UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 8, 2019
FUELCELL ENERGY, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
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1-14204 |
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06-0853042 |
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(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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3 Great Pasture Road, Danbury, Connecticut |
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06810 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (203) 825-6000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Common Stock, $0.0001 par value per share |
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FCEL |
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The Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Amendment to NRG Energy, Inc. Loan Agreement
As previously disclosed, on July 30, 2014, FuelCell Energy Finance, LLC (“FuelCell Finance”), a wholly owned subsidiary of FuelCell Energy, Inc. (the “Company”), entered into a loan agreement (the “NRG Loan Agreement”) with NRG Energy, Inc. (“NRG”) pursuant to which NRG extended a $40 million revolving construction and term financing facility (the “NRG Facility”) to FuelCell Finance for the purpose of accelerating project development by the Company and its subsidiaries. On December 13, 2018, FuelCell Finance’s wholly owned subsidiary, Central CA Fuel Cell 2, LLC (“Co-Borrower”, and, together with FuelCell Finance, the “Credit Parties”), drew a construction loan advance of approximately $5.8 million under the NRG Facility. In conjunction with this advance, the NRG Loan Agreement was amended on December 13, 2018, and this advance became the last advance under the NRG Facility. The NRG Loan Agreement was also subsequently amended on March 29, 2019, June 13, 2019, and July 11, 2019.
On August 8, 2019, FuelCell Finance, Co-Borrower, and NRG entered into the sixth amendment to the NRG Loan Agreement, which amends the definition of “Maturity Date” under the NRG Loan Agreement. Pursuant to the sixth amendment, the Maturity Date of each note is now the date that is the earliest of (a) September 30, 2019, (b) the commercial operation date or substantial completion date, as applicable, with respect to the fuel cell project owned by the co-borrower under such note, and (c) the repayment in full or the closing of a refinancing of the Company’s indebtedness with Hercules Capital, Inc.; provided, however, in the event NRG determines, in its sole discretion, that the Credit Parties are not making sufficient progress toward the completion of the construction of the 2.8 MW Tulare BioMAT project in California, NRG may accelerate the Maturity Date on the date of such determination. In conjunction with the sixth amendment, the Co-Borrower prepaid interest (which would otherwise be paid at maturity) that has been accrued through the date of the sixth amendment totaling approximately $0.3 million.
The foregoing summary of the terms of the sixth amendment is qualified in its entirety by reference to the full text of the sixth amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Amendment to Generate Lending, LLC Construction Loan Agreement
As previously disclosed, on December 21, 2018, the Company, through its indirect wholly-owned subsidiary FuelCell Energy Finance II, LLC (“Borrower”), entered into a Construction Loan Agreement (the “Generate Loan Agreement”) with Generate Lending, LLC (“Generate”) pursuant to which Generate agreed (the “Commitment”) to make available to Borrower a credit facility in an aggregate principal amount of up to $100,000,000. In connection with the execution of the Generate Loan Agreement by Generate and Borrower and concurrently therewith, Generate, Borrower and the Company entered into a Right to Finance Agreement, which gave the Generate an exclusive right, subject to certain exclusions and exceptions, to provide construction financing through the Generate facility to all of the Company’s stationary fuel cell projects and provided that, upon a breach of such exclusivity provision, Borrower would pay to Generate a cash amount equal to $650,000 (the “Liquidated Damages Amount”).
Pursuant to the terms of the Generate Loan Agreement, Generate had an optional call right which, if exercised, was required to be noticed during the ten day period beginning on June 20, 2019 and ending on (and including) June 30, 2019 (as amended or modified from time to time, the “Call Right”). If Generate had exercised its Call Right during that period, all of the Working Capital Loans (as described in the Generate Loan Agreement) (in an amount equal to $10,000,000), together with all accrued and unpaid interest thereon, would have been due and payable in their entirety, without penalty or premium, prior to September 30, 2019.
On June 28, 2019, Borrower, Generate, and various project company guarantors entered into the First Amendment to the Generate Loan Agreement (the “First Generate Amendment”). Under the First Generate Amendment, the Call Right was modified to give Generate the right to exercise the Call Right, requiring payment of all Working Capital Loans and all accrued and unpaid interest thereon on September 30, 2019, during the ten day period beginning on August 1, 2019 and ending on (and including) August 11, 2019. Concurrently with the execution of the First Generate Amendment, the Company, Borrower and Generate entered into the First Amendment to the Right to Finance Agreement, which provided that, if Generate exercised its Call Right, the Right to Finance Agreement (as amended) would terminate as of August 11, 2019. In addition, in the First Amendment to the Right to Finance Agreement, the provision requiring the payment of the Liquidated Damages Amount (as described above) was deleted in its entirety.
On August 13, 2019, Borrower, Generate and various project company guarantors entered into the Second Amendment to the Generate Loan Agreement (the “Second Generate Amendment Under the Second Generate Amendment, the Call Right was further amended to provide Generate the right to exercise the Call Right , requiring payment of all Working Capital Loans and all accrued and unpaid interest thereon on September 30, 2019, any time between September 1, 2019 and September 30, 2019, subject to further extension upon mutual agreement of Borrower and Generate. Pursuant to the Second Generate Amendment, Borrower and various project company guarantors agreed to (i) use all commercially reasonable efforts to provide Generate with a consent to assignment of the power purchase agreement for the 7.4 MW project in Brookhaven, New York currently under development, (ii) provide daily reports to Generate in form and substance satisfactory to Generate, (iii) use all commercially reasonable efforts to provide information to
Generate within three business days of Generate’s request therefor, and (iv) by September 1, 2019, at Borrower’s cost and Generate’s option to either (x) provide executed bailee letters for all collateral under the Generate Loan Agreement or (y) move all Collateral currently held at the Compan y’s Danbury and/or Torrington facilities, or any other facility owned or leased by Borrower or the Company to a mutually agreeable separate location only accessible with the consent of Generate. Failure to timely comply with any of the foregoing shall cons titute a Facility Event of Default as defined in the Generate Loan Agreement. With the execution of the Second Generate Amendment, Generate withdrew its August 7, 2019 notice exercising the Call Right. Concurrently with the execution of the Second Generate Amendment, the Company, Borrower and Generate entered into the Second Amendment to the Right to Finance Agreement, which provides that if Generate exercises its Call Right (as amended by the Second Generate Amendment), the Right to Finance Agreement will terminate as of September 30, 2019.
The foregoing summary of the terms of the Second Generate Amendment and the Second Amendment to the Right to Finance Agreement is qualified in its entirety by reference to the full text of the Second Generate Amendment and the Second Amendment to the Right to Finance Agreement, copies of which are attached as Exhibit 10.2 and Exhibit 10.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Amendment to Fifth Third Bank Construction Loan Agreement
As previously disclosed, on February 28, 2019, the Company, through its indirect wholly-owned subsidiary, Groton Station Fuel Cell, LLC (“Groton Borrower”), entered into a Construction Loan Agreement (the “Groton Agreement”) with Fifth Third Bank (“Fifth Third”) pursuant to which Fifth Third agreed to make available to Groton Borrower a construction loan facility in an aggregate principal amount of up to $23.0 million (the “Groton Facility”) to fund the manufacture, construction, installation, commissioning and start-up of the 7.4 MW fuel cell power plant for the Connecticut Municipal Electric Energy Cooperative located on the U.S. Navy submarine base in Groton, Connecticut (the “Groton Project”). Groton Borrower made an initial draw under the Groton Facility on the date of closing of $ 9.7 million and made a draw of $1.4 million in April 2019. The total outstanding balance as of August 13, 2019 was $11.1 million.
On August 13, 2019, Groton Borrower and Fifth Third entered into Amendment No. 1 to the Groton Agreement (the “Groton Amendment”). Under the Groton Amendment, the definition of Commitment was amended to reduce the aggregate principal amount of the facility available to Groton Borrower from $23.0 million to $18.0 million. Pursuant to the Groton Amendment, Groton Borrower has agreed to (i) no later than August 16, 2019, deliver executed bailee letters for certain collateral, (ii) no later than August 21, 2019, provide Fifth Third with a plan to fund the remaining project costs needed to complete the construction of the Groton Project, (iii) complete the conditioning of the first of the remaining two fuel cells units for the Groton Project no later than September 19, 2019 and the final fuel cell unit for the Groton Project by October 25, 2019, and (iv) no later than September 28, 2019, deliver to Fifth Third a binding loan agreement for permanent financing and one or more binding letters of intent from tax equity investors, such date to be automatically extended to October 21, 2019 in the event that the Company’s corporate loan facility with Hercules Capital, Inc. is repaid or extended beyond October 21, 2019; and further provided that such dates shall be extended by an additional 60 days due to delays outside of control of Groton Borrower or if Fifth Third is reasonably satisfied that Groton Borrower is negotiating diligently and in good faith with potential take-out lenders or tax equity investors.
The foregoing summary of the terms of the Groton Amendment is qualified in its entirety by reference to the full text of the Groton Amendment, a copy of which is attached as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.
Item 8.01. Other Events.
During the period beginning on July 25, 2019 and ending on (and including) August 8, 2019, the Company raised aggregate gross proceeds, before deducting commissions and any offering-related expenses, of approximately $6.4 million under its previously announced “at-the-market” equity program. The Company issued and sold a total of approximately 18.2 million shares during this period at an average sale price of $0.35 per share. The sales were completed pursuant to the At Market Issuance Sales Agreement (the “Sales Agreement”) between the Company, B. Riley FBR, Inc. and Oppenheimer & Co. Inc., dated June 13, 2018, which the Company filed as an exhibit to a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on June 13 , 2018 .
Net proceeds of such sales totaling approximately $1.9 million have been used to pay down the outstanding balance of the Company’s senior secured credit facility with Hercules Capital, Inc., as required by the recent amendment to that facility, leaving an outstanding balance under that facility of approximately $5.6 million as of August 13, 2019.
The shares sold under the Sales Agreement were issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No 333-215530), previously filed with the SEC on January 12, 2017, and declared effective by the SEC on February 24, 2017. A prospectus supplement related to the Company’s at the market equity program was also filed with the SEC on June 13, 2018. This Current Report on Form 8-K does not constitute and shall not constitute an offer to sell or the solicitation of an offer to buy shares of
the Company’s common stock, nor shall there be any sale of shares of the Company’s common stock in any state or jurisdiction in which such offe r, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
As of August 13, 2019, the Company may sell up to approximately $23.3 million of common stock under its at the market equity program (under the Sales Agreement referenced above), subject to contractual requirements, trading windows and market conditions.
As of August 13, 2019, there were 125,915,792 shares of common stock of the Company, par value $0.0001 per share, outstanding.
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Item 9 .01 . |
Financial Statements and Exhibits. |
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Exhibit No. |
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Description |
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10.1 |
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10.2 |
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10.3 |
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10.4 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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FUELCELL ENERGY, INC. |
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Date: August 13, 2019 |
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By: |
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/s/ Michael S. Bishop |
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Michael S. Bishop |
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Executive Vice President and Chief Financial Officer |
EXHIBIT 10.1
SIXTH AMENDMENT TO LOAN AGREEMENT
This SIXTH AMENDMENT TO LOAN AGREEMENT (this “ Amendment ”), dated as of August 8, 2019, is made by and among FUELCELL ENERGY FINANCE, LLC, a Connecticut limited liability company having its principal office located at 3 Great Pasture Road, Danbury, Connecticut 06810 (hereinafter referred to as “ Parent ”), CENTRAL CA FUEL CELL 2, LLC, a Delaware limited liability company (hereinafter referred to as “ Co-Borrower ”, and, together with Parent, the “ Credit Parties ”), and NRG ENERGY, INC., a Delaware corporation having an office address located at 804 Carnegie Center Drive, Princeton, New Jersey 08540, its permitted successors and/or assigns (hereinafter referred to as “ Lender ”). Each capitalized term used and not otherwise defined herein shall have the meaning assigned thereto in Article I of the Loan Agreement (as defined below).
WHEREAS , Parent and Lender entered into that certain Loan Agreement dated as of July 30, 2014, as amended by that certain First Amendment to Loan Agreement dated as of April 18, 2016, that certain Second Amendment to Loan Agreement dated as of December 13, 2018, that certain Third Amendment to Loan Agreement dated as of March 29, 2019, that certain Fourth Amendment to Loan Agreement dated as of June 13, 2019, and that certain Fifth Amendment to Loan Agreement dated as of July 11, 2019 (collectively, the “ Loan Agreement ”) pursuant to which Lender agreed to make certain Project Debt available to Co-Borrowers pursuant to the terms thereof; and
WHEREAS , Co-Borrower became a party to the Loan Agreement pursuant to that certain Joinder Agreement dated December 13, 2018, by and between Co-Borrower and Lender; and
WHEREAS , the Credit Parties have requested that Lender agree to amend the Loan Agreement as more particularly set forth herein and to avoid the occurrence of an Event of Default; and
WHEREAS , Lender is willing to agree to certain amendments specified below, in each case subject to the terms and conditions set forth herein.
NOW, THEREFORE , in consideration of the foregoing premises, and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Amendments to the Loan Agreement . Subject to the terms and conditions of this Amendment, Lender agrees to amend the Loan Agreement as of the Effective Date as follows:
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The definition of “Maturity Date” is hereby deleted in its entirety and replaced with the following: |
“ Maturity Date ” shall mean, with respect to each Note, the date that is the earlier of (a) September 30, 2019, (b) COD with respect to the Project owned by the Co-Borrower that executed such Note, (c) the repayment in full or the closing of a refinancing of Parent’s indebtedness with Hercules Capital; provided, however, in the event the Lender determines, in its sole discretion, that the Credit Parties are
not making sufficient progress toward the completion of the Project, the Lender may accelerate the Maturity Date on the date of such determination.
Section 2. Acknowledgments . To induce the Lender to enter into this Amendment, the Credit Parties acknowledge and agree that (i) the Loan Documents are legal, valid, and binding obligations of, and enforceable in accordance with their respective terms against, the Credit Parties who are parties thereto; (ii) the Liens on and security interests in the Collateral in favor of the Lender are valid, legal, binding, and properly perfected and are reaffirmed and ratified in all respects, and nothing contained herein is intended to alter the priority of, or terminate any, Lien on or security interest in any Collateral in favor of the Lender, for itself and the ratable benefit of the Lenders; (iii) the Credit Parties do not have any rights of offset, defenses, claims, or counterclaims under any Loan Document, at law, or in equity with respect to any of their obligations under the Loan Documents, all of which are valid and outstanding obligations of the Credit Parties; (iv) nothing contained herein extinguishes, discharges, or releases any of the obligations or any Loan Document or constitutes an accord, satisfaction, novation, or substitution of any of the obligations or any Loan Document; and (v) the Credit Parties have been represented (or had the opportunity to be represented) by the legal counsel of the Credit Parties’ choice, understand and are fully aware of the terms and conditions contained in this Amendment, and have voluntarily, without coercion or duress of any kind, entered into this Amendment .
Section 3. Release by the Co-Borrowers and the Corporate Guarantor. The Co-Borrower and the Parent, on behalf of themselves, and any person or entity claiming by or through them (hereinafter collectively referred to as the “Releasors”), hereby unconditionally remise, release and forever discharge the Lender, its past and present officers, directors, shareholders, agents, parent corporations, subsidiaries, affiliates, trustees, administrators, attorneys, predecessors, successors and assigns and the heirs, executors, administrators, successors and assigns of any such person or entity, as releasees (hereinafter collectively referred to as the “Releasees”), of and from any and all manner of actions, causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, promises, warranties, guaranties, representations, liens, mechanics’ liens, judgments, claims, counterclaims, crossclaims, defenses, claims for damages (whether direct or indirect, consequential, special, exemplary, or punitive) and/or demands whatsoever, including claims for contribution and/or indemnity, whether now known or unknown, past or present, asserted or unasserted, contingent or liquidated, at law or in equity, or resulting from any assignment, if any (hereinafter collectively referred to as the “Claims”), which any of the Releasors ever had or now have against any of the Releasees, for or by reason of any cause, matter or thing whatsoever, arising from the beginning of time to the date hereof. The Co-Borrower and the Parent hereby warrant and represent that they have not assigned, pledged, hypothecated, and/or otherwise divested themselves and/or encumbered all or any part of the Claims being released hereby and that they hereby agree to indemnify and hold harmless any and all of Releasees against whom any Claim so assigned, pledged, hypothecated, divested and/or encumbered is asserted.
Section 4. Reservation of Rights . Lender reserves any and all rights which it has, or may now or in the future have, to exercise any and all powers, rights, remedies and privileges under the Loan Agreement and any other Loan Documents with no impairment or prejudice of
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such power, right, remedy or privilege. No single or partial exercise of any such power, right, remedy or privilege shall preclude any other or further exercise thereof or of any other right, power, remedy or privilege, and all of such rights, powers, remedies and privileges are and shall continue to be cumulative. No failure of Lender to immediately exercise any such power, right, remedy or privilege shall constitute or be deemed to constitute a waiver thereof or the acquiescence by Lender with respect to any Default or Event of Default.
Section 5. No Course of Dealing or Performance . Each Credit Party acknowledges and agrees that the execution, delivery and performance of this Amendment by it does not and shall not create (nor shall either Credit Party rely upon the existence of or claim or assert that there exists) any obligation of Lender to consider or agree to any other amendment of or waiver or consent with respect to the Loan Agreement or any other Loan Document, or any other instrument or agreement to which Lender is a party (collectively, an “ Amendment or Consent ”), and in the event that Lender subsequently agrees to consider any requested Amendment or Consent, neither the existence of this Amendment nor any other conduct of Lender related hereto, shall be of any force or effect on Lender’s consideration or decision with respect to any such requested Amendment or Consent, and Lender shall not have any obligation whatsoever to consider or agree to any such Amendment or Consent.
Section 6. Representations and Warranties . To induce Lender to enter into this Amendment, each Credit Party does hereby represent and warrant that as of the Effective Date, after giving effect to the amendments contained herein:
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Each Credit Party has the power and authority, and has taken all the necessary actions, to authorize the execution, delivery and performance of this Amendment; |
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partnership agreement, as the case may be, of each Credit Party, or (2) any material agreements of each Credit Party or by which any of its properties may be bound; or (C) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by each Credit Party other than Permitted Liens. |
Section 7. Fees and Expenses .
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Parent agrees to pay all reasonable attorneys’ fees of Lender related to the preparation and finalization of this Amendment, such payment to be made no later than ten (5) business days after the Effective Date. |
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In addition, this Amendment shall not become effective until the date on which the Lender receives a payment of $318,692, which shall be applied to accrued and unpaid interest on the Loan. |
Section 8. Loan Agreement; Other Loan Documents . The Amended Agreement and the other Loan Documents remain in full force and effect in accordance with their respective terms and are hereby ratified and affirmed in all respects. Except for the amendments set forth in Section 1, nothing herein shall be construed to limit, affect, modify or alter each Credit Party’s obligations under the Loan Agreement or elsewhere under the Loan Documents. This Amendment shall not be construed to: (i) impair the validity, perfection or priority of any lien or security interests securing the Obligations; (ii) waive or impair any rights, powers or remedies of Lender under the Loan Agreement and the other Loan Documents; (iii) constitute an agreement by Lender or require Lender to extend the time for payment of any of the Obligations; or (iv) constitute a waiver of any right of Lender to insist on strict compliance by each Credit Party with each and every term, condition and covenant of this Amendment, the Amended Agreement and the other Loan Documents to which it is a party in accordance therewith.
Section 9. General . This Amendment (a) shall be deemed to be a Loan Document and (b) embodies the entire understanding and agreement among the parties hereto and thereto with respect to the subject matter hereof and thereof and supersedes all prior agreements, understandings and inducements, whether express or implied, oral or written.
Section 10. Successors and Assigns . This Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto.
Section 11. Execution in Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart by facsimile shall be equally effective as delivery of a manually executed counterpart to this Amendment.
Section 12. GOVERNING LAW . THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[signatures appear on the following pages]
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IN WITNESS WHEREOF , the parties hereto have caused this Amendment to be executed by their respective duly authorized representatives as of the date first written above.
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By: |
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FuelCell Energy, Inc. |
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Its: |
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Sole Member |
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/s/ Michael S. Bishop |
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Name: |
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Michael S. Bishop |
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Title: |
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Executive Vice President & Chief |
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Financial Officer |
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FuelCell Energy, Inc., sole member of |
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FuelCell Energy Finance, LLC |
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Sole Member |
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/s/ Michael S. Bishop |
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Name: |
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Michael S. Bishop |
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Title: |
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Executive Vice President & Chief |
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Financial Officer |
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EXHIBIT 10.2
SECOND AMENDMENT TO CONSTRUCTION LOAN AGREEMENT
THIS SECOND AMENDMENT TO CONSTRUCTION LOAN AGREEMENT (this “ Amendment ”) is dated as of August 13, 2019, by and among FUELCELL ENERGY FINANCE II, LLC, a Connecticut limited liability company (“ Borrower ”), BAKERSFIELD FUEL CELL 1, LLC, a Delaware limited liability company (“ Bakersfield ”), BRT Fuel Cell, LLC , a New York limited liability company (“ BRT ”), CR FUEL CELL, LLC, a New York limited liability company (“ CR ”), Yaphank Fuel Cell Park, LLC , a New York limited liability company (“ Yaphank ”), Homestead Fuel Cell 1, LLC , a Connecticut limited liability company (“ Homestead ”), DERBY FUEL CELL, LLC, a Connecticut limited liability company (“ Derby ”, and collectively with Bakersfield, BRT, CR, Yaphank and Homestead, each, an “ Initial Project Company Guarantor ”, and together, the “ Initial Project Company Guarantors ”), and GENERATE LENDING, LLC, a Delaware limited liability company (the “ Lender ”).
WHEREAS, the Borrower, the Initial Project Company Guarantors and the Lender are parties to a Construction Loan Agreement dated as of December 21, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”), pursuant to which the Lender has made a construction loan facility available to the Borrower; and
WHEREAS, the Borrower and the Lender have agreed to modify certain provisions of the Loan Agreement as more particularly set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
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Capitalized Terms; Effective Date . Capitalized terms used in this Amendment which are not otherwise defined herein shall have the meanings assigned thereto in the Loan Agreement, as modified by this Amendment. Except as expressly provided to the contrary herein, all modifications to the Loan Agreement set forth herein shall be effective as of the date of this Amendment. |
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Amendments to Loan Agreement . Each of the parties hereto hereby agrees that, on and as of the date of this Amendment: |
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Clause (i) of Section 2.3 of the Loan Agreement is hereby amended by deleting such clause in its entirety and substituting in lieu thereof the following new clause (i) to read in its entirety as follows: |
“(i) The Lender may, in its sole discretion, issue a notice to Borrower that Lender is terminating the Commitment, and that all Working Capital Loans shall be due and payable on September 30, 2019; provided that such notice shall be issued by the Lender if at all, during the period beginning on September 1, 2019 and ending on (and including) September 30, 2019, which period may be further extended by mutual agreement of the parties, and such notice may be in the form of an e-mail message or other memorandum. If the Lender delivers such notice, all of the Working Capital Loans, together with all accrued and unpaid interest thereon, shall be due and payable in its entirety, without penalty or premium, on September 30, 2019. If the Lender delivers such notice, the Borrower may prepay all then outstanding Working Capital Loans at any time prior to September 30, 2019, without penalty or premium. The obligation of the Borrower to repay the Working Capital Loans and all accrued and unpaid interest thereon as contemplated by this Section 2.3(i) shall be guaranteed by the Parent pursuant to the Parent Guaranty. In the event that Lender issues the foregoing notice, from and after such date, Lender shall not be entitled to any Disposition Fee under
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Section 2.3 (c) or have any rights under Section 2.3(d) with respect to any Disposition or Refinancing that occurs after such date; provided , however , the Lender shall be entitled to a Disposition Fee on any Disposition of the Bakersfield Project, regardless of when such Disposition occurs.”
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Clause (j) of Section 2.3 of the Loan Agreement is hereby amended by deleting such clause in its entirety and substituting in lieu thereof the following new clause (j) to read in its entirety as follows: |
“(j) At any time after September 30, 2019, and so long as no Project Event of Default or Facility Event of Default then exists, if an Initial Project is determined in accordance to Section 2.1(b) to not constitute an Approved Project, at any time thereafter upon Borrower’s written notice to Lender, and at Borrower’s sole cost and expense, the Initial Project Company Guarantor that owns such Initial Project shall be released from all of its obligations as a Loan Party under this Agreement and the other Loan Documents, including without limitation its guaranty of the Obligations pursuant to Section 10 of this Agreement, and the Lender shall release its security interest in the assets and Equity Interests of such Initial Project Company Guarantor. Thereafter, Borrower shall promptly transfer the Equity Interests of such Initial Project Company Guarantor to an Affiliate so that such Initial Project Company Guarantor is no longer a Subsidiary of Borrower. Notwithstanding the foregoing, if the Lender delivers to the Borrower a notice that it is exercising its rights to cause the Loans to become due and payable on September 30, 2019 as specified in Section 2.1(i) , then regardless of whether any Initial Project is determined in accordance with Section 2.1(b) to constitute an Approved Project, in no event shall such Initial Project Company Guarantor be released from any of its obligations as a Loan Party under this Agreement and the other Loan Documents, including without limitation its guaranty of the Obligations pursuant to Section 10 of this Agreement.”
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Conditions to Effectiveness . This Amendment shall become effective the subject to the fulfillment of the condition precedent that the Lender shall have received the following documents, each duly executed by the parties thereto and delivered to the Lender: |
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(ii)the Acknowledgement and Agreement of the Parent; and |
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(iii)the Second Amendment to Right to Finance Agreement, executed by the Borrower, the Parent and the Lender. |
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Withdrawal of Prior Notice Pursuant to Section 2.3(i) of the Loan Agreement . On August 7, 2019, the Lender delivered notice to the Borrower pursuant to Section 2.3(i) of the Loan Agreement, exercising Lender’s right to cause the Loans to become due and payable on September 30, 2019. Effective upon the satisfaction of the conditions set forth in paragraph 3 above, the Lender hereby withdraws such notice. |
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5. |
Covenants of Borrower and Initial Project Company Guarantors . To induce the Lender to enter into this Amendment and agree to the terms hereof, the Borrower and the Initial Project Guarantors hereby agree: |
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(a) |
to use all commercially reasonable efforts to provide to the Lender a consent to assignment with respect to the Yaphank Project off taker contract, executed and delivered by LIPA and Yaphank, by September 1st, 2019; |
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(c) |
to use all commercially reasonable efforts to provide information to Lender within three (3) Business Days of Lender’s request therefor; and |
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(d) |
at Borrower’s cost, (i) to move all Collateral currently held at Parent’s Danbury, Connecticut facility, Parent’s Torrington, Connecticut facility, or at any other location owned or leased by Parent, to a mutually agreeable separate location which can only be accessed with the consent of Lender, with such move to be completed by September 1st, 2019, or alternatively and in lieu thereof, at Lender’s sole option and request to be made no later than September 1st, 2019, to promptly obtain an acknowledgment from Borrower (as bailee), in form and substance satisfactory to Lender, that Borrower holds such Collateral (as bailee) for the benefit of Lender, and that Borrower (as bailee) agrees to comply, without further consent of Borrower, with instructions from Lender as to such Collateral. |
The Borrower and the Initial Project Guarantors acknowledge and agree that the failure to timely comply with the foregoing covenants shall constitute a Facility Event of Default under the Loan Agreement; provided , however , that it shall not be a Facility Event of Default under the Loan Agreement if the failure to timely comply with paragraph 5(a) above results from any delay, inaction, or refusal attributable solely to LIPA.
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6. |
Loan Party Representations and Warranties . |
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(a) |
Borrower and each Initial Project Company Guarantor hereby (i) confirms that all of the representations and warranties set forth in the Loan Agreement and the other Loan Documents are true and correct with respect to Borrower and each Initial Project Company Guarantor as of the date hereof (except insofar as such representations and warranties relate expressly to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date), (ii) covenants to perform its obligations under the Loan Agreement and other Loan Documents (including, but not limited to, this Amendment), (iii) specifically represents and warrants to Lender that it has good and marketable title to all of its respective Collateral, free and clear of any lien or security interest in favor of any other person or entity, other than Permitted Encumbrances, (iv) represents and warrants that the execution, delivery and performance of this Amendment have been authorized by all requisite limited liability company action on the part of each of Borrower and each Initial Project Company Guarantor and will not violate the certificate of formation, operating agreement, or other applicable organization or governing documents of Borrower or such Initial Project Company Guarantor, as applicable, and (v) represents and warrants that this Amendment constitutes the legal, valid and binding obligation of Borrower and each Initial Project Company Guarantor, enforceable against Borrower and each Initial Project Company Guarantor in accordance with its terms except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor’s rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). |
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( b) |
The Borrower and each Initial Project Company Guarantors hereby represent and warrant that no Facility Event of Default, Facility Default, Project Company Event of Default or Project Company Default has occurred and is continuing under the Loan Agreement. |
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(c) |
The Borrower and each Initial Project Company Guarantor hereby represent and warrant that attached hereto as Schedule 1 is a true, correct and complete list of the assets owned as of the date hereof by (i) Borrower and (ii) each Initial Project Company Guarantor. |
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8. |
Loan Party Assets . Each of the Borrower and the Initial Project Company Guarantors represents and warrants that (i) attached hereto as Schedule 1 is a true, correct and complete list of the assets of each of the Borrower and the Initial Project Company Guarantors, including the estimated value thereof, as of the date hereof, and (ii) the applicable Borrower or Initial Project Company Guarantor has good and valid title to such assets, free and clear of claims of any other Person, other than the Lender. |
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9 . |
No Other Modifications; Reaffirmation by the Borrower and Initial Project Company Guarantors . Except as expressly modified hereby, the terms of the Loan Agreement and each other Loan Document (and all covenants, conditions and agreements therein) shall remain in full force and effect in all respects, and are hereby ratified and confirmed in all respects by Borrower and each Initial Project Company Guarantor. Each of the Borrower and each Initial Project Company Guarantor hereby covenants and agrees to comply with all of the terms, covenants and conditions of the Loan Agreement (as amended hereby) and the Loan Documents to which it is a party, notwithstanding any prior course of conduct, waivers, releases or other actions or inactions on Lender’s part which might otherwise constitute or be construed as a waiver of or agreement to such terms, covenants and conditions, or otherwise. |
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10 . |
Release . BORROWER AND EACH INITIAL PROJECT COMPANY GUARANTOR HEREBY ACKNOWLEDGES THAT BORROWER’S PAYMENT OBLIGATIONS UNDER THE LOAN DOCUMENTS ARE ABSOLUTE AND UNCONDITIONAL WITHOUT ANY RIGHT OF RESCISSION, SETOFF, COUNTERCLAIM, DEFENSE, OFFSET, RECOUPMENT, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER. BASED UPON THE FACTS KNOWN TO BORROWER AND EACH INITIAL PROJECT COMPANY GUARANTOR AS OF THE EFFECTIVE DATE, BORROWER AND EACH INITIAL PROJECT COMPANY GUARANTOR HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER AND ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “ RELEASED PARTIES ”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, WHICH BORROWER OR ANY INITIAL PROJECT COMPANY GUARANTOR MAY NOW OR HEREAFTER HAVE AGAINST ANY OF THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM THE LOAN OR ANY OTHER OBLIGATIONS OWING TO LENDER, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND THE NEGOTIATION AND EXECUTION OF THIS AMENDMENT. |
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11 . |
References . All references in the Loan Agreement to “this Agreement,” “herein,” “hereunder” or other words of similar import, and all references to the Loan Agreement in the other Loan Documents, or any other document or instrument that refers to the Loan Agreement, shall be deemed to be references to the Loan Agreement as amended by this Amendment. |
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12 . |
Applicable Law . THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS. |
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1 3 . |
Counterparts; Electronic Delivery . This Amendment may be executed in one or more counterparts (all counterparts together reflecting the signature of all parties) each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery by any party to this Amendment of its signatures hereon through facsimile or other electronic image file (including .pdf) (i) may be relied upon as if this Amendment were physically delivered with an original hand-written signature of such party, and (ii) shall be binding on such party for all purposes. |
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1 4 . |
Successors . This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. |
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1 5 . |
Final Agreements . This Amendment represents the final agreement of the Borrower, the Initial Project Company Guarantors and the Lender with respect to the subject matter hereof, and may not be contradicted, modified or supplemented in any way by evidence of any prior or contemporaneous written or oral agreements of the Borrower, the Initial Project Company Guarantors and the Lender. |
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16. |
Costs and Expenses . The Borrower and the Initial Project Company Guarantors agree to reimburse the Lender for all of its costs and expenses, including the fees and expenses of its counsel, relating to this Amendment. |
[ Remainder of page intentionally blank; signature pages follow. ]
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IN WITNESS WHEREOF , the Borrower , the Initial Project Company Guarantor s and the Lender have caused this Amendment to be duly executed by their duly authorized officers, under seal, all as of the date first above written.
BORROWER:
FUELCELL ENERGY FINANCE II, LLC
By: FuelCell Energy Finance, LLC
Its: Sole Member
By: FuelCell Energy, Inc.
Its: Sole Member
By: /s/ Michael S. Bishop
Name: Michael S. Bishop
Title: Executive Vice President & Chief Financial Officer
[ Signatures continue on following page. ]
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BAKERSFIELD FUEL CELL 1, LLC |
By: FuelCell Energy Finance II, LLC
Its: Sole Member
By: FuelCell Energy, Inc.
Its: Sole Member
By: /s/ Michael S. Bishop
Name: Michael S. Bishop
Title: Executive Vice President & Chief
Financial Officer
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BRT Fuel Cell, LLC |
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By: FuelCell Energy Finance II, LLC
Its: Sole Member
By: FuelCell Energy, Inc.
Its: Sole Member
By: /s/ Michael S. Bishop
Name: Michael S. Bishop
Title: Executive Vice President & Chief
Financial Officer
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CR FUEL CELL, LLC |
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By: FuelCell Energy Finance II, LLC
Its: Sole Member
By: FuelCell Energy, Inc.
Its: Sole Member
By: /s/ Michael S. Bishop
Name: Michael S. Bishop
Title: Executive Vice President & Chief
Financial Officer
[ Signatures continue on following page. ]
SECOND AMENDMENT TO LOAN AGREEMENT
SIGNATURE PAGE
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By: FuelCell Energy Finance II , LLC
Its: Sole Member
By: FuelCell Energy, Inc.
Its: Sole Member
By: /s/ Michael S. Bishop
Name: Michael S. Bishop
Title: Executive Vice President & Chief
Financial Officer
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Homestead Fuel Cell 1, LLC |
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By: FuelCell Energy Finance II, LLC
Its: Sole Member
By: FuelCell Energy, Inc.
Its: Sole Member
By: /s/ Michael S. Bishop
Name: Michael S. Bishop
Title: Executive Vice President & Chief
Financial Officer
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DERBY FUEL CELL, LLC |
By: FuelCell Energy Finance II, LLC
Its: Sole Member
By: FuelCell Energy, Inc.
Its: Sole Member
By: /s/ Michael S. Bishop
Name: Michael S. Bishop
Title: Executive Vice President & Chief
Financial Officer
[ Signatures continue on following page. ]
SECOND AMENDMENT TO LOAN AGREEMENT
SIGNATURE PAGE
GENERATE LENDING, LLC ,
a Delaware limited liability company
By: __/s/ Matan Friedman ___________________
Name: Matan Friedman
Title: Manager
SECOND AMENDMENT TO LOAN AGREEMENT
SIGNATURE PAGE
OF
PARENT
August 13, 2019
Reference is made to (i) that certain Second Amendment to Construction Loan Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “ Amendment ”), by and among FUELCELL ENERGY FINANCE II, LLC, a Connecticut limited liability company (“ Borrower ”), BAKERSFIELD FUEL CELL 1, LLC, a Delaware limited liability company (“ Bakersfield ”), BRT Fuel Cell, LLC, a New York limited liability company (“ BRT ”), CR FUEL CELL, LLC, a New York limited liability company (“ CR ”), Yaphank Fuel Cell Park, LLC, a New York limited liability company (“ Yaphank ”), Homestead Fuel Cell 1, LLC, a Connecticut limited liability company (“ Homestead ”), DERBY FUEL CELL, LLC, a Connecticut limited liability company (“ Derby ”, and collectively with Bakersfield, BRT, CR, Yaphank and Homestead, each, an “ Initial Project Company Guarantor ”, and together, the “ Initial Project Company Guarantors ”), and GENERATE LENDING, LLC, a Delaware limited liability company (the “ Lender ”); (ii) that certain Construction Loan Agreement, dated as of December 21, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”), by and among the Borrower, the Initial Project Company Guarantors and the Lender; and (iii) that certain Guaranty Agreement, dated as of December 21, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the “ Parent Guaranty ”), by FUELCELL ENERGY, INC., a Delaware corporation (the “ Parent ”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to such terms in the Loan Agreement.
The Parent, a guarantor of the full and prompt payment of all of the indebtedness, obligations and liabilities of the Borrower to the Lender to pursuant the Parent Guaranty, hereby:
(a) acknowledges receipt of a copy of the Amendment, which amends the Loan Agreement to, among other things, provide for a new period during which the Lender may exercise its option to terminate its Commitment under the Loan Agreement and cause all Working Capital Loans to become due and payable on September 30, 2019;
(b) acknowledges and agrees that all obligations of the Borrower to the Lender under the Loan Agreement, as amended by the Amendment, and the other Loan Documents, are in each case guaranteed by the Parent pursuant to the Parent Guaranty, and reaffirms all of its obligations under the Parent Guaranty;
(c) acknowledges and agrees that the Parent Guaranty, and the Parent’s obligations thereunder, remain in full force and effect, without release, diminution or impairment, notwithstanding the execution and delivery of the Amendment or the modifications to the Loan Agreement set forth therein; and
(d) represents, warrants, acknowledges and agrees to and with Lender that ( i) the Parent does not hold or claim any right of action, claim, cause of action or damages, either at law or in equity, against Lender which arises from, may arise from, allegedly arise from, are based upon or are related in any manner whatsoever to the Loan Agreement, the Amendment, any other Loan Document or any other related agreement, document or instrument, which are based upon acts or omissions of Lender in connection therewith and (ii) the indebtedness, obligations and liabilities owing by the Parent Guarantor pursuant to the Parent Guaranty are absolutely owed to Lender, without offset, deduction or counterclaim.
[ Remainder of page intentionally blank; signature page follows. ]
IN WITNESS WHEREOF, the undersigned has executed this Acknowledgment and Agreement under seal as of the date first written above.
FUELCELL ENERGY, INC.
By: /s/ Michael S. Bishop (SEAL)
Name: Michael S. Bishop
Title: Executive Vice President and Chief Financial Officer
SECOND AMENDMENT TO LOAN AGREEMENT
(ACKNOWLEDGEMENT AND AGREEMENT OF PARENT)
List of Assets of Borrower and Each Project Company Guarantor
CURRENT INFORMATION
1. Tangible Personal Property
Inventory and Equipment . Set forth below are all the locations where Holdco and each Loan Party currently maintains inventory and equipment of Holdco or such Loan Party, as applicable (whether or not in the possession of Holdco or such Loan Party):
** On June 7, 2019, Lender received an e-mail attaching a PDF, which included the project asset information identified above, along with pictures of such collateral. In addition, the information on collateral identified above was provided to Lender identifying project values.
2. Real Estate Related UCC Collateral – Owned or Leased Real Property .
Set forth below are all the locations where Holdco or any Loan Party owns or leases any real property or otherwise conducts business:
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Name of Holdco/Loan Party |
Address/City/State/Province/Zip Code/Postal Code |
Owned or Leased |
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Bakersfield Fuel Cell, I LLC. |
7200 East Brundage Lane, Bakersfield, CA |
License |
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Derby Fuel Cell, LLC |
200 Roosevelt Drive Derby, CT 06418 |
Ground Lease |
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Yaphank Fuel Cell Park, LLC |
350 Horseblock Road Yaphank, NY 11980 |
Ground Lease |
EXHIBIT 10.3
SECOND AMENDMENT TO RIGHT TO FINANCE AGREEMENT
THIS SECOND AMENDMENT TO RIGHT TO FINANCE AGREEMENT (this " Amendment ") is dated as of August 13, 2019 (the " Effective Date "), by and among FUELCELL ENERGY, INC., a Delaware corporation (the " Parent "), FUELCELL ENERGY FINANCE II, LLC, a Connecticut limited liability company, a wholly-owned subsidiary of the Parent (the " Borrower ") ,and GENERATE LENDING, LLC, a Delaware limited liability company (the " Lender ").
WHEREAS, the Borrower, the Parent and the Lender are parties to a Right to Finance Agreement dated December 21, 2018, attached hereto as Exhibit A (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the " Right to Finance "); and
WHEREAS, the Borrower, the Initial Project Company Guarantors and the Lender are parties to a Construction Loan Agreement dated as of December 21, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the " Loan Agreement "), pursuant to which the Lender has made a construction loan facility available to the Borrower; and
WHEREAS, concurrently with the execution of this Amendment, the Borrower, the Initial Project Company Guarantors, and the Lender are entering into certain Second Amendment to Construction Loan Agreement (the " Second Amendment "), which Second Amendment includes an acknowledgement and agreement of the Parent; and
WHEREAS, the Borrower, the Parent and the Lender have agreed to modify certain provisions of the Right to Finance, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Capitalized Terms . Capitalized terms used in this Amendment which are not otherwise defined herein shall have the meanings assigned thereto in the Right to Finance.
2. Amendment of the Right to Finance . Each of the parties hereto hereby agrees that, on and as of the Effective Date:
(a) The last sentence of Paragraph 6 of the Right to Finance is hereby amended by deleting such sentence in its entirety and substituting in lieu thereof the following new sentence to read in its entirety as follows:
"In addition, if the Lender exercises its right to terminate the Commitment and require repayment of the Working Capital Loans pursuant to Section 2.3(i) of the Loan Agreement, this Agreement shall terminate as of September 30, 2019."
3. Applicable Law . THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS.
4. Counterparts; Electronic Delivery . This Amendment may be executed in one or more counterparts (all counterparts together reflecting the signature of all parties) each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery by any party to this Amendment of its signatures hereon through facsimile or other electronic image file (including .pdf) (i) may be relied upon as if this Amendment were physically delivered with an original hand-written signature of such party, and (ii) shall be binding on such party for all purposes.
5. Successors . This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
6. Final Agreements . This Amendment represents the final agreement of the Borrower, the Parent and the Lender with respect to the subject matter hereof, and may not be contradicted, modified or supplemented in any way by evidence of any prior or contemporaneous written or oral agreements of the Borrower, the Parent and the Lender.
[Remainder of page intentionally blank; signature page follows.]
IN WITNESS WHEREOF, the Borrower, the Parent and the Lender have caused this Amendment to be duly executed by their duly authorized officers, under seal, all as of the date first above written.
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BUYER:
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FUELCELL ENERGY FINANCE II, LLC
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By: |
FuelCell Energy Finance, LLC. |
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Its: |
Sole Member |
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By: |
FuelCell Energy, Inc. |
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Its: |
Sole Member |
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By: |
/s/ Michael S. Bishop |
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Name: |
Michael S. Bishop |
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Title: |
Executive Vice President & Chief Financial Officer |
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PARENT: |
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FUELCELL ENERGY, INC.
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By: |
/s/ Michael S. Bishop |
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Name: |
Michael S. Bishop |
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Title: |
Executive Vice President & Chief Financial Officer |
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LENDER: |
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GENERATE LENDING, LLC. A Delaware limited liability company |
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By: |
/s/ Matan Friedman |
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Name: |
Matan Friedman |
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Title: |
Manager |
SECOND AMENDMENT TO RIGHT TO FINANCE AGREEMENT SIGNATURE PAGE
Right to Finance Agreement
[See attached.]
SECOND AMENDMENT TO RIGHT TO FINANCE AGREEMENT SIGNATURE PAGE
EXECUTION VERSION
GENERATE LENDING, LLC
555 DE HARO STREET, SUITE 300
SAN FRANCISCO, CA 94107
December 21, 2018
FuelCell Energy, Inc.
3 Great Pasture Rd.
Danbury, CT 06810
Attention: Michael Bishop
Dear Mr. Bishop:
Re: RIGHT TO FINANCE AGREEMENT: REGARDING REVOLVING CONSTRUCTION LOAN AGREEMENT (THE “LOAN AGREEMENT”) DATED AS OF DECEMBER 21, 2018 BY AND AMONG FUELCELL ENERGY FINANCE II, LLC (“BORROWER”), CERTAIN OF ITS SUBSIDIARIES AND GENERATE LENDING, LLC (“LENDER”).
In connection with Lender and Borrower entering into the Loan Agreement, Lender, Borrower and FuelCell Energy, Inc. (the “ Parent ”), hereby agree to the following (this “ Agreement ”)
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1. |
All capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Loan Agreement. |
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2. |
During the Term of this Agreement (as defined in Section 8 below), Parent agrees that (i) Parent will not, and will not permit any Subsidiary to, enter into, offer, solicit or negotiate to enter into, any agreements, arrangements, term sheets or commitments with any third party to obtaining debt financing (“ Third Party Construction Financing ”) for the development, construction, installation, commissioning or startup of an Available Project; or (ii) consummate any Third Party Construction Financing for an Available Project, except as permitted pursuant to this Agreement. Parent will not and will not permit any Subsidiary to respond to any unsolicited third-party proposal or offer for Third Party Construction Financing by any person or entity, other than to inform such person or entity that an exclusive right to finance exists with respect to such Available Project, except as permitted pursuant to this Agreement. For the avoidance of doubt, a Third Party Construction Financing shall not mean any debt financing in which Parent is the primary borrower and which is secured by all or substantially all of Parent’s assets (a “ Parent Corporate Facility ”) and nothing herein shall be construed to limit any rights of Parent to consummate a Parent Corporate Facility. |
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3. |
In the event that Borrower has provided a Project Approval Certification and all related information required to be delivered by Borrower pursuant to Section 2.1(b) of the Loan Agreement and requested that (i) Lender determine that such Available Project is an Approved Project, and (ii) Lender provide a Working Capital Loan with regard to such Available Project in accordance with the terms and conditions of the Loan Agreement, and Lender has not provided written notice to Borrower within the eighteen (18) Business Day period referenced in Section 2.1(b) of the Loan Agreement that Lender has determined that such Available Project constitutes an Approved Project, the provisions of Section 2 of this Agreement shall no longer |
apply to such Available Project and Parent and Borrower shall not be subject to any restrictions regarding obtaining Third Party Construction Financing for such Available Project. Notwithstanding the foregoing, in the event that Lender does not designate an Available Project as an Approved Project during the referenced eighteen (18) Business Day period in accordance with this Section 3, if at any time thereafter but prior to Parent’s or Borrower’s closing on a Third Party Construction Financing for such Available Project, a “ Material Change ” shall occur with respect to such Available Project, then Parent shall be required to resubmit such Available Project to Lender in accordance with the provisions of Section 2 prior to consummating any Third Party Construction Financing. For purposes of this Agreement, a “ Material Change ” shall mean any of the following: (i) a material increase in the pricing of the Revenue Contract for such Available Project; (ii) an increase in the term of the Revenue Contract for such Available Project; (iii) a material improvement in the credit rating of the Customer for such Available Project; (iv) a change in the identity of the Customer for such Available Project; (v) a material decrease in the pricing of the EPC Contract or the O&M Agreement for such Available Project or (vi) a material change in the terms or structure of the Revenue Contract, EPC Contract or O&M Agreement.
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4. |
In the event that Lender approves an Available Project as an Approved Project pursuant to Section 2.1 of the Loan Agreement but does not provide a Working Capital Loan to such Approved Project within ninety (90) days after Notice to Proceed has been delivered to Lender for such Approved Project as a result of either: (i) Lender’s breach of its obligations under the Loan Agreement or (ii) the failure of any of the conditions set forth in Section 5.2 of the Loan Agreement to be satisfied despite Borrower’s reasonable efforts; then, in such event, the provisions of Section 2 of this Agreement shall no longer apply to such Approved Project and Parent and Borrower shall be relieved of any restrictions regarding obtaining Third Party Construction Financing for such Approved Project. |
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5. |
In the event that the Borrower has provided a Project Approval Certification and all related information required to be delivered by Borrower pursuant to Section 2.1 of the Loan Agreement and the amount of the Working Capital Loans to be requested for such Available Project combined with all Working Capital Loans then outstanding would, at any point, exceed $100 million, then, within thirty (30) days of Lender’s receipt of such written notice from Borrower, (i) Lender shall obtain approval of its board of directors to lift any restrictions regarding extending Loans in excess of $100 million and provide Borrower with a copy of any such Board approval; and (ii) Lender shall provide substantiation to Borrower showing the Lender has sufficient funds available (either through existing capital commitments, cash on hand or existing credit lines) to make such Working Capital Loans to Borrower. In the event that Lender does not satisfy either of the requirements in clauses (i) or (ii) within such thirty (30) day period, then this Agreement shall terminate at such time and neither Parent or Borrower shall be subject to any further restrictions or obligations set forth herein. |
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repayment of the Working Capital Loans pursuant to Section 2.3(i) of the Loan Agreement, this Agreement shall terminate as of June 30, 2019. |
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7. |
At any time prior to Borrower submitting any Available Project to Lender pursuant to Section 2.1 of the Loan Agreement, Borrower may, in its discretion, submit preliminary information to Lender regarding an Available Project in accordance with Schedule 1 attached to this Agreement (“ Preliminary Project Presentation Information ”) and Lender, in good faith, shall review such Preliminary Project Presentation Information to determine whether such Available Project is likely to be an Approved Project. No later than ten (10) days after Borrower’s submission of Preliminary Project Presentation Information to Lender, Lender shall, in good faith, provide adequate notice (a “ Preliminary Project Response ”) to Borrower whether or not Lender reasonably believes that such Available Project will ultimately be an Approved Project following a subsequent submission pursuant to Section 2.1 of the Loan Agreement. If Lender indicates it does not believe such Available Project will be an Approved Project, then the provisions of Section 2 of this Agreement shall no longer apply to such Available Project and Parent and Borrower shall not be subject to any restrictions regarding obtaining Third Party Construction Financing for such Available Project. Alternatively, if Lender’s Preliminary Project Response is that Lender reasonably believes that such Available Project will be an Approved Project, the provisions of Section 2 of this Agreement shall continue to apply to Parent and Borrower with respect to such Available Project and the final determination of whether such Available Project is an Approved Project will be made in accordance with the provisions of Section 2.1 (b) of the Loan Agreement; provided, however, that, to the extent that the Preliminary Project Presentation Information includes (i) a Credit File for the proposed Customer; (ii) a Revenue Contract with such proposed Customer; (iii) a proposed Construction Budget and Schedule; or (iv) a proposed Project Loan Disbursement Schedule, then by virtue of Lender’s Preliminary Project Response indicating that such Available Project will be an Approved Project, Lender will be deemed to have approved the foregoing items for purposes of Borrower’s subsequent submission of the Available Project to Lender under Section 2.1 of the Loan Agreement; provided that no material change to any such item shall have occurred since the Preliminary Project Presentation. |
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8. |
The term (“ Term ”) of this Agreement shall commence on the date hereof (the “ Effective Date ”) and, unless terminated sooner in accordance with the provisions of Sections 5 or 6 of this Agreement, shall remain in effect until the first to occur of: (i) the third (3 rd ) anniversary of the Effective Date and (ii) the termination of the Commitment pursuant to the Loan Agreement. |
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to Lender, this Agreement shall terminate and neither Parent or Borrower shall be subject to any further restrictions or obligations set forth herein. |
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10. |
This Agreement may be amended or otherwise modified only by a written instrument executed by the parties hereto which (i) specifically refers to the provision of this Agreement to be amended, and (ii) is signed by the parties hereto. This Agreement may be waived but only by a written instrument executed by the party providing the waiver which states that it constitutes a waiver hereunder and specifies the provision(s) being waived. A waiver by one party of any right or benefit provided in this Agreement does not infer or constitute a waiver of any other right or benefit in this Agreement. |
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11. |
Neither party shall transfer or assign any of its rights or obligations hereunder without the prior written consent of the other party and any transfer of obligations hereunder without the prior written consent of both parties shall be void and of no effect. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns. This Agreement is not intended and shall not be construed to create any rights in or to enforceable by any other person other than the parties to this Agreement. |
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12. |
Except for the provisions of Section 9, the parties agree that each of the clauses and sub-clauses of this Agreement shall be separate and several and enforceable as such. The complete or partial invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provision hereof. |
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION. EACH PARTY AGREES THAT ANY AND ALL ACTIONS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS SHALL BE COMMENCED AND PROSECUTED SOLELY AND EXCLUSIVELY IN ANY FEDERAL OR STATE COURT IN THE CITY AND STATE OF NEW YORK, AND ANY APPELLATE COURTS THEREFROM (“ NEW YORK COURTS ”), AND EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO OBJECT TO SUCH VENUE. EACH PARTY IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF THE NEW YORK COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. EACH PARTY CONSENTS TO SERVICE OF PROCESS UPON IT WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, AND BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAWS. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE SUCH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT THERETO. THIS AGREEMENT CONSITUTES A LOAN DOCUMENT.
Any communications between the parties hereto or regular notices provided herein to be given shall be given to the following addresses:
Generate Capital, Inc.
555 DeHaro Street
Suite 300
San Francisco, CA 94107
Email: notices@generatecapital.com
Attention: Notices
To Parent or Borrower:
FuelCell Energy, Inc.
3 Great Pasture Road Danbury, CT 06810 Email:
Attention: Legal Department
[ Remainder of page intentionally blank; signature page follows. ]
Please indicate your agreement to the terms set forth above by executing this Agreement where indicated below and returning a signed copy hereof to Generate, at which point this Agreement will constitute a binding agreement of the parties.
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Very Truly Yours, |
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GENERATE LENDING, LLC. |
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By: |
/s/ Matan Friedman |
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Name: |
Matan Friedman |
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Manager |
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FUELCELL ENERGY FINANCE II, LLC
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By: |
FuelCell Energy Finance, LLC Its: |
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Its: |
Sole Member |
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By: |
FuelCell Energy, Inc. |
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Its: |
Sole Member |
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By: |
/s/ Michael S. Bishop |
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Name: |
Michael S. Bishop |
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Title: |
Senior Vice President & Chief Financial Officer |
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FUELCELL ENERGY, INC.
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By: |
/s/ Michael S. Bishop |
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Name: |
Michael S. Bishop |
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Senior Vice President & Chief Financial Officer |
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RIGHT TO FINANCE AGREEMENT
SIGNATURE PAGE
EXHIBIT 10.4
AMENDMENT NO. 1 TO CONSTRUCTION LOAN AGREEMENT
This AMENDMENT NO. 1 TO CONSTRUCTION LOAN AGREEMENT (this “First Amendment ”) is made and entered into, effective for all purposes and in all respects, as of August 13, 2019, by and between GROTON STATION FUEL CELL, LLC, a Connecticut limited liability company (the “ Borrower ”) and FIFTH THIRD BANK, an Ohio banking corporation (the “ Lender ” and, together with the Borrower, the “ Parties ”).
WHEREAS, the Borrower and Lender entered into that certain Construction Loan Agreement dated as of February 28, 2019 (as amended, modified and/or supplemented from time to time, the “ Loan Agreement ”);
WHEREAS, the Parties now desire to amend the Loan Agreement; and
WHEREAS, the Parties desire to set forth herein the terms and conditions of their agreements and understandings with respect to the foregoing.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the Parties contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending legally and equitably to be bound, hereby covenant and agree as follows:
Section 1. Definitions . Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement.
Section 2. Amendments to Loan Agreement .
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a. |
The definition of “Commitment” in the Loan Agreement is hereby deleted in its entirety and replaced with the following: |
“ Commitment ” means the obligation of the Lender to make Construction Loans to the Borrower pursuant to Section 2.1 in an aggregate outstanding principal amount not to exceed $18,000,000.
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b. |
The definition of “Material Project Agreements” in the Loan Agreement is hereby deleted in its entirety and replaced with the following: |
“ Material Project Agreements ” means: (i) the Power Purchase Agreement; (ii) the Interconnection Agreement, (iii) the Sublease Agreement; (iv) the EPC Contract; (v) the Service Agreement; (vi) the Take-out Commitment Letter; (vii) the binding loan agreement between Borrower and its lenders, in a reasonable and acceptable form and substance that allows for repayment of construction loan of the Lender; and (viii) any replacement of any of the foregoing agreements.
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c. |
Section 6.12 to the Loan Agreement is hereby deleted in its entirely and replaced with the following: |
6.12 Bailee Letters, Take-out Financing . The Borrower shall:
(a) no later than August 16, 2019, deliver to the Lender bailee letters acknowledging the Lender’s lien on the Collateral, each in form and substance reasonably acceptable to the Lender, executed by the Lender, each applicable Loan Party and each owner of the fuel cell unit where such unit is held. In furtherance of the foregoing, the Borrower represents and warrants to Lender that each such unit is owned by and registered in the name of the Borrower;
(b) no later than August 21, 2019, deliver to the Lender an agreement, in form and substance reasonably acceptable to the Lender, executed by the Borrower and the Parent, pursuant to which the parties thereto confirm a plan to fund the remaining project costs needed to complete construction of the Project;
(c) complete the conditioning of the first of the remaining two fuel cell units no later than September 19, 2019 and the final fuel cell unit by October 25, 2019, such that each is completed, ready for operation and in storage; and
(d) deliver to the Lender, no later than September 28, 2019 with an automatic extension through October 21, 2019, if (i) the lender under the Hercules Loan Agreement extend the cure period or standstill period for any event of default under the Hercules Loan Agreement past October 21, 2019 or (ii) if the Hercules Loan Agreement has been repaid in its entirety (i) a binding loan agreement, in form and substance reasonably acceptable to the Lender, executed by the Borrower and the Take-out Lenders, pursuant to which the Takeout Lenders shall have, individually or collectively, agreed to provide a Take-out Financing and (ii) one or more binding letters of intent from tax equity investors committing to provide tax equity financing with respect to the Project; provided that, such date shall be extended by an additional 60 days (I) due to delays outside the control of the Borrower or (ii) if the Lender is reasonably satisfied that the Borrower is negotiating diligently and in good faith with potential Take-out Lenders or tax equity investors.
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d. |
Section 8.1(c) to the Loan Agreement is hereby deleted in its entirely and replaced with the following: |
(c) Any Loan Party shall breach any term, covenant or agreement contained in this Agreement or in any other Loan Documents and such default shall continue for a period in excess of ten (10) Business Days after the earlier of (i) Lender providing written notice to Borrower of such breach and (ii) Borrower having obtained knowledge of such breach; (provided that if the breach cannot reasonably be cured within such ten (10) Business Day period and Borrower shall have commenced to cure the same within such ten (10) Business Day period and thereafter diligently and expeditiously proceeds to cure the same,
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such ten (10) Business Day period shall be extended so long as it shall require Borrower, in the exercise of due diligence, to cure the same, but no such extension shall be for a period in excess of thirty (30) Business Days). Cure periods provided for under this Section 8.1(c) shall not apply to the covenants set forth in Section 6.12, unless Lender is reasonably satisfied that the Borrower is working diligently and in good faith negotiating to meet such deadlines, in which case such cure periods under Section 8.1(c) shall apply, and shall not apply to the covenants in Section 7 or any failure to pay as set forth in Sections 8.1(a) and (b) above; or.
Section 3. Miscellaneous .
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e. |
Amendment . By their respective execution hereof, the Parties acknowledge and agree that this First Amendment is intended to and shall fully satisfy the requirements set forth in Section 10.5 of the Loan Agreement with respect to amendment thereof. |
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f. |
Loan Document . This First Amendment is a Loan Document for all purposes under the Loan Agreement. |
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g. |
No Conflict . To the extent, if any, that any provision of this First Amendment conflicts with or differs from any provision of the Loan Agreement, such provision of this Amendment shall prevail and govern for all purposes and in all respects. |
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h. |
Limited Effect . The foregoing amendment is limited in effect and, except as specifically set forth above, shall apply only as expressly set forth in this First Amendment and shall not constitute a consent, waiver, modification, approval or amendment of any other provision of the Loan Agreement or any other Loan Document. Except as expressly provided herein, (i) nothing herein shall limit in any way the rights and remedies of the Lender under the Loan Agreement and the other Loan Documents, and (ii) the terms and conditions of the Loan Agreement and the other Loan Documents remain in full force and effect and are hereby ratified and affirmed. |
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i. |
Severability . Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and without affecting the validity or enforceability of any provision in any other jurisdiction. |
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j. |
Headings . The headings of various sections of this First Amendment are for convenience of reference only, do not constitute a part hereof and shall not affect the meaning or construction of any provision hereof. |
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IN WITNESS WHEREOF, the Parties have executed this First Amendment as of the date first written above.
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BORROWER |
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GROTON STATION FUEL CELL, LLC |
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FuelCell Energy Finance, LLC |
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Sole Member |
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By: |
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FuelCell Energy, Inc. |
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Its: |
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Sole Member |
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By: |
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/s/ Michael S. Bishop |
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Name: |
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Michael S. Bishop |
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Title: |
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Executive Vice President & Chief |
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Financial Officer |
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LENDER |
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FIFTH THIRD BANK |
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By: |
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/s/ Natalie Trojan |
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Name: |
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Natalie Trojan |
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Title: |
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Vice President |
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