Document:

Exhibit 10.1

Exhibit 10.1

FIRST AMENDMENT

This First Amendment (the “Amendment”) to the Credit Agreement referred to below is
dated as of March 6, 2009 and effective in accordance with Section 3 below, by and among
DYNCORP INTERNATIONAL INC., a Delaware corporation (“Holdings”), DYNCORP INTERNATIONAL LLC,
a Delaware limited liability company (the “Borrower”), certain Subsidiaries of the Borrower
party hereto (the “Subsidiary Guarantors”), the lenders party hereto (collectively, the
“Consenting Lenders”) pursuant to an authorization (in the form attached hereto as
Exhibit A, each a “Lender Authorization”) and WACHOVIA BANK, NATIONAL ASSOCIATION,
as administrative agent (the “Administrative Agent”) for the Lenders party to the Credit
Agreement referred to below.

STATEMENT OF PURPOSE:

The Borrower, the Consenting Lenders, certain other financial institutions and the
Administrative Agent are parties to the Credit Agreement dated as of July 28, 2008 (as amended,
restated, supplemented or otherwise modified prior to the date hereof, the “Credit
Agreement”).

The Borrower has requested that the Administrative Agent and the Lenders agree to amend the
Credit Agreement as more specifically set forth herein.

Subject to the terms and conditions set forth herein, the Administrative Agent and the
Consenting Lenders have agreed to grant such requests of the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

1. Capitalized Terms. Except as otherwise provided herein, all capitalized undefined
terms used in this Amendment (including, without limitation, in the introductory paragraph and the
statement of purpose hereto) shall have the meanings assigned thereto in the Credit Agreement.

2. Credit Agreement Amendments. The Credit Agreement is hereby amended as follows:

(a) Amendment to Section 1.1. Section 1.1 of the Credit Agreement is hereby
amended by deleting the following sentence from the end of the definition of “Excess Cash Flow”:

“Notwithstanding the foregoing, Excess Cash Flow with respect to the Fiscal
Year ending April 3, 2009 shall be calculated solely on the basis of the second,
third and fourth Fiscal Quarters of such Fiscal Year.”

(b) Excess Cash Flow Mandatory Prepayment. Section 4.4(b)(v) of the Credit
Agreement is hereby amended and restated in its entirety as follows:

“(v) Excess Cash Flow.

(i) Excess Cash Flow Prepayment. No later than one hundred
(100) days after the end of any Fiscal Year (commencing with the Fiscal Year
ending on April 3, 2009), the Borrower shall make mandatory principal
prepayments of the Loans in the manner set forth in clause (vi)
below in an amount equal to the sum of (A) Excess Cash Flow, if any, for
such Fiscal Year multiplied by the ECF Percentage less (B)
the sum of (1) the aggregate principal amount of all optional prepayments of
Revolving Credit Loans made pursuant to Section 2.4(c) during

 

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such Fiscal Year solely to the extent that the Revolving Credit
Commitment is reduced by a corresponding amount pursuant to Section
2.5(a) and (2) the aggregate principal amount of all optional
prepayments of the Term Loans made pursuant to Section 4.4(a) during
such Fiscal Year, in each case with respect to the optional prepayments
described in the foregoing clauses (1) and (2), solely to the extent that
such prepayments are not funded with the incurrence of any Indebtedness.
“ECF Percentage” means the percentage set forth in the table below
based on the Consolidated Total Leverage Ratio as of the end of the Fiscal
Year in respect of which the amount of the mandatory prepayment pursuant to
this clause (v)(i) is being calculated:

	 	 	 	 	 
	Consolidated Total Leverage Ratio	 	ECF Percentage
	Greater than or equal to 3.0 to 1.0

	 	 	50	%
	Less than 3.0 to 1.0, but greater than or equal to 2.0 to 1.0

	 	 	25	%
	Less than 2.0 to 1.0

	 	 	0	%

(ii) Right to Reject Prepayment. Notwithstanding anything to
the contrary set forth in this Agreement or any other Loan Document, any
Term Loan Lender, at its option, may elect not to accept any mandatory
prepayment required pursuant to the foregoing clause (v)(i). Upon
receipt by the Administrative Agent of any such mandatory prepayment of Term
Loans, the amount of the mandatory prepayment that is available to prepay
the Term Loans (the “Prepayment Amount”) shall be deposited with the
Administrative Agent and, promptly after the date of such receipt, the
Administrative Agent shall give written notice to the Term Loan Lenders of
the amount available to prepay the Term Loans and the date on which such
prepayment shall be made (the “Prepayment Date”), which date shall
be no later than ten (10) days after the date of such receipt. Any Lender
declining such prepayment (each, a “Declining Lender”) shall give
written notice thereof to the Administrative Agent by 11:00 a.m. two (2)
Business Days immediately preceding the Prepayment Date. On the Prepayment
Date, an amount equal to that portion of the Prepayment Amount accepted by
the Term Loan Lenders other than the Declining Lenders (such accepting
Lenders, the “Accepting Lenders”) to prepay Term Loans owing to such
Accepting Lenders shall be applied ratably by the Administrative Agent to
prepay Term Loans owing to such Accepting Lenders in the manner described in
clause (vi) below for such mandatory prepayment. Any amounts that
would otherwise have been applied to prepay Term Loans owing to Declining
Lenders shall be returned to the Borrower on the Prepayment Date.”

(c) Limitation on Restricted Payments. Section 11.6(f) of the Credit
Agreement is hereby amended and restated in its entirety as follows:

“(f) so long as no Default or Event of Default has occurred and is continuing
or would result from such distribution, the Borrower may declare and make (and each
Subsidiary of the Borrower may declare and make to enable the Borrower to do the
same) Restricted Payments to Holdings so that Holdings may, and Holdings shall be
permitted to, declare and pay dividends to the holders of its Capital Stock and
repurchase, redeem or otherwise acquire for value any Capital Stock of Holdings
(collectively, the “share 

 

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repurchases”); provided, that the aggregate amount of all such
dividends and share repurchases (after giving effect to such dividends and share
repurchase) shall not exceed $25,000,000 in any Fiscal Year less the
aggregate amount of all payments, prepayments, redemptions and other acquisitions
for value of the Senior Subordinated Notes made pursuant to Section
11.9(b)(D) during such Fiscal Year unless, both immediately prior to and after
giving pro forma effect to such dividend or share repurchase, (i)
the ratio of (A) the sum of (x) Consolidated Total Indebtedness as of the most
recently ended Fiscal Quarter ending on or immediately prior to such dividend or
share repurchase for which financial statements are available (such date, the
“repurchase calculation date”), minus (y) if, as of the repurchase
calculation date, there are no Revolving Credit Loans then outstanding, the amount
of unencumbered cash and Cash Equivalents (other than cash and Cash Equivalents
encumbered by Liens securing the Obligations hereunder) held by Holdings and its
Subsidiaries on such repurchase calculation date to (B) Consolidated EBITDA for the
period of four (4) consecutive Fiscal Quarters ending on or immediately prior to
such repurchase calculation date is less than 2.00 to 1.00 and (ii) the amount by
which the aggregate Revolving Credit Commitment as of the repurchase calculation
date exceeds the Revolving Credit Outstandings as of the repurchase calculation date
is greater than $100,000,000;”

(d) Prepayments of Senior Subordinated Notes. Section 11.9(b) of the Credit
Agreement is hereby amended by adding the following new clause (D) thereto:

“(D) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, payments, prepayments, redemptions or
other acquisitions for value of the Senior Subordinated Notes;
provided, that the aggregate principal amount of all such payments,
prepayments, redemptions or other acquisitions for value shall not exceed
$25,000,000 in any Fiscal Year less the aggregate amount of all
dividends and share repurchases made pursuant to Section 11.6(f)
during such Fiscal Year unless, both immediately prior to and after giving
pro forma effect to such payment, prepayment, redemption or
other acquisition, (i) the ratio of (A) the sum of (x) Consolidated Total
Indebtedness as of the most recently ended Fiscal Quarter ending on or
immediately prior to such payment, prepayment, redemption or acquisition for
which financial statements are available (such date, the “calculation
date”) minus (y) if, as of the calculation date, there are no
Revolving Credit Loans then outstanding, the amount of unencumbered cash and
Cash Equivalents (other than cash and Cash Equivalents encumbered by Liens
securing the Obligations hereunder) held by Holdings and its Subsidiaries on
such calculation date to (B) Consolidated EBITDA for the period of four (4)
consecutive Fiscal Quarters ending on or immediately prior to such
calculation date is less than 2.00 to 1.00 and (ii) the amount by which the
aggregate Revolving Credit Commitment as of the calculation date exceeds the
Revolving Credit Outstandings as of the calculation date is greater than
$100,000,000.”

3. Conditions to Effectiveness. Upon the satisfaction of each of the following
conditions, this Amendment shall be deemed to be effective:

(a) the Administrative Agent shall have received counterparts of this Amendment
executed by the Administrative Agent (on behalf of itself and each of the Consenting Lenders
by virtue of each Consenting Lender’s execution of a Lender Authorization), Holdings, the
Borrower and each of the Subsidiary Guarantors;

 

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(b) the Administrative Agent shall have received executed Lender Authorizations (or,
with respect to the Administrative Agent in its capacity as a Lender, an executed
counterpart of this Amendment) from the Required Lenders;

(c) the Administrative Agent shall have been paid the fees separately agreed to among
Wachovia Capital Markets, LLC, the Administrative Agent and the Borrower;

(d) the Borrower shall have paid to the Administrative Agent (or its applicable
affiliates), for the account of each Consenting Lender (including the Administrative Agent
in its capacity as a Lender) that executes and delivers this Amendment or a Lender
Authorization to the Administrative Agent (or its counsel) on or prior to 5:00 p.m. (Eastern
Time) on March 6, 2009, an amendment fee in an amount equal to 12.5 basis points
multiplied by the aggregate amount of such Lender’s Revolving Credit Commitment and
the aggregate outstanding principal amount of such Lender’s Term Loans; and

(e) the Administrative Agent shall have received such other instruments, documents and
certificates as the Administrative Agent shall reasonably request in connection with the
execution of this Amendment.

4. Effect of the Agreement. Except as expressly provided herein, the Credit Agreement
and the other Loan Documents shall remain unmodified and in full force and effect. Except as
expressly set forth herein, this Amendment shall not be deemed (a) to be a waiver of, or consent
to, a modification of or amendment of, any other term or condition of the Credit Agreement or any
other Loan Document, (b) to prejudice any other right or rights which the Administrative Agent or
the Lenders may now have or may have in the future under or in connection with the Credit
Agreement, as modified hereby, or the other Loan Documents or any of the instruments or agreements
referred to therein, as the same may be amended, restated, supplemented or otherwise modified from
time to time, (c) to be a commitment or any other undertaking or expression of any willingness to
engage in any further discussion with the Borrower or any other Person with respect to any waiver,
amendment, modification or any other change to the Credit Agreement or the Loan Documents or any
rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them,
under or with respect to any such documents or (d) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of any other agreement by and among the
Borrower, on the one hand, and the Administrative Agent or any other Lender, on the other hand.
References in the Credit Agreement, as modified hereby, to “this Agreement” (and indirect
references such as “hereunder”, “hereby”, “herein”, and “hereof”) and in any Loan Document to the
Credit Agreement shall be deemed to be references to the Credit Agreement as modified hereby.

5. Representations and Warranties/No Default. By their execution hereof, Holdings,
the Borrower and each of the Subsidiary Guarantors hereby certifies, represents and warrants to the
Administrative Agent and the Lenders that:

(a) after giving effect to the amendments set forth in Section 2 above, each of
the representations and warranties set forth in the Credit Agreement and the other Loan
Documents is true, correct and complete in all material respects as of the date hereof,
except for any representation and warranty made as of an earlier date, which representation
and warranty shall remain true, correct and complete as of such earlier date;
provided, that any representation or warranty that is qualified by materiality or by
reference to Material Adverse Effect shall be true, correct and complete in all respects as
of the date hereof;

(b) no Default or Event of Default has occurred or is continuing;

 

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(c) it has the right, power and authority and has taken all necessary corporate and
other action to authorize the execution, delivery and performance of this Amendment and each
of the other documents executed in connection herewith to which it is a party in accordance
with their respective terms and the transactions contemplated hereby; and

(d) this Amendment and each other document executed in connection herewith has been
duly executed and delivered by the duly authorized officers of Holdings, the Borrower and
each of the Subsidiary Guarantors, and each such document constitutes the legal, valid and
binding obligation of Holdings, the Borrower and each of the Subsidiary Guarantors,
enforceable in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors’ rights in general and the
availability of equitable remedies.

6. Reaffirmations. Each Credit Party (a) agrees that the transactions contemplated by
this Amendment shall not limit or diminish the obligations of such Person under, or release such
Person from any obligations under, the Credit Agreement (as modified hereby), the Holdings Guaranty
Agreement, the Subsidiary Guaranty Agreement, the Collateral Agreement and each other Security
Document to which it is a party, (b) confirms and reaffirms its obligations under the Credit
Agreement (as modified hereby), the Holdings Guaranty Agreement, the Subsidiary Guaranty Agreement,
the Collateral Agreement and each other Security Document to which it is a party and (c) agrees
that the Credit Agreement (as modified hereby), the Holdings Guaranty Agreement, the Subsidiary
Guaranty Agreement, the Collateral Agreement and each other Security Document to which it is a
party remain in full force and effect and are hereby reaffirmed.

7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

8. Counterparts. This Amendment may be executed by one or more of the parties hereto
in any number of separate counterparts and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.

9. Electronic Transmission. A facsimile, telecopy, pdf or other reproduction of this
Amendment may be executed by one or more parties hereto, and an executed copy of this Amendment may
be delivered by one or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original of this Amendment
as well as any facsimile, telecopy, pdf or other reproduction hereof.

[Signature Pages Follow]

 

5

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the date and year first above written.

	 	 	 	 	 
	 	HOLDINGS:
 
DYNCORP INTERNATIONAL INC.

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President, CFO & Treasurer 	 
	 
	 	BORROWER:
 
DYNCORP INTERNATIONAL LLC

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	SUBSIDIARY GUARANTORS:
 
DIV CAPITAL CORPORATION, as Subsidiary
Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	DYNCORP AEROSPACE OPERATIONS LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 

[Signature pages continue]

[First Amendment–DynCorp International LLC]

 

 

 

	 	 	 	 	 
	 	DTS AVIATION SERVICES LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	DYN MARINE SERVICES LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	DYN MARINE SERVICES OF VIRGINIA LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	DYNCORP INTERNATIONAL SERVICES LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	SERVICES INTERNATIONAL LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 

[Signature pages continue]

[First Amendment–DynCorp International LLC]

 

 

 

	 	 	 	 	 
	 	WORLDWIDE HUMANITARIAN SERVICES LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	WORLDWIDE RECRUITING AND STAFFING SERVICES LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 
	 	GLOBAL LINGUIST SOLUTIONS LLC, as Subsidiary Guarantor

 	 
	 	By:  	/s/ Michael J. Thorne
 	 
	 	 	Name:  	Michael J. Thorne 	 
	 	 	Title:  	Treasurer 	 
	 

[Signature pages continue]

[First Amendment–DynCorp International LLC]

 

 

 

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent (on behalf of itself and the
Consenting Lenders who have executed a Lender
Authorization) and as Issuing Lender, Swingline
Lender and a Lender

 	 
	 	By:  	/s/ Robert Sevin
 	 
	 	 	Name:  	Robert Sevin 	 
	 	 	Title:  	Director 	 
	 

[First Amendment–DynCorp International LLC]

 

 

 

Exhibit A

Form of Lender Authorization

 

 

 

LENDER AUTHORIZATION

First Amendment to DynCorp International LLC Credit Agreement

March 6, 2009

Wachovia Bank, National Association, as Administrative Agent

NC0680

1525 West W.T. Harris Blvd.

Charlotte, North Carolina 28262

Attention: Syndication Agency Services

	 	 	 	 	 
	 

	 	Re:
	 	First Amendment (the “Amendment”) dated as of March 6, 2009 to that
certain Credit Agreement dated as of July 28, 2008 (as amended, the “Credit
Agreement”) by and among DynCorp International Inc. (“Holdings”), DynCorp
International LLC (the “Borrower”), the banks and financial institutions party
thereto, as lenders (the “Lenders”), and Wachovia Bank, National Association,
as administrative agent (the “Administrative Agent”)

This Authorization acknowledges our receipt and review of the execution copy of the Amendment
in the form posted on SyndTrak Online. By executing this Authorization, we hereby approve the
Amendment and authorize the Administrative Agent to execute and deliver the Amendment on our
behalf.

Each financial institution executing this Authorization agrees or reaffirms that it shall be a
party to the Amendment and the other Loan Documents (as defined in the Credit Agreement) to which
Lenders are parties and shall have the rights and obligations of a Lender (as defined in the Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a “Lender”, under each
such agreement. In furtherance of the foregoing, each financial institution executing this
Authorization agrees to execute any additional documents reasonably requested by the Administrative
Agent to evidence such financial institution’s rights and obligations under the Credit Agreement.

A facsimile, telecopy, pdf or other reproduction of this Authorization may be executed by one
or more parties hereto, and an executed copy of this Authorization may be delivered by one or more
parties hereto by facsimile or similar instantaneous electronic transmission device pursuant to
which the signature of or on behalf of such party can be seen, and such execution and delivery
shall be considered valid, binding and effective for all purposes.

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	[Insert name of applicable financial institution]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:Exhibit 4.2

Exhibit 4.2

SCHEDULE “A”

attached to and forming part of the

Articles of Amendment

of

FuelCell Energy, Ltd.

(the “Corporation”)

1,000,000 CLASS A CUMULATIVE REDEEMABLE EXCHANGEABLE PREFERRED SHARES (the “Class A Preferred
Shares”), which shall have attached thereto the following rights, privileges, restrictions and
conditions:

	1	 	DEFINITIONS:

For the purposes of these share conditions the following definitions shall apply:

	1.1	 	“accrued and unpaid dividends” means an amount computed at the rate of dividend from time to
time attaching to the Class A Preferred Shares as though dividends on such shares had been
declared every Calendar Quarter and were accruing on a day to day basis from the date of issue
to the date to which the computation of accrued dividends is to be made, after deducting all
dividend payments made on such shares, as adjusted by Section 2.5;

	1.2	 	“Board of Directors” means the board of directors of the Corporation;

	 
	1.3	 	“Calendar Quarter” means each of the three month periods ended March 31, June 30, September
30 and December 31 in each year;

	 
	1.4	 	“Common Shares” means only common shares of FuelCell as constituted on May 27, 2004 or as
subsequently consolidated or subdivided and any other shares resulting from reclassification
or change of such common shares or amalgamation, consolidation, merger or sale, all as
referred to in Section 5.5;

	 
	1.5	 	“Current Exchange Basis” means the number of Common Shares into which each Preferred Share,
Class A is exchangeable, which number is equal at any particular time to the result obtained
(expressed to the nearest thousandth of a Common Share) by dividing (a) the sum of $25.00 plus
all accrued and unpaid dividends by (b) the Current Exchange Price;

	1.6	 	“Current Exchange Price” means, in Canadian currency:

	 	(a)	 	$110.97 per Common Share until July 31, 2005;

	 
	 	(b)	 	$120.22 per Common Share after July 31, 2005 until July 31, 2010;

 

 

 

	 	(c)	 	$129.46 per Common Share after July 31, 2010, until July 31, 2015;

	 	(d)	 	$138.71 per Common Share after July 31, 2015 until July 31, 2020; or

	 	(e)	 	at any time after July 31, 2020 the price equal to 95% of the Current Market Price at
the time of exchange (the “Final Exchange Price”), subject to adjustments as provided in
Section 5.5;

	1.7	 	“Current Market Price” as at any date when the Current Market Price is to be determined,
means the volume weighted average price in U.S. dollars at which board lots of the Common
Shares have been traded on NASDAQ during the 20 consecutive trading days commencing 30 trading
days before such date converted into Canadian dollars using the Bank of Canada’s noon rate of
exchange on the date of determination. In the event the Common Shares are not listed on
NASDAQ but are listed on another stock exchange or stock exchanges in Canada or the United
States, any references to NASDAQ shall be deemed to be references to such other stock
exchange, or, if more than one, to such one on which the greatest volume of trading of Common
Shares occurred during such 20 consecutive trading days. In the event Common Shares are not
so traded on any stock exchange in Canada or the United States, the Current Market Price
thereof shall be determined by the Board of Directors, which determination shall be
conclusive;

	1.8	 	“Dividend Commencement Date” means May 27, 2004;

	1.9	 	“Dividend Payment Date” means the 10th day of January, April, July and October in each year
with the first such date to be July 10, 2004;

	1.10	 	“FuelCell” means FuelCell Energy, Inc., a corporation existing under the laws of the State of
Delaware and includes any successor corporation;

	1.11	 	“Market Price” means the volume weighted average price in U.S. dollars at which board lots of
the Common Shares have been traded on NASDAQ during the Calendar Quarter and converted into
Canadian dollars using the Bank of Canada’s noon rate of exchange on the last day of the
Calendar Quarter. In the event the Common Shares are not listed on NASDAQ but are listed on
another stock exchange or stock exchange in Canada or the United States, any reference to
NASDAQ shall be deemed to be references to such other stock exchange, or, if more than one, to
such one on which the greatest volume of trading of Common Shares occurred during such
Calendar Quarter. In the event Common Shares are not so traded on any stock exchange in
Canada or the United States, the Market Price thereof shall be determined by the Board
of Directors, which determination shall be conclusive;

 

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	1.12	 	“NASDAQ” means NASDAQ Stock Market Inc.; and

	1.13	 	“Tax Act” means the Income Tax Act (Canada), and the regulations thereunder as such act and
regulations may be amended, superseded or replaced from time to time.

	2	 	DIVIDENDS

	2.1	 	The holders of Class A Preferred Shares shall be entitled to receive, and the Corporation
shall pay, preferential cumulative dividends, as and when declared by the Board of Directors,
out of the assets of the Corporation properly applicable to the payment of dividends, at a
rate per annum on the issue price of the Class A Preferred Shares determined for each Calendar
Quarter as follows:

	 	 	 	 	 
	Market Price, in Canadian	 	Annual Dividend Rate Applicable	 
	currency, in the Calendar Quarter	 	to that Calendar Quarter	 
	 
	 	 	 	 
	Less than or equal to $128.89
	 	 	5	%
	 
	 	 	 	 
	$128.90 to $146.81
	 	 	4	%
	 
	 	 	 	 
	$146.82 to $164.73
	 	 	3	%
	 
	 	 	 	 
	$164.74 to $182.65
	 	 	2	%
	 
	 	 	 	 
	greater than $182.65
	 	 	1	%

	 	 	Such dividends shall accrue and be cumulative from the Dividend Commencement Date. Such
dividends shall be payable on the Dividend Payment Dates to shareholders of record on the
immediately preceding Calendar Quarter end date. The rate of any dividend declared and
paid for a portion of a Calendar Quarter shall be prorated accordingly.

	 
	2.2	 	If on any Dividend Payment Date the dividend payable on such date is not declared and paid in
full on all of the Class A Preferred Shares then issued and outstanding, such dividend or the
unpaid part thereof shall be paid on a subsequent date or dates determined by the Board of
Directors on which the Corporation shall have sufficient monies properly applicable to the
payment of the same. When any such dividend is not paid in full, the Class A Preferred
Shares shall participate ratably with the preferred shares of all other shares, if any, which
rank on a parity with the Class A Preferred Shares with respect to the payment of dividends,
in respect of such dividends including accumulations, if any, in accordance with the sums
which would be payable on the Class A Preferred Shares and such other shares if all such
dividends were declared and paid in full in accordance with their terms. The holders of
Class A Preferred Shares shall not be entitled to any dividends other than or in excess of
the dividends hereinbefore provided for.

 

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	2.3	 	The Board of Directors is entitled at its discretion to determine with respect to any
dividend on Class A Preferred Shares that all holders of Class A Preferred Shares receive such
dividend in the form of a dividend-in-kind payable in Common Shares. In the event the
Corporation elects to pay a dividend by delivering Common Shares to the holders of Class A
Preferred Shares the price of the Common Shares shall be calculated to be 95% of the volume
weighted average price in U.S. dollars at which board lots of the Common Shares have been
traded on NASDAQ during the 20 consecutive trading days preceding the end of the Calendar
Quarter for which such dividend-in-kind is to be paid converted into Canadian dollars using
the Bank of Canada’s noon rate of exchange on the day of determination. In the event the
Common Shares are not listed on NASDAQ but are listed on another stock exchange or stock
exchanges in Canada or the United States, any reference to NASDAQ shall be deemed to be
references to such other stock exchange, or, if more than one, to such one on which the
greatest volume of trading of Common Shares occurred during such 20 consecutive trading days.
In the event Common Shares are not so traded on any stock exchange in Canada or the
United States, the price thereof shall be determined by the Board of
Directors, which determination shall be conclusive.

	2.4	 	Subject to Section 2.3, dividends (less any tax required to be withheld by the Corporation)
on the Class A Preferred Shares shall be paid by electronic funds transfer or by cheque
payable in lawful money of Canada, at any branch in Canada of the Corporation’s bankers. The
mailing of such cheque from the Corporation’s head office on or before the date on which such
dividend is to be paid to a holder of Class A Preferred Shares shall be deemed to be payment
of the dividends represented thereby and payable on such date unless the cheque is not paid
upon presentation.

	2.5	 	Notwithstanding the provisions of Section 2.1 but subject to Section 2.8, at all times prior
to January 1, 2011 the Corporation shall declare and pay a dividend on the Class A Preferred
Shares in respect of a Calendar Quarter ending in a particular fiscal year of the Corporation
only to the extent that the Corporation would not be liable to pay tax under Part VI. I of the
Tax Act in respect of such dividend other than tax that would be fully recovered by means of
the deduction under paragraph 110(1)(k) of the Tax Act for that fiscal year. On each Dividend
Payment Date, the Corporation shall estimate the amount of its taxable income for the fiscal
year which includes such Dividend Payment Date and shall compute the amount of the dividend
which it is obliged to declare and pay accordingly. Once the actual amount of taxable
income for such fiscal year is established by means of the filing of the
relevant tax return, or if a previous estimate thereof has been revised by a subsequent
estimate thereof made by the Corporation, such adjustment as is appropriate to achieve the
result expressed herein shall be made to the amount of the dividend required to be declared
and paid on the next Dividend Payment Date, whether that date falls within the same or a
subsequent fiscal year. The Corporation shall deliver to the holders of the Class A
Preferred Shares, on such Dividend Payment Date, a calculation in writing showing the
amount of the Corporation’s taxable income for its fiscal year that includes that Dividend
Payment Date as so estimated or as finally determined by the Corporation, as well as the
dividend that such holders are entitled to receive on that Dividend Payment Date having
regard to such estimated or actual taxable income, as the case may be.

 

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	 	 	If the Corporation does not declare and pay dividends on the Class A Preferred Shares as a
consequence of the provisions of this Section 2.5, dividends shall continue to accrue at
the rate or rates provided in these share conditions and the amount of any such unpaid
dividend or the unpaid part thereof, shall be adjusted upward by a multiplicative factor
equal to 1.0245 raised to an exponent equal to the number of Calendar Quarters, including
decimal fractions thereof based on 91 days per Calendar Quarter, between the 10th day
following the Calendar Quarter in which the unpaid dividend originally accrued and the date
actually paid assuming, for these calculations, that the Class A Preferred Shares were
issued on July 31, 2000 and that the Corporation paid $125,000 in dividends per Calendar
Quarter from the notional issue date until the Calendar Quarter ended December 31, 2003. By
way of illustration, for greater certainty, if the Board of Directors determines to declare
and pay on November 25, 2005, a dividend which originally accrued in respect of the
Calendar Quarter ending September 30, 2000, then the dividend which originally accrued
would be multiplied by 1.643 (i.e. 1.0245 to the exponent 20.51) to determine the adjusted
amount of the dividend to be declared. Any dividends declared and paid on the Class A
Preferred Shares, shall always be in respect of the earliest Calendar Quarter for which the
original accrued dividend, or any part thereof, remains unpaid. The Corporation shall
maintain in its books of account at the end of each Calendar Quarter a record of the
adjusted amount of each accrued and unpaid dividend, calculated on the basis of the amount
that would be payable as of the 10th business day following the Calendar Quarter, and the
aggregate adjusted amount of all such accrued and unpaid dividends.

	 
	2.6	 	The Corporation shall take into account the amount of any dividend allowance available to it
under subsection 191.1(2) of the Tax Act in determining the amount of the dividend which it is
required to declare and pay under Section 2.5 and, in the event the Corporation is or becomes
“associated” for purposes of the Tax Act with any other corporation prior to
January 1, 2011, no portion of the said dividend allowance shall be allocated to such
associated corporation under Subsection 191.1(3) of the Tax Act.

 

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	2.7	 	The Corporation shall have full flexibility in planning its tax affairs so as to reduce its
taxable income for a particular fiscal year as it sees fit, including the claiming of all
discretionary deductions, notwithstanding that this will have the effect of reducing the
amount of the dividends to actually be declared and paid to the holders of the Class A
Preferred Shares in that fiscal year, by virtue of the operation of Section 2.5.

	2.8	 	Notwithstanding Section 2.5, the Corporation may, in its sole discretion, on any Dividend
Payment Date, declare and pay dividends, up to the amount of the then accrued and unpaid
dividends, without regard to the limitation imposed under Section 2.5.

	2.9	 	On December 31, 2010 the amount of all accrued and unpaid dividends shall be paid to the
holders of Class A Preferred Shares.

	3	 	LIQUIDATION

	3.1	 	In the event of the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, or any other distribution of assets of the Corporation among its
shareholders for the purposes of winding up its affairs, the holders of Class A Preferred
Shares, shall be entitled to receive the amount paid up on such shares together with an amount
equal to all accrued and unpaid dividends thereon, which amounts shall be calculated as if
such dividend were accruing for the period from the expiration of the last Calendar Quarter
for which the dividends thereon have been paid in full up to the date of such event, the whole
before any amount shall be paid or any property or assets of the Corporation shall be
distributed to the holders of the common shares of the Corporation or to the holders of any
other shares of the Corporation ranking junior to the Class A Preferred Shares in any respect.
If such amounts are not paid in full, the Class A Preferred Shares shall participate ratably
with all preferred shares and all other shares, if any, which rank on a parity with the
preferred shares with respect to the return of capital or any other distribution of the assets
of the Corporation, in respect of any return of capital in accordance with the sums which
would be payable on such preferred shares and such other shares on such return capital, if all
sums so payable were paid in full in accordance with their terms. After payment to the holders
of the Class A Preferred Shares of the amounts so payable to them they shall not be entitled
to share in any other distribution of the property or assets of the Corporation.

 

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	4	 	REDEMPTION

	4.1	 	The Class A Preferred Shares are not redeemable by the Corporation on or prior to July 31,
2004.

	4.2	 	On or after July 31, 2004, and subject to the Business Corporations Act, (Alberta), the
Corporation may redeem the whole or any part of the Class A Preferred Shares if on the day
that the requisite notice of redemption is first given, the volume weighted average price in
U.S. Dollars at which the Common Shares have traded on NASDAQ during the 20 consecutive
trading days ending on a date not earlier than the fifth preceding date on which the notice of
redemption is given converted into Canadian dollars using the Bank of Canada’s noon rate of
exchange on such day was not less than a 20% premium to the Current Exchange Price on payment
of $25.00 per Preferred Share, Class A to be redeemed, together with an amount equal to all
accrued and unpaid dividends to the date fixed for redemption, the whole
constituting the redemption price. In the event the Common Shares are not listed on NASDAQ
but are listed on another stock exchange or stock exchanges in Canada or the United States,
any reference to NASDAQ shall be deemed to be references to such other stock exchange, or, if
more than one, to such one on which the greatest volume of trading of Common Shares occurred
during such 20 consecutive trading days. In the event Common Shares are not so traded on any
stock exchange in Canada or the United States, the price thereof shall be determined by the
Board of Directors, which determination shall be conclusive.

	4.3	 	On or after July 31, 2010, the Class A Preferred Shares are redeemable by the Corporation at
any time on payment of $25.00 per Preferred Share, Class A to be redeemed together with an
amount equal to all accrued and unpaid dividends to the date fixed for redemption, the whole
constituting the redemption price.

	4.4	 	In case a part only of the then outstanding Class A Preferred Shares is at any time to be
redeemed, the shares so to be redeemed shall be selected by lot in such manner as the Board of
Directors in its discretion shall decide or, if the Board of Directors so determines, may be
redeemed pro rata, disregarding fractions, and the Board of Directors may make such
adjustments as may be necessary to avoid the redemption of fractional parts of shares.

 

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	4.5	 	On any redemption of Class A Preferred Shares, the Corporation shall give in the manner
provided in Section 11 at least 30 days prior notice to each person who, at the date of giving
such notice, is the holder of Class A Preferred Shares to be redeemed, of the intention of the
Corporation to redeem such shares. Such notice shall set out the redemption price and the
date on which the redemption is to take place and, unless all the Class A Preferred Shares
held by the holder to whom it is addressed are to be redeemed, shall also set
out the number of such shares so held which are to be redeemed. On and after the date so
specified for redemption the Corporation shall pay, or cause to be paid to the holders of
such Class A Preferred Shares to be redeemed, the redemption price on presentation and
surrender at the head office of the Corporation or at any other place or places within
Canada designated by such notice, of the certificate or certificates for such Class A
Preferred Shares so called for redemption. Such payment shall be made by cheque payable at
par at any branch in Canada of the Corporation’s bankers. If a part only of the Class A
Preferred Shares represented by any certificate shall be redeemed, a new certificate for
the balance shall be issued at the expense of the Corporation. From and after the date
specified in any such notice, the Class A Preferred Shares called for redemption shall
cease to be entitled to dividends and the holders thereof shall not be entitled to exercise
any of the rights of shareholders in respect thereof unless payment of the redemption price
shall not be duly made by the Corporation. On or after the date specified for redemption of
Class A Preferred Shares by the Corporation, the Corporation shall have the right to
deposit the redemption price of any or all Class A Preferred Shares called for redemption
with any chartered bank or banks or with any trust company or trust companies in Canada
named for such purpose in the notice of redemption to the credit of a special account or
accounts in trust for the respective holders of such shares, to be paid to them
respectively upon surrender to such bank or banks or trust company or trust companies of
the certificate or certificates representing the same. Upon such deposit or deposits being
made, such shares shall be deemed to be redeemed and the rights of the holders of such
 shares shall be limited to receiving the proportion of the amounts so deposited applicable
to their respective shares without interest. Any interest allowed on such deposit or
deposits shall belong to the Corporation.

	4.6	 	Class A Preferred Shares which are redeemed or deemed to be redeemed in accordance with this
Section 4 shall be and be deemed to be cancelled and shall not be reissued.

	5	 	EXCHANGE PRIVILEGE

	5.1	 	A holder of Class A Preferred Shares has the right, at the holder’s option, to exchange,
subject to the terms and provisions hereof, such Class A Preferred Shares into fully paid and
non-assessable Common Shares at the then Current Exchange Basis; except that, in the case of
Class A Preferred Shares which shall have been called for redemption pursuant to Section 4,
such right shall terminate with respect thereto at the close of business on the third business
day prior to the date fixed for such redemption. If payment of the redemption price of Class A
Preferred Shares which have been called for redemption is not paid on due surrender of the
certificate for such Class A Preferred Shares the right of exchange shall revive and continue
from the
time of the failure to pay as if such Class A Preferred Shares had not been called for
redemption.

 

- 8 -

 

	5.2	 	In the event the Class A Preferred Shares are to be exchanged by a holder at the Final
Exchange Price the Corporation may satisfy its exchange obligations pursuant to this Section 5
by the payment of cash to the holder in the amount calculated by determining the number of
Common Shares that would be deliverable in accordance with the Current Exchange Basis and
multiplying this number by the Current Market Price. Such payment shall be made by cheque
payable at par at any branch in Canada of the Corporation’s bankers.

	5.3	 	The exchange of Class A Preferred Shares may be effected by the surrender of the certificate
or certificates representing the same at any time during usual business hours at the option
of the holder at the head office of the Corporation accompanied by: (1) payment or evidence
of payment of the tax (if any) payable as provided in Section 5.10; and (2) a written
instrument of surrender in form satisfactory to the Corporation duly executed by the
registered holder, or the holder’s attorney duly authorized in writing, in which instrument
such holder may also elect to exchange part only of:

	 	(a)	 	the Class A Preferred Shares represented by such certificate or
certificates not theretofore called for redemption, in which event such holder shall
be entitled to receive, at the expense of the Corporation, a new certificate
representing the Class A Preferred Shares represented by such certificate or
certificates which have not yet been exchanged;

	 
	 	(b)	 	the Class A Preferred Shares represented by such certificate or
certificates, theretofore called for redemption, in which event on the date specified
for the redemption of such Class A Preferred Shares such holder, shall be entitled to
payment of the redemption price of the Class A Preferred Shares represented by such
certificate or certificates which have been called for redemption and which have not
been exchanged, and to receive, at the expense of the Corporation, a certificate
representing Class A Preferred Shares represented by such certificate or certificates
which have been neither exchanged nor redeemed. As promptly as practicable after the
surrender of any Class A Preferred Shares for exchange, the Corporation shall deliver
to or upon the written order of the holder of the Class A Preferred Shares so
surrendered, a certificate or certificates issued in the name of, or in such name or
names as may be directed by, such holder representing the number of Common Shares to
which such holder is entitled together with a payment by cheque in respect of any
fraction of a Common Share that would be issuable on such exchange as provided in
Section 5.9. Such exchange shall be deemed to have been made at the close of
business on the date such Class A Preferred Shares shall
have been surrendered for exchange, so that the rights of the holder of such Class
A Preferred Shares as the holder thereof shall cease at such time and the person or
persons entitled to receive Common Shares upon such exchange shall be treated for
all purposes as having become the holder or holders of record of such Common Shares
at such time and such exchange shall be on the Current Exchange Basis as at such
time; provided that no such surrender on any date when FuelCell’s registers of
transfers of Common Shares shall be properly closed shall be effective to
constitute the person or persons entitled to receive Common Shares upon such
exchange as the holder or holders of record of such Common Shares on such date, but
such surrender shall be effective to constitute the person or persons entitled to
receive such Common Shares as the holder or holders of record thereof for all
purposes at, and such exchange shall be on the Current Exchange Basis as at, the
close of business on the next succeeding day on which such registers of transfers
are open. In no event shall the Corporation’s or FuelCell’s registers of transfers
of Common Shares be closed at any time during normal business hours during the 30
days immediately preceding any exchange or redemption date. The date of surrender
of any Class A Preferred Shares for exchange shall be deemed to be the date when
the certificate representing such Class A Preferred Shares is received by the
Corporation.

 

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	5.4	 	The registered holder of any Preferred Share, Class A on the record date for any dividend
declared payable on such share shall be entitled to such dividend notwithstanding that such
share is exchanged after such record date and before the payment date of such dividend. The
registered holder of any Common Share resulting from any exchange shall be entitled to rank
equally with the registered holders of all other Common Shares in respect of all dividends
declared payable to holders of Common Shares of record on any date on or after the date of
exchange. Subject as aforesaid and subject to the provisions hereof, upon the exchange of any
Class A Preferred Shares the Corporation shall make no payment or adjustment on account of
any dividends on the Class A Preferred Shares so exchanged or on account of the dividends on
the Common Shares deliverable upon such exchange.

	5.5	 	The Current Exchange Price shall be subject to adjustment from time to time as follows:

	 	(a)	 	In case FuelCell shall:

	 	(i)	 	subdivide its outstanding Common Shares into a
greater number of shares;

	 
	 	(ii)	 	combine or consolidate its outstanding Common Shares into a smaller number
of shares; or

	 
	 	(iii)	 	issue Common Shares (or securities convertible into Common Shares) to the
holders of any of its outstanding Common Shares by way of a stock dividend (other
than an issue to shareholders pursuant to their exercise of options to receive
dividends in the form of Common Shares or securities convertible into Common Shares),
in lieu of cash dividends declared payable by the Corporation on such shares);

 

- 10 -

 

the Current Exchange Price in effect on the effective date of such subdivision or combination or
consolidation or on the record date of such issuance of Common Shares (or securities convertible
into Common Shares) by way of a stock dividend, as the case may be, shall, in the case of events
referred to in Sections 5.5(a)(i) and 5.5(a)(iii) be decreased in proportion to the increase in
the number of outstanding Common Shares resulting from such subdivision or such dividend
(including, in the case where securities convertible into Common Shares are issued, the number of
Common Shares that would be outstanding had such securities been converted into Common Shares on
such record date), or, in the case of Section 5.5(a)(ii) shall be increased in proportion to the
decrease in the number of outstanding Common Shares resulting from the combination or
consolidation. Such adjustment will be made successively whenever any event referred to in this
Section 5.5(a) shall occur. Any such issue of Common Shares (or securities convertible into Common
Shares) by way of stock dividend shall be deemed to have been made on the record date of the stock
dividend for the purpose of calculating the number of outstanding Common Shares under this Section
5.5(a).

	 	(b)	 	In case FuelCell shall fix a record date for the issuance of rights, options or warrants to
all or substantially all the holders of its outstanding Common Shares entitling them for a
period expiring not more than 45 days after such record date, to subscribe for or purchase
Common Shares (or securities convertible into Common Shares) at a price per share (or having a
conversion price per share) less than 95% of the Current Market Price on such record date, the
Current Exchange Price shall be adjusted immediately after such record date so that it shall
equal a price determined by multiplying the Current Exchange Price in effect on such record
date by a fraction, of which the numerator shall be the total number of Common Shares
outstanding on such record date plus a number of Common Shares equal to the number arrived at
by dividing the aggregate price of the total number of additional Common Shares offered for
subscription or purchase (or the aggregate conversion price of the convertible securities so
offered) by the Current Market Price of a Common Share, and of which the
denominator shall be the total number of Common Shares outstanding on such record date
plus the total number of additional Common Shares offered for subscription or purchase (or
into which the convertible Securities so offered are convertible). Any Common Shares owned
by or held for the account of FuelCell shall be deemed not to be outstanding for the
purpose of any such computation. Such adjustment shall be made successively whenever such
a record date is fixed. If all such rights, options or warrants are not so issued or if
all such rights, options or warrants are not exercised prior to the expiration thereof,
the Current Exchange Price shall be readjusted to the Current Exchange Price which would
then be in effect if such record date had not been fixed, and the Current Exchange Price
shall be further adjusted based upon the number of Common Shares (or securities
convertible into Common Shares) actually delivered upon the exercise of such rights,
options or warrants, as the case may be.

 

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	 	(c)	 	In case FuelCell shall fix a record date for the making of a distribution (including a
distribution by way of a stock dividend) to all or substantially all the holders of its
outstanding Common Shares of:

	 	(i)	 	shares of any class other than Common Shares (excluding shares convertible
into Common Shares referred to in Section 5.5.(a)); or

	 
	 	(ii)	 	rights, options or warrants (excluding those referred to in Section 5.5(b));
or

	 
	 	(iii)	 	evidence of its indebtedness (excluding indebtedness convertible into
Common Shares referred to in Section 5.5(a)); or

	 
	 	(iv)	 	assets (excluding Common Shares issued by way of a stock dividend and cash
dividends paid in the ordinary course);

then in such case the Current Exchange Price shall be adjusted immediately after such record date
so that it shall equal the rate determined by multiplying the Current Exchange Price in effect on
such record date by a fraction, of which the numerator shall be the total number of Common Shares
outstanding on such record date multiplied by the Current Market Price per Common Share on such
record date, less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive) of such shares or rights, options or warrants or evidences of
indebtedness or assets so distributed, and of which the denominator shall be the total number of
Common Shares outstanding on such record date multiplied by such Market Price per Common Share; any
Common Shares owned by or held for the account of FuelCell shall be deemed not to be outstanding
for the purpose of any such computation; such adjustment shall be made successively whenever
such a record date is fixed, to the extent that such distribution is not so made, the
Current Exchange Price shall be readjusted to the Current Exchange Price which would then
be in effect based upon such shares or rights, options or warrants or evidences of
indebtedness or assets actually distributed.

 

- 12 -

 

	5.6	 	No adjustments of the Current Exchange Price shall be made pursuant to subsection 5.5(b) or
5.5(c) if the holders of the Class A Preferred Shares were permitted to participate in the
issue of such rights, options or warrants or such distribution, as the case may be, as though
and to the same effect as if they had exchanged their Class A Preferred Shares into Common
Shares prior to the issue of such rights, options or warrants or such distribution as the case
may be.

	5.7	 	No adjustment of the Current Exchange Price shall be made (i) in respect of the issue of
Common Shares pursuant to the exchange of Common Shares, or (ii) in any case in which the
resulting increase or decrease in the Current Exchange Price would be less than 1% of the then
Current Exchange Price, but in such case any adjustment that would otherwise have been
required then to be made shall be carried forward and made at the time of and together with,
the next subsequent adjustment to the Current Exchange Price which, together with any and all
such adjustments so carried forward, shall result in an increase or decrease in the Current
Exchange Price by not less than 1%.

	5.8	 	The Corporation shall give notice of any adjustment of the Current Exchange Price and the
resulting adjustment of the Current Exchange Basis to the holders of Class A Preferred Shares
in the manner provided in Section 11. The Corporation may retain a firm of independent
chartered accountants (who may be the auditors of the Corporation) to make any computation
required under Section 5.5, and any computation so made shall be final and binding on the
Corporation and the holders of the Class A Preferred Shares. Such firm of independent
chartered accountants may as to questions of law, request and rely upon an opinion of counsel
(who may be counsel for the Corporation).

	5.9	 	Upon the surrender of any Class A Preferred Shares for exchange, the number of full Common
Shares issuable upon the exchange shall be computed on the basis of the aggregate
number of such Class A Preferred Shares to be exchanged in any case where a fraction of a
Common Share is involved the Corporation shall pay for such fractional interest by payment by
cheque of an amount equal to the then value of such fractional interest computed on the basis
of the Current Market Price for the Common Shares in lieu of the issuance of a fractional
share.

 

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	5.10	 	The issuance of certificates for Common Shares upon the exchange of Class A Preferred Shares
shall be made without charge to the holders of the Class A
Preferred Shares so exchanged for any fee or tax imposed on the Corporation in respect of
the issuance of such certificates for the Common Shares represented thereby; provided that
the Corporation shall not be required to pay any tax which may be imposed upon the person
or persons to whom such Common Shares are issued in respect of the delivery of such Common
Shares or the certificate therefor or which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate in a name or names other
than that of the holder of the Class A Preferred Shares exchanged, and the Corporation
shall not be required to issue or deliver such certificate unless the person or persons
requesting the issuance thereof shall have paid to the Corporation the amount of such tax
or shall have established to the satisfaction of the Corporation that such tax has been
paid.

	5.11	 	In case of any reclassification or change (other than a change resulting only from
consolidation or subdivision) of the Common Shares, or in the case of any consolidation,
amalgamation, or merger of FuelCell or the Corporation with or into any other corporation, or
in the case of any sale of their respective properties and assets as, or substantially as, an
entirety to any other corporation, each Class A Preferred Shares shall, after
such reclassification, change, consolidation, amalgamation, merger or sale, be exchangeable
into the number of shares or other securities or property of FuelCell, or such continuing,
successor or purchasing corporation, as the case may be, to which a holder of the number of
Common Shares as would have been issued if such Class A Preferred Shares had
been exchanged immediately prior to such reclassification, change,
consolidation, amalgamation, merger or sale would have been entitled upon
such reclassification, change, consolidation, amalgamation, merger or sale. The Board of
Directors may accept the certificate of any firm of independent chartered accountants (who may
be the auditors of the Corporation) as to the foregoing calculation, and the Board of
Directors may determine such entitlement on the basis of such certificate. Any such
determination shall be conclusive and binding on the Corporation and the holders of the Class
A Preferred Shares. No
such
reclassification, change, consolidation,
amalgamation, merger or sale shall be carried into effect unless, in the opinion of the Board
of Directors, all necessary steps shall have been taken to ensure that the holders of the
Class A Preferred Shares shall thereafter be entitled to receive such number of shares or
other securities or property of the Corporation, FuelCell, or such continuing,
successor or purchasing corporation, as the case my be, subject to adjustment thereafter
in accordance with provisions similar, as nearly as may be, to those contained in this Section
5.

	5.12	 	If in the opinion of the Board of Directors the provisions of this Section 5 are not strictly
applicable or if strictly applicable would not fairly protect the rights of the holders of the
Class A Preferred Shares or the Corporation in
accordance with the intent and purposes hereof, the Board of Directors shall make any
adjustment in such provisions as the Board of Directors deems appropriate.

 

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	5.13	 	If the Corporation intends to take any action which would require an adjustment of the
Current Exchange Price pursuant to Sections 5.5(a), 5.5(b), or 5.5(c) hereof (other than the
subdivision or consolidation of the outstanding Common Shares), the Corporation shall, at
least 14 days prior to the earlier of any record date fixed for any action or the effective
date for such action notify the holders of Class A Preferred Shares by written notice setting
forth the particulars of such action to the extent that such particulars have been determined
at the time of giving the notice.

	6	 	PRE-EMPTIVE RIGHTS

	6.1	 	Holders of Class A Preferred Shares shall not be entitled as of right to subscribe for or
purchase or receive any shares, bonds, debentures, or other securities of the Corporation now
or hereafter authorized, other than shares receivable upon the exercise of the right of
exchange as provided herein.

	7	 	RESTRICTIONS

	7.1	 	So long as any Class A Preferred Shares are outstanding, the Corporation shall not, without
the approval of the holders of the Class A Preferred Shares given in the same manner as
provided under Section 11:

	 	(a)	 	issue any shares ranking in priority to or pari passu with the Class A
Preferred Shares as to the payment of dividends or the distribution of assets in the
event of liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, or other distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs;

	 
	 	(b)	 	pay any dividends on any shares of the Corporation which by their terms rank
junior to the Class A Preferred Shares;

	 
	 	(c)	 	redeem or purchase or make any capital distribution in respect of any shares
of the Corporation ranking junior to the Class A Preferred Shares (except out of net
cash proceeds of a substantially concurrent issue of shares of the Corporation which
by their terms rank junior to the Class A Preferred Shares);

	 
	 	(d)	 	redeem or purchase any other shares of the Corporation ranking pari
passu with the Class A Preferred Shares; or

 

- 15 -

 

	 	(e)	 	set aside any money or make any payments for any sinking fund or other
retirement fund applicable to any shares of the Corporation ranking junior to the
Class A Preferred Shares;

	 	 	unless all dividends up to, and including, the Dividend Payment Date for the last completed
Calendar Quarter for which dividends shall be payable shall have been declared and paid or
set apart for payment in respect of the Class A Preferred Shares and all other shares
ranking on a parity with or in priority to the Class A Preferred Shares.

	 
	7.2	 	Nothing in Section 7.1 shall apply to, hinder or prevent, and authorization is hereby given
for, any of the actions referred to in such Section if consented to, or approved, by the
holders of the Class A Preferred Shares in the manner hereinafter specified or if all the
outstanding Class A Preferred Shares have been duly called for redemption and adequate
provision has been made assuring that they will be redeemed or deemed to be redeemed on or
before the date specified for redemption.

	 
	8	 	VOTING RIGHTS

	 
	8.1	 	Subject to the provisions of the Business Corporations Act (Alberta), the holders of the
Class A Preferred Shares shall not be entitled as such to any voting rights or to receive
notice of or to attend any meeting of the shareholders of the Corporation or to vote at any
such meeting (but shall be entitled to receive notice of meetings of shareholders of the
Corporation called for the purpose of authorizing the dissolution of the Corporation or the
sale of its undertakings or a substantial part thereof).

	 
	9	 	AMENDMENTS

	 
	9.1	 	The rights, privileges, restrictions and conditions attached to the Class A Preferred Shares
may not be amended, modified, suspended, altered or repealed unless consented to, or approved
by, the holders of the Class A Preferred Shares in the manner set out in Section 11 and in
accordance with any requirements of the of the Business Corporations Act (Alberta), or any
Act enacted in substitution therefor or in addition thereto applicable to the Corporation,
and any amendments thereto from time to time.

	 
	10	 	APPROVAL BY HOLDERS OF CLASS A PREFERRED SHARES

	 
	10.1	 	Any consent or approval required or permitted to be given by the holders of Preferred Shares,
Class A shall be deemed to have been sufficiently given if it shall have been given in writing
by the holders of all of the outstanding Class A Preferred Shares.

 

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	11	 	NOTICES

	 
	11.1	 	Any notice required to be given under the provisions attaching to the Class A Preferred
Shares to the holders thereof shall be given by posting same in postage paid envelope
addressed to each holder at the last address of such holder as it appears on the books of the
Corporation or, in the event of the address of any such holder not so appearing, then to the
address of such holder last known to the Corporation; provided that accidental failure or
omission to give any notice as aforesaid to one or more of such holders shall not invalidate
any action or proceeding founded thereon.

	 
	12	 	TAX ELECTION

	 
	 	 	The Corporation shall elect, in the manner and within the time provided under Section 191.2
of the Tax Act, to pay tax at a rate, and to take all other necessary action under the Tax
Act, such that no holder of Class A Preferred Shares will be required to pay tax on
dividends received or deemed to be received on Class A Preferred Shares under Section 107.2
of Part IV.1 of the Tax Act.

 

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