described in this Section, for the purpose, and subject to limitations, set forth in
Section 2.1(a)(iii) above.

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

III. OWNERSHIP OF INTELLECTUAL PROPERTY

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

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

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

IV. ROYALTIES

4.1 Royalty Payments.

(a) Annual Royalty. In consideration of the license of FCE Technology granted herein, POSCO
Power agrees to pay to FCE an annual royalty of ___ of the Net Sales (the “Annual Royalty”) during the
Initial Term, subject to the Minimum Annual Royalty (defined below) provision set forth in Section
4.2 below. The Annual Royalty payment shall be paid by POSCO Power as follows:

 (i) in cash equal to ____ of the Net Sales; and

 

9

 

(ii) in shares of the capital stock (“NewCo Stock”) of NewCo equal to
 _____ 
of the Net Sales, up
to
 _____ 
of the total outstanding capital stock of NewCo, in accordance with the valuation procedure set
forth below; it being understood and agreed that, if the NewCo Stock received by FCE in the
aggregate reaches
 _____ 
of the total outstanding capital stock of NewCo, POSCO Power may, at its sole
and absolute discretion, choose to pay the amount exceeding
 _____ 
of the Net Sales in either cash or
NewCo Stock, or any combination thereof; it being further understood and agreed that, in
the event the initial public offering of the capital stock of NewCo is not completed by POSCO Power
within 5 years from the Effective Date, upon a written request by FCE, any Annual Royalty payments
for the subsequent years shall be made in cash, in lieu of the NewCo Stock payment.

(b) Valuation. The Parties agree that the valuation of NewCo shall be determined by
an internationally recognized accounting firm jointly selected and paid for by the Parties
(“Parties Accounting Firm”). The Parties further agree that the valuation shall: (x) be undertaken
no more than one time per year; (y) take place during June of each year; and (z) be the basis for
determining the royalty payment in shares of NewCo Stock for the applicable calendar year. If the
Parties dispute the valuation as determined by the Parties’ Accounting Firm, then the disputing
Party has the right at its own expense to retain another internationally recognized independent
accounting firm; and in such event, the valuation of NewCo shall be the average of the two
valuations; provided, however, that the average of the two valuations shall not exceed by
more than
 _____ 
of the difference between the valuations determined by the Parties Accounting Firm and
the independent accounting firm.

(c) Payment Date. The Annual Royalty payment shall be paid as follows:

(i) semi-annually and within forty-five (45) days of June 30 and December 31 of each year, in
the case of cash royalty payments pursuant to Section 4.1(a)(i) or (ii) above; and

(ii) once a year and within sixty (60) days of December 31 of each year in the case of royalty
payments in NewCo Stock pursuant to Section 4.1(a)(ii).

(d) The Parties acknowledge that although the royalty percentage set forth above in Section
4.1 shall be applicable, it may be difficult to ascertain the royalties in certain transactions.
Such transactions may include, but are not limited to, transactions in which the POSCO Products and
POSCO Parts are leased, loaned, bartered or exchanged for goods or services, transferred to a third
party or any entity affiliated or closely associated with POSCO Power at a price other than market
price or on terms other than in an arm’s length, or otherwise put into use by POSCO Power or POSCO
Affiliates. The Parties shall use commercially reasonable good faith efforts to establish
guidelines for determining the royalties for such transactions within sixty (60) days from the
Effective Date, taking into consideration the principles of the Korean GAAP and U.S. GAAP and
incorporating the principles of best accounting practices. If the Parties failed to agree as set
forth herein, the Parties agree to abide by the procedures set forth in Section 4.5.

 

10

 

4.2 Minimum Annual Royalty. Beginning in 2009, POSCO Power shall pay to FCE the
following minimum annual royalty (the “Minimum Annual Royalty”) for each of the following years, to
the extent the Annual Royalty due and payable under Section 4.1(a) above at any given year is less
than the Minimum Annual Royalty applicable for that year:

	 	 	 	 	 
	Year	 	Minimum Annual Royalty	 
	2009
	 	 	 	 
	2010
	 	 	 	 
	2011
	 	 	 	 
	2012
	 	 	 	 
	2013
	 	 	 	 
	2014
	 	 	 	 
	2015
	 	 	 	 
	2016
	 	 	 	 

The Parties agree that the Minimum Annual Royalty shall be paid within forty-five (45) days of
December 31 of each year in which the Minimum Annual Royalty is due and payable; provided,
however, the Parties agree that FCE shall forego a proportional amount of the Minimum
Annual Royalty applicable for year 2009 in the event the completion of the POSCO Power Facility is
delayed beyond the end of February, 2009; provided, further, that in no event shall
the Minimum Annual Royalty for years 2010 through 2016 be less than shown above.

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

4.4 Royalty Report.

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

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

 

11

 

4.5 Royalty Determination Firm. The Parties agree that in case of any dispute with
respect to the determination of royalty pursuant to Sections 2.4, 2.5, 4.1(d) and 9.6, any such
determination shall be determined by an internationally recognized independent accounting firm
jointly selected and paid for by the Parties (“Royalty Determination Firm”). If the Parties
dispute the royalty amount determined by the Royalty Determination Firm, then the disputing Party
has the right at its own expense to retain another internationally recognized independent
accounting firm; and in such event, the determination of the royalty shall be the average of the
two determinations, provided that, that the average of the two determinations shall not exceed by
more than
 _____ 
of the difference between the royalty amount determined by the Royalty Determination Firm
and the royalty amount determined by the independent determination firm.

V. SERVICE RESPONSIBILITY AND TRAINING

5.1 POSCO Power Service Responsibility. POSCO Power shall be responsible for providing
preventive maintenance service on all POSCO Products for which BOP was manufactured in the United
States by FCE and sold by POSCO Power in the Korean Market. In addition, POSCO Power shall be
responsible for providing comprehensive maintenance services, including planned and unplanned
maintenance services, for POSCO Products for which BOP was manufactured by POSCO Power in Korea.
For the avoidance of doubt, the term “preventive maintenance” as used in this section shall consist
of technical service, parts and consumables associated with preventative maintenance as specified
in the maintenance manuals for the DFC Products published by FCE from time to time, or as required
by FCE-issued service bulletins.

5.2 FCE Service Responsibility. FCE shall be responsible for 24-hour monitoring of
all POSCO Products and FCE Products sold in Korea and for dispatching trained personnel to such
sites in response to reports of problems with the operation of said POSCO Products and FCE Products
which are covered either by the FCE factory warranty which is included with the equipment sale to
the end use customer, or by a long term service contract. FCE shall not be responsible to perform
maintenance services on the BOP portion of POSCO Products for which the BOP was manufactured by
POSCO Power in Korea.

5.3 Long Term Service. FCE represents that it is the uniform global policy of FCE to
require the purchaser of the FCE Product to also purchase a long term service contract. POSCO Power
agrees that it will require the purchaser of the FCE Products to also purchase a long-term service
contract. The commercial terms and conditions, including pricing, shall be negotiated by POSCO
Power in consultation with FCE, using the LTSA as a guide. FCE further agrees that, beginning on
the third anniversary from the Effective Date of this Agreement, and provided that POSCO Power (or
NewCo if applicable) has met FCE’s requirements to become a factory certified service provider,
which determination shall be made in good faith, it shall appoint POSCO Power as the sole provider
of service support for all POSCO Products, POSCO Parts and FCE
Products (excluding the Fuel Cell Stack Modules) in Korea and as a provider of service support for
all POSCO Products and POSCO Parts in the Non-Exclusive Territory, it being understood and agreed
that, any outstanding long-term service contract of FCE in the Korean Market shall be assigned to
POSCO Power, to the extent such assignment is permitted pursuant to any such contract.

 

12

 

5.4 FCE Training. FCE agrees that for the three-year period from the Effective Date of
this Agreement, it shall provide technical training in the on-site servicing of POSCO Parts and
POSCO Products, including on-site and classroom training, pursuant to the TTP. The goal of such
training is to enable POSCO Power to provide all services, with the exception of services related
to the Fuel Cell Stack Module, beginning on the third anniversary of the Effective Date. FCE shall
provide such on-site training to POSCO Power at no additional cost to POSCO Power, except for costs
as indicated in the TTP. FCE shall not be responsible for providing training to POSCO Power
personnel related to equipment not manufactured by FCE.

VI. GOVERNMENT REGULATIONS

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

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

VII. REPRESENTATIONS AND WARRANTIES

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

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

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

 

13

 

(iii) The execution, delivery and performance by FCE of this Agreement, and the consummation
by FCE of the transactions contemplated hereby do not (a) violate any Applicable Law; (b) violate
or conflict with any contract or agreement to which FCE is a party, including, but not limited to,
any agreement with Marubeni Corporation and the FCE-MTU BOP License, upon receipt of the MTU
Consent and Marubeni Settlement; (c) violate any Governmental Order; (d) require the approval,
consent or permission of any Governmental Authority having authority over FCE except for the DOE
Approval; or (e) violate FCE’s organizational documents;

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

(v) To FCE’s knowledge after due inquiry, POSCO Power’s contemplated use of the FCE Technology
under this Agreement does not infringe any valid rights of any third party, including but not
limited to patent rights, copyrights, trademarks or other intellectual property rights owned or
controlled by third parties in any country; and

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

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

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

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

 

14

 

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

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

(v) All work to be performed by POSCO Power in its manufacture, assembly and test activities
hereunder shall be performed in accordance with FCE’s drawings, manufacturing practices,
instructions and quality plans as furnished by FCE.

VIII. TERM

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

8.2 Extension. The Initial Term may be extended for additional terms (each,
“Additional Term”, and, together with the Initial Term, the “Term”), each for a
period of three (3) years, by mutual agreement; provided that the first Additional Term shall be on
terms and conditions no less favorable than those set forth in this Agreement and the other
Transaction Agreements, as applicable. Any Additional Term, other than the first Additional Term,
shall be on terms mutually agreed upon by the Parties. This Agreement shall be extended only if the
Alliance Agreement is extended for the same period.

 

15

 

IX. TERMINATION

9.1 Termination by Mutual Agreement. This Agreement may be terminated, without any
further obligation or liability:

(i) by mutual written agreement of the Parties;

(ii) if the Parties failed to reach agreement under Section 2.7(c) of the Alliance Agreement;
or

(iii) if the conditions set forth in Section 4.1(a), (b) and (f) of the Alliance Agreement
have not been secured or obtained by April 7, 2007.

9.2 FCE Termination by Material Breach of POSCO Power.

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

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

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

(ii) FCE shall have a non-exclusive perpetual license and right to use the POSCO Technology to
manufacture and sell the FCE Products, only to the extent that FCE Products incorporate POSCO
Technology, under all patents of all countries under which POSCO Power or POSCO Affiliates, as
applicable, during the Term, has or may acquire the right to grant such licenses, provided
that any sublicensing or resale to any Korean Company by FCE shall be subject to POSCO Power’s
consent in its sole discretion, and provided, further, that the foregoing license
shall be subject to the payment by FCE to POSCO Power of royalties to be mutually determined by the
Parties in a commercially reasonable good faith manner, it being understood and agreed that
if the Parties are unable to reach agreement within sixty (60) days following the initial request
of FCE, the royalties determined pursuant to Section 4.5 above shall be final and binding upon the
Parties;

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

(iv) POSCO Power, on its own behalf and on behalf of POSCO Affiliates, shall pay FCE all
royalty amounts then due and owning hereunder and all reimbursement amounts then due and owing
under the TTP.

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

 

16

 

9.3 POSCO Power Termination by Material Breach of FCE.

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

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

(i) If the FCE Technology has not been fully transferred to POSCO Power, as scheduled in the
TTP, at the time of termination: (A) FCE shall promptly and in a commercially reasonable manner
transfer to POSCO Power all of the remaining FCE Technology, and further acknowledge and agree that
POSCO Power shall be entitled to seek and obtain from FCE the specific performance of FCE’s
obligations under this section in the U.S. District Court for the Southern District of New York, or
in the event that court lacks jurisdiction, in any competent court in the State of New York, if FCE
fails to transfer the FCE Technology to POSCO Power, as set forth in the TTP; and (B) FCE shall pay
to POSCO Power actual damages in an amount not to exceed US
 _____ 
if, for whatever reason, the specific
performance remedy set forth herein is not available to POSCO Power; or

(ii) If the FCE Technology has been fully transferred to POSCO Power, as scheduled in the
TTP, at the time of termination: (A) POSCO Power may retain all FCE Technology, including all
copies and summaries thereof, furnished by FCE prior to such termination; and (B) POSCO Power shall
have a non-exclusive perpetual license and right in and of the FCE Technology to construct,
assemble, manufacture, use, sell, import, maintain, service and/or repair the POSCO Parts and POSCO
Products in the Korean Market and to sell, maintain, service and/or repair the POSCO Parts and
POSCO Products in the Non-Exclusive Territory, subject to the payment by POSCO Power of royalties,
as set forth in the MTU Consent; and

(iii) FCE further agrees that FCE shall, at the request of POSCO Power, continue to supply
Fuel Cell Stack Modules on terms and conditions to be mutually agreed upon by the Parties in good
faith.

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

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

 

17

 

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

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

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

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

X. INDEMNIFICATION

10.1 POSCO Power Obligations. POSCO Power shall indemnify and hold harmless FCE and
its affiliates, officers, directors, members, employees and agents, against any and all judgments,
damages, liabilities, costs and losses of any kind (including reasonable attorneys’ and experts’
fees) (collectively, “Losses”) that arise out of or relate to (i) any breach by POSCO Power of its
representations or warranties or covenants under this Agreement, (ii) any claim, action or
proceeding that arises from defects caused by the manufacture by POSCO Power or POSCO Affiliates of
POSCO Products or POSCO Parts, or (iii) any claim, action or proceeding that arises from defects
caused by the servicing by POSCO Power or POSCO Affiliates of the FCE Products; provided,
however, that FCE must promptly notify POSCO Power in writing of any such claim, action or
proceeding (but the failure to do so shall not relieve POSCO Power of any liability hereunder
except to the extent that POSCO Power has been materially prejudiced therefrom). POSCO Power may
elect, by written notice to FCE within ten (10) days after receiving notice of such claim, action
or proceeding to assume the defense thereof with counsel acceptable to FCE. If POSCO Power does not
so elect to assume such defense or disputes its indemnity obligation with respect to such claim,
action or proceeding, or if FCE reasonably believes that there are conflicts of interest between
FCE and POSCO Power or that additional defenses are available to FCE with respect to such defense,
then FCE shall retain its own counsel to defend such claim, action or proceeding, at POSCO Power’s
defense. POSCO Power shall reimburse FCE for expenses as these are incurred under this

 

18

 

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

10.2 FCE Obligations. FCE shall indemnify and hold harmless POSCO Power and its
affiliates, officers, directors, members, employees and agents, against any and all judgments,
damages, liabilities, costs and losses of any kind (including reasonable attorneys’ and experts’
fees) (collectively, “Losses”) that arise out of or relate to (i) any breach by FCE of its
representations, warranties, covenants or agreements under this Agreement (it being understood
and agreed that any indemnity with respect to the FCE Products shall be governed by a separate
purchase order contract), (ii) any claim, action or proceeding that arises from or relates to the
servicing by FCE of POSCO Products, POSCO Parts or FCE Products, (iii) any breach by FCE of its
representations, warranties, covenants or agreements under the Marubeni Settlement or the MTU
Consent or (iv) any claim, action or proceeding that arises from any licensor of FCE, including,
without limitation, MTU, in or relating to the FCE Technology (it being understood and
agreed that this obligation includes an obligation to take all necessary steps to ensure the
continued use by POSCO Power of the FCE Technology, without interruption), provided,
however, that POSCO Power must promptly notify FCE in writing of any such claim, action or
proceeding (but the failure to do so shall not relieve FCE of any liability hereunder except to the
extent that FCE has been materially prejudiced therefrom). FCE may elect, by written notice to
POSCO Power within ten (10) days after receiving notice of such claim, action or proceeding to
assume the defense thereof with counsel acceptable to POSCO Power. If FCE does not so elect to
assume such defense or disputes is indemnity obligation with respect to such claim, action or
proceeding, or if POSCO Power reasonably believes that there are conflicts of interest between FCE
and POSCO Power or that additional defenses are available to POSCO Power with respect to such
defense, then POSCO Power shall retain its own counsel to defend such claim, action or proceeding,
at FCE’s defense. FCE shall reimburse POSCO Power for expenses as these are incurred under this
Section. POSCO Power shall have the right, at its own expense, to participate in the defense of any
claim, action or proceeding against which it is indemnified hereunder; provided,
however, that POSCO Power shall have no right to control the defense, consent to judgment
or agree to settle any such claim, action or proceeding without the written consent of FCE unless
POSCO Power waives its right to indemnity hereunder. FCE, in the defense of any such claim, action
or proceeding, except with the written consent of POSCO Power, shall not consent to entry of any
judgment or enter into any settlement which (i) does not include, as an unconditional term, the
grant by the claimant to POSCO Power of a release of all liabilities in respect of such claims or
(ii) otherwise adversely affects the rights of POSCO Power.

 

19

 

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

XI. CONFIDENTIAL INFORMATION

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

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

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

 

20

 

XII. NOTICES

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

if to FCE, to:

FuelCell Energy, Inc. 

3 Great Pasture Road 

Danbury, CT 06813

Facsimile: (203) 825-6079

Attention: Ben Toby

with copy to:

FuelCell Energy, Inc. 

3 Great Pasture Road 

Danbury, CT 06813

Facsimile: (203) 825-6069

Attention: Ross Levine

if to POSCO Power, to:

POSCO Power

Dacom Building, 10th Floor

706-1 Yeoksam-dong, Kangnam-gu 

Seoul 135-987, Korea

Facsimile: 011-82-2-3457-1960 

Attention: Taehyoung (TH) Kim

with copy to:

POSCO 
 POSCO Center

892 Daechi 4-Dong, Gangnam-Gu 

Seoul, 135-777, Korea 

Facsimile: 011-82-2-3457-1972

Attention: Bong-Han “Stephen” Kim, Esq

All notices under this Agreement that are addressed as provided in this Section (i) if
delivered personally or by internationally recognized courier service, will be deemed
given upon delivery or (ii) if delivered by facsimile, will be deemed given when confirmed.
Either Party from time to time may change its address or designee for
notification purposes by giving the other party notice of the new address or designee and the date
upon which such change will become effective.

 

21

 

XIII. ENTIRE AGREEMENT

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

XIV. APPLICABLE LAW AND ARBITRATION

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

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

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

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

 

22

 

14.3 ICC Arbitration. If the parties are unable to resolve any Dispute pursuant
Section 14.2 above and except as otherwise specified in Section 9.3(b)(i), the Dispute shall be
finally settled under the Rules of Arbitration (the “Rules”) of the International
Chamber of Commerce (“ICC”) by three (3) arbitrators designated by the parties. Each party shall
designate one arbitrator. The third arbitrator shall be designated by the two arbitrators
designated by the parties. If either party fails to designate an arbitrator within thirty (30) days
after the filing of the Dispute with the ICC, such arbitrator shall be appointed in the manner
prescribed by the Rules. An arbitration proceeding hereunder shall be conducted in London, U.K.,
and shall be conducted in the English language. The decision or award of the arbitrators shall be
in writing and is final and binding on both parties. The arbitration panel shall award the
prevailing party its attorneys’ fees and costs, arbitration administrative fees, panel member fees
and costs, and any other costs associated with the arbitration, the enforcement of any arbitration
award and the costs and attorney’s fees involved in obtaining specific performance of an award;
provided, however, that if the claims or defenses are granted in part and rejected in part, the
arbitration panel shall proportionately allocate between the parties those arbitration expenses in
accordance with the outcomes; provided, further, that the attorney’s fees and costs of enforcing a
specific performance arbitral award shall always be paid by the non-enforcing party, unless the
applicable action was determined to be without merit by final, non-appealable decision. The
arbitration panel may only award damages as provided for under the terms of this Agreement and in
no event may punitive, consequential and special damages (or as otherwise specified in this
Agreement, including, without limitation, Section 10.3) be awarded. In the event of any conflict
between the Rules and any provision of this Agreement, this Agreement shall govern.

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

XV. MISCELLANEOUS

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

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

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

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

 

23

 

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

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

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

15.8 Right to Injunction; Specific Performance. The Parties further acknowledge and
agree that POSCO Power will suffer irreparable harm, which is not compensable by monetary damage in
the event the FCE Technology has not been fully transferred to POSCO Power at the time of the
termination of this Agreement due to a material breach by FCE hereunder. Accordingly, the Parties
agree that POSCO Power shall be entitled to an injunction or injunctions to enforce specifically
the transfer of the FCE Technology to POSCO Power in accordance with Section 9.3(b)(i) above.

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

15.10 Marubeni; MTU. FCE hereby acknowledges and agrees to comply with the terms and
conditions of the MTU Consent and the Marubeni Settlement to the extent
that the failure to comply with such terms and conditions will adversely affect the rights of POSCO
Power to which it is entitled under this Agreement and the other Transaction Agreements. POSCO
Power hereby acknowledges and agrees to comply with the terms and conditions of the letter
agreement to be entered into with Marubeni Corporation in connection with the Marubeni Settlement
to the extent that the failure to comply with such terms and conditions will adversely affect the
rights of FCE to which it is entitled under this Agreement and the other Transaction Agreements.

 

24

 

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

	 	 	 	 	 
	 	FUELCELL ENERGY, INC.

 	 
	 	By:  	/s/ Robert Daniel Brdar
 	 
	 	 	Name:  	Robert Daniel Brdar 	 
	 	 	Title:  	President, CEO and Chairman 	 
	 
	 	POSCO POWER

 	 
	 	By:  	/s/ Seung-Woo Lee
 	 
	 	 	Name:  	Seung-Woo Lee 	 
	 	 	Title:  	President & CEO 	 
	 

Technology Transfer, License and Distribution Agreement

 

 

 

EXHIBIT A (FORM OF TTP TO BE INSERTED WHEN AVAILABLE)

 

 

 

EXHIBIT B (FORM OF LTSA TO BE INSERTED WHEN AVAILABLE)

 

 

 

EXHIBIT C (FORM OF PURCHASE ORDER TO BE INSERTED WHEN AVAILABLE)

 

 

 

SCHEDULE A (POSCO Affiliates)

POSCO Affiliates shall include the following companies:

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

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

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

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

 

 

 

SCHEDULE B (Non-Exclusive Territory)

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

Western Europe

Andorra

Austria

Belgium

Cyprus

Denmark

Federal Republic of Germany

Finland

France

Great Britain and including, but not limited to

Northern Ireland CIS (Commonwealth of Independent States)

Greece

Greenland

Ireland

Iceland

Italy

Liechtenstein

Luxembourg

Malta

Monaco

Netherlands

Norway

Portugal

San Marino

Spain

Sweden

Switzerland

The Vatican State

Eastern Europe

Albania

Bulgaria

Czech Republic

Slovakia

Hungary

Poland

Romania

All states of the former USSR

Yugoslavia

Slovenia

Croatia

Asia

Japan

Middle East

Bahrain

Iran

Iraq

Israel

Jordan

Kuwait

Lebanon

Oman

Qatar

Saudi-Arabia

Syria

Turkey

Yemen, Arab Rep.

Yemen, Peoples Rep.

United Arab Emirates (UAE)

North America

United States

Canada

Mexico

 

 

 

SCHEDULE C (FCE Previously Granted Distribution Rights)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Rights in	 	Needs
	Distributor	 	Type of Agreement	 	Effective Date	 	Expiration	 	Korea	 	extension?

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]