<PAGE>
EXHIBIT 10.40
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN
INDICATED WITH A "[x]."
Amendment to PP-GEFS Distributor Agreement
CONFIDENTIAL
Amendment to the Distributor Agreement between GE Fuel Cell Systems, L.L.C. and
Plug Power, L.L.C., dated February 2, 1999
July ___, 2000
This Amendment to the Distributor Agreement (the "Amendment") dated
February 2, 1999 is made and entered into as of this ____ day of July, 2000, by
GE FUEL CELL SYSTEMS, L.L.C., a Delaware limited liability company located at
968 Albany-Shaker Road, Building 1, Latham, New York 12110 (hereinafter referred
to as "GEFCS" or "DISTRIBUTOR"), and PLUG POWER, INC., a Delaware corporation,
successor-in-interest to Plug Power, L.L.C., located at 968 Albany-Shaker Road,
Latham, New York 12110 (hereinafter referred to as "PP" or "SUPPLIER"). GEFCS
and PP are individually referred to herein as a "Party" and collectively as the
"Parties".
WHEREAS, DISTRIBUTOR and SUPPLIER entered into a Distributor Agreement
dated February 2, 1999 (the "Agreement"), in order to set forth, among other
items, DISTRIBUTOR's obligation to market, sell, and provide services for
"Product" and "Pre-Commercial Units," both of which are defined in the
Agreement;
WHEREAS, GEFCS and other General Electric Company affiliates have entered
into various agreements with PP related to the Agreement, including, without
limitation, the letter agreement from GE Power Systems to PP dated February 3,
1999, and the Agreement between PP, GE On-Site Power, Inc., and GEFCS dated
August 27, 1999 ("August 27 Agreement"); and
WHEREAS, DISTRIBUTOR and SUPPLIER now desire to further amend the Agreement
to reflect certain changes, including the revision of the Product and Pre-
Commercial Unit performance specifications and delivery schedules and the
establishment of a process by which GEFCS determines that the Product and Pre-
Commercial Units meet the applicable specifications, as set forth below;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the mutual benefits to be derived
herefrom, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereto agree as follows:
1. Product and Pre-Commercial Unit ("PCU") Performance Specifications
The sections entitled "Pre-Commercial Unit Performance Specifications" and
"Product ("Commercial Unit") Performance Specifications" set forth in
Schedule B of the Agreement are replaced in their entirety with Schedule A
of the Amendment. Schedule A includes, among other things, information
regarding a GEFCS acceptance testing process for PCUs and CUs, by which
GEFCS will determine, in its sole discretion, whether the PCUs and CUs meet
the agreed upon specifications, and GEFCS notifies PP, if applicable, that
the product is "available for sale by GEFCS".
The following sentence is added after the last sentence of Section 1.9 of
the Agreement:
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Amendment to PP-GEFS Distributor Agreement
The term "Pre-Commercial Unit," when used herein, shall include the
Pre-Commercial Unit (PCU) versions of Residential Unit RU1, RU2, RU3,
and RU4.
The following sentence is added after the last sentence of Section 1.11 of
the Agreement:
The term "Product," when used herein, shall include the Commercial Unit
(CU) versions of Residential Unit RU1, RU2, RU3, and RU4.
The following is added after Section 1.16 of the Agreement:
1.17 RU1, RU2, RU3, and RU4. The terms "RU1", "RU2", "RU3", and "RU4",
when used herein, shall mean "Residential Unit" versions 1 through 4 of
Pre-Commercial Units and Commercial Units, with associated performance
levels as set forth in Schedule A of the Amendment.
1.18 Amendment. The term "Amendment", when used herein, shall mean the
Amendment to this Agreement dated July ____, 2000.
2. GEFCS PRODUCT PURCHASE GOALS
DISTRIBUTOR's Global Sales Commitments and Major Market Sales Commitments,
as defined in the Agreement, are deleted.
Section 5.2 of the Agreement is deleted in its entirety and replaced with
the following:
5.2 Product Purchase Goals. DISTRIBUTOR will use commercially
reasonable efforts, subject to delivery of the PCUs and CUs deemed by
GEFCS to be available for sale in accordance with the delivery schedule
set forth in Paragraph 10 of the Amendment, to achieve the purchase
goals set forth below by December 31, 2004.
GEFCS Purchase Goals
PCUS AND CUS (COMBINED)
-----------------------
RU1 [X]
RU2 AND RU3 (COMBINED) [X]
RU4 [X]
In the event that PP does not deliver to GEFCS PCUs and CUs a) deemed
by GEFCS to be available for sale and b) in accordance with the
delivery schedule set forth in Paragraph 10 of the Amendment, GEFCS
and PP shall mutually agree on revised purchase goals, provided that
if GEFCS and PP are unable to agree on such revised purchase goals, no
product purchase goals shall be applicable.
Section 5.5 of the Agreement is deleted in its entirety and replaced with
the following:
5.5 [Section intentionally left blank]
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Amendment to PP-GEFS Distributor Agreement
The phrase "in accordance with Schedule D" is deleted from
Section 4.3(a) of the Agreement.
Schedule D of the Agreement is deleted in its entirety and replaced with
the following:
SCHEDULE D
[This Schedule intentionally left blank]
3. PCU and Product Warranties
Section 7 of the Terms and Conditions of Purchase/Sale set forth in
Schedule B of the Agreement is revised as follows:
a. The second sentence of subsection (c) is deleted and replaced by the
following:
For Products purchased under this Agreement during the period ending
December 31, 2004, the foregoing warranties shall apply for a period
that is the greater of (a) [X] from the date of installation, or (b)
[X] from the date of SUPPLIER's invoice to GEFCS following delivery of
the Product and associated components. This Product warranty period
shall apply to all of the CU versions of RU1, RU2, RU3, and RU4.
For Products purchased under this Agreement beginning January 1, 2005,
the foregoing warranties shall apply for a period that is the greater
of (a) [X] from the date of installation, or (b) [X] from the date of
SUPPLIER's invoice to GEFCS following delivery of the Product and
associated components. This Product warranty period shall apply to all
of the CU versions of RU1, RU2, RU3, and RU4.
b. The third sentence of subsection (c) is deleted and replaced by the
following:
For Pre-Commercial Units purchased under this Agreement, the foregoing
warranties shall apply for a period that is the greater of (a) [X] from
the date of installation or [X] from the date of SUPPLIER's invoice to
DISTRIBUTOR following delivery of the PCU and associated components to
DISTRIBUTOR, whichever is less, and (b) the period of time until a CU
of the same RU version as the Pre-Commercial Unit is available for sale
by DISTRIBUTOR (as determined by DISTRIBUTOR pursuant to the PCU and
Product acceptance criteria in Schedule A of the Amendment). This PCU
warranty period shall apply to all of the PCU versions of RU1, RU2,
RU3, and RU4.
c. The fourth paragraph beginning with the sentence, "For Products,
SUPPLIER will provide DISTRIBUTOR with the option of purchasing an
extension to the initial warranty period" is deleted.
4. CU RU1 Replacement
The following paragraph shall be added after the third paragraph of Section
7 of the Terms and Conditions of Purchase/Sale set forth in Schedule B of
the Agreement:
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Amendment to PP-GEFS Distributor Agreement
PP, at its sole expense, will replace each CU RU1 with a CU RU4 that
is deemed available for sale by GEFCS. PP will complete each
replacement within [X] of installation of each RU1. Replacement will
not extend the Product warranty period beyond the warranty period set
forth in Paragraph 3(a) of the Amendment, provided, however, that in
no event shall the warranty period for the replacement CU RU4 apply
for a period less than [X] beginning on the date of installation of
such CU RU4. In the event that PP is unable to replace any RU1 within
[X] of installation [X], then PP agrees, at GEFCS's sole option, to
either (a) refund to GEFCS, or such other party as designated by
GEFCS, all [X] incurred by GEFCS, its distributors, or end-users in
connection with the failure to replace the RU1, including without
limitation the total [X] price paid by the then-current owner of the
RU1 for such RU1 and all installation, removal, and shipping costs of
the RU1, or (b) pay to the then-current owner of the RU1 [X] until
such time that a replacement RU4 is available, at which time PP, at
PP's sole expense, will replace such CU RU1 with a CU RU4.
5. PCU and CU Prices
Section 3.3(a) of the Agreement is deleted in its entirety and replaced
with the following:
3.3(a) The prices charged to DISTRIBUTOR for all PCUs and CUs
purchased hereunder shall be the lower of (i) the applicable prices
set forth in the Amendment, including all Schedules thereto, and (ii)
the lowest prices charged by SUPPLIER to any other person or entity
for the same such PCU or CU in similar quantities during the [X]
preceding DISTRIBUTOR's purchase.
The following is added after Section 3.3(d) of the Agreement:
(e) For Products other than the PCU and CU versions of RU1, RU2, RU3,
and RU4 offered for sale by SUPPLIER to DISTRIBUTOR, SUPPLIER's
prices to DISTRIBUTOR (i.e., transfer prices) will be as mutually
agreed in good faith between the Parties. In the event that the
Parties can not agree on transfer prices applicable to such additional
Products, then the Parties shall commence nonbinding mediation to
establish the transfer prices, which mediation shall be facilitated by
a mediator selected by the Parties. In the event that the Parties are
not able to agree on transfer prices during the ninety (90) day period
following the commencement of mediation, either Party may submit to
arbitration the issue of establishing the transfer prices. Such issue
shall be determined by one arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
(AAA) as then in effect and except as modified by explicit provision
in this Article.
The Parties may mutually agree to extend the time periods provided for
in the AAA Arbitration Rules. Unless the Parties agree otherwise or
the arbitral tribunal directs otherwise, the locale of the arbitration
will be Latham, New York. At its discretion, the arbitral tribunal
may hold pre-hearing conferences or adopt other procedures (including
reasonable discovery). The right to reasonable examination of
opposing witnesses in oral hearing will not be denied. The English
language shall be used in the arbitral proceedings. Each Party will
bear its own costs of presenting or defending its position in the
arbitration.
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Amendment to PP-GEFS Distributor Agreement
(f) DISTRIBUTOR will have the right to audit SUPPLIER's financial
records to the extent necessary to confirm SUPPLIER's calculation of
actual [X].
The first sentence of Section 6.9 of the Agreement is deleted in its
entirety and replaced with the following:
Prices to DISTRIBUTOR for PCU, Product, and additional Product
replacement parts will be as mutually agreed by the Parties; provided
however that in no case will the prices exceed SUPPLIER's actual [X].
All major components replaced by SUPPLIER pursuant to the warranty
provisions herein will be returned to SUPPLIER at SUPPLIER's request
and at SUPPLIER's expense.
6. PCU AND CU PRICES (THROUGH 12/31/2004)
Schedule C of the Agreement is deleted in its entirety and replaced by the
following:
PCU and Product Prices
PCU PRICE TO GEFCS CU PRICE TO GEFCS
($/UNIT) ($/UNIT)
------------------ -----------------
RU1 $[X] $[X]
RU2 [X] [X]
RU3 [X] [X]
RU4 [X] [X]
Prices shown are for the PCUs and CUs as specified in Schedule A of
the Amendment and deemed available for sale by GEFCS. Prices for the
PCUs and CUs as shown are firm (i.e., not subject to change) and will
apply during the period beginning on the execution date of the
Amendment and ending on December 31, 2004.
Provided that SUPPLIER meets the PCU RU1 delivery date set forth in
Paragraph 10 of the Amendment, DISTRIBUTOR will, on or before July 1,
2001, on a monthly basis provide SUPPLIER with a 12-month rolling
forecast of DISTRIBUTOR's monthly purchases. Each of the first [X] of
DISTRIBUTOR's forecast will be a firm order. DISTRIBUTOR's forecast
for the final [X] of the forecast period is for SUPPLIER's planning
purposes only. DISTRIBUTOR, at its sole discretion, may change the
monthly purchase forecast in any month in the final [X] forecast
period by any amount. In the event that SUPPLIER fails to meet the
PCU RU1 delivery date set forth in Paragraph 10 of the Amendment,
DISTRIBUTOR will begin providing SUPPLIER with 12-month rolling
forecasts 3 months after the date that SUPPLIER first makes PCU RU1
available for sale by DISTRIBUTOR.
Any Products for which DISTRIBUTOR has issued a purchase order, but is
unable to sell, may be held in SUPPLIER's inventory at the request of
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Amendment to PP-GEFS Distributor Agreement
DISTRIBUTOR. Electing to have SUPPLIER hold DISTRIBUTOR's inventory
does not relieve DISTRIBUTOR of its obligations under the purchase
order. DISTRIBUTOR will reimburse SUPPLIER for its fully loaded
inventory carrying cost, including warehouse expenses, interest, and
any inventory carrying cost charged to SUPPLIER by SUPPLIER's vendors
as a direct result of DISTRIBUTOR's request for SUPPLIER to hold
inventory. On or before April 1, 2001, SUPPLIER will provide
DISTRIBUTOR with a firm price for the monthly inventory carrying
charge for 2001. On or before each August 1 thereafter, SUPPLIER will
provide DISTRIBUTOR with a firm price for the monthly inventory
carrying charge for the upcoming year.
The last sentence of Section 6.6 of the Agreement is deleted in its
entirety.
7. PCU and CU Prices (1/1/2005 - 3/4/2009)
The last two sentences of Section 5.1 of the August 27 Agreement are
deleted in their entirety and replaced with the following:
For the period January 1, 2005-December 31, 2006, the CU price to be
paid by DISTRIBUTOR (the "Transfer Price") will be as set forth in
Schedule B of the Amendment to the Distributor Agreement dated July
31, 2000 ("Amendment"). In the event that (a) SUPPLIER's actual [X]
(defined as [X] (defined as [X]), provided that manufacturing overhead
may not exceed [X] of the sum of direct material costs plus direct
labor costs), as set forth in Column B of Schedule B of the Amendment
for the applicable production lot (based on total PP cumulative
production volume for all customers) exceed the Transfer Price for
such lot, and/or (b) the Transfer Price for such lot exceeds the [X],
then the Transfer Price for such lot will be set at [X]. When used in
the Amendment, [X] shall mean then prevailing average, global retail
price for a PEM Fuel Cell-Powered Generator Set (as defined in Section
1.7 of the Agreement) of comparable features (including kW output,
cogeneration capability, efficiency, life, and lifecycle cost) to the
Product.
The Parties will establish a mutually agreed upon mechanism for
establishing the [X] no later than July 1, 2003; provided however that
if the Parties cannot reach agreement on the mechanism, then the
Parties shall commence nonbinding mediation to establish the [X],
which mediation shall be facilitated by a mediator selected by the
Parties. In the event that the Parties are not able to agree on a [X]
during the ninety (90) day period following the commencement of
mediation, either Party may submit to arbitration the issue of
establishing the [X]. Such issue shall be determined by one arbitrator
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (AAA) as then in effect and except as modified
by explicit provision in this Article.
The Parties may mutually agree to extend the time periods provided for
in the AAA Arbitration Rules. Unless the Parties agree otherwise or
the arbitral tribunal directs otherwise, the locale of the arbitration
will be Latham, New York. At its discretion, the arbitral tribunal
may hold pre-hearing conferences or adopt other procedures (including
reasonable discovery). The right to
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Amendment to PP-GEFS Distributor Agreement
reasonable examination of opposing witnesses in oral hearing will not
be denied. The English language shall be used in the arbitral
proceedings. Each Party will bear its own costs of presenting or
defending its position in the arbitration.
For the period January 1, 2007-March 4, 2009, the Transfer Price will
be as set forth in Schedule B of the Amendment. In the event that (a)
SUPPLIER's [X] for the applicable production lot exceed the Transfer
Price for such lot, and/or (b) the Transfer Price for such lot exceeds
the [X], then the Transfer Price for such lot will be set at the [X].
SUPPLIER's Direct Costs and the Transfer Prices, as set forth Schedule
B of the Amendment, are expressed in nominal (i.e., year 2000) dollars
and will be adjusted on each January 1st, beginning January 1, 2005,
for changes in the Producer Price Index ("PPI") from the prior period
(e.g., on January 1, 2005, the Direct Costs and Transfer Prices will
be adjusted for changes in the PPI from the execution date of the
Amendment to January 1, 2005. On January 1, 2006, the Direct Costs
and Transfer Prices will be adjusted for changes in the PPI from
January 1, 2005 to January 1, 2006).
8. OPTION TO EXTEND TERM/CU PRICES (3/5/2009-12/31/2014)
The following sentence is added after the first sentence of Section 5.1 of
the August 27 Agreement:
GEFCS shall have the option of extending the termination date of the
Distributor Agreement from March 4, 2009 through December 31, 2014,
provided that such option will expire on July 31, 2008, unless
exercised by GEFCS on or prior to that date. If GEFCS elects to
extend the Distributor Agreement, the payment terms and purchase goals
in existence at the end of the current (i.e., March 4, 2009) term will
apply for the [X] (i.e., [X] through [X]).
The following is added as the last paragraph of Section 5.1 of the August
27 Agreement:
In order to supplement the Distributor Agreement with Product transfer
prices applicable to the period March 5, 2009-December 31, 2014, GEFCS
and PP agree to begin discussions of such prices not later than
January 1, 2008, and engage in negotiations to conclude such
discussion by March 31, 2008. In the event GEFCS and PP fail to
mutually agree on transfer prices, the prices shall be set at [X].
9. PAYMENT TERMS
The fifth sentence of Section 2 of the Terms and Conditions of
Purchase/Sale in Schedule B of the Agreement is deleted and replaced by the
following two sentences:
Unless otherwise agreed between SUPPLIER and DISTRIBUTOR, payments
shall become due [X] days from DISTRIBUTOR's receipt of SUPPLIER's
invoice. For any of DISTRIBUTOR's orders where SUPPLIER is more than
one month late in delivery, DISTRIBUTOR, at its sole option, may
cancel any or all of such order.
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Amendment to PP-GEFS Distributor Agreement
10. PCU AND PRODUCT DELIVERY SCHEDULE
The following is added after Section 6.10 of the Agreement:
6.11 Delivery Schedule. SUPPLIER shall use best efforts to deliver
PCUs and CUs to DISTRIBUTOR according to the following schedule:
PCU AND CU DELIVERY SCHEDULE
PCUS AVAILABLE TO CUS AVAILABLE TO
DISTRIBUTOR DISTRIBUTOR
----------------- ------------------------------
RU1 [X] [X]
RU2 [X] [X]
RU3 [X] [X]
RU4 [X] [X]
Section 6.7(a) of the Agreement is deleted in its entirety and replaced
with the following:
SUPPLIER will use best efforts to maintain a minimum annual Product
production capacity necessary to meet DISTRIBUTOR's CU purchase goals
as shown in Paragraph 2 of the Amendment. To the extent SUPPLIER
experiences capacity constraints that limit its ability to deliver
PCUs or Products to DISTRIBUTOR, PP will allocate the PCUs and/or
Products to GEFCS and to other parties that have placed firm orders on
a pro rata basis as a proportion of their firm orders.
Sections 6.7(b) and 6.7(c) of the Agreement are deleted in their entirety.
The second sentence of Section 3 (Delivery and Passage of Title) of the
Terms and Conditions of Purchase/Sale of Schedule B of the Agreement is
deleted in its entirety and replaced with the following two paragraphs:
If SUPPLIER fails to deliver the PCU and CU versions of RU1, RU2, RU3,
and/or RU4 in accordance with the delivery schedule set forth in
Paragraph 10 of the Amendment or such units are delivered in
accordance with the delivery schedule but are deemed by GEFCS not to
be available for sale, then the unit price to DISTRIBUTOR for each
unit deemed available for sale, in addition to the remedies available
to DISTRIBUTOR elsewhere under the Agreement and the Amendment, will
be reduced by [X] for each month of delay (e.g., CU RU1 delivery in
[X], represents a 1 month delay) after the first two months of delay
(i.e., SUPPLIER has a 2 month grace period); provided that the unit
price to DISTRIBUTOR will not be reduced by more than [X], and the
price reduction will apply only for the first [X] after the delayed
PCU and/or CU version becomes available to DISTRIBUTOR (e.g., if
SUPPLIER first makes PCU RU3 available in [X], DISTRIBUTOR's price for
PCU RU3 for the period [X] to [X] will be $[X]/unit, returning to
$[X]/unit beginning [X]).
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Amendment to PP-GEFS Distributor Agreement
If SUPPLIER delivers the PCU and CU versions of RU1, RU2, RU3, and/or
RU4 prior to the delivery schedule set forth in Paragraph 10 of the
Amendment and such units are deemed by GEFCS to be available for sale,
then the unit price to DISTRIBUTOR for each unit deemed available for
sale will be increased by [X] for each month of acceleration; provided
that the unit price to DISTRIBUTOR will not be increased by more than
[X], and the price increase will apply only for the first [X] after
the accelerated PCU and/or CU version becomes available to DISTRIBUTOR
(e.g., if SUPPLIER first makes PCU RU3 available in [X], DISTRIBUTOR's
price for PCU RU3 for the period [X] to [X] will be $[X]/unit,
returning to $[X]/unit beginning [X]).
11. TERMINATION FOR CAUSE
The following paragraph is added after the first sentence of Section 4.2 of
the Agreement:
This Agreement may be terminated by GEFCS prior to expiration of the
initial five (5) year term or any renewal term hereof by furnishing
prior written notice to PP in the event PP should fail to perform any
of its obligations set forth in the Amendment, including its
obligations in the Schedules thereto, provided PP shall fail to remedy
any such nonperformance within 120 days after receiving written demand
therefor.
12. COMPETING PRODUCTS
The following paragraphs revise the letter agreement between GE Power
Systems and Plug Power, L.L.C., dated February 3, 1999:
In the event that PP does not offer PEM fuel cell-powered generator
sets capable of producing maximum continuous output of (a) [X]),
and/or (b) [X]), that are (i) suitable for residential, commercial,
and/or industrial stationary power applications outlined in the
paragraph 1 of Schedule A-1 of the Agreement, and (ii) capable of
running on natural gas and LPG fuel, and (iii) capable of producing
IEEE 519-quality AC electricity at [X] and [X] Hz, and (iv) available
for commercial sale by GEFCS, and another manufacturer has a PEM fuel
cell-powered generator set available in the [X] and/or [X] kW size
range(s) available for commercial sale by GEFCS ("Competing Product"),
then upon one hundred and twenty (120) days written notice to PP,
GEFCS or a GEFCS affiliate may, at its sole option, become a
distributor for such non-PP PEM fuel cell, provided that PP does not
produce a competitive product in that size range within the one
hundred and twenty (120) day period.
GEFCS will provide PP with (a) notice of the availability of a
Competing Product at the earliest feasible date, and (b) periodic
marketing updates that address, among other matters, distributor and
end-user feedback on the Products, GEFCS's marketing plans, and the
demand for various sized products.
In the event that GEFCS or a GEFCS affiliate elects to distribute a
non-PP PEM fuel cell-powered generator set in the [X] kW size range
("Non-PP [X] kW PEM Gen Set"), then PP may name additional
distributors, on either an exclusive or
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Amendment to PP-GEFS Distributor Agreement
non-exclusive basis, for PP product in the [X] kW size range ("PP [X]
kW PEM Gen Set"), provided that PP shall notify GEFCS when PP deems,
in its sole discretion, that such PP [X] kW PEM Gen Set is
commercially available and GE may elect during the sixty (60) day
period following such notice to discontinue distribution of the Non-PP
[X] kW PEM Gen Set and become the exclusive distributor of the PP [X]
kW PEM Gen Set.
In the event that GEFCS or a GEFCS affiliate elects to distribute a
non-PP PEM fuel cell-powered generator set in the [X] kW size range
("Non-PP [X] kW PEM Gen Set"), then PP may name additional
distributors, on either an exclusive or non-exclusive basis, for PP
product in the [X] kW size range ("PP [X] kW PEM Gen Set"), provided
that PP shall notify GEFCS when PP deems, in its sole discretion, that
such PP [X] kW PEM Gen Set is commercially available and GE may elect
during the sixty (60) day period following such notice to discontinue
distribution of the Non-PP [X] kW PEM Gen Set and become the exclusive
distributor of the PP [X] kW PEM Gen Set.
13. GENERAL PROVISIONS
In the event of a conflict between the terms of this Amendment and any
other ancillary documents related thereto, the terms of this Amendment
shall apply.
This Amendment may be executed in one or more counterparts, and by the
different Parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this Amendment.
This Amendment shall be construed without regard to any presumption or rule
requiring construction or interpretation against the Party drafting or
causing any instrument to be drafted.
The headings contained in this Amendment are for convenience of reference
only, do not constitute a party of this Amendment, and will not be used in
interpreting this Amendment.
Except as expressly set forth herein, this Amendment in no way alters or
affects any other terms of the Agreement, which otherwise remains in full
force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date
first above written.
PLUG POWER, INC.
BY: /S/ Gary Mittleman
--------------------------
NAME: GARY MITTLEMAN
TITLE: PRESIDENT AND CEO
GE FUEL CELL SYSTEMS, L.L.C.
BY: /S/ Barry Glickman
--------------------------
NAME: BARRY GLICKMAN
TITLE: PRESIDENT
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Amendment to PP-GEFS Distributor Agreement
SCHEDULE A
RU1, RU2, RU3, AND RU4 PERFORMANCE SPECIFICATIONS
RU PRODUCT CONCEPT:
The RU product is a fuel cell-powered generating system for the home, designed
to provide the power needs of a "standard" household, defined as one using [X]
kWh per year. The RU system sits outside or inside the home and is connected
directly into the home's electrical system via the [X]. It may be run grid
independent, or grid-connected, depending on the end-user and local conditions.
The system runs on natural gas or LPG and is low cost, efficient, and
environmentally friendly.
The Product will be introduced over time as a series of three releases, preceded
by a Pre-Commercial Unit at the beginning of each release. The Product releases
are called: RU1, RU2 and RU3 (to be released simultaneously), and RU4. Each
subsequent release provides improved functionality, and cost savings to the
homeowner. RU2 and RU3 are identical units except that RU2 is designed for
natural gas fuel and RU3 for LPG fuel.
PRE-COMMERCIAL UNITS:
The terminology Pre-Commercial (PCU) is identical to and interchangeable with
the Plug Power terminology [X] unit. The objective is for the PCUs to have
similar appearance, technology, functionality and performance to the Commercial
Unit (CU) RU product, including:
1. The PCU performance specifications are as indicated in the attached
table (PCU RU Performance Specifications).
2. PCUs will be complete to the point where interfaces between major
components (including, but not limited to, stack, reformer, inverter,
etc.) will be the CU RU.
3. Weight, size, and physical appearance will be similar to the CU RU.
4. Operating methodology used to start, run and maintain the PCU will be
the same as the CU RU.
RU1:
OVERVIEW: Grid connected, natural gas-fueled product providing complementary
power, capable of [X] purposes only.
MAIN FEATURES:
. Grid connected unit with the ability to run [X] cumulative hours per
year.
. In [X] operation, system [X]supports the entire home.
. RU1 recognizes [X] to the home for a period longer than [X].
. RU1 recognizes the availability of grid power and resynchronizes without
power loss to the home of more than [X].
. In [X] mode the unit will regulate voltage and frequency while delivering
power to the required specifications.
. When operating in [X] the system will shut down.
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Amendment to PP-GEFS Distributor Agreement
. The system will indicate mode change [X].
. The system is capable of [X] being present.
. The system has two available settings [X] kW power requirements.
. [X] operation is used when [X]. Operating strategy and implementation
will be [X] as compared to [X].
. System efficiency will be evaluated based on the unit's ability to
deliver kW to the house for each unit of natural gas fuel input to the
system. [X]
. The unit will have [X].
. The CU RU1 systems will meet the all of the performance specifications
indicated for RU1 in the attached table ("CU RU Performance
Specifications").
RU2:
OVERVIEW: Grid independent, natural gas-fueled product providing primary power
with grid providing back up service.
IMPROVEMENTS OVER RU1
. 50Hz capability
. Improved efficiency
. Grid independent
. [X] load following capability (e.g., unit output response time to
changes in customer load)
MAIN FEATURES:
. System has the ability to [X].
. System is designed to achieve total kW delivered to the homeowner with
minimum natural gas usage. [X]
. In the case of a [X].
. When [X], the system will shut down.
. The system packaging will provide [X].
. The system is capable of [X] being present.
. Transition of the house load between the system and the grid shall occur
with a [X]. The system will indicate mode change [X].
. Plug Power will offer an [X].
. Plug Power will offer [X].
. The system will regulate voltage and frequency while delivering power to
the required specifications.
. The unit will have a [X].
. The CU RU2 systems will meet the all of the performance specifications
indicated for RU2 in the attached table ("CU RU Performance
Specifications").
RU3:
OVERVIEW: Grid independent, LPG-fueled product providing primary, stand-alone
power.
IMPROVEMENTS OVER RU1
. LPG (HD5) fuel capability
12
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Amendment to PP-GEFS Distributor Agreement
. 50Hz capability
. Improved efficiency
. Grid independent
. [X] load following capability (e.g., unit output response time to
changes in customer load)
MAIN FEATURES:
. The system is designed to run grid independent, without a grid back-up.
However, the system has ability to [X].
. System is designed to achieve total kW delivered to the homeowner with
minimum LPG usage [X].
. In the case of a [X].
. The system packaging will provide [X].
. The system is capable of starting without the grid being present.
. The system will regulate voltage and frequency while delivering power to
the required specifications.
. When [X], the system will shut down.
. Transition of the house load between the system and the grid shall occur
with [X].
. Plug Power will offer [X].
. The unit will have [X].
. The CU RU3 systems will meet the all of the performance specifications
indicated for RU3 in the attached table ("CU RU Performance
Specifications").
RU4:
OVERVIEW: Grid independent product targeted at grid displacement (i.e., cost
savings versus continuing to buy from grid is the primary customer CTQ)
IMPROVEMENTS OVER RU2/RU3
. [X] balanced
. Higher efficiency operation
. Higher reliability
. Lower operation and maintenance (O&M) costs
MAIN FEATURES:
. The system is designed to run grid independent, without a grid back-up.
However, the system has ability to [X].
. System is designed to achieve total kW delivered to the homeowner with
minimum fuel usage. [X].
. In the case of a [X], the system will [X].
. The system packaging will provide [X].
. The system will be [X] earlier RU versions is not needed.
. The system is designed for routine maintenance visits every [X] (as
opposed to the [X] required for RU1, RU2 and RU3).
. The system will have options to utilize either natural gas or LPG. The
operating strategy will be the [X] for either fuel type, but the system
efficiencies will [X] (as reflected in the "RU Performance
Specifications" table).
. The system will [X].
13
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Amendment to PP-GEFS Distributor Agreement
. The system is capable of starting without the grid being present.
. The system will regulate voltage and frequency while delivering power to
the required specifications.
. When [X], the unit will provide [X]. If [X], the system will [X]. [X].
If after the [X], the system will shut down.
. Transition of the house load between the system and the grid shall occur
with a [X]. The system will indicate mode change via [X].
. Plug Power will offer an [X]. When grid connected the RU4 system will
provide the [X].
. Plug Power will offer [X].
. The unit will have [X].
. The CU RU4 systems will meet the all of the performance specifications
indicated for RU4 in the attached table ("CU RU Performance
Specifications").
CERTIFICATIONS:
. CU versions of RU1, RU2, RU3, and RU4 (including the external packaging
of all RU versions), will be compliant with all requisite standards
(including, but not limited to, [X]).
. CU versions of RU1, RU2, RU3, and RU4 will have a [X] certification.
. PCU and CU versions of RU1, RU2, RU3, and RU4 must satisfy GE's
environmental, health and safety (EH&S) review as a condition of
acceptance.
. CU versions of RU1, RU2, RU3, and RU4 are intended to be capable of
parallel operation with an electrical grid. Hence, these products will
be built with inverters that are [X].
DOCUMENTATION:
. PCU and CU versions of all RU products will be shipped with sufficient
documentation (including, but not limited to, standard [X]) to allow for
start-up and service by individuals with a skill level comparable to a
typical [X], after such individual has completed [X] service training
program.
SHIPPING:
. Plug Power will prepare all PCUs and CUs to allow for standard
commercial shipment (e.g., truck, rail, cargo ship) to customer
locations in the US and overseas. Plug Power will be responsible for
supplying all pertinent shipping paperwork including material safety
data sheets and hazardous material disclaimers (Reference GE
requirements [X]).
MONITORING AND DIAGNOSTICS:
. PCU and CU versions of all RU products will be designed to accommodate
[X]. At a minimum, the RU system [X] will allow the [X]. For grid
parallel RU products, the [X] system will also allow for adjustment of
the [X] on the unit.
. For PCU and CU versions of all RU products, maintenance providers must
be able to [X]. [X].
. PCU and CU versions of all RU products will have the ability to [X].
INTERCONNECTION:
. PCU and CU versions of all RU products will be capable of
interconnection to the electrical system of a typical single family
residence. Each RU system will have a [X]. The [X] for RU1 will be
defined by [X]. [X] for RU2, RU3 and RU4 will be defined no later than 2
months prior to the respective PCU launch.
14
<PAGE>
. PCU and CU versions of all RUs will be able to connect and operate to
the utility grid without [X]; provided however, that the RU operate [X].
. Power transfer from the PCU and CU version of all RUs to the electric
grid will take no longer than [X]. The power transfer will not [X].
Service Call Rate ("SCR"):
[X]
PCU AND CU ACCEPTANCE CRITERIA:
[X]
15
<PAGE>
PCU RU PERFORMANCE SPECIFICATIONS
<TABLE>
<CAPTION>
RU1 RU2 RU3 RU4 RU4
----------------------------------------------------------------------------------------------------
GRID GRID Remote Stand Alone Stand Alone
Parallel w/ Independent Stand Alone - Grid - Grid
emergency w/ GRID Displacement Displacement
Stand Alone backup
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
[X]
[Eight pages have been omitted]
16
<PAGE>
SCHEDULE B
----------
PP Direct Costs and Transfer Prices to GEFCS
<TABLE>
<CAPTION>
# OF UNITS PP PROJECTED DIRECT COST* GE PRICE
LOT # IN LOT ($/UNIT) (TRANSFER PRICE)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
RU1
RU2/3
RU4
2005 -
</TABLE>
[X]
[One page has been omitted]
17
