Item 1.01.Entry into a Material Definitive Agreement.
Amendment No. 2 to Joint Development Agreement between FuelCell Energy, Inc. and
ExxonMobil Technology and Engineering Company (f/k/a ExxonMobil Research and
Engineering Company)
On April 29, 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. 2 to the Joint Development
Agreement between the Company and EMTEC ("Amendment No. 2"), effective as of
April 30, 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, the Company and EMTEC agreed to further extend the term such
that it will end on December 31, 2022 (unless terminated earlier) 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 allows for the continuation of
research that would 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 foregoing summary of the terms of Amendment No. 2 is qualified in its
entirety by reference to the full text of Amendment No. 2, 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 ExxonMobil Technology and Engineering Company
In addition to the Original Agreement (as amended by Amendment No. 1 and
Amendment No. 2), 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. 2.
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. 2.
Item 7.01 Regulation FD Disclosure.
On May 5, 2022, the Company issued a press release announcing the extension of
the term of its Joint Development Agreement with EMTEC. A copy of this press
release is furnished with this Current Report on Form 8-K as Exhibit 99.1.
The information furnished in this Item 7.01, including Exhibit 99.1, is not
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability
of that section. This information will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except to the extent that the Company specifically incorporates it
by reference.
Item 9.01.Financial Statements and Exhibits.
(d) The following exhibits are being filed or furnished (as applicable)
herewith:
Exhibit No. Description
10.1 Amendment No. 2 to Joint Development Agreement between FuelCell
Energy, Inc. and ExxonMobil Technology and Engineering Company,
effective as of April 30, 2022.
99.1 Press Release issued by FuelCell Energy, Inc. on May 5, 2022.
Cover Page Interactive Data File (embedded within the Inline XBRL
104 document).
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