| Item 1.01. | Entry into a Material Definitive Agreement. |
Amendment No. 3 to
Joint Development Agreement between FuelCell Energy, Inc. and ExxonMobil Technology and Engineering Company
On December 19, 2022,
FuelCell Energy, Inc. (the “Company”) and ExxonMobil Technology and Engineering Company (f/k/a ExxonMobil Research and Engineering
Company) (“EMTEC”) entered into Amendment No. 3 to the Joint Development Agreement between the Company and EMTEC (“Amendment
No. 3”), effective as of December 1, 2022.
The Joint Development
Agreement between the Company and EMTEC (the “Original Agreement”) was executed on November 5, 2019, was effective as of October
31, 2019, and had a term of two years from the effective date, ending on October 31, 2021. Under the Original Agreement, the Company
has engaged in exclusive research and development efforts with EMTEC to evaluate and develop new and/or improved carbonate fuel cells
to reduce carbon dioxide emissions from industrial and power sources in exchange for (i) payment by EMTEC of certain fees and
costs (including research costs of up to $45,000,000) as well as certain milestone-based payments, and (ii) certain licenses, in each
case as described in the Original Agreement. The terms of the Original Agreement are described more fully in the Current Report on
Form 8-K filed by the Company on November 6, 2019.
In Amendment No. 1 to
the Joint Development Agreement (“Amendment No. 1”), which was executed on October 29, 2021 and effective as of October 31,
2021, the Company and EMTEC agreed, among other things, to extend the term for an additional six months, ending on April 30, 2022. Amendment
No. 1 allowed for the continuation of research intended to enable incorporation of design improvements to Company fuel cell design
in order to support a decision to use the improvements in a future demonstration of the technology for capturing carbon at ExxonMobil’s
Rotterdam refinery in the Netherlands (such demonstration, the “Rotterdam Project”) and provided additional time to achieve
Milestone 1, as defined in the Original Agreement. The terms of Amendment No. 1 are described more fully in the Current Report on Form
8-K filed by the Company on November 2, 2021.
In
Amendment No. 2 to the Joint Development Agreement (“Amendment No. 2”), which was executed on April 29, 2022 and effective
as of April 30, 2022, the Company and EMTEC agreed to further extend the term such that it would end on December 31, 2022 and to increase
the maximum amount of research costs to be reimbursed by EMTEC from $45,000,000 to $50,000,000. Amendment No. 2 allowed for the continuation
of research intended to enable the parties to (i) gain an improved understanding of the fuel cell operating envelope for various carbon
capture applications; and (ii) complete data collection to support the project gate decision to use the developed technology in a Company
fuel cell module demonstration for capturing carbon at ExxonMobil’s Rotterdam facility. In Amendment No. 2, the Company and EMTEC
also agreed to conduct a joint market study, with a target completion date on or before October 31, 2022, to (a) define application opportunities,
commercialization strategies, and development requirements, (b) identify partners for potential pilot/demonstration projects and (c) assess
fuel cell/stack/module manufacturing scale-up and cost reduction. The terms of Amendment No. 2 are described more fully in the Current
Report on Form 8-K filed by the Company on May 5, 2022. As of October 31, 2022, the Company and EMTEC were still collaborating
on the joint market study which was completed in early fiscal year 2023.
In Amendment No. 3, the
Company and EMTEC agreed to further extend the term such that it will end on August 31, 2023 (unless terminated earlier) and to further
increase the maximum amount of research costs to be reimbursed by EMTEC from $50,000,000 to $60,000,000. Amendment No. 3 is intended to
(i) allow for continuation of research that would enable the parties to finalize data collection in support of the project gate decision
to use the developed technology in a Company fuel cell module demonstration for capturing carbon at ExxonMobil’s Rotterdam facility,
(ii) allow for the continuation of the development, engineering and mechanical derisking of the Generation 2 Technology fuel cell module
prototype, and (iii) allow for studying the manufacturing scale-up and cost reduction of a commercial Generation 2 Technology fuel cell
carbon capture facility.
The foregoing summary
of the terms of Amendment No. 3 is qualified in its entirety by reference to the full text of Amendment No. 3, a copy of which is attached
as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Other Material Relationships
with EMTEC
In
addition to the Original Agreement (as amended by Amendment No. 1, Amendment No. 2, and Amendment No. 3), in June 2019, the Company and EMTEC entered
into a license agreement to facilitate the further development of the Company’s SureSource CaptureTM product.
Pursuant to this license agreement, the Company granted EMTEC and its affiliates a non-exclusive, worldwide, fully-paid, perpetual, irrevocable,
non-transferable license and right to use the Company’s patents filed on or before April 30, 2021, and any data, know-how, improvements,
equipment designs, methods, processes and the like provided directly by the Company or its affiliates to EMTEC or its affiliates
under any agreement or otherwise, on or before April 30, 2021, to the extent it is useful to research, develop and commercially exploit
carbonate fuel cells in applications in which the fuel cells concentrate carbon dioxide from industrial and power sources and for any
other purpose attendant thereto or associated therewith.
This license agreement
is being described only for the purpose of describing the material relationships between the Company and EMTEC and is not impacted by
Amendment No. 3.
Additionally, the Company
and EMTEC previously entered into a letter agreement, dated as of October 28, 2021 and executed on October 29, 2021 (the “Letter
Agreement”), pursuant to which the Company agreed to invest with EMTEC in the Rotterdam Project, should EMTEC move forward with
the demonstration project. In the Letter Agreement, the Company agreed that, if (i) the Company achieves Milestone 1 (which occurred
in January 2022), and (ii) EMTEC and the Company execute a contractual agreement to proceed with the Rotterdam Project, then at EMTEC’s
option, the Company will either make an investment in the amount of $5,000,000 in the Rotterdam Project or discount EMTEC’s purchase
of the Company’s fuel cell module and detailed engineering design, as agreed to by the parties, required for the Rotterdam Project
by said amount.
This Letter Agreement
is being described only for the purpose of describing the material relationships between the Company and EMTEC and is not impacted by
Amendment No. 3.