CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
EXHIBIT 10.14
Agreement No: 4633-ERTER-TR-99
Amount: $1,191,478
Type: Cost-Sharing
RESTATED AGREEMENT
This Restated Agreement dated this 26th day of June, 1997 by and between
the NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY ("NYSERDA"), a New
York public benefit corporation having its principal office and place of
business at Corporate Plaza West, 286 Washington Avenue Extension, Albany, New
York 12203-6399, and MECHANICAL TECHNOLOGY, INC., a New York corporation having
its principal office and place of business at 968 Albany-Shaker Road, Latham,
New York (the "Contractor").
WHEREAS, NYSERDA and the Contractor have previously worked together under
NYSERDA and MECHANICAL TECHNOLOGY, INC. Agreements 1791-ERER-ER-92, 4087-ERTER-
TR-95 and 4540-ERTER-TR-97 to support the development, demonstration and
commercialization of the Proton Exchange Membrane ("PEM") Fuel Cell (the
"Project");
WHEREAS, in an effort to streamline and consolidate all of the rights and
obligations under the aforementioned Project, NYSERDA and the Contractor desire
to terminate Agreements 1791-ERER-ER-92, 4087-ERTER-TR-95, and 4540-ERTER-TR-97
and have all of the rights and obligations of NYSERDA and the Contractor under
the aforementioned Agreements contained in this Agreement No. 4633-ERTER-TR-98;
and
WHEREAS, NYSERDA and the Contractor desire to continue to work together to
support the successful commercialization of the Project.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties do hereby agree as
follows:
Article I
Definitions
-----------
Section 1.01. Definition. Unless the context otherwise requires, the terms
----------
defined below shall have, for all purposes of this Agreement, the respective
meanings set forth below, the following definitions to be equally applicable to
both the singular and plural forms of any of the terms defined.
(a) General Definitions:
-------------------
Agreement: This Agreement and Exhibits A, B, C, and D hereto, all of which
---------
are made a part hereof as though herein set forth in full.
Budget: The Budget set forth in Exhibit A hereto.
------
Contract Administration: NYSERDA's Director of Contract Management, Robert
-----------------------
G. Callender, or such other person who may be designated, in writing, by
NYSERDA.
Effective Date: The effective date of this Agreement shall be the date in
--------------
the first paragraph of page one, above.
Final Report: The Final Report required by the Statement of Work hereof.
------------
Person: An individual, a corporation, an association or partnership, an
------
organization, a business or a government or political subdivision thereof, or
any governmental agency or instrumentality.
Progress Reports: The Progress Reports required by the Statement of Work
----------------
hereof.
Statement of Work: The Statement of Work attached hereto as Exhibit. A.
-----------------
Subcontract: An agreement for the performance of Work by a Subcontractor,
-----------
including any purchase order for the procurement of permanent equipment or
expendable supplies in connection with the Work.
Subcontractor: A person who performs Work directly or indirectly for or on
-------------
behalf of the Contractor (and whether or not in privity of contract with the
Contractor) but not including any employees of the Contractor or the
Subcontractors.
Work: The Work described in the Exhibit A (including the procurement of
----
equipment and supplies in connection therewith) and the performance of all other
requirements imposed upon the Contractor under this Agreement.
(b) Data Rights and Patents Definitions:
-----------------------------------
Contract Data: Technical Data first produced in the performance of the
-------------
Agreement or Agreements numbered 1791-ERER-ER-92, 4087-ERTER-TR-95, or 4540-
ERTER-TR-97, or Technical Data actually delivered in connection with the
Agreement or Agreements numbered 1791-ERER-ER-92, 4087-ERTER-TP-95, or 4540-
ERTER-TR-97.
Practical Application: To manufacture in the case of a composition or
---------------------
product, to practice in the case of a process or method, or to operate in the
case of a machine or system, and under conditions which indicate that the
benefits of the invention are available to the public on reasonable terms.
Proprietary Data: Technical Data which embody trade secrets developed at
----------------
private
2
expense, such as design procedures or techniques. chemical composition of
materials, or manufacturing methods, processes, or treatments, including minor
modifications thereof, provided that such data:
(i) are not generally known or available from other sources without
obligation concerning their confidentiality,
(ii) have not been made available by the owner to others without
obligation concerning its confidentiality; and
(iii) are not already available to NYSERDA without obligation
concerning their confidentiality.
Subject Invention: Any invention or discovery of the Contractor conceived
-----------------
or first actually reduced to practice in the course of or under this Agreement
or Agreements numbered 1791-ERER-ER-92, 4087-ERTER-TR-95 or 4540-ERTER-TR-97,
and includes any art, method, process, machine, manufacture, design, or
composition of matter, or any new and useful improvement thereof, or any variety
of plants, whether patented or unpatented, under the Patent Laws of the United
States of America or any foreign country.
Technical Data: Recorded information regardless of form or characteristic,
--------------
of a scientific or technical nature. It may, for example, document research,
experimental or developmental, or demonstration, or engineering work, or be
usable or used to define a design or process, or to procure, produce, support,
maintain, or operate material. The data may be graphic or pictorial delineations
in media such as drawings or photographs, text in specifications or related
performance or design type documents or computer software (including computer
software programs, computer software data bases, and computer software
documentation.). Examples of Technical Data include research and engineering
data, engineering drawings and associated lists, specifications, standards,
process sheets, manuals, technical reports, catalog item identification, and
related information. Technical Data as used herein does not include financial
reports, cost analyses, and other information incidental to contract
administration.
Unlimited Rights: Rights to use, duplicate, or disclose Technical Data, in
----------------
whole or in part, in any manner and for any purpose whatsoever, and to permit
others to do so.
(c) Payments to NYSERDA Definitions:
-------------------------------
PEM Fuel Cell: The Proton Exchange Membrane ("PEM") Fuel Cell is a
-------------
electrochemical device designed to convert hydrogen and oxygen to electricity
with high efficiency and is characterized by high power density in terms of
weight and size and as designed, developed, assembled and tested pursuant to
this Agreement.
3
PEM Fuel Cell Stack: The PEM Fuel Cell Stack consists of multiple PEM fuel
-------------------
cells arranged in a layer manner to provide an integrated structure.
Product: The Product includes the PEM Fuel Cell and the PEM Fuel Stack,
-------
whether used individually or together and regardless of application.
New York State Manufacturer: Any manufacturer which provides (1) in excess
---------------------------
of 25% value added to the manufacture of the Product, or (2) provides in excess
of 75% value added for the assembly and R&D required for the manufacture of the
Product and/or (3) any manufacturer which provides in excess of 25% of value
added to the manufacture of a Subject Invention, or (4) provides in excess of
75% value added for the assembly and R&D required for manufacture of the Subject
Invention as developed in this Project, within the geographical boundaries of
the State of New York. Such value added shall be capable of being proven by an
audit conducted in accordance with generally accepted auditing standards. "Value
added" for manufacturing means any separable component of the Product or a
Subject Invention, paid for by the Contractor to others, for parts, components,
and services, all manufacturing costs, including but not limited to labor, labor
overhead, materials, and G&A, but excluding profit. "Value added" for assembly
and R&D means all assembly and R&D costs, including but not limited to assembly
and R&D labor, assembly and R&D labor overhead and general and administrative
services, excluding profit, assembly and R&D materials, and all manufactured
component costs used in the manufacturing process.
Sale: A sale or lease of a Product.
----
Sale Price: The Contractor's manufacturing cost of the Product, including
----------
the cost of all materials, direct labor, manufacturing overhead, and general and
administrative expenses, excluding returns, and allowances such as sales tax,
freight, commissions and insurance, if applicable, derived from a Sale.
Seller: The Contractor, or any franchisee, licensee or assignee thereof.
------
Article II
Performance of Work
-------------------
Section 2.01. Manner of Performance. Subject to the provisions of Article
---------------------
XII hereof, the Contractor shall perform all of the Work described in the
Statement of Work, or cause such Work to be performed in an efficient and
expeditious manner and in accordance with all of the terms and provisions of
this Agreement. The Contractor shall perform the Work in accordance with the
current professional standards and with the diligence and skill expected for the
performance of work of the type described in the Statement of Work. The
Contractor shall furnish such personnel and shall procure such materials,
machinery, supplies, tools, equipment and other items as may reasonably be
necessary or appropriate to perform the Work in accordance with this Agreement.
4
Section 2.02. Project Personnel. It is understood and agreed that
-----------------
Mr. William Ernst shall serve as Project Director and as such shall have the
responsibility of the overall supervision and conduct of the Work on behalf of
the Contractor and that the persons described in the Statement of Work shall
serve in the capacities described therein. Any change of Project Director by the
Contractor shall be subject to the prior written approval of NYSERDA. Such
approval shall not be unreasonably withheld, and, in the event that notice of
approval or disapproval is not received by the Contractor within thirty days
after receipt of request for approval by NYSERDA, the requested change in
Project Director shall be considered approved.
Article III
Deliverables
------------
Section 3.01. Deliverables. All deliverables shall be provided in
------------
accordance with the Exhibit A Statement of Work.
Article IV
Compensation
------------
Section 4.01. Cost-Sharing. It is understood and agreed that NYSERDA and
------------
the Contractor are sharing the costs for the Work to be performed. In
consideration for this Agreement and as full compensation for NYSERDA's share of
the costs for the performance of all Work, and in respect of all other direct
and indirect costs, charges or expenses incurred in connection therewith,
NYSERDA shall pay to the Contractor a maximum amount of $1,191,478 for the cost
elements identified in the Budget to be funded with NYSERDA funds, subject to
the provisions and restrictions contained herein. Such amount shall be paid only
to the extent that costs are incurred by the Contractor in performance of the
Work in accordance with the provisions of this Agreement, the Budget and the
following:
(a) Staff Charges: The Contractor shall be compensated for the services
-------------
performed by its employees under the terms of this Agreement at the employee's
actual wage rate. In the event that any of the Contractor's rates are reduced to
the benefit of any client of the Contractor as a result of any audit or for any
other reason, the Contractor shall so notify NYSERDA and the appropriate
reductions shall be made to the rates utilized hereunder.
(b) Direct Charges: The Contractor shall be reimbursed for reasonable and
--------------
necessary actual direct costs incurred (e.g., equipment, supplies, travel and
other costs directly associated with the performance of the Agreement) to the
extent required in the performance of the Work in accordance with the provisions
of the Budget. Travel, lodging, meals and
5
incidental expenses shall be reimbursed for reasonable and necessary costs
incurred. Costs should generally not exceed the daily per diem rates, published
in the Federal Travel Regulations. Reimbursement for the use of personal
vehicles shall be limited to the Internal Revenue Service business standard
mileage rate.
(c) Indirect Costs: The Contractor shall he reimbursed for fringe
--------------
benefits, overhead, general and administrative (G&A), and other indirect costs
and profit included in the Budget at such rates as the Contractor may
periodically calculate, consistent with appropriate federal guidelines or
generally accepted accounting principles.
(d) Remaining Funds: NYSERDA and the Contractor agree that the cost to
---------------
complete all of the Work under this Agreement is $1,191,478. NYSERDA and the
Contractor agree that the Contractor has completed Work under the Project and
has been reimbursed by NYSERDA. NYSERDA and the Contractor agree that $317,633
is available to complete the Work under this Agreement.
Section 4.02. Title to Equipment. Title shall vest in the Contractor to all
------------------
equipment purchased hereunder.
Section 4.03. Progress Payments. The Contractor may submit invoices for
-----------------
progress payment no more than once each month or no less than once each calendar
quarter for Work performed during such period. Invoices shall be addressed to
NYSERDA, "Attention: Accounts Payable." Such invoices shall make reference to
the Agreement number shown on the upper right hand corner of page one of the
Agreement. Invoices shall set forth total project costs incurred. These shall be
broken down into NYSERDA's Funding share and into the Cost-Share and other
Cofunding share, and they shall be in a format consistent with the cost
categories set forth in the Budget. Invoices shall provide reasonable
documentation for the above to provide evidence of costs incurred, including:
(a) Staff charges: for each employee, the name, title, number of hours
worked, hourly rate and labor extension;
(b) Direct charges: all direct costs shall be itemized on the invoice and
supported by documentation, such as vendor invoices, travel vouchers or other
documentation; and
(c) Indirect charges: indirect cost rates and method by which rates are
applied.
The Contractor shall be notified by NYSERDA in accordance with Section
5.04.4 (b)(2) of NYSERDA's Prompt Payment Policy Statement, attached hereto as
Exhibit D, of any such information or documentation which the Contractor did not
include with such invoice.
In accordance with and subject to the provisions of such Exhibit D, NYSERDA
shall pay to the Contractor, within the prescribed time after receipt of an
invoice for a progress
6
payment, 90% of NYSERDA's share of the amount so requested, unless NYSERDA
should determine that any such payment or any part thereof is otherwise not
properly payable pursuant to the terms of the Agreement or the Budget.
Section 4.04. Final Payment. Upon final acceptance by NYSERDA of the Final
-------------
Report and all other deliverables contained in Exhibit A, Statement of Work,
pursuant to Section 6.02 hereof, the Contractor shall submit an invoice for
final payment with respect to the Work, together with such supporting
information and documentation as, and in such form as, NYSERDA may require. An
invoice for final payment shall include, in addition to the material required
pursuant to Section 4.03 hereof, a statement as to whether any invention or
patentable devices have resulted from the performance of the Work. All invoices
for final payment hereunder must, under any and all circumstances, be received
by NYSERDA prior to September 30, 1998. In accordance with and subject to the
provisions of NYSERDA's Prompt Payment Policy Statement, attached hereto as
Exhibit D, NYSERDA shall pay to the Contractor within the prescribed time after
receipt of such invoice for final payment, the total amount payable pursuant to
Section 4.01 hereof, less all progress payments previously made to the
Contractor with respect thereto and subject to the maximum commitment of
$1,191,478 set forth in Section 4.07 hereof.
Section 4.05. Release by the Contractor. The acceptance by the Contractor
-------------------------
of final payment shall release NYSERDA from all claims and liability that the
Contractor, its representatives and assigns might otherwise have relating to
this Agreement.
Section 4.06. Maintenance of Records. The Contractor shall keep, maintain,
----------------------
and preserve at its principal office throughout the term of the Agreement and
for a period of three years after acceptance of the Work, full and detailed
books, accounts, and records pertaining to the performance of the Agreement,
including without limitation, all bills, invoices, payrolls, subcontracting
efforts and other data evidencing, or in any material way related to, the direct
and indirect costs and expenses incurred by the Contractor in the course of such
performance. Further, the Contractor shall keep, maintain, and preserve at its
principal office until such time as the Contractor's payment obligations to
NYSERDA pursuant to Section 8.03 of the Agreement have been met, full and
detailed books, accounts, and records in connection with Sales, and shall
require licensees to maintain records of Sales.
Section 4.07. Maximum Commitment. The maximum aggregate amount payable by
------------------
NYSERDA to the Contractor hereunder is $1,191,478. NYSERDA shall not be liable
for any costs or expenses in excess of such amount incurred by the Contractor in
the performance and completion of the Work.
Section 4.08. Audit. NYSERDA shall have the right from time to time and at
-----
all reasonable times during the term of the Agreement and such period thereafter
to inspect and audit any and all books, accounts, and records at the office or
offices of the Contractor where they are then being kept, maintained and
preserved pursuant to Section 4.06 hereof. Any
7
payment made under the Agreement shall be subject to retroactive reduction for
amounts included therein which are found by NYSERDA on the basis of any audit of
the Contractor by an agency of the United States, State of New York or NYSERDA
not to constitute an allowable charge or cost hereunder. Further, the Contractor
shall provide to NYSERDA, on a reasonable basis, access to its books and records
and those of any parent, subsidiary, affiliate, franchisee, licensee, or
assignee to assure compliance with the payment provisions contained in Section
8.03 of the Agreement.
Article V
Assignments, Subcontracts and Purchase Orders
---------------------------------------------
Section 5.01. General Restrictions. Except as specifically provided
--------------------
otherwise in this Article, the assignment, transfer, conveyance, subcontracting
or other disposal of this Agreement or any of the Contractor's rights,
obligations, interests or responsibilities hereunder, in whole or in part,
without the express consent in writing of NYSERDA shall be void and of no effect
as to NYSERDA. Such consent shall not be unreasonably withheld, and, in the
event that notice of approval or disapproval is not received by the Contractor
within thirty days of receipt of the request for approval, the assignment,
transfer, conveyance, subcontracting or other disposal of this Agreement or any
of the Contractor's rights, obligations, interests, or responsibilities
hereunder. in whole or in part, shall be considered approved. In the event that
NYSERDA requires additional time for considering approval, NYSERDA shall notify
the Contractor within thirty days of receipt of the request for approval that
additional time is required and shall specify the additional amount of time
necessary up to sixty (60) days.
Section 5.02. Subcontract Procedures. Without relieving it of, or in any
----------------------
way limiting, its obligations to NYSERDA under this Agreement, the Contractor
may enter into Subcontracts for the performance of Work or for the purchase of
materials or equipment. Except for a subcontractor or supplier specified in a
team arrangement with the Contractor in the Contractor's original proposal, and
except for any subcontract or order for equipment, supplies or materials from a
single subcontractor or supplier totaling under $10.000, the Contractor shall
select all subcontractors or suppliers through a process of competitive bidding
or multi-source price review. A team arrangement is one where a subcontractor or
supplier specified in the Contractor's proposal is performing a substantial
portion of the Work and is making a substantial contribution to the management
and/or design of the Project. In the event that a competitive bidding or multi-
source price review is not feasible, the Contractor shall document an
explanation for, and justification of, a sole source selection.
The Contractor shall document the process by which a subcontractor or
supplier is selected by making a record summarizing the nature and scope of the
work, equipment, supplies or materials sought, the name of each person or
organization submitting, or requested to submit, a bid or proposal, the price or
fee bid, and the basis for selection of the
8
subcontractor or supplier. An explanation for, and justification of, a sole
source selection must identify why the work, equipment, supplies or materials
involved are obtainable from or require a subcontractor with unique or
exceptionally scarce qualifications or experience, specialized equipment, or
facilities not readily available from other sources, or patents, copyrights, or
proprietary data.
All Subcontracts shall contain provisions comparable to those set forth in
this Agreement applicable to a subcontractor or supplier, and those set forth in
Exhibit B to the extent required by law, and all other provisions now or
hereafter required by law to be contained therein.
The Contractor shall submit to NYSERDA's Contract Administrator for review
and written approval any subcontract(s) specified in the Statement of Work as
requiring NYSERDA approval. The Contractor shall submit to NYSERDA a copy of all
fully executed subcontracts and purchase orders that total greater than $10,000.
Section 5.03. Performance. The Contractor shall promptly and diligently
-----------
comply with its obligations under each Subcontract and shall take no action
which would impair its rights thereunder. The Contractor shall not assign,
cancel or terminate any Subcontract without the prior written approval of the
Contract Administrator as long as this Agreement remains in effect. Such
approval shall not be unreasonably withheld and, in the event that notice of
approval or disapproval is not received by the Contractor within thirty days
after receipt of request for approval by NYSERDA, the requested assignment,
cancellation, or termination of the Subcontract shall be considered approved by
NYSERDA. In the event that NYSERDA requires additional time for considering
approval, NYSERDA shall notify the Contractor within thirty days of receipt of
the request for approval that additional time is required and shall specify the
additional amount of time necessary up to sixty (60) days.
Section 5.04. Assignment to Plug Power, L.L.C. NYSERDA hereby expressly
-------------------------------
consents, in writing, to the assignment of this Agreement, NYSERDA Agreements
1791-ERER-ER-92, 4087-ERTER-TR-95, and 4540-ERTER-ER-97, as modified and
restated by this Agreement, and any and all rights, title, interests, duties,
liabilities and obligations in connection therewith, to Plug Power, L.L.C.
NYSERDA agrees to take any and all action requested by the Contractor or Plug
Power, L.L.C., to effect such transfer as a matter of law.
Article VI
Schedule: Acceptance of Work
----------------------------
Section 6.01. Schedule. The Work shall be performed as expeditiously as
--------
possible in conformity with the schedule requirements contained herein and in
the Statement of Work. The draft and final versions of the Final Report shall be
submitted by the dates specified in the Exhibit A Schedule. It is understood and
agreed that the delivery of the draft and final versions
9
of such reports by the Contractor shall occur in a timely manner and in
accordance with the requirements of the Exhibit A Schedule.
Section 6.02. Acceptance of Work. The completion of the Work shall be
------------------
subject to acceptance by NYSERDA in writing of the Final Report and all other
deliverables as defined in Exhibit A, Statement of Work.
Article VII
Force Majeure
-------------
Section 7.0.1. Force Majeure. Neither party hereto shall be liable for any
-------------
failure or delay in the performance of its respective obligations hereunder if
and to the extent that such delay or failure is due to a cause or circumstance
beyond the reasonable control of such party, including, without limitation, acts
of God or the public enemy, expropriation or confiscation of land or facilities,
compliance with any law, order or request of any Federal, State, municipal or
local governmental authority, acts of war, rebellion or sabotage or damage
resulting therefrom, fires, floods, storms, explosions, accidents, riots,
strikes, or the delay or failure to perform by any Subcontractor by reason of
any cause or circumstance beyond the reasonable control of such Subcontractor.
Article VIII
Technical Data: Patents- Payments to NYSERDA
--------------------------------------------
Section 8.01. Rights in Technical Data
------------------------
(a) Technical Data: Rights in Technical Data shall be allocated as follows:
(1) NYSERDA shall have:
(i) rights in Contract Data and Proprietary Data in order to exercise
license rights, as provided in paragraph (a)(2)(iii) below; and
(ii) no rights under this Agreement in any Technical Data which are
not Contract Data.
(2) The Contractor shall have:
(i) unlimited rights in all Technical Data, Contract Data and
Proprietary Data subject to paragraph (iii) below;
(ii) the right to withhold Proprietary Data except as otherwise
provided in paragraph (iii) below; and
10
(iii) the right to make, use and sell the Product. In the event the
Contractor fails to make, use, or sell any Subject Invention
within 10 years from the Contractor's receipt of Final Payment as
described in Section 4.04 hereof, so that the benefits of such
Subject Invention are available to the public and after written
notice to the Contractor and a period of not less than six months
in which the parties shall negotiate in good faith in order to
resolve any disputes, NYSERDA shall be granted a royalty-free,
non-exclusive, worldwide license sufficient in scope to allow
NYSERDA to make, use or sell the Subject Invention and to allow
others to do so. NYSERDA shall keep any Proprietary Data
concerning such Subject Invention confidential, and may disclose
such Proprietary Data to its sublicensees who have agreed to keep
such Proprietary Data confidential.
The Contractor agrees that to the extent it receives or is given access to
Proprietary Data or other technical, business or financial data in the form of
recorded information from NYSERDA or a NYSERDA contractor or subcontractor, the
Contractor shall treat such data in accordance with any restrictive legend
contained thereon, unless another use is specifically authorized by prior
written approval of the Contract Administrator.
Section 8.02. Patents.
-------
(a) The Contractor retains the entire right, title and interest throughout
the world in each Subject Invention of the Contractor conceived or first
actually reduced to practice in the performance of the Work under the Agreement;
except, that with respect to any Subject Invention in which the Contractor
elects to retain title, NYSERDA shall have a non-exclusive, non-transferrable,
irrevocable, paid-up license for itself, the State of New York and all political
subdivisions and other instrumentalities of the State of New York, to practice
or have practiced for or on their behalf the Subject Invention throughout the
world, exclusively for their own use of the Subject Invention.
(b) Effective on the date of this Agreement, the Contractor shall submit to
NYSERDA, not less frequently than annually, written reports which indicate the
status of utilization of Subject Inventions. The reports shall include
information regarding the status of development, date of first commercial sale
or use, and gross royalties received by the Contractor. Such report shall be
furnished to NYSERDA not later than February 1 following the calendar year
covered by the report. The Contractor may include the information required by
this Section in the Annual Report required by Section 8.03 of this Agreement.
Section 8.03. Payments to NYSERDA.
--------------------
(a)
(1) When a Sale is made by a Seller when the Seller is a New York
State Manufacturer: .5% of the Sale Price;
The Contractor's obligation to make payments to NYSERDA under
this subparagraph (1) shall extend for a period of fifteen (15)
years or until the Contractor has paid NYSERDA $1,200,000,
whichever occurs first, commencing with the date of the filing of
the Fiscal Report with NYSERDA.
(2) When a Sale is made by a Seller when the Seller is not a New York
State Manufacturer: 3% of the Sale Price.
The Contractor's obligation to make payments to NYSERDA under
this subparagraph (2) shall extend for a period of ten (10) years
or until the Contractor has paid NYSERDA $2,400,000, whichever
occurs first, commencing with the date of the filing of the Final
Report with NYSERDA. In the event the Contractor is obligated to
make payments in accordance with the requirements of this
subparagraph, any payments made to NYSERDA as a result of the
sale of the Product pursuant to the conditions of subparagraph
(1) hereof shall be applied to the Contractor's revised maximum
payment obligation to NYSERDA of $2,400,000.
Also, after the fifteen (15) year payment period or dollar cap under
subparagraph (1) has been met of the ten (10) year payment period or dollar cap
under subparagraph (2) has been met, whichever obligation occurs first, the
Contractor's obligation to make payments to NYSERDA shall extend for another
period of ten (10) years and the Contractor shall make payments to NYSERDA of
.1% of the Sale Price for any Sale made by any Seller if the Contractor's annual
net sales for that year exceed $1,000,000,000.
All payments due pursuant to this Section 8.03 shall be payable in annual
installments and shall be paid by the first day of March in the calendar year
immediately following the year during which the Contractor receives revenues as
described above (the "Due Date") and such annual installments to NYSERDA shall
not exceed $200,000, in the aggregate, for any given year. Any payment not
received by the applicable Due Date shall be deemed delinquent. A delinquent
payment shall be made with interest with such interest computed commencing with
the Due Date of such payment. The interest rate payable shall be the "Prime
Rate" existing as of the due date of such payment plus five (5) percentage
points. Such interest shall be compounded monthly.
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
11
amounts:
(b) Annual Reports. The Contractor shall provide NYSERDA an annual report
--------------
detailing, by manufacturer, the number of items sold or leased, or the payment
or other
12
receipts received, and the resultant amount earned by, and paid to, NYSERDA in
accordance with paragraph (a) hereof. Such report shall be furnished to NYSERDA
not later than February 1 following the calendar year covered by the report. The
Contractor's obligation to provide Annual Reports shall commence on February 1
of the calendar year following either the Contractor's receipt of Final Payment
pursuant to Section 4.04 hereto, or upon the first Sale, whichever event occurs
first. In the event that, for a period of five consecutive years, the annual
reports indicate that no Sales are made and no payment is due to NYSERDA, the
Contractor may cease submittal of annual reports. If, however, Sales are made in
subsequent years, the Contractor's obligation to submit annual reports shall
resume.
(c) Licensing or Franchise Agreements. The Contractor shall not enter into
---------------------------------
any agreement with any party with respect to the licensing, franchising, or
assignment of rights in the Product or any Subject Invention which contains
provisions inconsistent with the Contractor's obligation as set forth in this
Section. The Contractor shall provide copies of any proposed licensing or
franchise agreements to NYSERDA and shall not execute any such agreements
without the prior written consent of NYSERDA. Such consent shall not be
unreasonably withheld, and, in the event that notice of consent or disapproval
is not received by the Contractor within thirty days after receipt of request
for approval by NYSERDA, such licensing or franchise agreement shall be
considered approved.
Article IX
Warranties and Guarantees
-------------------------
Section 9.01. Warranties and Guarantees. The Contractor warrants and
-------------------------
guarantees that:
(a) it is financially and technically qualified to perform the Work;
(b) it is familiar with and will comply with all general and special
Federal, State, municipal and local laws, ordinances and regulations, if any,
that may in any way affect the performance of this Agreement;
(c) the design, supervision and workmanship furnished with respect to
performance of the Work shall be in accordance with sound and currently accepted
scientific standards and engineering practices;
(d) all materials, equipment and workmanship furnished by it and by
Subcontractors in performance of the Work or any portion thereof shall be free
of defects in design, material and workmanship, and all such materials and
equipment shall be of first-class quality, shall conform with all applicable
codes, specifications, standards and ordinances and shall have service lives and
maintenance characteristics suitable for their intended purposes in accordance
with sound and currently accepted scientific standards and engineering
practices;
13
(e) neither the Contractor nor any of its employees, agents,
representatives or servants has actual knowledge of any patent issued under the
laws of the United States or any other matter which could constitute a basis for
any claim that the performance of the Work or any part thereof infringes any
patent or otherwise interferes with any other right of any Person;
(f) there are no existing undisclosed or threatened legal actions, claims,
or encumbrances, or liabilities that may adversely affect the Work or NYSERDA's
rights hereunder; and
(g) it has no actual knowledge that any information or document or
statement furnished by the Contractor in connection with this Agreement contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statement not misleading, and that all facts have been
disclosed that would materially adversely affect the Work.
Article X
Indemnification
---------------
Section 10.01. Indemnification. The Contractor shall protect, indemnify and
---------------
hold harmless NYSERDA and the State of New York from and against all
liabilities, losses, claims, damages, judgments, penalties, causes of action,
costs and expenses (including, without limitation, attorneys' fees and expenses)
imposed upon or incurred by or asserted against NYSERDA or the State of New York
resulting from, arising out of or relating to the performance of this Agreement.
The obligations of the Contractor under this Article shall survive any
expiration or termination of this Agreement, and shall not be limited by any
enumeration herein of required insurance coverage.
Article XI
Insurance
---------
Section 11.01. Maintenance of Insurance Policy Provisions. The Contractor,
------------------------------------------
at no additional cost to NYSERDA, shall maintain or cause to be maintained
throughout the term of this Agreement, insurance of the types and in the amounts
specified in the Section hereof entitled Types of Insurance. All such insurance
shall be evidenced by insurance policies, each of which shall:
(a) name or be endorsed to cover NYSERDA, the State of New York and the
Contractor as insureds, as their respective interests may appear;
(b) provide that such policy may not be cancelled or modified until at
least 30 days after receipt by NYSERDA of written notice thereof; and
14
(c) be reasonably satisfactory to NYSERDA in all other respects.
Section 11.02. Types of Insurance. The types and amounts of insurance
------------------
required to be maintained under this Article are as follows:
(a) Commercial general liability insurance for bodily injury liability,
including death, and property damage liability, incurred in connection with the
performance of this Agreement, with minimum limits of $1,000,000 in respect of
claims arising out of personal injury or sickness or death of any one person,
$1,000,000 in respect of claims arising out of personal injury, sickness or
death in any one accident or disaster, and $1,000,000 in respect of claims
arising out of property damage in any one accident or disaster;
(b) Commercial automobile liability insurance in respect of motor vehicles
owned, licensed or hired by the Contractor and the Subcontractors for bodily
injury liability, including death and property damage, incurred in connection
with the performance of this Agreement, with minimum limits of $500,000 in
respect of claims arising out of personal injury, or sickness or death of any
one person, $1,000,000 in respect of claims arising out of personal injury,
sickness or death in any one accident or disaster, and $500,000 in respect of
claims arising out of property damage in any one accident or disaster; and
(c) Upon commencement of marketing of the Product, product liability
insurance for bodily injury liability, including death, and property damage
liability, arising out or the use of the Product with minimum limits of
$1,000,000 in respect of claims arising out of personal injury or sickness or
death of any one person, $1,000,000 in respect of claims arising out of personal
injury, sickness or death in any one accident or disaster, and $1,000,000 in
respect of claims arising out of property damage in any one accident or
disaster. Product liability insurance naming the NYSERDA and State of New York
as additional insureds required under This Agreement shall remain in effect for
as long as the payment obligation pursuant to Section 8.03 of this Agreement is
in effect.
Section 11.03. Delivery of Policies; Insurance Certificates. Prior to
--------------------------------------------
commencing the Work, the Contractor shall deliver to NYSERDA certificates of
insurance issued by the respective insurers, indicating the Agreement number
thereon, evidencing the insurance required by Sections 11.02 (a) and (b) hereof
and bearing notations evidencing the payment of the premiums thereon or
accompanied by other evidence of such payment satisfactory to NYSERDA. Upon
commencement of marketing of the Product, the Contractor shall deliver to
NYSERDA certificates of insurance issued by the respective insurers, indicating
the Agreement number thereon, evidencing the insurance required by Section 11.02
(c) hereof and bearing notations evidencing the payment of the premiums thereon
or accompanied by other evidence of such payment satisfactory to NYSERDA. In the
event any policy furnished or carried pursuant to this Article will expire on a
date prior to acceptance of the Work by NYSERDA pursuant to the section hereof
entitled Acceptance of Work, the Contractor, not less than 15 days prior to such
expiration date, shall deliver to NYSERDA certificates of
15
insurance evidencing the renewal of such policies, and the Contractor shall
promptly pay all premiums thereon due. In the event of threatened legal action,
claims, encumbrances, or liabilities that may affect NYSERDA hereunder, or if
deemed necessary by NYSERDA due to events rendering a review necessary, upon
request the Contractor shall deliver to NYSERDA a certified copy of each policy.
Article XII
Stop Work Order; Termination
----------------------------
Section 12.01. Stop Work Order.
---------------
(a) NYSERDA may at any time, by written Order to the Contractor, require
the Contractor to stop all or any part of the Work called for by this Agreement
for a period of up to 90 days after the Stop Work Order is delivered to the
Contractor, and for any further period to which the parties may agree. Any such
order shall be specifically identified as a Stop Work Order issued pursuant to
this Section. Upon receipt of Such an Order, the Contractor shall forthwith
comply with its terms and take all reasonable steps to minimize the incurrence
of costs allocable to the Work covered by the Order during the period of work
stoppage consistent with public health and safety. Within a period of 90 days
after a Stop Work Order is delivered to the Contractor, or within any extension
of that period to which the parties shall have agreed, NYSERDA shall either:
(i) by written notice to the Contractor, cancel the Stop Work Order,
which shall be effective as provided in such cancellation notice,
or if not specified therein, upon receipt by the Contractor, or
(ii) terminate the Work covered by such order as provided in the
Termination Section of this Agreement.
(b) If a Stop Work Order issued under this Section is cancelled or the
period of the Order or any extension thereof expires, the Contractor shall
resume Work. An equitable adjustment shall be made in the delivery schedule, the
estimated cost, the fee, if any, or a combination thereof, and in any other
provisions of the Agreement that may be affected, and the Agreement shall be
modified in writing accordingly, if:
(i) the Stop Work Order results in an increase in the time required
for, or in the Contractor's cost properly allocable to, the
performance of any part of this Agreement, and
(ii) the Contractor asserts a claim for such adjustments within 30
days after the end of the period of Work stoppage; provided that,
if NYSERDA decides the facts justify such action, NYSERDA may
receive and act
16
upon any such claim asserted at any time prior to final payment
under this Agreement.
(c) If a Stop Work Order is not cancelled and the Work covered by such
Order is terminated, the reasonable costs resulting from the Stop Work Order
shall be allowed by equitable adjustment or otherwise.
(d) Notwithstanding the provisions of this Section 12.01, the maximum
amount payable by NYSERDA to the Contractor pursuant to this Section 12.01 shall
not be increased or deemed to be increased except by specific written amendment
hereto.
Section 12.02. Termination.
-----------
(a) This Agreement may be terminated by NYSERDA at any time during the term
of this Agreement with or without cause, upon 30 days prior written notice to
the Contractor. In such event, compensation shall be paid to the Contractor for
Work performed and expenses incurred prior to the effective date of termination
in accordance with the provisions of the Article hereof entitled Compensation
and in reimbursement of any amounts required to be paid by the Contractor
pursuant to Subcontracts; provided, however, that upon receipt of any such
notice of termination, the Contractor shall cease the performance of Work, shall
make no further commitments with respect thereto and shall reduce insofar as
possible the amount of outstanding commitments (including, to the extent
requested by NYSERDA, through termination of subcontracts containing provisions
therefor). Articles VIII, IX, and X shall survive any termination of this
Agreement, and Article XVI shall survive until the payment obligations pursuant
to Article VIII have been met.
(b) In the event of termination, the Contractor's payment obligations set
forth in Section 8.03 of the Agreement shall be adjusted as of the effective
date of termination, with such payment obligations being calculated as follows:
Total NYSERDA funds
actually paid to
the Contractor X Payments defined
- ---------------------------------------- in Section 8.03 of the
NYSERDA total maximum Agreement
commitment set forth
in Section 4.07 of
the Agreement
(c) Nothing in this Article shall preclude the Contractor from continuing
to carry out the Work called for by the Agreement after receipt of a Stop Work
Order or termination notice at its own election, provided that, if the
Contractor so elects, (i) any such continuing Work after receipt of the Stop
Work Order or termination notice shall be deemed not to be Work-pursuant to the
Agreement and (ii) NYSERDA shall have no liability to the Contractor for any
17
costs of the Work continuing after receipt of the Stop Work Order or termination
notice.
Article XIII
Independent Contractor
----------------------
Section 13.01. Independent Contractor. The status of the Contractor under
----------------------
this Agreement shall be that of an independent contractor and not that of an
agent, and in accordance with such status, the Contractor, the Subcontractors,
and their respective officers, agents, employees, representatives and servants
shall at all times during the term of this Agreement conduct themselves in a
manner consistent with such status and by reason of this Agreement shall neither
hold themselves out as, nor claim to be acting in the capacity of, officers,
employees, agents, representatives or servants of NYSERDA nor make any claim,
demand or application for any right or privilege applicable to NYSERDA,
including, without limitation, rights or privileges derived from workers'
compensation coverage, unemployment insurance benefits, social security coverage
and retirement membership or credit.
Article XIV
Compliance with Certain Laws
----------------------------
Section 14.01. Laws of the State of New York. The Contractor shall comply
-----------------------------
with all of the requirements set forth in Exhibit B hereto.
Section 14.02. All Legal Provisions Deemed Included. It is the intent and
------------------------------------
understanding of the Contractor and NYSERDA that each and every provision of law
required by the laws of the State of New York to be contained in this Agreement
shall be contained herein, and if, through mistake, oversight or otherwise, any
such provision is not contained herein, or is not contained herein in correct
form, this Agreement shall, upon the application of either NYSERDA or the
Contractor, promptly be amended so as to comply strictly with the laws of the
State of New York with respect to the inclusion in this Agreement of all such
provisions.
Section 14.03. Other Legal Requirements. The references to particular laws
------------------------
of the State of New York in this Article, in Exhibit B and elsewhere in this
Agreement are not intended to be exclusive and nothing contained in such
Article, Exhibit and Agreement shall be deemed to modify the obligations of the
Contractor to comply with all legal requirements.
Article XV
Notices, Entire Agreement, Amendment, Counterparts
--------------------------------------------------
Section 15.01. Notices. All notices, requests, consents, approvals and
-------
other
18
communications which may or are required to be given by either party to the
other under this Agreement shall be deemed to have been sufficiently given for
all purposes hereunder when delivered or mailed by registered or certified mail,
postage prepaid, return receipt requested, (i) if to NYSERDA, at Corporate Plaza
West, 286 Washington Avenue Extension, Albany, New York 12203-6399 or at such
other address as NYSERDA shall have furnished to the Contractor in writing, and
(ii) if to the Contractor, at 968 Albany-Shaker Road, Latham, New York
12110-1487, or such other address as the Contractor shall have furnished to
NYSERDA in writing.
Section 15.02. Entire Agreement: Amendment. This Agreement embodies the
---------------------------
entire agreement and understanding between NYSERDA and the Contractor and
supersedes all prior agreements and understandings relating to the subject
matter hereof. Except as otherwise expressly provided for herein, this Agreement
may be changed, waived, discharged or terminated only by an instrument in
writing, signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.
Section 15.03. Counterparts. This Agreement may be executed in counterparts
------------
each of which shall be deemed an original, but all of which taken together will
constitute one and the same instrument.
Article XVI
Business Reorganizations
------------------------
Section 16.01. Business Reorganizations. In the event the Contractor
------------------------
proposes to consolidate or merge into or with another corporation or entity, or
to sell or dispose of all or a majority of the assets of the Contractor, or to
otherwise undertake a reorganization which alters or changes the rights of
NYSERDA as provided in this Agreement, before any such action shall be taken,
the Contractor shall either:
(a) buy out its obligation to make payments to NYSERDA as described in
Section 8.03 of this Agreement by paying NYSERDA an amount equal to three times
the amount of funds actually paid by NYSERDA to the Contractor under this
Agreement; or
(b) assign or otherwise transfer to a new entity the Contractor's
obligations under this Agreement, including, but not limited to, the obligation
to make payments to NYSERDA as described in Section 8.03 of this Agreement. Such
assignment or transfer shall be subject to the prior written approval of
NYSERDA. Such approval shall not be unreasonably withheld, and, in the event
that notice of approval or disapproval is not received by the Contractor within
thirty days after receipt of request for approval, the assignment or transfer
shall be considered approved. In the event that NYSERDA requires additional time
for considering approval, NYSERDA shall notify the Contractor within thirty days
of receipt of the request for approval that additional time is required and
shall specify the additional amount of time necessary up to sixty (60) days.
19
Article XVII
Publicity
---------
Section 17.01. Publicity.
---------
(a) The Contractor shall collaborate with NYSERDA's Manager of Technical
Communications to prepare any press release and to plan for any news conference
concerning the Work. In addition the Contractor shall notify NYSERDA's Manager
of Technical Communications regarding any media interview in which the Work is
referred to or discussed.
(b) It is recognized that during the course of the Work under this
Agreement, the Contractor or its employees may from time to time desire to
publish information regarding scientific or technical developments made or
conceived in the course of or under this Agreement. In any such information, the
Contractor shall credit NYSERDA's funding participation in the Project, and
shall state that "NYSERDA has not reviewed the information contained herein, and
the opinions expressed in this report do not necessarily reflect those of
NYSERDA or the State of New York." Notwithstanding anything to the contrary
contained herein, the Contractor shall have the right to use and freely
disseminate project results for educational purposes, if applicable, consistent
with the Contractor's policies.
(c) Commercial promotional materials or advertisements produced by the
Contractor shall credit NYSERDA, as stated above, and shall be submitted to
NYSERDA for review and recommendations to improve their effectiveness prior to
use. The wording of such credit can be approved in advance by NYSERDA, and,
after initial approval, such credit may be used in subsequent promotional
materials or advertisements without additional approvals for the credit,
provided, however, that all such promotional materials or advertisements shall
be submitted to NYSERDA prior to use for review, as stated above. Such approvals
shall not be unreasonably withheld, and, in the event that notice of approval or
disapproval is not received by the Contractor within thirty days after receipt
of request for approval, the promotional materials or advertisement shall be
considered approved. In the event that NYSERDA requires additional time for
considering approval, NYSERDA shall notify the Contractor within thirty days of
receipt of the request for approval that additional time is required and shall
specify the additional amount of time necessary up to 60 days. If NYSERDA and
the Contractor do not agree on the wording of such credit in connection with
such materials, the Contractor may use such materials, but agrees not to include
such credit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day, month and year first above written.
MECHANICAL TECHNOLOGY, INC. NEW YORK STATE ENERGY
20
RESEARCH AND DEVELOPMENT
AUTHORITY
By: /s/ Martin J. Mastroianni By /s/ F. William Valentino
----------------------------- -----------------------------------
F. William Valentino
President
Name: Martin J. Mastroianni
---------------------------
Title: President
--------------------------
(Seal)
21
STATE OF NEW YORK )
) SS:
COUNTY OF ALBANY )
On this 24th day of June , 1997, before me personally came
------ ------------------ -----
Martin J. Mastroianni , to me known, who being duly sworn, did depose and
- ----------------------------
say that he resides at Saratoga Springs, N.Y. that he is the
---------------------------------------
President of Mechanical Technology, Inc. , the
- ----------------------------------------------------------------
corporation described in and which executed the foregoing instrument; that he
knew the seal of said corporation; that the seal affixed to said instrument was
such corporate seal; that it was so affixed by the order of the Board of
Directors of said corporation, and that he signed his name thereto by like
order.
/s/ Gloria M. Edmund
- -------------------------------
Notary Public
State of New York
Gloria M. Edmund
Notary Public State of New York
No. 4522548
Qualified in Albany County
Commission Expires 1/31/99
----------
22
[NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY LETTERHEAD]
December 17, 1997
Mr. William P. Sumigray
Contract Manager
Plug Power, L.L.C.
966 Albany-Shaker Road
Latham, New York 12203-6399
Dear Mr. Sumigray:
Subject: Modification No. 1 to Agreement No. 4633-ERTER-TR-98
- PEM Fuel Cell Power System Project
Reference is made to the subject Agreement between us dated June 26, 1997 (the
"Agreement").
WHEREAS, Plug Power, L.L.C. submitted a proposal to NYSERDA under competitive
solicitation 380-97 to request NYSERDA's continued support of the Project; and
WHEREAS, NYSERDA desires to provide additional funding in the amount of $256,578
under this Modification to support the Phase II effort delineated in the
attached Exhibit A-1, Statement of Work, Budget, and Schedule attached hereto
and made a part hereof.
NOW, THEREFORE, the Agreement is hereby modified as follows:
1. Agreement, upper right-hand corner, Amount: Delete the amount "$1,191,478"
------ ------
and Substitute the amount "$1,448,046".
----------
2. Article I, Definitions, Section 1.01, Definitions, (a) General Definitions,
----------- ----------- -------------------
Agreement: Delete the words "Exhibit A" and Substitute the words "Exhibits A,
--------- ------ ----------
A-l".
3. Article I, Definitions, Section 1.01, Definitions, (a) General Definitions,
----------- ----------- -------------------
Budget: Delete the words "Exhibit A" and Substitute the words "Exhibits A
------ ------ ----------
and A-l".
4. Article I, Definitions, Section 1.01, Definitions, (a) General Definitions,
----------- ----------- -------------------
Statement of Work: Delete the words "Exhibit A" and Substitute the words
----------------- ------ ----------
"Exhibits A and A-l".
5. Article I, Definitions, Section 1.01, Definitions, (a) General Definitions,
----------- ----------- -------------------
Work: Delete the words "Exhibit A" and Substitute the words "Exhibits A and
---- ------ ----------
A".
6. Article III, Deliverables, Section 3.05, Deliverables. Delete the words
------------ ------------ ------
"Exhibit A,
Statement of Work" and Substitute the words "Exhibits A and A-1,
----------
Statements of Work".
7. Article IV, Compensation, Section 4.01, Cost-Sharing. Delete the amount
------------ ------------ ------
"$1,191,478" and Substitute the amount "$1,448,056".
----------
8. Article IV, Compensation, Section 4.01, Cost-Sharing, (d) Remaining Funds.
------------ ------------ ---------------
. first sentence. Delete the amount "$1,191,478" and Substitute the amount
------ ----------
"$1,448,056".
. third sentence. Delete the amount "$317,633" and Substitute the amount
------ ----------
"$256,578".
9. Article IV, Compensation, Section 4.04, Final Payment.
------------ -------------
. first sentence. Delete the words "Exhibit A, Statement of Work" and
------
Substitute the words "Exhibits A and A-1, Statements of Work".
----------
. third sentence. Delete the date "September 30, 1998" and Substitute the
------ ----------
date "December 31, 2000".
. last sentence. Delete the amount "$1,191,478" and Substitute the amount
------ ----------
"$1,448,056".
10. Article IV, Compensation, Section 4.07, Maximum Commitment. Delete the
------------ ------------------ ------
amount "$1,191,478" and Substitute the amount "$1,448,056".
----------
11. Article VI, Schedule; Acceptance of Work, Section 6.01, Schedule.
---------------------------- --------
. first sentence. Delete the words "Statement of Work" and Substitute the
------ ----------
words "Statements of Work".
. second sentence and third sentence. Delete the words "Exhibit A Schedule"
------
and Substitute the words "Exhibits A and A-1 Schedules".
----------
!2. Article VI, Schedule; Acceptance of Work, Section 6.02, Acceptance of Work.
---------------------------- ------------------
Delete the words "Exhibit A, Statement of Work" and Substitute the words
------ ----------
"Exhibits A and A-1, Statements of Work".
13. Exhibit A, Statement of Work, Schedule and Budget. Add the attached Ex A-1,
---
Statement of Work, Schedule and Budget dated December 17, 1997.
No other provision of the Agreement is otherwise changed or modified.
The parties hereto do hereby indicate their acceptance of and agreement to the
foregoing by causing their duly authorized representatives to execute this
Modification No. 1 in the respective spaces provided below.
PLUG POWER, L. L.C. NEW YORK STATE ENERGY
RESEARCH AND DEVELOPMENT
AUTHORITY
By /s/ Gary Mittleman By /s/ F. William Valentino
-------------------------- ---------------------------------------
Name Gary Mittleman F. William Valentino
------------------------- President
Title Pres & CEO.
-----------------------
Jean M. Woodard
Vice President and Treasurer
[stamped]
EXHIBIT A-1
-----------
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
FUEL PROCESSOR INTEGRATION PROGRAM FOR
TRANSPORTATION FUEL CELL POWER
SYSTEMS
A PROPOSAL TO THE
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
Prepared by:
Plug Power L.L.C.
968 Albany Shaker Road
Latham, New York 12110
March 18, 1998
This proposal contains proprietary information that may not be
divulged outside the NYSERDA
organization without prior written consent from
Plug Power L.L.C.
Executive Summary
Fuel cell power systems for transportation applications hold great promise in
meeting many areas of environmental concern, such as reduction of vehicle
emissions and fuel conservation. While some fuel cell systems are being
developed to run on pure hydrogen stored within the vehicle, more practical
vehicle designs (aimed at running on, e.g., gasoline or methanol) require the
incorporation of a fuel processor and a fuel cell that are tightly integrated to
maximize efficiency and performance. However, the integration of fuel processors
and fuel cells demands careful evaluation, analysis and attention to difficult
system integration challenges. Comprehensive understanding of the issues
associated with thermal integration, optimal system water management, control
integration and fuel impurity effects are areas that Plug Power has identified
as the most important and most critical for achieving successful
commercialization of transportation power systems.
This proposal requests NYSERDA's support for the establishment of a fuel cell,
fuel processor integration testing program that will help to resolve several of
these fundamental system integration issues.
The proposed program includes the creation of a state-of-the-art reformate stack
test stand that will be capable of supporting the testing needs of automotive
sized fuel processor and fuel cell power systems. The test stand will support
the operation of a variety of automotive fuel processor systems, and it will
support the testing of Plug Power developed fuel cells. The test stand will also
include a full complement of instrumentation and data acquisition equipment
required for comprehensive testing and evaluation of alternative system
configurations and components. Along with this unit, Plug Power will develop and
establish a testing strategy that will be designed to evaluate critical fuel
processor and fuel cell integration issues. Issues such as water balance,
control strategy integration, reformate gas composition, and thermal balancing,
of the integrated system will be primary focus areas for the testing program.
Concurrent with the establishment of the testing program, Plug Power will begin
testing fuel processors with Plug Power developed fuel cells.
This program will also establish the foundation for continued system performance
improvements resulting from continued integration testing and system design
refinements. Data acquired from testing fuel cells integrated with fuel
processors will be used to define a continuing and evolving series of technology
improvement programs, continued re-definition of integration testing plans, and
progressive refinements in system designs and performance.
Program Goals and Objectives
The ultimate goal of the proposed program is to establish a fundamental
understanding of fuel processor and fuel cell integration technology and issues
that need to be addressed to improve system performance. From this basic
understanding of the issues, further refinement of technology development
programs will emerge. As interim goals and objectives of this program, Plug
Power intends to:
. Construct a state-of-the-art test stand to permit testing of
integrated fuel processor fuel/ cell systems
. Improve our fuel processing technology base
. Perform technical assessments of fuel processors
. Evaluate reformate composition vs. fuel cell performance
. Evaluate thermal management alternatives
. Evaluate alternative methods of system water management
. Observe the effects of varying reactant stoichiometries
. Monitor the performance of alternative control strategies
. Establish a fundamental understanding of transient operation
. Begin to evaluate system start-up strategies
Background
Fuel cells have recently come into the spotlight as viable candidates for
generating the electrical power required for all-electric and/or hybrid electric
vehicles. Currently, there are several programs being conducted by Government
agencies and private organizations, which are aimed at demonstrating the ability
of fuel cells to provide the electrical power required for practical sized
vehicles.
Aside from the selection of vehicle size and type of vehicle power system for
fuel cell powered vehicles, the decision regarding fuel is perhaps the one with
the most profound implications. While hydrogen is the fuel of choice for Proton
Exchange Membrane (PEM) fuel cells, most system developers acknowledge the
problems associated with storing significant amount of hydrogen fuel on a
vehicle. This combined with the associated lack of on-highway hydrogen re-
fueling infrastructure and the difficult challenge of developing such a system
in the short term, leads power system developers into the decision to
incorporate fuel processors capable of deriving hydrogen from "popular" fuels,
such as gasoline, diesel or methanol into their system designs.
In simple terms, the fuel processor has to accomplish two goals and is usually
thought of as two separate reactors: the reformer and the CO cleanup device.
. Reformer: Reforms the hydrocarbon fuel into a hydrogen rich gas
(reformate) and
. Cleanup: Reduces the CO content of the reformate below 50 ppm.
There are basically three different types of reformers:
. Steam reformers,
. Partial oxidation reformers, and
. Catalytic autothermal reformers.
The steam reformer has the benefit of being the most widely used reformer for
large-scale commercial hydrogen production purposes, so there is a wealth of
knowledge on the technology. Of the various types of reformers, steam reforming
is also noted for being able to produce the most hydrogen per kg of input fuel.
Another positive attribute of steam reformers is the hydrogen concentration of
the reformate is the highest of all technologies, since steam reformers do not
mix any air into the chamber that produces the reformate.
The disadvantage with steam reforming is that it requires the most physical
volume and consequently will be the heaviest of the reformer options. Since the
steam reformer is the largest of the reactors, it is also most likely to have
the highest capital cost. Steam reformers also have very slow start-up times,
and are relatively slow to react to load changes.
Partial Oxidation reforming is relatively a mature and well-understood
technology; however there are significant engineering issues in reducing the
reformer size from plant-size to automotive-size. Partial oxidation has the
advantage of being compact, and having less weight than steam reforming. Partial
oxidation reformers also have fast start-up times, and are fairly responsive to
load changes. Another important advantage is that partial oxidation reformers
are promising to be the most economical of all reformer technologies.
Low hydrogen production efficiency is the main disadvantage of partial oxidation
reformers. Because air is introduced into the reactor, N\2\ dilutes the
reformate stream so the H\2\ concentration in the reformate is much lower than
that of the steam reformer. Although the technology is mature, there is less
commercial expertise with partial oxidation in comparison with steam reforming.
Catalytic Autothermal Reformers (CAR) combine the catalytic steam reforming
reaction and the partial oxidation reactions in a single reaction chamber. This
yields relatively good response times for start-ups and load changes, and also
encourages lighter weight construction, smaller volumes, and higher conversion
efficiencies.
The disadvantage with the CAR process is that it is the newest reformer
technology with the least amount of commercial experience. As is the case for
the partial oxidation system, air is introduced into the reactor, so the H\2\
concentration in the reformer will be low in comparison to the steam reformer.
The cost for such a system is projected to fall between the costs of the partial
oxidation reformer and the steam reformer.
CO cleanup devices
CO is a by-product of the reforming process, and CO in the reformate stream
hurts the performance of PEM fuel cells. Consequently, CO levels in the
reformate stream must be reduced to very low levels (10 to 50 parts-per-million,
or ppm). There are several ways of eliminating or minimizing the levels of CO in
the reformate stream. One way is to purify the hydrogen, meaning that the output
from the device is pure hydrogen. The other method is to react the CO with
another gas and convert it into another compound.
There are two hydrogen purification methods being considered; pressure swing
adsorption (PSA) and membrane separation, that can both provide extremely pure
hydrogen (less than 100 ppm CO). The benefit of such systems is that fuel cells
run more efficiently with pure hydrogen than with an H/2/-rich gas that has many
diluents, such as CO/2/ and N/2/. Currently, both processes are accomplished at
extremely high pressures (200 psi) and with fairly high capital investments.
Parasitic compression losses from the required high-pressures, as well as the
high capital costs for compressors, are the key disadvantages.
There are also several cleaning, devices that chemically convert the CO to other
compounds. One such device is a low temperature shift reactor that reacts CO
-----------------------------
with H/2/O to form CO/2/ and H/2/. Another device is a preferential oxidizer
---------------------
that reacts CO with O/2/ to get CO/2/. A third device is called a methanizer,
----------
and it reacts with CO and H/2/ to get CH/4/. Each of these devices has the
advantage of not requiring high pressures to operate and are fairly inexpensive
solutions.
The disadvantages with each of these systems are that they all need extremely
good temperature control to be able to clean the CO down to the required levels
and that the final reformate feeding the fuel cell will be filled with diluents.
The obvious challenge to developing an efficient and economical transportation
fuel cell power system configuration is confident selection of the best reformer
and CO cleanup devices. The selection process is fraught with system design
trade-offs that can only be made using reliable data acquired under operating
conditions. Other design selections need to be made based upon the results of
parametric testing of alternative system configurations.
The proposed program constructs the test stand required to test alternative fuel
processor and fuel cell configurations, to acquire the data required to make the
system design decisions.
Statement of Work
The proposed program consists of three tasks that will be conducted in parallel.
The first task will be the design and construction of a world-class reformate
fuel cell test stand, the second task will be to develop a testing program to
evaluate system integration design in order to drive toward optimal system
configurations. The third task will be dedicated to Program Management, and will
ensure that the two technical activities are well coordinated, and that the
technologies developed are coordinated with the needs of other automotive
oriented programs within Plug Power. The two technical tasks will be coordinated
through a series of design reviews and strategy development sessions that will
ensure the testing facility reflects the needs of the testing program. The
following paragraphs described the planned work for each task.
TASK 1 -Test Stand Design and Construction
Under this task, Plug Power will design and fabricate a state-of-the-art testing
reformate fuel cell test stand for integrated fuel processor and fuel cell
systems. Each test stand will be designed to meet all local safety codes, and
will provide the support services demanded by comprehensive fuel cell power
system testing.
Task 1.1 - Test Stand Definition
Under this effort, Plug Power personnel will define the performance requirements
and corresponding system needs of the test stand. Specific requirements will be
driven by the objectives of the testing engineers, and by capacities dictated by
the anticipated needs of automotive sized systems. Such needs are expected to
include, but will not be limited to:
. Fuel storage and delivery
. Air compression and delivery
. Reformate composition and quality
. Cooling system
. Service water
. Instrumentation and control
. Safety system
. Space requirements
. Electrical
. Data acquisition and storage
Results of the test stand definition work will be summarized in the form of a
"Test Stand Needs" document. This document will then be used to ensure that all
needs are reflected in the test stand.
Task 1.2 -Test Stand Design
The test stand will be designed based upon the needs defined in Task 1.1. The
initial design will be reviewed internally by Plug Power personnel to ensure
conformance with the Test Stand Needs document developed in Task 1.1. After the
design has been reviewed, a design package will be prepared and bids obtained.
In addition to the test stand design, interfaces will be completed for both fuel
processors and fuel cells. The test station design will include manual and
automated controls for all fuel processor and fuel cell parameters, and will be
based upon the recent Plug Power test station designs. Test equipment will be
carefully selected for ease of incorporation into each of the test stations and
will provide critical data concerning gas composition, reactant flow rates and
pressures, coolant loop temperatures and pressures, and characteristics of the
electrical load. Other instrumentation will be incorporated to permit the
accurate measurement and analysis of critical system mass and flow balances. The
test station is envisioned to incorporate a dedicated data acquisition processor
for high-speed collection of critical performance data.
The test station will then be connected, via a computer network, to a host
computer for storage and post-test analysis of all the data.
Task 1.3 -Test Stand Construction
The test stand will be constructed according to design and its operation
verified during commissioning tests. Wherever possible, the operation and
performance of each component will be tested to ensure that all performance
objectives have been met, and that the test stand will provide the desired
capacities of flow, pressure, load, etc. for the test articles. It is envisioned
that a fuel processor and a fuel cell will be made available to confirm the
functionality of the various system elements.
Task 2.0 - Integrated System Testing
After completion of the test stand, the task of evaluating the various system
integration issues will commence. Prior to the testing, however, a structured
test strategy will be developed followed by detailed test plans. The following
paragraphs detail the activities planned for the testing aspects of the
integrated system program.
Task 2.1 - Develop Testing Strategy and Methodology
To ensure that all system development and testing requirements are addressed in
all tests, a testing strategy and philosophy will be developed. If the testing
is to provide useful data, it is essential that all system integration issues
such as water balancing, thermal management, and integrated system control
issues are addressed in a through and consistent manner. This task will strive
to identify all the critical and essential testing objectives, and will develop
a consistent set of testing methodologies to ensure that the objectives are
consistently met. Results of this work will be used to ensure that the test
stand designed in Task 1 supports all the testing objectives.
Task 2.2 - Develop Test Plans
General testing sequences will be developed during this task that utilize the
testing methodology developed in Task 2.1, and are based upon the specific
designs of the testing facilities. These test procedures will be established to
ensure that consistent data will be acquired during all phases of testing.
Several test plans will be prepared to address specific objectives. For example,
a test plan for determining thermal balance throughout the integrated system
will be developed. Another test plan will be developed to ensure that all
anticipated control aspects of a system will be evaluated. Other general tests
will be prepared to cover initial system start-up, steady state and transient
modes of operation.
It is the intent of this task to create "generic" test recipes that can be
easily modified for use on specific fuel processors or system configurations.
Task 2.3 - Enhance Plans for First Reformer Testing
Specific test plans for a specific fuel processor and fuel cell system
components will be developed as part of this task. The general test plans
prepared in Task 2.2 will be modified and enhanced for the specific requirements
of specific reformers and system configurations. It is anticipated that a
methanol reformer will be the first device tested in the new facility.
Task 2.4 - Conduct First Reformer Testing
Utilizing the testing procedures developed in Task 2.3, the first reformer will
be tested to prepare for incorporation with the test stand. Particular attention
will be paid to the performance of the facilities and operation of the safety
systems incorporated into the facility. Other test objectives will be to confirm
expectations regarding gas composition of the reformer output stream, confirm
projections of water requirements and output from system components, and confirm
control strategies.
Task 2.5 - Conduct Second Reformer Testing
To meet the program objectives of acquiring a broad range of fuel processor
testing experience, testing of a second reformer will be conducted. In
preparation of testing the second reformer, testing plans originally developed
in Task 2.3 will be modified as required, and testing will be conducted.
Task 3.0 - Program Management
Ensuring that program objectives are achieved, and that schedules are
maintained, will be the responsibility of an active program manager. An
essential role of the program manager will be to ensure coordination between the
test stand designers and the test planners and designers.
Additionally, the Program management activity will be responsible for preparing
and delivering periodic reports to NYSERDA. and maintaining a line of frequent
communications concerning program status, progress and areas requiring attention
with representatives of NYSERDA.
Program Schedule - Plug Power has planned this proposed program for a 6-month
duration. The program plan is depicted in Figure 1 below. Plug Power promises to
make our best effort with the financial resources being supplied by New York
State to meet all targeted objectives.
[Chart Appears Here Which Sets Forth the Schedule for Completion
of Work Under the Program, as set forth below:]
2nd Quarter 3rd Quarter 4th Quarter
--------------- --------------- ---------------
Task Name Apr May Jun Jul Aug Sep Oct Nov Dec
--------- --- --- --- --- --- --- --- --- ---
NYSERDA REFORMER PROGRAM
1.0 Test Stand
1.1 Test Stand Definition [April through May]
1.2 Test Stand Design [April]
1.3 Test Stand Construction [Mid-April through Mid-May]
2.0 Integrated System Testing [Mid-April through Mid-October]
2.1 Develop Testing Methodology [Mid-April]
2.2 Develop Test Plans [Mid-April through May]
2.3 Enhance Plans for First Reformer Tests [Mid-May]
2.4 Conduct First Reformer Testing [August-October]
2.5 Conduct Second Reformer Testing [August-October]
3.0 Program Management [April through October]
Deliverables - After the completion of all work, Plug Power will submit two
copies of the draft final report to NYSERDA for Review. Within thirty days
after receipt of the annotated report from NYSERDA, Plug Power shall submit six
copies of the final report, plus one reproducible copy.
EXHIBIT A-1
-----------
[***--Note: all numbers have been omitted from this table and filed separately
with the Securities and Exchange Commission pursuant to Rule 406 under the
Securities Act]
- ------------------------------------------------------------------------------------------------------------------------------------
New York State Energy Research and Development Authority Solicitation/Contract No. Page
Contract Pricing Proposal Form
- ------------------------------------------------------------------------------------------------------------------------------------
Contractor: Name of Proposed Project:
PLUG POWER, L.L.C. FUEL PROCESSOR INTEGRATION
FOR TRANSPORTATION FUEL
CELL POWER SYSTEMS.
- -------------------------------------------------------------------------------
Address: 968 Albany-Shaker Road
Latham, New York 12110
- ------------------------------------------------------------------------------------------------------------------------------------
Location (where work is to be performed): NYSERDA funding:
SAME AS ABOVE
- ------------------------------------------------------------------------------------------------------------------------------------
Total Project Cost:
- ------------------------------------------------------------------------------------------------------------------------------------
Total Funding & Cost-sharing
Project Co-funding & Other
Cost Element Cost via NYSERDA Co-funding
- ------------------------------------------------------------------------------------------------------------------------------------
1. Direct Materials
- ------------------------------------------------------------------------------------------------------------------------------------
a. Purchased Parts 204,000 106,958 97,042
- ------------------------------------------------------------------------------------------------------------------------------------
b. Other FUEL 15,000 7,864 7,136
- ------------------------------------------------------------------------------------------------------------------------------------
Total Direct Materials 219,000 114,822 104,178
====================================================================================================================================
2. Materials Overhead Rate:
- ------------------------------------------------------------------------------------------------------------------------------------
3. Direct Labor (specify
names/titles) Hours Rate/hr 69,290 36,329 32,961
- ------------------------------------------------------------------------------------------------------------------------------------
ENGINEERING & 3250 $21.32
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNICIAN
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Direct Labor 69,290 36,329 32,961
====================================================================================================================================
4. Labor Overhead Rate% $ Base
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Labor Overhead
====================================================================================================================================
5. Outside Special Testing
====================================================================================================================================
6. Equipment
====================================================================================================================================
7. Travel
====================================================================================================================================
8. Other Direct Costs
====================================================================================================================================
9. Subcontractors/Consultants
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING CONSULTANT 5,000 2,622 2,378
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Subcontractors/Consultants
====================================================================================================================================
10. General & Administrative
Expense Rate% Element(s)
- ------------------------------------------------------------------------------------------------------------------------------------
21.5 402,750 86,591 45,415 41,176
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
11. Fee or Profit (0 for cost-sharing
agreements) Rate:
====================================================================================================================================
12. Total Estimated Project Cost 489,341 256,578 232,763
====================================================================================================================================
This proposal reflects our best estimates of this date, in accordance with the instructions to proposers.
- ------------------------------------------------------------------------------------------------------------------------------------
Typed Name and Title: WILLIAM P. SUMIGRAY Signature: Date:
CONTRACT MANAGER /s/ William P. Sumigray 12/17/97
- ------------------------------------------------------------------------------------------------------------------------------------
Has any executive agency of the U.S. government performed any review of your records in connection with
any prime contract or subcontract within the past twelve months: X Yes No
--- ----
If yes, identify:
- ------------------------------------------------------------------------------------------------------------------------------------
Meoh fuel processor testing program
April May June July August September October Totals
Phase 1
Test stand design &
fabrication
J. Chen 40 40 40 120
E. White 20 20 20 60
Electrician 40 80 80 200
Electrical Engineer 40 20 60
FP engineer 80 80 80 240
Engineer *M. 60 40 20 120
Cusack)
Technician 80 80 80 240
Technician 80 80 80 240
1280
Phase 2
Test planning and
procedures
J. Chen 40 40 80
E. White 20 20 40
J. Love 20 20 40
FP engineer 40 40 40 120
Engineer (M 40 40 40 120
Cusack)
Test Engineer 40 40 80
480
Phase 3
Testing
J. Chen 40 40 20 20 20 140
FP engineer 40 40 80 80 80 320
Test technician 40 40 80 80 80 320
Test technician 80 80 80 240
J. Love 20 20 20 20 20 100
1120
Phase 4
Program Mgmt
D. Hicks 40 20 20 20 20 20 20 160
J. Law 20 20 20 20 20 20 20 140
D. Neuman 10 10 10 10 10 10 10 70
370
Materials
Lab modifications $ 30,000
Fuel system $ 30,000
Fuel usage $ 15,000
FP station build $ 57,000
Computer $ 5,000
DAQ $ 7,000
Frame $ 4,000
Fittings $ 3,000
Meters $10,000
pumps $ 2,000
flow control $ 7,000
display
flow controllers 7,000
gas conditioner 2,000
Infrared CO meter 10,000
Gas Chromatograph
$ 45,000
FC station build $ 27,000
Computer@5,000
Frame@4,000
Fittings@3,000
Meters@5,000
Elec load@10,000
Cooling system $ 15,000
Building consultant $ 5,000
Total Direct Direct
Material Cost $224,000 Materials $224,000
Direct Labor and Overhead ($55/hr) $178,750
G&A $ 86,591
(21.5%)
TOTAL $489,341
INDIRECT RATES
--------------
THE INDIRECT RATES APPLICABLE TO THIS BUDGET EXHIBIT A-1 ARE AS FOLLOWS:
OVERHEAD 158% X DIRECT LABOR
G&A 21.5% X DIRECT LABOR, OVERHEAD AND
G&A
[NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY LETTERHEAD]
March 30, 1999
Mr. William P. Sumigray
Contract Manager
Plug Power,-L.L.C.
968 Albany-Shaker Road
Latham, New York 12203-6399
SUBJECT: MODIFICATION NO. 2 TO AGREEMENT NO. 4633-ERTER-TR-98
-- PEM Fuel Cell Power System Project
Dear Mr. Sumigray:
Reference is made to the Agreement between us dated June 26, 1997 and
Modification No. 1 dated December 17, 1997 ("the Agreement"), wherein the
following changes are hereby incorporated:
WHEREAS, NYSERDA has provided Plug Power L.L.C. with $1,448,056 for the
development of the PEM Fuel Cell Power System under the Referenced Agreement and
subsequent Modification; and
WHEREAS, NYSERDA desires to provide additional funding from the 1996 Clean
Water/Clean Air Bond Act in the amount of $3,000,000 under Agreement Number
4870-ERTER-BA-99 to undertake an air quality project and to support the Phase
III effort; and
WHEREAS, PLUG Power L.L.C. has a certain payment obligation to NYSERDA under
Section 8.03 of the Subject Agreement.
NOW, THEREFORE, the Agreement is hereby modified as follows:
1. Article VIII, Technical Data: Patents: Payments to NYSERDA. Section 8.03,
--------------------------------------------
Payments to NYSERDA, (a), Payments to NYSERDA, subparagraph (1), second
------------------- -------------------
paragraph Delete the first sentence and Substitute the following sentence,
------ ----------
"The Contractor's obligation to make payments to NYSERDA under this
subparagraph (1) shall extend for a period of 15 years thereafter or until
the Contractor has paid to NYSERDA $4,200,000, whichever occurs first,
commencing with the date of the filing
of the Final Report to NYSERDA."
2. Article VIII, Technical Data: Patents: Payments to NYSERDA. Section 8.03,
--------------------------------------------
Payments to NYSERDA, (a), Payments to NYSERDA, subparagraph (2), second
------------------- -------------------
paragraph.
. Delete the first sentence and Substitute the following sentence, "The
------ ----------
Contractor's obligation to make payments to NYSERDA under this
subparagraph (2) shall extend for a period of 10 years thereafter or
until the Contractor has paid to NYSERDA $5,400,000, whichever occurs
first, commencing with the date of the filing of the Final Report to
NYSERDA."
. Delete the amount "$2,400,000" from the last sentence and Substitute the
------ ----------
amount "$5,400,000."
3. Article VIII, Technical Data: Patents: Payments to NYSERDA. Section 8.03,
--------------------------------------------
Payments to NYSERDA, (a), Payments to NYSERDA, sixth paragraph. Delete the
------------------- ------------------- ------
amount "$200,000" from the last sentence and Substitute the amount
----------
"$540,000."
No other provision of this Agreement is otherwise modified or changed.
The parties hereto do hereby indicate their acceptance of and agreement to the
foregoing by causing their duly authorized representatives to execute this
Modification No. 2 in the respective spaces provided below.
PLUG POWER L.L.C. NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By /s/Gary Mittleman By /s/ Jean M. Woodard
------------------------ --------------------------
Jean M. Woodard
Name Gary Mittleman Vice President & Treasurer
----------------------
Title Pres & CEO
---------------------