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EXHIBIT 10.16
INDUSTRIAL RESEARCH ASSISTANCE PROGRAM
CONTRIBUTION AGREEMENT
Project No.: 330430
THIS AGREEMENT IS MADE IN DUPLICATE -
BETWEEN: National Research Council Canada
Industrial Research Assistance Program
1101-200 Town Centre Court
Scarborough, Ontario
M1P 4X8
(herein called the NRC)
AND: HYDROGENICS CORPORATION
180 Geary Avenue
Toronto, Ontario
Canada
M6H 2B9
(herein called the Firm)
1. This agreement comes into effect on the 1 st. of November 1998 and
terminates on the 3 rd. of May, 1999.
2. The NRC agrees to contribute up to a maximum of $39,375 for research and
development undertaken by the Firm as described in the attached
STATEMENT OF WORK (SW) and in accordance with the attached BASIS OF
PAYMENT (BP) and CONDITIONS OF CONTRIBUTION (CC).
3. The Firm agrees to undertake the work described in the STATEMENT OF WORK
and understands and accepts all the CONDITIONS OF CONTRIBUTION.
4. This agreement shall become null and void if not signed and returned to
NRC within thirty (30) days of the signature date of the authorized
officer of the NRC.
National Research Council Canada
[SIG] 98/11/17
---------------- ----------------------------
P.C.M Simmons Date
HYDROGENICS CORPORATION
/s/ PIERRE RIVARD 24 NOV 98
---------------- ----------------------------
Pierre Rivard Date
President
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Statement of Work SW-1
Project No.:330430
Project Title
Development Of An Advanced, Modular Client / Server Fuel Cell Automated Test
Station Mainframe and Satellite
Objective(s)
- A new means of measuring internal resistance of stacks or fuel cells in
real-time that can be developed and implemented in this new generation of test
benches. Setup time is expected to be reduced from five minutes to five seconds.
- A level of redundancy that can be reasonably and safely achieved between
the satellite stations and the mainframe. The aim is for 40% redundancy be
reduced between the sateliite stations and the main frame.
- Developing the mainframe/satellite umbilical connection to provide
sufficient bandwidth to achieve economical centralization of functions. The goal
is accommodate 30 channels per stack for up to six stacks, while still providing
safety reponses with a two second acquisition cycle.
- Develop the speed of response to be within safe limits; To determine
what speed optimization will be required or is possible. The goal is that all
stacks and channels be attended within 3 seconds. i.e., data acquired and safety
reponses.
Plan of Work
Start, Nov. 1 st, 1998
1. Conceptual Design-- Mechanical, $19,500 Ends on the Dec 2 nd, Design of
process and instrumentation diagram, Sizing of components, materials sourcing.
One mech., one elec., one chem. engineer.
2. Conceptual Design-- Electrical, $16,000, Ends Dec. 8 th, Wiring Diagrams
and physical layout, Two elec., one mech., engineers.
3. Conceptual Design-- Software, $43,000, Dec 22 nd. Coding and documenting
Bridgeview interface, Two elec., one mech., one Chem.engineers.
4. Satellite Module Assembly, $39,000 Ends Jan 29 th. Assembly of piping
censors actuators, and wiring. Two elec., one mech., one Chem.engineers.
5. Mainframe Assembly, $18,000 Ends Feb 19 th. Assembly of data actuation
box and umbilical code gateway, computer mounted. Two elec., one mech., one
Chem.engineers..
6. System Integration, $12,000, Ends March 8 th, Link of assemblies
integration of assembly subcomponents, Two elec., one mech., one
Chem.engineers..
7. Functional Testing, $7,000, Ends March 26 th Power up pressure and
electrical checks, and proofing of design. Two elec., one mech., one
Chem.engineers..
8. Final Report/Design Iterations, $3,000, Ends April 16th. Documentation,
operating protocol, revisions, Two elec., one mech., one Chem.engineers.
<PAGE> 3
BASIS OF PAYMENT BP-1
--------------------------------------------------------------------------------
PROJECT NO.: 330430
(NOTE: THE GOODS AND SERVICES TAX (GST) WILL NOT BE REIMBURSED BY NRC AND THE
FIRM MUST DELETE ANY GST COSTS FROM INVOICES PRIOR TO SUBMISSION TO NRC FOR
PAYMENT.)
1.0 NRC agrees to reimburse the Firm for work performed on the project as
follows:
- Thirty nine (39%) of actual salary costs (excluding benefits) paid
for 4 senior engineers, estimated to be $39,375.(Maximum)
1.1 The Firm agrees to invoice NRC Monthly in arrears for costs incurred.
1.2 The Firm agrees to provide proof of costs incurred with each claim.
1.3 The Firm agrees to provide NRC the reports on the dates outlined below.
The Firm acknowledges that failure to comply with these requests will
cause the payments of current and subsequent claims to be delayed or
stopped.
1.4 NRC may agree to the reallocation of funds between the above payment
categories provided that the NRC is advised in advance of the reasons for
the proposed changes and that the NRC is in agreement for the need of such
changes.
1.5 Any changes to personnel supported by NRC or any changes to their
salaries must be discussed and approved by the NRC prior to invoicing.
2.0 Sources of Funding
<TABLE>
<S> <C>
NRC-IRAP $39,375 Maximum (25%)
Tax Credit $41,344 Estimated (26%)
Company $76,781 Estimated (48%)
Total $157,500
</TABLE>
THE FIRM ACKNOWLEDGES THAT ANY OTHER GOVERNMENT FUNDING IS ENTIRELY A
MATTER BETWEEN ITSELF AND THE DIFFERENT LEVEL OF GOVERNMENT, AND NRC
CANNOT GIVE ANY ASSURANCE ABOUT THE AMOUNT.
3.0 Summary of NRC's Support by Fiscal Year
1998/99 and 1999/00 (Nov. 01,1998 to May 3, 1999
<TABLE>
<S> <C>
98/99 IRAP - $ 33,075 Max.
99/00 IRAP - $ 6,300 Max
Total $ 39,375
</TABLE>
CLAIMS FOR ALLOWABLE PROJECT COSTS INCURRED IN A GIVEN FISCAL YEAR (APRIL
1 TO MARCH 31) MUST BE SUBMITTED BY APRIL OF THE FOLLOWING FISCAL YEAR.
THE MAXIMUM AMOUNT PER FISCAL YEAR CANNOT BE EXCEEDED WITHOUT PRIOR
APPROVAL OF NRC.
4.0 Reports and Meetings Schedule
Brief monthly progress reports are requested. Final report is due May 3rd,
1999
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BASIS OF PAYMENT BP-2
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5.0 Special Conditions
None
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NATIONAL RESEARCH COUNCIL CONSEIL NATIONAL DE RECHERCHES CC-1 of 2
CANADA CANADA
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CONDITIONS OF CONTRIBUTION
This Contribution Agreement is conditional upon the Firm's adherence to all
conditions set out below. A breach of any of the following conditions, or a
submission to NRC of false or misleading information, is grounds for suspension
or immediate termination of NRC's financial assistance to the project, in
addition to any other action permitted by law. NRC will notify the Firm, in
writing, of any such suspension or termination. Failure on the part of NRC to
act on any breach does not constitute a waiver of NRC'S right to act on that or
any other breach of the following conditions.
1. The Firm must undertake the project as described in the Statement of Work.
Any significant change proposed in relation to anything that is written in
the Statement of Work or the Basis of Payment, requires an amendment to
this agreement signed by both the Firm and NRC.
2. The Firm must submit reports and claims to NRC as specified in the Basis
of Payment. Payment of claims is contingent upon receipt of reports.
3. The Firm must notify NRC in writing if it seeks or receives financial
assistance for the project from a government at any level, beyond that
disclosed in the Firm's proposal for the project. In such cases, NRC
reserves the right to reduce the amount of its contribution to the
project.
4. The Firm must maintain adequate records of the research conducted for the
project and of direct and indirect costs incurred on the project. Upon
reasonable written notice by NRC, the Firm must make such records
available to authorized representatives of NRC for inspection, auditing,
or copying, and must permit authorized representatives of NRC to have
access to the Firm's facilities and personnel for the purposes of
inspection and interviewing. The Firm must obtain an audit of the project
from an external auditor upon the request of NRC. The auditor is required
to follow "Instructions for External Auditors" which will be supplied by
NRC. This clause 4 remains in effect for two years after the termination
of the project.
5. The Firm must maintain data relating to the economic benefits traceable to
the project for at least the first five years of their commercial
significance to the Firm, and provide NRC with such data upon request.
6 The Firm must demonstrate, to the satisfaction of NRC, acceptable
performance of the project, and the capability of continuing the project.
The Firm must permit NRC to inspect the facilities used by the Firm in
connection with the project, and to discuss the project with
IRAP-supported personnel.
7. The Firm must contribute its agreed portion of the total project costs. If
the Firm has not contributed its share as agreed in the Basis of Payment,
or if the funds were not spent as intended, NRC shall be entitled to claim
a refund up to the percentage by which the Firm's contribution has fallen
short of the agreed amount.
8. The Firm must make reasonable efforts to protect intellectual property
arising from the project. If a patent appears possible but the Firm does
not want to apply for it, the Firm must offer to assign ownership of the
invention to NRC, without charge. If information arising in the project
has commercial utility and is protected by copyright or confidentiality,
but will not be used by the Firm, the Firm must discuss with NRC the
possibility of transferring it to NRC or to a third party.
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NATIONAL RESEARCH COUNCIL CONSEIL NATIONAL DE RECHERCHES CC-2 of 2
CANADA CANADA
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9. The Firm must obtain prior written consent from NRC if, at any time during
the project or within five years after the end of the project, the Firm
intends:
(a) to enter into third party agreements that would limit the Firm's
control of the results derived from the project,
(b) to do part of the project outside Canada,
(c) to manufacture using the results of the project outside Canada, or
(d) to sell, assign, transfer, or otherwise dispose of any rights to
intellectual property arising out of the project to any person or
organization outside Canada, or to any government other than the
Government of Canada.
10. The Firm must indicate in writing, or by a clear label, the
confidentiality of any specific information which it wishes to be treated
as confidential by NRC. Protection from third-party access to confidential
business information supplied to NRC is provided by the federal Access to
Information Act.
11. No person will receive a direct benefit from this contract if that person
is subject to, and not in compliance with, a Conflict of Interest and
Post-Employment Code, either the one for Public Office Holders, for the
Public Service, or for NRC Employees. (NOTE: post-employment rules mainly
affect persons in the NRC "MG" category, the public service categories
"Senior Manager" and above, ministerial staff, and Governor in Council
appointees.)
12. The Firm must maintain environmental protection measures in relation to
the project that satisfy the requirement of all relevant regulatory
bodies. The Firm must comply with protocols that have been established in
relation to aspects of the project involving human subjects, animals, and
biohazardous material.
13. This agreement terminates immediately if the Firm ceases operations,
assigns its rights under this agreement, enters into receivership, or
becomes insolvent or bankrupt.
14. The Firm must indemnify NRC in respect of any claim against NRC by a third
party resulting directly or indirectly from the project. The Firm must
not take action against NRC for failure or delay in performance caused by
circumstances beyond NRC's reasonable control, nor for incorrectness of
data supplied, advice given, or opinions expressed in relation to the
project.
15. Either party may terminate this agreement for any reason, by giving the
other party notice in writing. A notice given by NRC must allow at least
two months before the termination. The Firm shall have no obligation to
NRC to work on the project after notice is given or received, and NRC
shall not reimburse costs incurred subsequent to the termination date, nor
any costs incurred at a rate greater than the typical rate before the
notice was given. Any termination is without prejudice to the rights and
obligations of the parties which have accrued before termination, and the
obligations to protect intellectual property and submit reports continue.
9 May 1995 [END]
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[NRC-CNRC LETTERHEAD]
[NRC-CNRC LOGO]
AMENDMENT NO: 1
March 29, 1999
Mr. Pierre Rivard P.Eng.
Hydrogenics Corporation
180 Geary Ave
Toronto, On
Canada M6H 2B9
RDA Contribution Agreement # 330430:
Subject:
Replacement of designated emplyee by two additional persons due to departure of
one employee
The above-referenced Contribution Agreement is hereby amended as follows:
In regard to item 1.0, where the present wording is as follows;
"Thirty nine (39%) of actual salary costs (excluding benefits) paid for 4 senior
engineers, estimated to be $39,375.(Maximum)";
shall be amended to the following "Thirty nine (39%) of actual salary costs
(excluding benefits) paid for 4 senior engineers and one scientist,
estimated to be $39,375.(Maximum)"
All other terms and conditions remain unchanged.
The amended version of the Contribution Agreement is in effect starting Jan 1,
1999.
Please have a duly authorized officer of your Firm sign both copies of this
amendment and return one copy to:
National Research Council Canada
200 Town Centre Court, Suite 1101
Scarborough, Ontario
M1P 4X8 Attn: P. Hendricks
[NRC-CNRC LETTERHEAD] [NRC-CNRC LOGO]
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Page 2
This amendment shall become null and void if not signed and returned to NRC
within thirty days of the date of this letter.
National Research Council
[SIG] March 29/99
------------------------- ------------------------
Date
HYDROGENICS CORPORATiON
/s/ PIERRE RIVARD March 29/99
------------------------- ------------------------
Pierre Rivard Date
P.Eng.
