<PAGE> 1
EXHIBIT 10.15
EA9730-53
DEPARTMENT OF NATURAL RESOURCES
EFFICIENCY AND ALTERNATIVE ENERGY PROGRAM
CONTRIBUTION AGREEMENT
THIS AGREEMENT is made in duplicate
BETWEEN:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA ("CANADA"),
represented by the Minster of Natural Resources,
AND: HYDROGENICS CORPORATION,
incorporated under the laws in force in the Province of Ontario,
(the "PROPONENT").
WHEREAS Canada wishes to encourage the adoption of energy
efficiency and renewable energy technologies in all sectors of the Canadian
economy and has established the Efficiency and Alternative Energy Program for
this purpose;
WHEREAS Canada and the Proponent agree that for the Proponent to develop
and implement the Project as described in Schedule A, the Proponent will require
financial assistance from Canada;
AND WHEREAS Canada is willing to provide financial assistance towards
the total Eligible Costs of the Project in the manner and upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, Canada and the Proponent agree as follows:
1. INTERPRETATION
1.1 In this Agreement:
"AGREEMENT" means this Agreement and the attached Schedules A, B and C;
"COMPLETION DATE" means the date specified in Article 3.2;
"ELIGIBLE COSTS" means any cost incurred by the Proponent in the period
between DECEMBER 1, 1999 AND JANUARY 1, 2002 in relation to the Project
and which is listed in Schedule B;
"FISCAL YEAR" means the period beginning on April 1 of any year and
ending on March 31 in the next year;
"INTELLECTUAL PROPERTY" means any information developed by the Proponent
in performance of the Project including, without limitation, data,
techniques, methods, processes, know-how, inventions, designs, formulae,
photographs. drawings, plans, specifications, reports, studies,
technical and procedural manuals, programs including computer hardware
and software and source code, whether susceptible to copyright or not,
and all patents, copyrights, trademarks, and industrial designs arising
therefrom;
"MINISTER" means the Minister of Natural Resources and includes any duly
authorized officers or representatives;
"PROJECT" means the Project described in Schedule A;
"PROPOSAL" means a written proposal including at least a background,
purpose, work description, results expected and a budget, which is
accepted by the Minister for a specific Project; and
"REVENUE" means all considerations received by the Proponent from any
person or party in respect of the licensing, selling, marketing or
commercialization of the Intellectual Property, less returns actually
credited and any applicable sales taxes.
1
<PAGE> 2
2. REPRESENTATIONS AND WARRANTIES
2.1 The Proponent represents and warrants that all factual matters contained
in the Proposal and all material submitted in support are true and
accurate, and that all estimates, forecasts and other related matters
involving judgement were prepared in good faith and to the best of its
ability, skill and judgement.
3. CONDUCT OF PROJECT
3.1 The Proponent shall carry out the Project promptly, diligently and in a
professional manner and in accordance with the terms and conditions of
this Agreement.
3.2 The Proponent shall complete the Project by January 1, 2002.
3.3 The Proponent shall comply with all federal, provincial and municipal
laws in relation to the Project.
4. CONTRIBUTIONS
4.1 Notwithstanding any other provision of this Agreement, Canada's
liability under this Agreement shall not in any circumstances exceed
$200,000.00 plus applicable 7% Goods and Services Tax (GST).
4.2 Subject to the terms and conditions of this Agreement, Canada shall
make a contribution to the Proponent towards the Eligible Costs of the
Project in accordance with Article 5 and Schedule B.
4.3 In order to be eligible to receive a full contribution as described
herein, the Proponent must submit its final claim for payment on or
before MARCH 31, 2002.
4.4 Canada may reduce its contribution by such an amount as the Minister may
decide if the Proponent receives contributions or payments in respect of
the Project covered by this Agreement in addition to, or from sources
other than, those named in its Proposal.
5. METHOD OF PAYMENT
5.1 Subject to Article 5.2, following receipt of a claim, acceptable to the
Minister, for payment of Eligible Costs paid by the Proponent,
accompanied by copies of invoices, vouchers, and any other documents
that the Minister may require, Canada shall pay its contribution towards
the Eligible Costs of the Project.
5.2 Canada shall withhold 10% from any payment under Article 5.1 until:
(a) the Project has been completed to the satisfaction of the
Minister;
(b) a final report documenting the completion of the Project has
been received and approved by the Minister; and
(c) the Minister has approved a final statement of Eligible Costs
paid in respect of the Project.
5.3 The Proponent shall submit claims for payment at least on a quarterly
basis and not more frequently than on a monthly basis.
6. REPAYMENT OF CONTRIBUTION
6.1 The Proponent shall pay to Canada TWO per cent (2.0 %) of the Revenue
received by the Proponent.
6.2 Notwithstanding any other provision of this Agreement, Article 6.1 shall
remain in effect for a period of TEN years or until Canada has received
$200,000.00 from any Revenue received by the Proponent, whichever occurs
first.
6.3 The Proponent shall submit Revenue reports and payments to Canada as
described in Schedule C for the period set out in Article 6.2.
6.4 The Proponent agrees that all considerations to be received by the
Proponent in respect of the licensing, selling, marketing or
commercialization of the Intellectual Property shall be established in a
bona fide arm's length transaction between parties.
7. ACCOUNTS AND AUDIT
7.1 Prior to the Completion Date of the Project and for three years after
the period described in Article 6.2, the Proponent shall.
(a) keep proper books, accounts and records of its Revenue and any
contributions received and expenses incurred and paid in
connection with the Project and shall keep its invoices,
receipts and vouchers relating thereto;
-2-
<PAGE> 3
(b) keep proper and accurate records relating to the environmental
impact (if any) of the Project; and
(c) on demand, make available to the Minister such books, accounts,
records, invoices, receipts and vouchers referred to above and
permit the Minister to examine and audit and take copies and
extracts from such documents.
7.2 If any discrepancy is identified between the amounts paid by Canada and
the amounts actually payable under this Agreement, the appropriate
adjustments shall be promptly made between the parties. If there has been
an overpayment by Canada, the amount of the overpayment shall constitute
a debt due to Canada and may be so recovered.
8. INTELLECTUAL PROPERTY
8.1 Subject to Articles 8.2, 8.3 and 12.1, title to all Intellectual Property
shall be vested in the Proponent.
8.2 The Proponent hereby grants to Canada a non-exclusive, royalty-free
licence in perpetuity to use or sublicense the use of any Intellectual
Property for any purpose, which licence Canada may not exercise until
three years after the Completion Date and then only if in the Minister's
sole opinion the Proponent has failed to take reasonable steps to develop
and market in Canada the products, processes or services to which the
Intellectual Property relates.
8.3 The Proponent shall supply to Canada copies of all reports, documents and
publications arising out of the performance of the Project; and the right
to the copyright in all such reports, documents and publications shall be
vested in Canada which hereby grants to the Proponent a non-exclusive,
royalty-free licence to copy and publish the material provided that
Canada's financial support is prominently acknowledged in any
publication.
8.4 The Proponent shall ensure that any moral rights in the reports,
documents and publications arising out of the performance of the Project
are irrevocably waived in favour of Canada.
8.5 Except with the written consent of the Minister, the Proponent shall not
license the Intellectual Property to any government other than the
Government of Canada or to any person, corporation, partnership or
business for the purpose of manufacturing outside Canada the products or
processes resulting from the Project, and shall place the same
restrictions on any authorized licensee.
8.6 If the Proponent elects not to retain ownership of or use any
Intellectual Property, the Proponent shall notify the Minister of this
election and shall, if the Minister so requires, assign and transfer the
Intellectual Property to Canada, whereupon Canada will grant the
Proponent a non-exclusive, royalty-free licence to use the Intellectual
Property solely for internal purposes, if so requested by the Proponent.
9. INDEMNITY
9.1 The Proponent shall indemnify and save harmless Canada and its Ministers,
officers, employees and agents from and against any and all claims,
damages, loss, costs and expenses which they or any of them may at any
time incur or suffer as a result of or arising out of any injury to
persons (including injuries resulting in death) or loss of or damage to
property which may be or be alleged to be caused by or suffered as a
result of the carrying out of the Project or any part thereof, except to
the extent caused by a breach of duty of Canada or its Ministers,
officers, employees or agents.
9.2 The Proponent shall indemnify and save harmless Canada and its Ministers,
officers, employees and agents from and against any and all claims,
damages, loss, costs and expenses which they or any of them may at any
time incur or suffer as a result of or arising out of any claim, demand
or action for the infringement or alleged infringement of any patent,
registered industrial design, copyright or other intangible property
based upon the use thereof by the Proponent or upon the use of the
Intellectual Property by Canada in accordance with the terms of this
Agreement.
9.3 The Proponent shall indemnify and save harmless Canada and its Ministers,
officers, employees and agents from and against any and all claims,
damages, loss, costs and expenses which they or any of them may at any
time incur or suffer as a result of or arising out of any claim, demand
or action made by a third party against them or any of them based upon
Canada's capacity as a provider of financial assistance under this
Agreement, including without limitation, any claim in respect of
materials or services provided by a third party to the Proponent or to a
subcontractor of the Proponent.
10. ACCESS
10.1 The Proponent shall ensure that the Minister has access during normal
working hours to any premises or place where the Project is being carried
out for the purposes of inspecting and assessing the progress of the
Project and all matters pertaining thereto.
-3-
<PAGE> 4
11. REPORTS
11.1 The Proponent shall submit Project reports satisfactory to the Minister
in accordance with the provisions of Schedule C or as otherwise requested
by the Minister.
12. DEFAULT
12.1 If, in the opinion of the Minister, there has been a misrepresentation or
a breach of warranty under Article 2, or the Proponent fails to proceed
diligently with the Project, or is otherwise in default in carrying out
any of the terms, conditions, covenants, or obligations of this
Agreement, or if the Proponent becomes bankrupt or insolvent, or has a
receiving order made against it (either under the Bankruptcy and
Insolvency Act or otherwise), or a receiver is appointed, or the
Proponent makes an assignment for the benefit of creditors, or if an
Order is made or a Resolution passed for the winding up of the Proponent,
or if the Proponent takes the benefit of any statute for the time being
in force relating to bankrupt or insolvent debtors, the Minister may, by
giving notice in writing to the Proponent, exercise any or all of the
following remedies:
(a) terminate the whole or any part of this Agreement;
(b) terminate the obligation on the part of Canada to pay any monies
in respect of the Project, including monies due or accruing due;
(c) direct the Proponent to repay forthwith all or any part of monies
paid by Canada pursuant to this Agreement and that amount is a
debt due to Canada and may be so recovered;
(d) request the Proponent to assign all rights in the Intellectual
Property and the Proponent shall, if so requested, do so; and
(e) request the Proponent to transfer to Canada title to all or any of
the equipment and supplies purchased by the Proponent to carry out
the Project and funded by Canada under this Agreement, and the
Proponent shall, if so requested, do so.
12.2 In the event of a termination of this Agreement by the Minister under
Article 12.1, Canada may, in the discretion of the Minister, pay to the
Proponent Canada's share of the Eligible Costs of the Project completed
to the date of termination.
-4-
<PAGE> 5
13. SALE OF PROPERTY
13.1 If, prior to the Completion Date of the Project, the Proponent sells,
leases, or otherwise disposes of any property other than Intellectual
Property, where the cost of the property is part of the Eligible Costs
under the Project to which Canada has contributed under this Agreement,
the Proponent shall immediately notify the Minister in writing of the
disposition and, if the Minister so requires, the Proponent shall share
with Canada the proceeds of the disposition in the same ratio as that of
Canada's contribution to the purchase of the property, except that
Canada's share shall not exceed its contribution under this Agreement.
14. SUBCONTRACTS
14.1 Except as provided in the Proposal, the Proponent shall not subcontract
all or any part of the Project funded by Canada unless the Proponent has
obtained the prior written consent of the Minister. Every subcontract
entered into by the Proponent shall provide that the subcontractor shall
comply with the terms and conditions of this Agreement which are
applicable to the subcontract.
15. ACKNOWLEDGMENT
15.1 The Proponent will acknowledge the financial support of Canada in all
public information produced as part of the Project.
16. NOTICES
16.1 The claims for payment, requests, notices, and information referred to in
this Agreement shall be sent in writing or by any method of
telecommunication and, unless notice to the contrary is given, shall be
addressed to the party concerned at the following address:
TO CANADA:
Natural Resources Canada
CANMET Energy Technology Centre
Bells Corners Complex
1 Haanel Drive, Building 3
Nepean, Ontario
K1A 1M1
Attention: Norm Benoit
Telephone: (613) 996-6165
Facsimile: (613) 995-7868
TO THE PROPONENT:
Hydrogenics Corporation
100 Caster Avenue
Woodbridge, Ontario
L4L 5Y9
Attention: Pierre Rivard, President
Telephone: (905) 851-8866-extension 222
Facsimile: (905 851-2328
16.2 Notices, requests and documents are deemed to have been received, if sent
by registered mail, when the postal receipt is acknowledged by the other
party; by telegram, when transmitted by the carrier; by telex or
facsimile, when transmitted and receipt is confirmed; and by messenger or
specialized courier agency, when delivered.
-5-
<PAGE> 6
17. LEGAL RELATIONSHIP
17.1 Nothing contained in this Agreement shall create the relationship of
principal and agent, employer and employee, partnership or joint venture
between the parties.
17.2 The Proponent shall not make any representation that the Proponent is an
agent of Canada and shall ensure that the members of the Proponent do not
make any representation that could reasonably lead any member of the
public to believe that the Proponent or its members or contractors are
agents of Canada.
18. TIME OF ESSENCE
18.1 Time is of the essence of this Agreement.
19. MEMBERS OF THE HOUSE OF COMMONS
19.1 No Member of the House of Commons shall be admitted to any share or part
of this Agreement or to any benefit to arise therefrom.
20. CONFLICT OF INTEREST
20.1 It is a term of this Agreement that no individual, for whom the
post-employment provisions of the Conflict of Interest and
Post-Employment Code for Public Office Holders or the Conflict of
Interest and Post-Employment Code for the Public Service apply, shall
derive a direct benefit from this Agreement unless that individual is in
compliance with the applicable post-employment provisions.
21. FUNDS
21.1 The Proponent shall not make any direct or indirect reference to this
Agreement for the purpose of raising funds without the prior written
approval of the Minister.
22. ASSIGNMENT
22.1 This Agreement shall not be assigned in whole or in part by the Proponent
without the prior written consent of the Minister and any assignment made
without that consent is void and of no effect.
22.2 Where an assignment of this Agreement is made pursuant to Article 22.1,
such assignment shall not relieve the Proponent of any obligation under
this Agreement or impose any liability upon Canada.
23. DISPUTE RESOLUTION
23.1 The parties agree to negotiate all disputes arising from this Agreement
in good faith after receiving written notification of the existence of a
dispute from any party.
23.2 If a dispute arising out of this Agreement cannot be settled amicably
through negotiation, then the parties agree that either party may submit
the dispute to mediation as administered by the Arbitration and Mediation
Institute of Canada Inc. upon written notice to the other party. The cost
of mediation shall be borne equally by the parties.
24. GOVERNING LAW
24.1 This Agreement shall be interpreted in accordance with the laws in force
in the Province of ***.
25. AMENDMENTS
25.1 No amendment of this Agreement nor waiver of any of the terms and
provisions shall be deemed valid unless effected by a written amendment
signed by the parties.
26. ENTIRE AGREEMENT
26.1 This Agreement constitutes the entire Agreement between the parties with
respect to the subject matter of this Agreement and supersedes all
previous negotiations, communications, and other agreements, whether
written or verbal between the parties.
-6-
<PAGE> 7
27. SUCCESSORS AND ASSIGNS
27.1 This Agreement shall enure to the benefit of and be binding on the
parties and their respective representatives, successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed on behalf of HER
MAJESTY THE QUEEN IN RIGHT OF CANADA by an officer duly authorized by the
Minister of Natural Resources and on behalf of the PROPONENT, by an officer duly
authorized in that behalf.
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
May 25, 2000 /s/ MICHAEL BURKE
------------- ----------------------------------------------------
DATE MICHAEL BURKE, TECHNOLOGY MANAGER, INDUSTRY PROGRAMS
HYDROGENICS CORPORATION
18/05/00 /s/ PIERRE RIVARD
------------- ----------------------------------------------------
DATE PIERRE RIVARD, PRESIDENT
-7-
<PAGE> 8
SCHEDULE A
HYDROGENICS CORPORATION
STATEMENT OF WORK
BACKGROUND:
The proposed test station would build on the present HYDROGENICS FCATS
(Fuel Cell Automated Test station) technology, which is now in its 8th
generation of developmental effort. Beyond the features that are currently
offered to the automotive-grade FCATS, the proposed new version would add
significant features that are specific to residential applications. The
proposed design will include means to measure the power conditioning
capability of a residential generator, including the inverter and
inductance simulation, the coupling to the utility grid, the fuel processor
performance, the fuel cell stack performance (including the real-time
measurement of up to 400-cell stacks' individual cell voltages), the heat
recovery system, and others.
Such an appliance does not yet exist in today's market. Most clients have
the capability to develop and manufacture their own test stations, but find
that their resources are better employed developing fuel cells or Membrane
Electrode Assemblies (MEA's) rather than data acquisition and control.
HYDROGENICS and its partners propose to develop a prototype to assess the
marketing potential of a residential FCATS' reliability, performance, cost
and man-machine interface, for the benefit of all utilities, governmental
agencies and fuel cell manufacturers.
OBJECTIVE/PURPOSE:
HYDROGENICS, in concert with Ontario Power Technologies (formerly Ontario
Hydro Technologies) and a group of utilities, propose to develop an
automated test station specifically designed for residential fuel cells.
This advanced design will measure residential fuel cells' energy and mass
balance, effluent concentrations, performance de-rating over time, heat
losses, etc., leading to better products targeted at energy efficiency
designs for future homes. An advanced test station will also allow to
objectively document the environmental benefits of residential fuel cell
systems, helping to prove compliance to international accords on emissions
reduction and to build a compelling case for clean power.
- 8 -
<PAGE> 9
<TABLE>
<CAPTION>
PERFORMANCE TARGETS
-------------------------------------------------------------------------------------------------------------------------------
Functional Residential FCATS
-------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Measure and display individual cells' voltage concurrently, and in real-time 400 cells
-------------------------------------------------------------------------------------------------------------------------------
Measure electrical output harmonics and power conditioning quality To plus or minus 1% FS
-------------------------------------------------------------------------------------------------------------------------------
Real-time, on-line Internal Resistance IR measurement To plus or minus I Ohms
-------------------------------------------------------------------------------------------------------------------------------
Effluent analysis (Gas Chromatography) To 200 ppm CO(plus or minus l)
To 2% molar CO(2)
To 10% molar Bleed air
To 100% RH
To 80% molar N2
-------------------------------------------------------------------------------------------------------------------------------
Rated maximum fuel cell output 12kW
-------------------------------------------------------------------------------------------------------------------------------
Full unattended operations, & safety monitoring 24 hours per day
7 days per week
-------------------------------------------------------------------------------------------------------------------------------
Desired life cycle of test articles(1) 40,000 hrs +
-------------------------------------------------------------------------------------------------------------------------------
Desired life cycle of Test Station > 100,000 hrs
-------------------------------------------------------------------------------------------------------------------------------
Reformate conditioning and metering Load following within 5 seconds
-------------------------------------------------------------------------------------------------------------------------------
Time response for dew point change 5 min
-------------------------------------------------------------------------------------------------------------------------------
Bulk -- Mainframe(W x M x L) (meters) 2.5 x 2 x 1.5
-------------------------------------------------------------------------------------------------------------------------------
Bulk -- Test article cubicle (W x H x L) (meters) 2 x 2 x 2
-------------------------------------------------------------------------------------------------------------------------------
Weight 800 kg
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------
(1) Note that tests will normally be of limited duration: 10's to 100's of
hours, to confirm performance claims of initial units. To certify
commercial-grade products, only several hours of test will be required
prior to commissioning in the field.
- 9 -
<PAGE> 10
MAJOR TASKS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
ACTIVITY COMPLETION WORK
DATE
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Start 1 Jan 2000 Milestone
-------------------------------------------------------------------------------------------------------------------------------
Beta Conceptual 27 Feb 2000 Process & Instrumentation Diagram P&ID, parameterization,
Design - Mechanical design of 3D bulk and clearance/positioning, cabinetry, specifying
components, detailing
-------------------------------------------------------------------------------------------------------------------------------
Beta Conceptual 8 Apr 2000 Design of electrical wiring diagram, physical wiring diagram,
Design -- Electrical terminal box physical layout diagram
-------------------------------------------------------------------------------------------------------------------------------
Beta Conceptual 5 May 2000 Coding main and sub-routines in BridgeVIEW(TM), Man-Machine
Design - Software Interface
-------------------------------------------------------------------------------------------------------------------------------
Beta Satellite Cart 29 Jan 2000 Assembly of piping, sensors, actuators, valves, relays,
Assembly components and wiring
-------------------------------------------------------------------------------------------------------------------------------
Beta Mainframe 12 Aug 2000 Assembly of wiring to/from computer and data acquisition
Assembly circuitry, mounting of terminal box, umbilical cord bulkheads and
gateways, connectors, UPS
-------------------------------------------------------------------------------------------------------------------------------
Beta System 26 Apr 00 Linking of mainframe to satellite, and of satellite to fuel cell stack
Integration / balance of plant
-------------------------------------------------------------------------------------------------------------------------------
Beta Functional 10 Sept 2000 Power up, troubleshooting, leak check, continuity check
Testing
-------------------------------------------------------------------------------------------------------------------------------
Beta Delivery to 15 OCT 2001 Milestone
OPT
-------------------------------------------------------------------------------------------------------------------------------
Beta On-Going 1 Jan 2001 Testing under dynamic load conditions, diurnal load cycles,
Testing at OPT seasonal load cycles, co-generation evaluations
-------------------------------------------------------------------------------------------------------------------------------
Alpha Assembly 20 Sep 2000 Based on Beta model and on initial feedback from OPT testing
-------------------------------------------------------------------------------------------------------------------------------
Alpha Design 15 Mar 2001 Continuous improvement of the pre-commercial design
Iterations at
HYDROGENICS
-------------------------------------------------------------------------------------------------------------------------------
Alpha On-Going 1 Jan 2002 Testing under dynamic load conditions, fuel cell and reformer
Testing at evaluation, and durability/robustness issues.
HYDROGENICS
-------------------------------------------------------------------------------------------------------------------------------
Final Report / 3 Sep 2001 Photographing, diagramming, charting, screen captures, operating
Documentation protocol
-------------------------------------------------------------------------------------------------------------------------------
End of Project 1 Jan 2002 Milestone
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
METHOD OF APPROACH
HYDROGENICS proposes to develop two stations. One Alpha version would be
installed at HYDROGENICS, to be organically modified and improved over the
project's time line. Another version, the Beta, would be installed at OPT(2), to
be trialled with an actual residential system expected to be delivered by
Energy Partners by the end of the first year of this project.
Two stations are required, so that one station can be dedicated "non-stop" to
OPT's commitment to Consolidated Edison to test Energy Partners' residential
fuel cell in the coming year, and one station can be used as a work-in progress
at HYDROGENICS to incorporate design improvements required by pre-commercial
certification.
Design improvements emanating from OPT's Beta test article would be immediately
fed back for embodiment in the Alpha version at HYDROGENICS, so that OPT's
experimental work with Energy Partners can proceed without interruption, and so
that HYDROGENICS can evolve its system to commercial readiness without
impacting on OPT. The second version of the FCATS will entail minimal changes
to the hardware, but will likely involve significant iterations to the softawre.
The mainframe module will include the following elements: industrial-grade
computer, keyboard, mouse, data acquisition modules mounted in a chassis, AC/DC
power supplies (24VDC, +15VDC, -15VDC, 5VDC), cabinet, Uninterruped Power Supply
(UPS), 120 VAC bus and fusing, roller base. The mainframe runs all the software
necessary for remote monitoring and control of the residential system, under
test.
The software will be written in BridgeVIEW, National Instruments' industrial-
grade superset of LabVIEW, a graphical programming tool easily customizable by
users of the FCATS. The data acquisition and control modules
---------------------------------
(2) OPT - Ontario Power Technologies
- 10 -
<PAGE> 11
will be FieldPOINT modules, recently introduced by National Instruments. All
modules will be opto-isolated, for enhanced reliability and safety. Modularity
of RS 485/232 network modules is to ensure expandability and flexibility.
The mechanical parts in the mainframe will include: mass flow controllers,
electrical terminal box, valves and solenoids, thermocouple pads, pressure
relief valves, back pressure regulators, analog pressure gauge, all related
tubing and connections.
There will be two "roll-away" carts in close proximity to the mainframe, and
linked to the main module by an umbilical connection: the programmable load
unit, including a programmable inductance and a programmable resistance to
simulate the full range of home appliances' energy proflle; and an AC impedance
cart, used to measure the internal resistance of the stacks at high currents
without having to scale back the current or to interrupt experiments.
Following the fabrication, the sponsors will conduct extensive testing and
accreditation of the beta and alpha prototype, feeding back information on the
design. During the accreditation phase, favored operating regimes will be
ascertained, and complementary/advanced balance of plant designs will be
developed.
<TABLE>
<CAPTION>
BENEFITS:
<S> <C>
ENERGY SAVINGS: Facilitating up to 660 PetaJoules/annum in Canada, assuming
10% penetration of residential fuel cell markets by 2010.
EMPLOYMENT: 1) Development Phase
-----------------
12 researchers (6.7 person years) at HYDROGENICS and
Ontario Power Technologies OPT
2) Commercialization Phase -
-----------------------
30 new jobs created (Scientific, Production, Support)
SALES: This product will increase HYDROGENICS' sales by 30% (by
$3M) by 2001.
</TABLE>
<TABLE>
<CAPTION>
Amounts in $000's
-----------------
<S> <C> <C> <C> <C>
Sales 1998 1999 2000 2001
Domestic 0 0 0 0.5
Export 0 0 1.5 3.0
</TABLE>
ENVIRONMENT: The advent of distributed generation in the form of
residential fuel cells will incur important energy savings
and emissions reduction. It is estimated yearly energy
savings of 660 PJ , with emissions reduction of 20 MT of
C0(2)-equivalent in green house gas emission.
Distributed generation will allow incremental growth in
grid capacity, rather than oversized and inefficient
quantum increases in large-scale power generation.
Similarly, localized cogeneration (heat+electricity) at
the home level will create important systemic savings in
energy; unlike electrons, heat cannot be adequately
transported over long distances, and thus much of it is
lost under a centralized generation paradigm. By
comparison, the residential Fuel cells' distributed
cogeneration will reduce the systemic caloric waste of
centralized power stations. Distributed generation will
also eliminate the electrical losses incurred in the
transport of electrical power over transmission and
distribution lines.
TECHNOLOGY
LEADERSHIP: This project will consolidate Canadian leadership in the
rapidly evolving field of fuel cells (window of
opportunity accessible only for a limited time, until
larger foreign competitors fill the niche). It will also
expand HYDROGENICS technology base, skills set and
manpower. It will yield lowered manufacturing costs,
leading to lower fuel cell costs and to increased
international competitiveness of the Canadian industrial
base in this emerging market. It will yield Improved
quality control and manufacturability of fuel cells among
residential fuel cell manufacturers. Finally, it will
increase training/R&D opportunities for Ontario Power
Technologies' University partners, preparing the manpower
and skill base necessary to nurture a fast-growing industry
- 11 -
<PAGE> 12
SCHEDULE B
HYDROGENICS CORPORATION
ELIGIBLE COSTS
The Proponent shall be reimbursed for Eligible Costs paid following successful
completion of Project requirements. Canada shall pay an amount equal to the
lesser of the dollar or percentage amount of the Eligible Costs of the Project
as indicated below. Eligible Costs shall be approved in accordance with
Treasury Board Guidelines associated with the execution of the various Tasks as
described in Schedule A. The reimbursable Provincial Sales Tax and the Goods
and Services Tax costs must be net of any tax rebate to which the Proponent is
entitled.
<TABLE>
<CAPTION>
TOTAL ELIGIBLE COSTS $1,499,000.00
<S> <C> <C>
CONTRIBUTORS: $ %
CANADA 200,000.00 13.3
PROPONENT* 1,299,000.00 86.7
*The Proponent's contribution shall include funding from:
IRAP Pre-commercialization Assistance 475,000 31.7
SR&ED tax credits 75,000 5.0
ELIGIBLE COSTS:
Labour 866,000.00
Material & equipment 602,000.00
Travel 10,000.00
Depreciation 5,000.00
Rentals 1,000.00
Legal 15,000.00
Total 1,499,000.00
</TABLE>
NON-ELIGIBLE COSTS:
1)Property Taxes
2)Purchase of Land
- 12 -
<PAGE> 13
SCHEDULE C
HYDROGENICS CORPORATION
REPORTS
1.1 REPORT WITH CLAIMS FOR PAYMENT
With each claim for payment as described in article 5.1, the Proponent
shall submit a report of activities to that time, in sufficient detail to
allow progress to be evaluated.
1.2 REVENUE REPORTS AND PAYMENTS
The Proponent shall provide to the Minister not later than 30 days after
the end of March and September in each calendar year, for the period of
the payment obligation described in ARTICLE 6.2 of this Agreement, a
complete and accurate report (including nil reports) of any Revenue
received by the Proponent and shall include any payments due to Canada.
The reports shall:
(a) contain a statement of the Revenue received by the Proponent;
(b) include a computation of any share of the Revenue, if any, due
and payable to Canada; and
(c) be certified as correct by the Treasurer or some other senior
officer of the Proponent.
1.3 FINAL REPORT
The final report will not contain confidential information but will
contain enough descriptive, technical and energy, environmental and costs
benefits information that it will be suitable for publication as a
Technology Transfer item on its own and/or could be used as the basis for
a fact sheet that would be prepared by others.
- Executive Summary
- Introduction
- Background
- Objectives
- Schematics
- A review of the results of the project with comparisons of the
achievements with the deliverables and of the work completed with the
major work elements, with explanations of any deviations.
- A description of the benefits that have or will accrue as a result of
the project including energy efficiency, environmental impact. costs
and paybacks, and any other appropriate measures such as productivity
and quality improvements.
- 13 -
