EXHIBIT 10.19
DCH Technology, Inc.
Sales Agreement
SALES AGREEMENT
This agreement between DCH Technology, Inc. (hereinafter known as "DCH") with
its offices located at 14241 Ventura Blvd., Suite 208, Sherman Oaks,
California and Phoenix Hydrogen Systems LLC (hereinafter known as "PHS"),
with its offices located at 3925 Vernon Street, Long Beach, California is
entered into this 15th day of January 1997.
SECTION I: SALES AGREEMENT
a) DCH agrees to sell to PHS one hundred (100) hydrogen sensors per the
following:
1) Fifty (50) each leak detectors consisting of the DCH Robust Hydrogen
Sensor hosted on a circuit card assembly as described by
DCH PN 6009640119 (described in Appendix A). These units will be
utilized for the purpose of detecting hydrogen leaks and displaying
and/or sounding an alarm when a leak of a TBD magnitude is detected.
(TBD will be specified based on experience with the initial deliveries
and intended application.)
2) Less than ten (10) each hand held hydrogen detectors as described by
DCH PN 8009640120 (described in Appendix B). These units will be used
as portable, hand held units by PHS and selected customers of PHS.
PHS will notify DCH of the exact number of required hand held units.
3) Approximately twenty (20) each Mid-Range Detectors consisting of
sensor assemblies utilized to detect hydrogen concentrations in the
30% to 60% range described as DCH PN 6009640121 (described in
Appendix C). PHS will notify DCH of the exact number of required Mid
Range Detectors.
4) Approximately twenty (20) each Purity Meters consisting of sensor
assemblies utilized to determine the purity level of hydrogen in a
99.9% to 99.99% range described as DCH PN 6009640122 (described in
Appendix D). PHS will notify DCH of the exact number of required
Purity Meters. DCH will conduct engineering, research and testing
activities to determine the feasibility of providing Purity Meters to
PHS. If it is determined that the construction of a reliable Purity
Meter product is not feasible with the DCH hydrogen sensor
technology, DCH will notify PHS as soon as possible after such
determination is made. In such a case, the order for Purity Meters
under this paragraph will change to the same quantity of leak
detectors or mid-range detectors per PHS's request at the time.
b) PHS understands that the pricing afforded it is well below regular DCH
sale prices. In recognition of this, PHS states its intent to purchase
future additional quantities of the DCH products listed for incorporation
into future PHS products. These will be purchased at prices to be
negotiated by both Parties and in quantities exceeding 100
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units per year. Prices paid PHS will not exceed those paid by others who
purchase similar quantities.
SECTION II: PRICE
DCH will sell the units listed under Section I above to PHS for a unit price
of $600.00 (six hundred dollars) each payable in US currency.
SECTION III: PAYMENT SCHEDULE
DCH shall be paid according to the following schedule:
a) Initial payment: One payment of $30,000.00 (thirty thousand dollars) due
at the time of order for the first fifty (50) units.
b) Subsequent payments: Subsequent payments of $600.00 (six hundred dollars)
for each product delivered after the first fifty units due upon delivery.
SECTION IV: DELIVERY SCHEDULE
The delivery schedule may be modified as agreed by both parties. DCH shall
deliver the units to PHS according to the following schedule:
a) One (1) Hand Held Unit (PN 8009640120): 6 to 8 weeks after receipt of
initial payment of June 1, 1997 (whichever is earlier)
b) One (1) Leak detector (PN 6009640119): to be delivered on or before
June 1, 1997
c) Two (2) Leak detectors (PN 6009640119): to be delivered on or before
July 1, 1997
d) Two (2) Leak detectors (PN 6009640119): to be delivered on or before
August 1, 1997
e) One (1) Leak detector (PN 6009640119): to be delivered on or before
September 1, 1997
f) Three (3) Hand Held Units (PN 6009640120): to be delivered on or before
September 15, 1997
g) Two (2) Mid-Range Units (PN 6009640121): to be delivered on or before
September 1, 1997 [One each delivered to PHS and one each delivered to a
third party (TBD) for verification and testing purposes]
h) Two (2) Purity Meters (PN 6009640122): to be delivered on or before
October 15, 1997 [One each delivered to PHS and one each delivered to a
third party (TBD) for verification and testing purposes]
i) Balance of product delivery (listed below) is TBD; however, all items
will be delivered and paid for before January 31, 1998:
Hand held units
Mid Range Units
Purity Meters
Leak Detectors
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SECTION V: MID RANGE AND PURITY METER EXCLUSIVITY
DCH agrees to sell the Mid Range Hydrogen Detector and Hydrogen Purity meter
products to PHS for the price identified in Section I. However, should DCH
identify a market for either or both products, and since PHS has agreed to
assist DCH in the development of these products, DCH agrees set a market
price for the items that will ensure a significant pricing advantage to PHS
and allow DCH to pay a royalty fee to PHS. This royalty fee will be
established by 6/97.
SECTION VI: PRE-PUBLICATION REVIEW
The parties agree to secure pre-publication approval from the other Party of
any document, article, press release or other written material relating to
the work and services performed and products supplied under this agreement.
Such approval or disapproval shall not be unreasonably withheld or delayed
beyond thirty (30) days.
SECTION VII: PRODUCT LIABILITY
Except for any liability resulting from any patent infringement, negligent or
intentional acts or omissions of either Party, each party indemnifies the
other for all damages, costs and expenses, including attorney's fees, arising
from personal injury or property damage occuring as a result of the making,
using or selling of a product, process or service by or on behalf of the
other Party.
SECTION VIII: NON-COMPETITION
DCH agrees that it will not engage in the hydrogen generation business in
competition with PHS. PHS agrees that it will not engage in the hydrogen
sensor business in competition with DCH.
SECTION IX: FORCE MAJURE
No failure or ommission by either Party in the performance of any obligation
under this Agreement shall be deemed a breach of this Agreement if such
failure shall arise from any cause or causes beyond the control of either
Party (except for failure of subcontractors) including, but not limited to,
the following: Acts of God, fire, storm, flood, earthquake, acts of the
public enemy, war, rebellion, insurrection, or riot.
SECTION X: CONTROLLING LAW
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of California. The Parties agree to the exclusive
jurisdiction of the courts of California or the United States District Court
for California. However, as a first recourse, any dispute arising under this
Agreement may be settled by nonbinding arbitration by a
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single arbitrator in the County of Los Angeles, California, under the rules
of the American Arbitration Association.
SECTION XI: TERMINATION
Either Party may terminate this Agreement in the event that either Party
shall become insolvent, shall declare bankruptcy or have any lien against
placed against it.
PHS may terminate this agreement upon notice in writing to DCH. Unused
products that have been paid for by PHS will be reimbursed to PHS by DCH
after the product has been sold to other DCH customers.
SECTION XII: NON-DISCLOSURE
Non-disclosure of data is considered an important part of this business
relationship and is defined on the Propiretary Information Exchange Agreement
between DCH and PHS dated August 13, 1996.
SECTION XIII: TITLE TO INVENTIONS AND PATENT RIGHTS
Each Party shall share equally in the title to any invention made as a result
of the research, engineering and testing conducted under this agreement by
DCH and PHS relating to either the mid-range or high purity sensor. If
either Party elects not to retain title to such invention under this
agreement, the other Party shall have the option to retain full title to the
invention.
Each Party agrees to share equally in the costs of any resulting patent
applications and shall share equally in the ownership interest of any subject
invention and patent. If either Party elects not to file a patent
application for such invention under this agreement, the other Party shall
have the option to file a patent application and undertake all associated
costs and full ownership.
SECTION XIV: ENGINEERING SUPPORT
DCH agrees to work closely with PHS to determine the acceptable and most
advantageous systems for hydrogen leak detection, mid-range sensing and purity
measurement. DCH's research, engineering and test efforts shall commence
upon receipt of the initial payment identified in Section I.
DCH shall provide periodic (bi-weekly) updates to PHS on the progress of the
development of the Purity Meter and Mid-Range Sensors.
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SECTION XV: COOPERATIVE MARKETING AND CUSTOMER INTERFACE
It is recognized that both parties depend upon the other as customer references
to promote each Party's products and services. However, detailed information
(such as units and quantities purchased, anticipated contracts and purchases,
etc.) remain confidential and under the referenced Non-Disclosure Agreement
identified in Section XII.
SECTION XVI: INDEPENDENT CONTRACTORS
Under the terms of this Agreement, both Parties are independent contractors.
Neither Party is an employee, agent, partner or representative of the other
Party. Nothing contained herein shall be deemed to create a joint venture
relationship between DCH and PHS. Each Party specifically acknowledges that it
does not have authority to incur any obligations or responsibilities on behalf
of the other Party.
DCH Technology, Inc. Phoenix Hydrogen Systems, LLC
/s/ David A. Walker /s/ David Moard 2/14/97
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David A. Walker David Moard
Vice President, Operations President
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APPENDIX A: LEAK DETECTOR SPECIFICATION
DCH PART NUMBER 6009640119
As the work progresses, specifications for the product may change. Pricing will
be modified accordingly as agreed by both parties.
DCH shall provide a leak detector system consisting of a hydrogen sensor head
assembly, connected to two circuit cards with output through an RS-232
connector.
The assembly shall be enclosed in an explosion proof container (approximately
6"x6"x2") with the sensor head attached. The assembly shall provide two
signals: a low level alarm (typically 0.8% hydrogen concentration) and a high
level alarm (typically 2% hydrogen concentration). Alarm hardware to include
2 each dry type, normally closed contacts terminated at a terminal strip
inside the enclosed box for field hard wiring to customer alarm system. The
detector shall provide a response speed of five (5) seconds or better near
the Lower Explosive Limit.
PHS shall provide power to the leak detector assembly which may be 120 VAC,
60Hz, 1(unknown symbol). The detector shall not be poisoned by either
Methane, Carbon Monoxide nor Carbon Dioxide.
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APPENDIX B: HAND HELD UNIT SPECIFICATION
DCH PART NUMBER 8009640120
As the work progresses, specifications for the product may change. Pricing will
be modified accordingly as agreed by both parties.
The hand held unit shall consist of a portable, pre-packaged hydrogen detector
with the following features and functions:
a) Power on/off switch
b) Push button with multiple functions
c) Four-position DIP switch to define up to sixteen (16) different operating
modes
d) LCD for displaying the percent of hydrogen as a two-digit E-format number
and a logarithmic bar graph, the sensor temperature in Celsius, and an
"ALERT" and "LOW BAT" indicator
e) Piezo alarm
f) Analog output port with two outputs and a ground. These outputs could be
used for the hydrogen level and sensor temperature or for the hydrogen level
using two different scales, such as linear and logarithmic
g) Sensor externally attached directly to the unit
h) Power jack for connecting the battery to the recharger
i) RS-232 serial port for communication with a computer, such as for
datalogging or for downloading previously logged information
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APPENDIX C: MID-RANGE DETECTOR SPECIFICATION
DCH PART NUMBER 6009640121
As the work progresses, specifications for the product may change. Pricing will
be modified accordingly as agreed by both parties.
DCH shall provide a Mid-Range Detector system consisting of a hydrogen sensor
head assembly, connected to two circuit cards with 4-20 mA output through two
terminals on an internal strip for hard wire field wiring.
The assembly shall be enclosed in an explosion proof container (approximately
6"x6"x2") with the sensor head attached. The assembly shall provide an
accurate reading of hydrogen concentration between 30 and 60%. The container
shall accommodate 1/2" electrical conduit for field wiring. The sensor head
assembly will be constructed with a 1/4" NPT female fitting to accept gas
sample up to 150 psig.
PHS shall provide power to the assembly which may be 24VDC. The detector shall
not be poisoned by either Methane, Carbon Monoxide nor Carbon Dioxide.
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APPENDIX D: PURITY METER SPECIFICATION
DCH PART NUMBER 6009640122
As the work progresses, specifications for the product may change. Pricing will
be modified accordingly as agreed by both parties.
DCH shall provide a Purity Meter consisting of a hydrogen sensor head assembly,
connected to two circuit cards with 4-20mA output through two terminals on an
internal terminal strip for field hard wiring.
The assembly shall be enclosed in an explosion proof container (approximately
6"x6"x2") with the sensor head attached. The assembly shall provide a visual
reading of the purity level of hydrogen at a given sensing point in the
"three to four nines" (i.e., 99.9% to 99.99%) ranges. The container shall be
sized to accommodate 1/2" electrical conduit for field wiring. The sensor
head assembly will be constructed with a 1/4" NPT female pipe fitting to
accept gas sample up to 150 psig.
PHS shall provide power to the purity meter assembly which may be 24VDC. The
meter shall not be poisoned by either Methane, Carbon Monoxide nor Carbon
Dioxide.
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