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 marked with an *. 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
	 	 	19	 
	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)
	*
	 	 	*	 

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

 

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 AND TERMINATION

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.

 

18

 

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.

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

Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated February 20, 2007

 

 

 

EXHIBIT B

Technology Transfer, License and Distribution Agreement

Incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q/A for the quarter ended January 31, 2009

 

 

 

EXHIBIT C

Form of DOE Approval

FEB 07 2007

Mr. R. Daniel Brdar

President and Chief Executive Officer

FuelCell Energy, Inc.

3 Great Pasture Road

Danbury, CT 06813

			
	Subject: 	Approval of Transfer of Fuel Cell Technology

Cooperative Agreement DE-FC21-95MC31184

Dear Mr. Brdar:

In accordance with my delegated authority, I accept the “adequate recognition” as set
forth in your letter dated January 18, 2007. I hereby approve your request to transfer
fuel cell technology from FuelCell Energy, Inc. (FCE) to POSCO of South Korea. Transfer
of fuel cell technology is limited to the balance of plant and information required for
integration with the balance of plant. Transfer of fuel cell stack information not
reasonably required for balance of plant integration is subject to a separate
determination if such circumstance should arise.

This approval is provided pursuant to Article 12 of Cooperative Agreement
DE-FC21-95MC31184 between FCE and NETL.

Sincerely,

/s/
Card O. Bauer

Carl O. Bauer

Director

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

	surdoval@netl.doe.gov

	 	• Voice (412) 386-6002

	• Fax (412) 386-4822 	• www.netl.doe.gov

 

 

 

EXHIBIT D

Form of MTU Consent

February
7, 2007

Mr. Michael Bode

President and CEO

MTU CFC Solutions GmbH

81663 Munchen, Germany

Re: BOP Sub-license with POSCO Power of Korea

Dear
Michael:

This
letter refers to Article 2.a. of the MTU/FCE Balance of Plant
(BOP) Cross License of July 16,
1998, as modified December 15, 1999 (the “BOP Cross
License”). As we have discussed, FCE intends to
execute a direct sub-license with POSCO Power of Korea (the “POSCO Power Sub-License”). This POSCO
Power Sub-License will be on a non-exclusive basis, will comply with the terms of the existing BOP
Cross License, as amended by the attached supplementary agreement, and will provide for the transfer
of existing BOP Know How to POSCO Power.

Therefore, FCE requests MTU’s approval, in accordance with Article 2.a of the BOP Cross License,
for FCE to enter into the POSCO Power Sub-License.

In addition, FCE proposes the attached revision to the BOP Cross License, to allow for POSCO Power
to retain rights to use MTU’s existing BOP technology,
regardless of any termination of the BOP
Cross License, subject to continued payment of royalties by FCE to MTU, and provided that MTU shall
have no rights to use any BOP technology developed by POSCO Power.

Please indicate your approval of this plan by signing both copies of this letter and the attached
modification and returning one copy of each to my attention. If you need further
information, please call or email.

Very truly yours,

/s/ Ross M. Levine, Esq

Ross
M. Levine, Esq

Director, Government Contracts

APPROVED
BY MTU CFC SOLUTIONS GmbH

	 	 	 	 	 
	/s/
Michael Bode
 

Michael Bode

	 	9/2/2007
 

Date
	 	 
	President and CEO
	 	 	 	 

	 	 	 	 	 
	 

	 	FuelCell Energy, Inc.
	 	direct  203 825 6057
	 

	 	3 Great Pasture Road
	 	fax      203 825 6069
	 

	 	Danbury, CT 06813
	 	www.fuelcellenergy.com
rlevine@fce.com

 

 

 

SUPPLEMENTARY AGREEMENT

by and between

FUEL CELL ENERGY, INC (“FCE”)

and

MTU CFC SOLUTIONS GmbH (“MTU”)

This Supplementary Agreement is made and entered into this 7th day of February 2007 (the
Effective Date) by and between FCE and MTU.

WHEREAS

FCE and MTU presently are parties to the Balance of Plant Cross-License of July 16, 1998 (the BOP
Cross License), as modified on December  15, 1999.

WHEREAS

MTU and FCE wish to revise certain terms relating to rights of the Parties upon termination of the
BOP Cross License

WHEREAS

FCE intends to execute a direct sub-license with POSCO Power of Korea entitled the “Technology
Transfer License and Distribution Agreement dated as of February 7, 2007 (the “POSCO Power
Sub-License”), which will be on a non-exclusive basis, will comply with the terms of the existing
BOP Cross License, and will provide for the transfer of existing BOP Know How to POSCO Power.

THEREFORE

The parties agree as follows:

	 	1.	 	All rights of POSCO Power to use MTU’s existing (as of the date hereof) BOP Know-How
to be transferred by FCE to POSCO Power under the POSCO Power Sub-License shall remain in
full force and effect regardless of termination of the BOP Cross License.

	 
	 	2.	 	FCE will continue to pay royalties to MTU for all such use by POSCO Power at
the rates as agreed in the BOP Cross License as if the BOP Cross License remained
in full force and effect.

	 
	 	3.	 	It is understood that the BOP Know How being licensed to POSCO Power is based on the
following definition of BOP:

 

 

 

	 	 	 	“Balance of Plant” or “BOP” shall mean all subsystems for operation and generation of
electrical power by Molten Carbonate Fuel Cell Direct FuelCells (DFC) 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.”

	 
	 	4.	 	Any and all BOP Know How that FCE may obtain from POSCO Power
during the course of the POSCO Power Sub-License shall be excluded
from all requirements of Article V of the BOP Cross License so that FCE is
not required to transfer such BOP Know How to MTU.

	 
	 	5.	 	Any and all BOP Know How that FCE may obtain from MTU subsequent
to the date hereof shall not be transferred to POSCO Power.

Except as expressly amended above, all other terms and conditions of the BOP Cross License are
unchanged and remain as first written.

IN
WITNESS WHEREOF, the parties hereto have caused this Supplementary Agreement to be executed in a
manner binding upon them by their duly authorized officers as of the
date shown below.

FUELCELL ENERGY, INC.

	 	 	 	 	 
	By:

	 	/s/ R. Daniel Brdar
 

	 	 
	

	 	Name: R. Daniel Brdar	 	 
	

	 	Title:   President and Chief Executive Officer	 	 
	 
	 	 	 	 
	Date:

February 8, 2007
	 	 
	 
	 	 	 	 
	MTU CFC

SOLUTIONS GmbH
	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael Bode
 

	 	 
	

	 	Name: Michael Bode	 	 
	

	 	Title:   President and Chief Executive Officer	 	 
	 
	 	 	 	 
	Date:

February 9, 2007
	 	 

 

2

 

EXHIBIT E

Form of Marubeni Settlement

KOREA WAIVER AGREEMENT

This Korea Waiver Agreement (this “Agreement”) is entered into by and between Marubeni Corporation,
a Japanese corporation having its principal office at 4-2 Ohtemachi-I-Chome Chiyoda-ku Tokyo
100-8088, Japan (“MC”), and FuelCell Energy, Inc., a Delaware corporation having its principal
office at 3 Great Pasture Rd., Danbury, CT 06813, USA (“FCE”), as of February 9, 2007.

RECITALS

WHEREAS, FCE and MC have entered into an Alliance Agreement dated June 15, 2001, subsequently
modified by Modification Agreements 1 through 3 (collectively “Distribution Agreements”), wherein
FCE has granted exclusive rights to sell the fuel cell products manufactured by FCE (the “Products”
or “Direct FuelCells®” or “DFC®”) in Japan, as well as non-exclusive right to sell the Products in
Korea;

WHEREAS, FCE intends to enter into an Alliance Agreement (the “POSCO Power Alliance Agreement”) and
Technology Transfer, License and Distribution Agreement (the “Technology License Agreement”) with
POSCO Power, a Korean corporation (“POSCO Power”); the effective date of the POSCO Power Alliance
Agreement is conditioned upon the receipt of certain third-party approvals, which date is expected
to be no later than April 7, 2007;

WHEREAS, MC desires to waive, abandon, release, and relinquish its rights to sell or distribute the
Products in Korea as granted in Article 2.1 of the Distribution Agreements (the “Distribution
Rights”), and, as consideration therefor, MC has requested a payment of US$ * from each of FCE and
POSCO Power, and each of FCE and POSCO Power have agreed to make such payment to MC upon the
effective date of the POSCO Power Alliance Agreement and Technology License Agreement referred to
above in the second whereas clause; and

WHEREAS, under an agreement dated April 6, 2004 MC committed to order 4 MW from FCE (“4 MW Order”),
and under a separate agreement dated March 21, 2006 MC committed to order 6 MW from FCE (“6 MW
Order”).

NOW THEREFORE, IT IS AGREED AS FOLLOWS:

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

 

 

 

ARTICLE I. WAIVER AND RELEASE BY MC

Subject to and conditioned upon FCE’s fulfillment of its obligations hereunder, and notwithstanding
any agreement, oral or written, or understanding to the contrary herein, if any, MC hereby
abandons, relinquishes, releases and waives (this “Waiver”) the Distribution Rights in Korea. This
Waiver of the Distribution Rights by MC shall become effective on the Effective Date referred to in
the POSCO Power Alliance Agreement, it being understood and agreed that the Distribution Rights
waived hereunder shall revert back to MC if POSCO Power will not have begun manufacture of the
commercial balance of plant in Korea for use with fuel cell stack modules manufactured by FCE at
its facilities in Connecticut, USA, within two years of the Effective Date referred to in the POSCO
Power Alliance Agreement, provided that, if the delay in the manufacture of the commercial
balance of plant in Korea is caused by reasons beyond the reasonable control of POSCO Power, or any
delay in FCE’s transfer of the relevant know-how, technology and other necessary information for
the manufacture of the balance of plant, POSCO Power shall be given an additional reasonable period
as long as POSCO Power is making good faith efforts to begin the manufacture of the commercial
balance of plant, as mutually agreed upon by FCE, MC, and POSCO Power in good faith, to manufacture
the commercial balance of plant in Korea. In the event of any delays for which extension of period
is required, FCE, MC and POSCO Power shall start the discussion about corrective action and agree
upon a reasonable extension period immediately.

ARTICLE II. FCE OBLIGATIONS

In consideration for the Waiver of the Distribution Rights, POSCO Power will agree under a separate
agreement with MC to make a payment to MC in the sum of * U.S. Dollars (U.S.$ * ) within sixty
(60) days after the Effective Date referred to in the POSCO Power Alliance Agreement; and FCE
agrees hereunder to pay MC the sum of * U.S. Dollars (U.S.$ * ) on or before the first
anniversary of the Effective Date referred to in the POSCO Power Alliance Agreement.

FCE further agrees that, as orders are received from POSCO Power under the POSCO Power Alliance
Agreement, MC shall receive credit against existing backlog commitments to FCE, up to a maximum of
2.25 MW; and such credit shall be applied sequentially, first to the 4 MW Order and subsequently to
the 6 MW Order, thereby reducing the order obligation from MC to FCE in aggregate by 2.25 MW. In
the event that an order is placed to FCE by MC pursuant to this Agreement which exceeds the
remaining backlog commitment under the 4 MW Order, FCE agrees that the remaining credit will be
applied to the 6 MW Order at the same time.

FCE further acknowledges that MC is planning to establish an independent power plant (IPP) in Korea
(hereinafter “IPP Project”), and that POSCO Power has consented to the IPP Project as part of the
POSCO Power Alliance Agreement. In the event that the IPP Project determines to use the Products
at its discretion, MC agrees to purchase said Products for the IPP Project from FCE and
subsequently to sell said Products to POSCO Power, subject to POSCO Power’s agreement in turn to
sell said Products to the IPP Project with nominal mark-up by POSCO Power. The IPP Project shall
be no larger than 5.3 MW in total output except for such IPP projects as approved by POSCO in good
faith negotiation with MC. The production release from MC to FCE, under 4 MW Order first and
subsequently under 6 MW Order, for such Products must be received in a form acceptable to FCE
within 12 months after the Effective Date referred to in the POSCO Power Alliance Agreement, and
must be delivered to the customer site within 24 months of said date, subject only to any delays
caused by FCE’s normal manufacturing schedule. Pricing from FCE to MC for such Products under the
IPP Project for DFC1500MA and/or DFC3000 units (“MW-class DFC Units”) shall be $ * until the
remaining backlog order commitment under the 4 MW Order is exhausted; after which the pricing for
MW-class DFC Units pursuant to this Agreement from FCE to MC shall be $ * .

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

 

 

 

Subject to POSCO Power’s agreement to allow the development of additional projects by MC in Korea
after the second anniversary of the effective date of the POSCO Power Alliance Agreement, MC agrees
to purchase
power plants under such projects from POSCO Power directly.

All such IPP Projects in Korea shall require a long-term service agreement (LTSA) to be executed by
the IPP with FCE, or FCE’s servicing representative as shall be designated by FCE to provide
service on behalf of FCE, at prices indicated on FCE’s standard service agreements in effect as of
October 2007, or other price as may be mutually agreed to make the IPP Projects economically
feasible.

ARTICLE III. REPRESENTATIONS AND WARRANTIES

Each party hereby represents and warrants that it has the authority to enter into this Agreement
and execute and deliver the documents required hereunder, if any.

ARTICLE IV. MISCELLANEOUS PROVISIONS

4.1. Successors. Except as otherwise provided herein, this Agreement and all of its terms
and provisions shall inure to the benefit of, and shall be binding upon the heirs, legal
representatives, successors and assigns of the respective parties and each of them.

4.2 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, USA.

4.3. Entire Agreement. This Agreement embodies the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein and is an integrated
contract.

4.4. Severability. If any provision of this Agreement, or the application of such provision
to any person or circumstance, shall be held invalid, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those as to which is held
invalid, shall not be affected thereby.

4.5. Confidentiality. The parties hereto agree to keep all information contained
herein confidential, unless public disclosure is authorized in writing by the other parties to this
agreement.

4.6. Fax Signatures. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one and the same
instrument.

4.7. Disclosure. MC and FCE agree that a copy of the executed version of this
Agreement may be provided to POSCO and POSCO Power without violating confidentiality provisions
between FCE and MC. FCE and MC acknowledge that POSCO Power is a beneficiary of this Agreement.

4.8. Effective Date. This Agreement shall become effective upon the last to occur
of the following events: (a) execution by the parties; and (b) the Effective Date referred to in
the POSCO Power Alliance Agreement.

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above set forth.

MARUBENI CORPORATION

	 	 	 	 	 	 
	By:
	 	/s/ Kenji Natori 	 
	 	 	Printed Name:

	 	Kenji Natori	 
	 	 	Title:

	 	General Manager, 
New Technology & Renewable Energy Dept.	 
	 
	 	 	 	 	 
	Date: February 9, 2007	 
	 	 	 	 	 	 
	FUELCELL ENERGY, INC
 
	By:
	 	/s/ R. Daniel Brdar 	 
	 	 	Printed Name:
	 	R. Daniel Brdar	 
	 	 	Title:
	 	President and CEO	 
	 
	 
	 	 	 	 
	Date:
	 	2/19/07	 	 

 

 

 

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 marked with an *. 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 10
th 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 4.1% 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 2.6% of the Net Sales; and

 

9

 

(ii) in shares of the capital stock (“NewCo Stock”) of NewCo equal to 1.5% of the Net
Sales, up to 5% 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 5% of the total outstanding capital stock of
NewCo, POSCO Power may, at its sole and absolute discretion, choose to pay the amount exceeding
2.6% 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.

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

 

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 10% of the difference between the royalty amount determined by the Royalty
Determination Firm and the royalty amount determined by the independent determination firm.

V. 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.

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

 

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, 10 th 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

TECHNOLOGY TRANSFER PROGRAM

THIS TECHNOLOGY TRANSFER PROGRAM (“TTP”) is made and entered into this 11th day of
July, 2007, to be effective as of July 11, 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”).

This TTP is made and entered into by the Parties pursuant to Section 4.1(d) of the Alliance
Agreement dated February 7, 2007 (the “Alliance Agreement”) and is made part of the Technology
Transfer, Licensing and Distribution Agreement dated February 7, 2007 (the “TTA”). Capitalized
terms used herein, but not defined herein, shall have the meanings given to them in the TTA or the
Alliance Agreement, as applicable.

The purpose of this TTP is to describe the transfer by FCE to POSCO Power of the FCE
Technology which shall have the meaning set forth in the Technology Transfer Agreement.

Section 1. Technology to be transferred by TTP

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

	1.1	 	Technology to be Transferred in Phase 1

FCE shall transfer to POSCO Power the technology, information, and know-how described in the this
section relating to POSCO Power/POSCO Affiliate’s Phase 1 activities.

	1.1.1	 	Detailed design of BOP and module interfaces with respect to marketing and service,
including:

	 	a.	 	Equipment Documentation (manuals, etc)

	 
	 	b.	 	Product Specifications

	 
	 	c.	 	Product Application Guides

	 
	 	d.	 	Power plant Manuals — Installation, Maintenance, Operation

	 
	 	e.	 	Training Materials

	 
	 	f.	 	Process & Instrumentation Diagrams (“P&IDs”)

	 
	 	g.	 	Instrument Lists

	 
	 	h.	 	Top Level Control Logic

	 
	 	i.	 	Electrical Drawings

 

 

 

	 	j.	 	Detailed General Arrangement Drawings

	 
	 	k.	 	Equipment Lists

	 
	 	l.	 	Heat and material balance data

	 
	 	m.	 	FCE’s current BOP vendors list including target cost level under FCE’s cost-out program

	 
	 	n.	 	Software architecture description

	1.1.2	 	Mechanical design detail, routing detail, piping isometrics, and related information
necessary for fabrication of BOP for FCE’s existing DFC Products, including:

	 	a.	 	P&ID’s

	 
	 	b.	 	Instrument Lists

	 
	 	c.	 	Detailed Electrical Drawings, including routing

	 
	 	d.	 	Detailed General Arrangement Drawings

	 
	 	e.	 	Equipment Specifications

	 
	 	f.	 	Equipment Layout Drawings

	 
	 	g.	 	Piping Isometrics

	 
	 	h.	 	QC Procedures

	1.1.3	 	Second-level of BOP design information, as listed below. The information described in this
section will be provided by FCE to POSCO Power/POSCO Affiliate after it is assembled into a
single document by FCE, but not later than the conclusion of the Phase 1 activities.

	 	a.	 	Power plant design basis used by FCE to design the current DFC Products: this
includes assumptions about ambient conditions, fuel compositions, and module
performance characteristics.

	 
	 	b.	 	Heat/Mass balance calculations used in FCE power plant design.

	 
	 	c.	 	Stack Module Application Information: a summary of the requirements which the
BOP must meet for proper operation of a stack module, such as: heat-up and cool down
rates and module heat up characteristics (heat capacity); pressure limitations;
required gas compositions; required flows and flow rate limitations; startup
procedures; module mechanical interfaces; module electrical interfaces; module
instrument interfaces; module handling approaches and limitations; module performance
characteristics of voltage versus current; performance decay; and pressure drop versus
flow characteristics.

	 
	 	d.	 	Detailed software list and source codes, which are owned by FCE, and which are
applicable to FCE Products.

	1.1.4	 	Other information and know-how to achieve the objectives of Phase 1 may be made available by
FCE to POSCO Power, if needed, under the mutual agreement between two parties.

 

 

 

	1.2	 	Technology to be Transferred in Phase 2

FCE shall transfer to POSCO Power/POSCO Affiliate the technology, information, and know-how
described in this section during Phase 2. The technology transfer in this phase shall relate to:

	 	a.	 	the BOP mechanical and electrical design basis

	 
	 	b.	 	FCE’s product development process (PDP)

	 
	 	c.	 	heat and mass balance modeling assumptions, for the purpose of supporting POSCO
Power/POSCO Affiliate in the development of capability to independently model the DFC
system

	 
	 	d.	 	the product certification approach used by FCE in the design of the DFC
Products.

	1.3	 	Technology to be Transferred in Phase 3

FCE shall transfer to POSCO Power/POSCO Affiliate the technology, information, and know-how
described in this section during Phase 3. The technology transfer in this phase shall relate to:

	 	a.	 	manufacturing BOP of the next-generation FCE products such as future
improvements and enhancements.

Other information and know-how shall be made available by FCE to POSCO Power, if needed, under the
mutual agreement between two parties.

Section 2. Method for the Technology Transfer

	2.1	 	Personnel

Each of FCE and POSCO Power/POSCO Affiliate will appoint a dedicated Program Manager to serve as
the primary point of interface between POSCO Power/POSCO Affiliate and FCE. FCE will also support
the program with management and expertise gathered from its engineering department and related
departments, on an as-needed basis.

	2.2	 	Mechanism for the Transfer of Technology

Information will be transferred initially in CD format, and on a continuing basis using a
web-based portal. FCE will notify POSCO Power as soon as practicable when any changes to the
information have been made by FCE, and will post such modified information on the web portal for
downloading by POSCO Power/POSCO Affiliate.

A procedure for managing changes to the design of the BOP shall be implemented and maintained by
both parties mutually.

 

 

 

	2.3	 	Training

	2.3.1	 	Standard Training Classes

FCE shall make available to POSCO Power/POSCO Affiliate the training classes described in
Attachment 8. The Parties agree that POSCO Power/POSCO Affiliate may have the discretion to select
the classes, the size of each class, and the time and frequency of the selected classes, provided
that POSCO Power/POSCO Affiliate provides a reasonable advance notice to FCE. POSCO Power/POSCO
Affiliate agrees to pay for certain classes, as set forth in Attachment 8.

	2.3.2	 	Training in FCE Engineering Procedures

In addition to the training described in Attachment 8, FCE will offer to POSCO Power/POSCO
Affiliate training in engineering procedures as outlined below. Training under this section will
be provided without additional charge to POSCO Power/POSCO Affiliate.

	 	a.	 	engineering change process;

	 
	 	b.	 	engineering coordination memo system;

	 
	 	c.	 	SmartPlant Review software to enable viewing the MBOP model;

	 
	 	d.	 	standard FCE factory test procedures;

	 
	 	e.	 	power plant testing and certification procedures;

	 
	 	f.	 	applications engineering.

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

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

	2.4	 	Meetings

	2.4.1	 	Regular Meetings

Regular meetings will take place as outlined in Attachment 2. POSCO Power/POSCO Affiliate and FCE
will implement a schedule for further regular meetings after end of the schedule of Attachment 2 on
mutual agreement. Following is a brief description of the various types of meetings which shall be
scheduled:

	 	a.	 	Program Reviews are conducted to ensure that design milestones have been met in
accordance with the requirements outlined in the Product Development Process (PDP), prior
to proceeding to the next stage. FCE will transfer detailed procedures outlining the
entire PDP, including the protocol for Program Reviews.

 

 

 

	 	b.	 	Product Design Reviews are technical reviews of various types, including conceptual,
preliminary and detailed; and also including layout, maintenance and accessibility,
subsystems performance, safety, etc.

	 
	 	c.	 	Facility Design Reviews are technical reviews of manufacturing facilities, and they
are conducted to ensure best practices in manufacturing are captured prior to commencing
construction activities. FCE proposes both preliminary and final Facility Design Reviews
during Phase 1.

	 
	 	d.	 	Hazardous Operations Reviews (“Haz Ops”) are studies of the hazardous operation of the
power plant conducted by cross-functional teams, conducted to ensure safety of operation.
FCE will make available training in the methodology for conducting the Haz Op.

	2.4.2	 	Ad Hoc Meetings

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

Section 3. Schedule

Technology Transfer listed in Section 1.1 shall commence in March 2007 and shall be completed by
February 2008. Technology Transfer listed in Sections 1.2 and 1.3 shall be made in accordance with
the schedule set forth in Sections 2.3 and 3.3 of Exhibit “A”, respectively. If any update or
modification for FCE Products is made after commencement of the technology transfer, such update or
modification shall be notified and transferred to POSCO Power/POSCO Affiliate as soon as
practicable within first four weeks from such update and modification is made.

Web-based portal shall be open and available for access by POSCO Power/POSCO affiliate in March
2007. POSCO Power/POSCO Affiliate may download documents and drawings of FCE Technology and
coordinate with FCE engineering person at this web-based portal.

Necessary training and personnel dispatch shall be performed on an as-needed basis by mutual
agreement.

Section 4. Costs

FCE shall use commercially reasonable efforts to make available technical consultation and
assistance in connection with POSCO Power/POSCO Affiliate’s activities under this TTP without
additional charge, provided, however, that FCE shall not be obligated to provide such assistance in
excess of 500 man-days per year in year 1 and year 2; 300 man-days per year in subsequent years for
the duration of the TTP; or a total of six man-years in aggregate for the duration of the TTP.
Additional man-days beyond the amounts listed above, may be provided by FCE subject to availability
of personnel. Payments from POSCO Power to FCE for additional man-days, if any, shall be based upon
mutually agreeable terms and conditions. For the purposes of this section, a “man-day”
shall be defined as eight (8) working hours, and a “man-year” shall be defined as 1,920
working hours.

 

 

 

Reporting. At the end of each month, FCE shall provide monthly reports to POSCO Power,
stating the number of man-days consumed, and the number of man-days remaining, in the applicable
calendar year. Additionally, FCE shall provide on a quarterly basis (at the end of January, April,
July and October) a Work Progress Summary outlining activities and deliverables completed or
ongoing from the prior reporting period. POSCO Power shall return to FCE by fax or email within 10
business days, a signed acknowledgement copy of the quarterly Work Progress Summary.

Documented travel and living expenses for FCE personnel during visits to POSCO Power/POSCO
Affiliate facilities in Korea or other locations, when carried out pursuant to this TTP or at the
request of POSCO Power or POSCO Affiliate, shall be borne by POSCO Power or POSCO Affiliate, or if
paid by FCE, shall be reimbursed to FCE. The payment standard for traveling expenses by FCE’s
supervisors is provided as Attachment 7 to this TTP. POSCO Power or POSCO Affiliate agrees to
provide updates to FCE whenever the payment standard for traveling expenses is changed. Invoices
from FCE to POSCO Power/POSCO Affiliates shall issued to POSCON, at 606 Ho-dong Nam-gu, Pohang,
Kyungbuk 790-719, Korea, attention Mr. Young-Gil Kwon.

Section 5. Obligation to Exercise Best Good Faith Efforts

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

Section 6. Action Plans for Technology Transfer Program

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

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

Dated: July 11, 2007

	 	 	 
	Fuel Cell Energy, Inc.

	 	POSCO Power
	 
	 	 
	/s/ R. Daniel Brdar	 	/s/ S. W. Lee
	By: R. Daniel Brdar

	 	By: S. W. Lee

 

 

 

List of Exhibits and Attachments

LIST OF EXHIBITS

	 	 	 
	Exhibit “A”

	 	Action Plans for Technology Transfer Program
	 
	 	 
	LIST OF ATTACHMENTS
	 
	 	 
	Attachment 1:

	 	Facility Requirements
	Attachment 2:

	 	Schedule for Technology Transfer in Phase 1
	Attachment 3:

	 	Product Development Schedule in Phase 1
	Attachment 4:

	 	Division of Scope and Responsibility in Phase 2
	Attachment 5:

	 	Example of Program Schedule for Phase 2
	Attachment 6:

	 	Representative Schedule for Design and Construction of
Manufacturing Facility
	Attachment 7:

	 	Payment Standard for Traveling Expenses by FCE’s Supervisors
	Attachment 8:

	 	FCE Training Courses

 

 

 

EXHIBIT “A”

ACTION PLAN

FOR TECHNOLOGY TRANSFER PROGRAM

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

This Action Plan is organized into three phases, corresponding to discrete product development
activities to be undertaken by POSCO Power/POSCO Affiliate in the early years of FCE and POSCO
Power’s 10-year TTA. The process will begin with initial transfer of technical information, and
training of POSCO Power/POSCO Affiliate personnel, relating to the manufacture of the current
generation BOP to FCE’s design. Upon achieving certain product development milestones as described
herein, and reaching a sufficient level of familiarity with FCE’s design and technology, POSCO
Power/POSCO Affiliate and FCE anticipate in Phase 2 the co-development of BOP for one of FCE’s
next-generation DFC products. Finally, in Phase 3, POSCO Power/POSCO Affiliate will develop BOP for
a future generation DFC product.

The product development activity will be centered around the licensed technology as defined
in the TTA. Within the limits of the licensed technology as defined in the TTA, POSCO Power will
determine which product best meets the market demands in the territory including Korea. FCE will
follow POSCO Power’s recommendations, and structure of this Action Plan accordingly.

Section 1. Phase 1

1.2 Description & Scope

The focus of this phase is BOP fabrication in Korea, with locally sourced BOP or FCE’s current BOP
components manufactured to FCE’s existing designs for the DFC products.

It is anticipated that the first product manufactured by POSCO Power/POSCO Affiliate will be the
DFC300MA. However POSCO Power may elect to manufacture the DFC1500MA or the DFC3000 at POSCO
Power’s sole discretion based on the outcome of their market study activity.

The first article DFC BOP manufactured by POSCO Power/POSCO Affiliate in Phase 1 is to be tested
at a test facility, not a customer site, in Korea.

 

 

 

1.2.1 During this phase, FCE agrees to do the followings:

(i) to make available technology, information, and know-how relating to:

Fabrication of the BOP for POSCO Products in a modified but existing POSCO Power/POSCO
Affiliate facility, using the existing design of FCE;

Pre-shipment performance testing and quality evaluations for demonstrating achievement
of contract requirements and safety standards; and

Installation and commissioning of power plants at end customers’ facilities.

(ii) to transfer know-how relating to comprehensive operation and maintenance service support
to end use customers. For power plants sold to customers during years 1 to 3, FCE will undertake
this responsibility, using FCE personnel stationed in Korea, or other arrangement as may be
mutually agreed between FCE and POSCO Power. The commercial terms and program approach for service
activities described in this paragraph are as outlined in the TTA.

(iii) to purchase EBOP and MBOP manufactured by POSCO Power/POSCO Affiliate during Phase 1
for sale to FCE’s customers in North America; provided that FCE’s cost targets, commercial
performance levels, and quality standards are met, which shall be communicated to POSCO
Power/POSCO Affiliate in advance. The determination whether to procure BOP from POSCO Power/POSCO
Affiliate for sale to FCE’s customers shall be made at the sole discretion of FCE.

(iv) to assist POSCO Power/POSCO Affiliate regarding procurement of BOP components from FCE
vendors until such time as POSCO Power/POSCO Affiliate’s vendor network is developed. FCE shall
use commercially reasonable efforts to supply BOP components from FCE’s vendors to POSCO
Power/POSCO Affiliate with favorable conditions.

1.2.2 During this phase, POSCO Power/POSCO Affiliate agree to do the followings:

(i) to design and manufacture EBOP units to FCE’s performance
specifications and cost targets.

(ii) to translate into Korean and otherwise adapt FCE’s DFC user interface for suitable
application in the Korean market. The primary responsibility for this work shall belong to POSCO
Power/POSCO Affiliate, but FCE agrees to provide technical support and respond to questions from
POSCO Power/POSCO Affiliate that arise during the process of adapting and designing the user
interface.

 

 

 

(iii) to begin the efforts to purchase BOP components from local vendors,
following FCE’s designs and specifications.

(iv) not to contact FCE’s sub-vendors directly without FCE’s approval.

1.3 Technology to be Transferred in Phase 1

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

Additionally, the capabilities and requirements for the fabrication facility to be constructed by
POSCO Power/POSCO Affiliate in Phase 1 are provided in Attachment 1.

1.4 Schedule for Phase 1

It is anticipated during Phase 1 POSCO Power/POSCO Affiliate shall construct the BOP manufacturing
facility in Korea, and shall complete a successful test of a first article power plant with an
MBOP fabricated by POSCO Power/POSCO Affiliate in Korea.

POSCO Power/POSCO Affiliate’s product development plan calls for, and FCE agrees to support with
technology transfer as described herein: the construction of a manufacturing facility to
manufacture BOP in Korea by October 2008; the manufacture and shipment of the first commercial BOP
for DFC300MA to a customer in Korea in January 2009; and the manufacture and shipment of the first
commercial BOP for MW-class DFC Products in late 2009.

To support this schedule under Phase 1, FCE and POSCO Power/POSCO Affiliate will work together, and
FCE agrees to make available technology to POSCO Power/POSCO Affiliate, according to the detailed
schedule shown on the table provided in Attachment 2. Attachment 3 provides another view of the
schedule for Phase 1. FCE and POSCO Power/POSCO Affiliate acknowledge that the schedules are
preliminary in nature, based on information available at this time, and are subject to change.

Section 2. Phase 2

2.1 Description & Scope

In this phase, POSCO Power/POSCO Affiliate and FCE will jointly develop the next-generation BOP
for one of the DFC products, either sub-MW or MW-class, as determined jointly by FCE and POSCO
Power/POSCO Affiliate. Technology, information, and know-how related to the BOP for DFC products
which are actively being developed under this phase, as well as those which are not actively being
developed will be made available as set forth below. Considering resource constraints of
both parties and market demands, FCE and POSCO Power/POSCO Affiliate shall determine the
scope of their co-development efforts by mutual agreement.

 

 

 

This phase work will be aimed at the co-development of a new BOP design which is intended to meet
or exceed the FCE cost, performance and quality targets for the next generation of DFC products.

2.1.1. During this phase, FCE agrees to do the followings:

(i) to purchase BOP manufactured by POSCO Power/POSCO Affiliate during Phase 2 for sale to
FCE’s customers in North America; provided that, FCE’s cost targets, commercial performance
levels, and quality standards are met, which shall be communicated to POSCO Power/POSCO Affiliate
in advance. The determination whether to procure BOP from POSCO Power/POSCO Affiliate for sale to
FCE’s customers shall be made at the sole discretion of FCE.

2.1.2. During this phase, POSCO Power/POSCO Affiliate agree to do the followings:

(i) build the necessary expertise and capability to contribute to this effort during the
preceding phase of work between the two companies.

A detailed breakdown showing the division of scope and responsibility between POSCO Power and FCE
during this phase is provided in Attachment 4. The division of scope and responsibility between
POSCO Power and FCE shall be changed, if needed, by mutual agreement.

2.2 Technology to be Transferred in Phase 2

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

2.3 Schedule for Phase 2

Phase 2 is anticipated to begin as early as March 1 2008, and FCE agrees to support the achievement
of such schedule as set forth herein. The actual commencement date for Phase 2 shall be determined
by POSCO Power/POSCO Affiliate’s readiness to commence the Phase 2 activities. Additionally, in
phase 2 FCE shall provide training regarding POSCO Power/POSCO Affiliate’s independently performing
BOP system design starting in phase 3. Commencement of Phase 3 activity shall also be determined by
the completion status of the Phase 2 training activity.

In order to support FCE’s resource planning efforts, POSCO Power/POSCO Affiliate and FCE will
mutually agree on or before September 1, 2007, which product the parties shall jointly develop
under Phase 2.

 

 

 

An example schedule showing key milestones under the Phase 2 development program is
provided as Attachment 5.

Section 3. Phase 3

1 Description & Scope

In this phase, POSCO Power/POSCO Affiliate will receive technology transfer from FCE, including
formal training as well as on-the-job training and co-work with FCE, concerning POSCO Power/POSCO
Affiliate’s developing BOP for future generation DFC products substantially without the support of
FCE. The product development focus in Phase 3 is anticipated to be MW-class products, in keeping
with the current outlook for the Korean and other markets defined the Alliance Agreement.

3.1.1
During this phase, FCE agrees to do the followings:

(i) to purchase BOP manufactured by POSCO Power/POSCO Affiliate during Phase 2 for sale to
FCE’s customers in North America; provided that, FCE’s cost targets, commercial performance
levels, and quality standards are met, which shall be communicated to POSCO Power/POSCO Affiliate
in advance. The determination whether to procure BOP from POSCO Power/POSCO Affiliate for sale to
FCE’s customers shall be made at the sole discretion of FCE.

3.1.2 During Phase 2, POSCO Power/POSCO Affiliate agree to do the followings:

(i) to make an actual decision which product will be developed.

3.2 Technology to be Transferred in Phase 3

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

3.3 Schedule for Phase 3

Phase 3 is anticipated to begin as early as possible, and FCE agrees to support the achievement of
such schedule within commercially reasonable efforts. The actual commencement date for Phase 3
shall be determined by POSCO Power/POSCO Affiliate’s readiness to commence the Phase 3 activities.
Additionally, completion of the first article test of the product developed under Phase 2 is to be
expected prior to the commencement of Phase 3.

 

 

 

Section 4. Manufacturing Related Activities

FCE shall additionally make available technology, information, and know-how relating to
factory design, to be used by POSCO Power/POSCO Affiliate in the construction of facilities for the
manufacturing of BOP for POSCO Products. A representative schedule for design and construction of
the BOP manufacturing facility is provided as Attachment 6.

Section 5. Reporting from POSCO Power to FCE

POSCO Power/POSCO Affiliates shall provide on a quarterly basis a Work Progress Summary outlining
activities and deliverables completed or ongoing from the prior reporting period.

 

 

 

Attachment
1. Facility Requirements

(Capabilities
& Requirements for Design and Manufacturing)

	 	 	 	 	 
	Area	 	Requirements:
	Manufacturing

	 	•
	 	Square footage to support rate production
	Facility

	 	•
	 	Indoor assembly area
	 

	 	•
	 	Separate fabrication / welding and assembly areas
	 

	 	•
	 	30T overhead crane with 20’ lift
	 

	 	•
	 	15T forklift
	 

	 	•
	 	3 phase 480V 60 Hz / 3 phase 400V 50 Hz for skid testing
	 

	 	•
	 	Natural gas available (low priority)
	 

	 	•
	 	Coil steel handling capability
	 

	 	•
	 	CNC shear / punch / brake
	 

	 	•
	 	Laser / plasma/water jet cutter
	 

	 	•
	 	Automated welding (orbital welder for pipe, robot for sheet / plate)
	 

	 	•
	 	CNC drilling (15-20’ horizontal bed for skid base drilling)
	 

	 	•
	 	Rolls (tank sides / large diameter pipe)
	 

	 	•
	 	Hydro / pneumatic testing (pipes / vessels)
	 

	 	•
	 	Machine shop capabilities
	 

	 	•
	 	Sand Blast / paint (liquid or powder coat)
	 

	 	•
	 	Inspection tooling
	 

	 	•
	 	I/C tools (4-20 loop calibrators, TC readouts, pressure calibrators)
	 

	 	•
	 	Electrical tools (megger, hi-pot set)
	 

	 	•
	 	Electrical Panel Shop
	 

	 	•
	 	Adequate storage facility for completed BOPs.
	 
	 	 	 	 
	Capabilities

	 	•
	 	Certified welders (SMAW/GMAW) for structural and piping
	Required for

	 	•
	 	Mechanics / Pipe fitters / Assemblers
	BOP

	 	•
	 	Machinists / Toolmakers
	Fabrication *

	 	•
	 	Sheet metal fabricators
	 

	 	•
	 	Wiremen / panel builders / electricians
	 

	 	•
	 	Instrument technicians (capable of performing full BOP testing)
	 

	 	•
	 	Insulators / Estimators
	 

	 	•
	 	Independent Quality Assurance department
	 

	 	•
	 	Purchasing
	 

	 	•
	 	Shipping and Receiving
	 

	 	•
	 	Painters
	 

	 	•
	 	Manufacturing / Project engineers
	 

	 	•
	 	Welding engineers (AWS familiarity)

	 	•	 	Required within POSCO Power’s facility or through local contract vendors

 

 

 

Attachment 1. Facility Requirements (cont.)

	 	 	 	 	 
	Material

	 	•
	 	Metals experience (welding / fabrication): carbon steel, stainless steel, aluminum
	Processing

	 	•
	 	Copper brazing experience (tubing)
	 

	 	•
	 	Wood crate fabrication for export shipping
	 

	 	•
	 	Shipping shrink wrap experience
	 

	 	•
	 	Close proximity to mills / steel distributors
	 

	 	•
	 	Close proximity to galvanizing facilities
	 

	 	•
	 	Segregated carbon steel and stainless steel work areas
	 

	 	•
	 	Willingness to handle (load) sorbent and catalyst media into vessels
	 

	 	•
	 	Insulation and jacketing experience (mineral wool, ceramic fiber, micro-porous silica)
	 

	 	•
	 	Decal (plant logos) application experience (or ability to source locally)
	 

	 	•
	 	Painting (carboline or equivalent)
	 
	 	 	 	 
	Quality System

	 	•
	 	ISO 17025 Certified (covers test equipment calibration)
	 

	 	•
	 	Document Control
	 

	 	•
	 	Incoming Material Inspection
	 

	 	•
	 	Welder Certifications
	 

	 	•
	 	Non-conforming Material Handling Procedures
	 

	 	•
	 	Corrective & Preventive Action Procedures
	 

	 	•
	 	Supplier Qualification Procedures
	 

	 	•
	 	Manufacturing Procedures
	 

	 	•
	 	Quality Audit Process
	 
	 	 	 	 
	Engineering /

	 	•
	 	Mechanical Engineers (ASME / DIN familiarity)
	Design

	 	•
	 	Electrical Engineers (NEC familiarity, & utility interconnect knowledge)
	 

	 	•
	 	Structural Engineers (AISC familiarity)
	 

	 	•
	 	Piping Engineers (ASME familiarity)
	 

	 	•
	 	Chemical Engineer
	 

	 	•
	 	Instrument / Controls Engineer
	 

	 	•
	 	CAD Modeling / Drafting (mechanical / electrical Autocad, Integraph PDS and Smart Plant
Review)
	 

	 	•
	 	Understanding of CSA FC-1 fuel cell safety standard and IEC 62283-3-1 fuel cell safety standard
(in draft)
	 

	 	•
	 	Knowledge of ASME “U”, “PP” (code vessels, code piping)
	 
	 	 	 	 
	Required

	 	•
	 	ANSI / CSA America FC1 — Standard for Fuel Cell Power Plants
	Certifications

	 	•
	 	UL 1741 — 2007 — Standard for Power Conversion Systems
	(Powerplant)

	 	•
	 	California Rule 21 — Utility Interconnection Standard for California
	 

	 	•
	 	CARB 07 — Standard for Distributed Generation Unit Emissions (CCR 94200-94214) for
	 

	 	 
	 	Operation on Natural Gas in the State of California
	 
	 	 	 	 
	Applicable Codes
and Standards

	 	•
	 	IEEE 1574-2003 — Standard for Interconecting Distributed Resources with Electric Power
Systems
	 
	 	•
	 	IEEE 1547.1 — 2005 —
Standard for Conformance Test Procedures for Equipment Interconnecting Distributed Resources with Electric Power Systems.
	 

	 	•
	 	NFPA 70 — 2005 — National Electric Code
	 

	 	•
	 	NFPA 853 — 2003 — Standard for Installation of Fuel Cell Power Plants
	 

	 	•
	 	ASME piping and vessel codes, as applicable per process conditions
	 

	 	•
	 	OSHA General Industry Standards — 29 CFR Part 1910

 

 

 

Attachment 2. Schedule for Technology Transfer in Phase 1

	 	 	 	 	 	 	 
	Start	 	End	 	Where	 	Action
	9 March 2007

	 	Upon completion
of document
transfer
	 	Remote
	 	Entire MBOP Fabrication
Documentation Transferred for
DFC300, DFC1500 & DFC3000
	 
	 	 	 	 	 	 
	12 March 2007

	 	One week
	 	FCE
	 	Kick-off training program: orientation for
how to use different types of information
provided; how to use the web portal etc.
	 
	 	 	 	 	 	 
	9 March 2007

	 	End of Phase 1
	 	Remote
	 	Engineering Coordination Memo web-based
portal open
	 
	 	 	 	 	 	 
	12 March 2007

	 	End of 1st Article
Test (est. 29 Feb
08)
	 	Remote
	 	Weekly Conference Call coordination

meetings
	 
	 	 	 	 	 	 
	16 April 07

14 May 07

18 June 07

	 	Estimated
duration 3 to 5
days
	 	POSCO Power

or FCE
	 	Monthly Coordination Meetings
	 
	 	 	 	 	 	 
	30 April 07

	 	Estimated
duration 2 to 3
days
	 	FCE
	 	POSCO Power/POSCO Affiliate’s
Existing Fabrication Facility
Modification & Process Design Review
	 
	 	 	 	 	 	 
	2 July 07

	 	Estimated
duration 2 to 3
days
	 	FCE
	 	POSCO Power/POSCO Affiliate’s New
Fabrication Facility & Process
Preliminary Design Review
	 
	 	 	 	 	 	 
	15 Oct 07

12 Nov 07

10 Dec 07

	 	Estimated
duration 2 to 3
days
	 	POSCO Power

or FCE
	 	Monthly Coordination Meetings
	 
	 	 	 	 	 	 
	22 Oct 07

	 	Estimated
duration 2 to 3
days
	 	FCE
	 	POSCO Power/POSCO Affiliate New

Fabrication Facility & Process Final

Design Review
	 
	 	 	 	 	 	 
	7 Jan 08

	 	Estimated
duration 5 days
	 	POSCO Power
	 	FCE Assist POSCO Power/POSCO
Affiliate with MBOP First Article Factory Test
	 
	 	 	 	 	 	 
	14 Jan 08

	 	1 Feb 08
	 	POSCO Power
	 	FCE Assist POSCO Power/POSCO Affiliate with
MBOP/EBOP/FC Module Integration
	 
	 	 	 	 	 	 
	4 Feb 08

	 	29 Feb 08
	 	POSCO Power
	 	First Article Test:

FCE Engineering and Field Service
Support of 1st Article Test

 

 

 

Attachment 3. Product Development Schedule in Phase 1

 

 

 

Attachment 4. Division of Scope and Responsibility in Phase 2

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	FCE w/	 	POSCO
	 	 	 	 	 	 	POSCO	 	Power w/
	 	 	 	 	POSCO	 	Power	 	FCE
	Task	 	FCE	 	Power	 	Support	 	Support
	Generate / Maintain Program Schedule
	 	 	 	 	 	X	 	 
	Develop Power Plant Specification & Design Guidelines
	 	 	 	 	 	X	 	 
	Module Design & Development
	 	X	 	 	 	 	 	 
	Electrical Balance of Plant Specification
	 	X	 	 	 	 	 	 
	Electrical Balance of Plant Sourcing
	 	 	 	 	 	 	 	X
	Configuration Control
	 	 	 	 	 	X	 	 
	Power Plant Process Design & Development
	 	X	 	 	 	 	 	 
	MBOP Design & Development
	 	 	 	 	 	 	 	 
	General Design Specifications
	 	 	 	 	 	X	 	 
	CAD Modeling / Drafting
	 	 	 	 	 	 	 	X
	Component Specifications
	 	X	 	 	 	 	 	 
	Development / Qualification of Global
Suppliers & Creation of Source Control
Documents
	 	 	 	 	 	 	 	X
	Material Procurement
	 	 	 	X	 	 	 	 
	Mechanical Layout & Piping Arrangement
	 	 	 	 	 	 	 	X
	Pipe & Structural Stress Analysis
	 	 	 	X	 	 	 	 
	Electrical Design / Layout
	 	 	 	 	 	 	 	X
	Area Classification
	 	 	 	 	 	X	 	 
	Safety Audit
	 	 	 	 	 	X	 	 
	Control Platform and Software
	 	X	 	 	 	 	 	 
	Installation, Maintenance & Operator’s Manuals
	 	 	 	 	 	X	 	 
	Installation & Site Layout Drawings
	 	 	 	 	 	X	 	 
	Korean Translation of Documentation
	 	 	 	X	 	 	 	 
	Manufacturing
	 	 	 	X	 	 	 	 
	Manufacturing and Supplier Quality
	 	 	 	 	 	 	 	X
	Certification to applicable Korean Standards
	 	 	 	 	 	 	 	X
	Certification to CARB emissions standard
	 	 	 	 	 	X	 	 
	Certification to CSA fuel cell standard
	 	 	 	 	 	X	 	 
	Maintenance of CSA Certification
	 	X	 	X	 	 	 	 
	Design Validation Testing
	 	 	 	 	 	X	 	 

 

 

 

Attachment 5. Example of Program Schedule for Phase 2

(C* = stack module conditioning and test)

 

 

 

Attachment 6.

Representative Schedule for Design and Construction of Manufacturing Facility

 

 

 

Attachment 7

Payment Standard for Traveling Expenses by FCE’s Supervisors

1. SCOPE

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

2. PAYMENT STANDARD

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

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

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

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

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

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

Schedule A: Transportation Expenses

(Unit: U$)

	 	 	 	 	 	 	 
	 	 	Airfare	 	 
	Item	 	Domestic	 	International	 	Railroad / Auto / Passage Fare
	Officer

	 	Business Class
	 	Business Class
	 	Actual Expense
	 
	 	 	 	 	 	 
	Employee

	 	Economy Class
	 	Business Class	 	 

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

Schedule B: Traveling Expenses

(Unit: U$)

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

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

 

 

 

3. PAYMENT METHOD

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

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

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

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

 

 

 

Attachment 8. FCE Training Courses

	 	 	 
	Fuel Cell Seminar (Course #06-001)
	 
	Description:

	 	This is a brief overview covering the theory and operation of FuelCell
Energy’s Direct FuelCell (DFC) power plants.
	 
	 	 
	Prerequisite:

	 	None
	 
	 	 
	Duration:

	 	Half-day
	 
	 	 
	Price:

	 	Instructor’s travel and expenses. No charge if held at, or within a two-hour
drive of FuelCell Energy, Danbury, CT.
	 
	 	 
	Scheduling:

	 	Anytime (restricted by instructor’s availability)
	 
	 	 
	Target Audience:

	 	Existing and potential customers; community groups and organizations
	 
	 	 
	Training Location:

	 	Customer site or FCE Danbury
	 
	 	 
	Contents:

	 	Fuel cell theory of operation; comparisons to other fuel cell types and
generation methods; descriptions and comparisons of FCE products; benefits of
distributed generation using fuel cells
	 
	 	 
	First Responder (Course #06-002)
	 
	 	 
	Description:

	 	This is basic training covering routine plant maintenance and operation.
	 
	 	 
	Prerequisite:

	 	None
	 
	 	 
	Duration:

	 	Half-day
	 
	 	 
	Price:

	 	One session provided free for each new plant installation. Otherwise, $1500
flat rate (1 to 3 people) plus travel expenses (if applicable)
	 
	 	 
	Scheduling:

	 	Immediately following installation
	 
	 	 
	Target Audience:

	 	Customer employees working on site.
	 
	 	 
	Class Size:

	 	Minimum: 1 Maximum: 3
	 
	 	 
	Training Location:

	 	Customer Site
	 
	 	 
	Contents:

	 	Thorough walk-down of the plant; safety precautions; routine maintenance and
operating procedures
	 
	 	 
	FuelCell Technician
Classroom Training (Course $06-101 (DFC300); #06-101 (DFC1500/3000)
	 
	 	 
	Description:

	 	This is classroom training on the DFC plant theory, systems details,
operations and maintenance. This is a prerequisite for final certification as a FuelCell
technician. It is also useful as stand-alone training for maintenance and
operations supervisors. One course is offered for the DFC 300 plants, and
one is offered for the megawatt (DFC 1500/3000) plants.
	 
	 	 
	Prerequisite:

	 	None
	 
	 	 
	Duration:

	 	4.5 Days
	 
	 	 
	Price:

	 	$2000 per student
	 
	 	 
	Scheduling:

	 	As scheduled, or by request as available.
	 
	 	 
	Target Audience:

	 	Operators, Maintenance Personnel, Supervisors
	 
	 	 
	Class Size:

	 	Minimum: 5 Maximum: 10
	 
	 	 
	Training Location:

	 	Customer Site (preferred) or FCE
	 
	 	 
	Contents:

	 	This course consists of three days covering the theory and operation of the
fuel cell and its supporting systems, and one day of operations training. This
course includes 4 written exams. Three exams cover plant systems; the fourth covers
plant operations and maintenance safety topics unique to the fuel cell
plant. An overall grade of 70% must be achieved to pass this course. All exams include
multiple choice, true/false, matching, and short-answer questions.

 

 

 

Attachment 8. FCE Training Courses (cont.)

	 	 	 
	FuelCell Technician On-The-Job Training (OJT) (Course #06-102)
	 
	 	 
	Description:

	 	160 hours on-the-job training under the supervision of a field service team
leader or supervisor. Each graduate of this training will be certified as a
FuelCell
technician, qualified to operate and maintain that power plant model,
either sub-megawatt (DFC 300) or megawatt (DFC 1500/3000). This training does not
certify the graduate to commission a new-installation fuel cell plant. Upon
completion of this training, the technician is certified for one year. Re-
certification will consist of on-line computer-based instruction and testing.
	 
	 	 
	Prerequisite:

	 	Classroom Training 06-101

Certification is required to be completed within 90 days of classroom training
graduation.
	 
	 	 
	Duration:

	 	4 Weeks
	 
	 	 
	Price:

	 	$3000 per technician
	 
	 	 
	Scheduling:

	 	Arranged through FCE Customer Service.
	 
	 	 
	Target Audience:

	 	Operators and maintenance personnel
	 
	 	 
	Training Location:

	 	OJT is currently available in the California and Connecticut areas.
	 
	 	 
	Contents:

	 	Each technician is required to complete a qualification process that includes the
execution (or simulation) of several plant operations and maintenance
procedures, the demonstration of practical knowledge through oral testing, and
at least 160 hours of OJT under the supervision of a field service team leader or
supervisor.
	 
	 	 
	FuelCell Technician
Re-Certification (Module #06-103)
	 
	 	 
	Description:

	 	Re-certification extends the FuelCell Technician certification by one year and
consists of on-line computer-based instruction focusing on significant changes
to procedures, engineering changes, and lessons learned since the last
certification period. Also, some re-testing is given on plant theory and
operation. On-line study is self-paced and includes practice exams. Access is provided to
the on-line re-certification exam when the technician is ready to take it.
	 
	 	 
	Prerequisite:

	 	No more than 90 days has lapsed since the expiration of certification.
	 
	 	 
	Duration:

	 	Self-Paced
	 
	 	 
	Price:

	 	$500 per trainee
	 
	 	 
	Recommended 

Training Period:

	 	

Self-paced, beginning 10 to 30 days prior to certification expiration.
	 
	 	 
	Target Audience:

	 	Fuel Cell Technicians
	 
	 	 
	Training Location:

	 	Self Study and Local Testing Facility
	 
	 	 
	Contents:

	 	Procedure and Engineering Changes; Lessons Learned; Plant Theory and
Operations

 

 

 

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)

	 	 	 	 	 	 	 	 	 	 	 
	Distributor	 	Type of Agreement	 	Effective Date	 	Expiration	 	Rights in Korea	 	Needs extension?
	Alliance Power, Inc.

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	BOC Limited (Linde Group)

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	 
	Caterpillar Inc.

	 	Purchase and Marketing
Agr.
	 	*
	 	*
	 	*
	 	*
	 
	Chevron Energy Solutions Company

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	 
	Clearview Power, LLC

	 	Development Agreement
	 	*
	 	*
	 	*
	 	*
	 
	Distributed Energy Resource Group

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	 
	Enbridge, Inc.

	 	Distribution Agreement
	 	*
	 	*
	 	*
	 	*
	Gills Onions LLC

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	Logan Energy

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	 
	Marubeni (Japan)

	 	Alliance Agreement
	 	*
	 	*
	 	*
	 	*
	MTU CFC Solution, GmbH

	 	Cell License
	 	*
	 	*
	 	*
	 	*
	 
	MTU CFC Solution, GmbH

	 	BOP Cross-License
	 	*
	 	*
	 	*
	 	*
	Northern Power Systems, Inc.

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	 
	PPL Energy Plus, LLC

	 	Distributor Agreement
	 	*
	 	*
	 	*
	 	*
	PowerHouse Energy LLC

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	 
	Princeton Group, Inc. of Va.

	 	Marketing/Consulting
	 	*
	 	*
	 	*
	 	*
	Renewable Technologies, Inc.

	 	Market Development Agr.
	 	*
	 	*
	 	*
	 	*
	Silverwood Energy, Inc.

	 	Market Development Agr.
	 	v
	 	*
	 	*
	 	*

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

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