Exhibit 10.48
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 246-2 UNDER THE
SECURITIES EXCHANGE ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN
INDICATED WITH AN "*".
AMENDED AND RESTATED DISTRIBUTOR AGREEMENT
THIS AMENDED AND RESTATED DISTRIBUTOR AGREEMENT is made and entered into
as of this 21st day of August, 2001 (herein referred to as the "Effective
Date"), between GE FUEL CELL SYSTEMS, L.L.C. ("GEFCS"), a Delaware limited
liability company located at ▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as "DISTRIBUTOR"), and PLUG POWER, INC., a Delaware
corporation located at ▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as "PP" or "SUPPLIER"). DISTRIBUTOR and SUPPLIER are
referred to individually herein as a "Party", and collectively as the
"Parties".
W I T N E S S E T H:
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WHEREAS, DISTRIBUTOR and SUPPLIER entered into a distributor agreement
dated February 2, 1999 (the "Original Agreement"), in order to set forth, among
other items, DISTRIBUTOR's obligation to market, sell, and provide services for
"Product" and "Pre-Commercial Units," both of which are defined in the Original
Agreement;
WHEREAS, GEFCS and other General Electric Company affiliates have entered
into various agreements with PP related to the Original Agreement, including,
without limitation, the letter agreement from GE Power Systems to PP dated
February 3, 1999, the Agreement between PP, GE On-Site Power, Inc., and GEFCS
dated August 27, 1999 ("August 27 Agreement"), and amendments to the Original
Agreement between PP and GEFCS dated July 31, 2000 ("July 31 Amendment"), and
March 27, 2001 the ("March 27 Amendment"); and
WHEREAS, DISTRIBUTOR and SUPPLIER now desire to enter into a new
Distributor Agreement ("Agreement") that reflects PP's and GEFCS's current
understanding with respect to, among other matters, GEFCS's distribution rights
and obligations, PP's supply obligations, the manner in which prices for
Product (hereinafter defined) supplied to GEFCS are to be established, the
Parties' ability to terminate this Agreement and the rights of DISTRIBUTOR and
SUPPLIER upon termination of this Agreement;
WHEREAS, DISTRIBUTOR and SUPPLIER intend this Agreement to replace and
supercede, except to the extent provided herein and except to the extent either
party may have liability to the other resulting from conduct, or its
consequences, undertaken in good faith, relying on the provisions of those
agreements during the periods of their effectiveness, the Original Agreement,
the July 31 Amendment and the March 27 Amendment;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the mutual benefits to be derived
herefrom, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I - DEFINITIONS
1.1 Affiliate. The term "Affiliate" when used herein shall mean, with
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respect to any Person, any Person directly or indirectly controlling,
controlled by, or under common control with such other Person, except that an
Affiliate of SUPPLIER shall only include any Person
directly or indirectly controlled by SUPPLIER. As used herein, control shall
mean the ownership, either directly or by attribution, of more than 50% of the
combined voting rights attributable to the equity interests of a Person or the
ability, either direct or indirect, to control the composition of the majority
of the Board of Directors or comparable management body of a Person.
1.2 Agreement. The term "Agreement" when used herein shall mean this
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document and any annex, exhibit, attachment, schedule, addendum, or
modification hereto, unless the context otherwise indicates.
1.3 Business Plan. The term "Business Plan" shall mean SUPPLIER's
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Business Plan, as duly adopted and ratified by SUPPLIER.
1.4 Commercial Period. The term "Commercial Period" shall be defined as
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follows. In the event that (i) one or more Products meets the specifications as
outlined in the MGPP, (ii) a "Launch Readiness Demonstration Test" (as such
term is defined in the NPD) has been successfully completed with respect to
such Product(s), and (iii) the prices to be charged to DISTRIBUTOR for such
Product(s) have been established in accordance with Section 3.3 hereof, then
SUPPLIER shall deliver a notice to DISTRIBUTOR regarding such developments.
Unless DISTRIBUTOR delivers an objection disputing the information in such
notice within 15 days of its receipt thereof, the "Commercial Period" with
respect to such Product or Products shall be deemed to have commenced on the
date that DISTRIBUTOR received such notice.
1.5 Confidential Information. The term "Confidential Information" when
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used herein shall have the meaning ascribed in Section 7.1 hereof. 1.6
Customer. The term "Customer(s)" when used herein shall mean any purchaser or
potential purchaser of the Products or Services from DISTRIBUTOR, directly or
indirectly through third parties.
1.7 GE MicroGen. The term "GE MicroGen" or "GEMG" when used herein shall
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mean GE MicroGen, Inc., a corporation wholly-owned by General Electric Company.
1.8 GEPS. The term "GEPS" when used herein shall mean the GE Power
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Systems business of General Electric Company.
1.9 MGPP. A high level, multi-generation product plan which is
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incorporated as a part of the Business Plan and which includes a table
delineating high-level product specification and cost of electricity targets, a
schedule reflecting the calendarization of development and launch of products,
and a product strategy statement that includes, for each product type, a
description of the product's target customers, target applications and value
proposition.
1.10 NPD. SUPPLIER's New Product Delivery Process, as amended by SUPPLIER
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from time to time.
1.11 PEM Fuel Cell-Powered Generator Set. The term "PEM Fuel Cell-Powered
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Generator Set" when used herein shall mean a proton exchange membrane fuel cell
stack, of any power output, with (in the case of a hydrocarbon fuel) or without
(in the case of hydrogen fuel) a
fuel processor, packaged with all of the ancillary components, systems,
electronics, batteries, controls, protective relaying (e.g., over/under
current, transfer switch), and enclosure(s) required to be ready for indoor or
outdoor installation and operation for stand-alone or grid-interconnected
stationary power applications.
1.12 Person. The term "Person" when used herein shall mean an individual,
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a corporation, a partnership, a limited liability company, an association, a
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
1.13 Product Quality and Safety Assurance Program. The term "Product
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Quality and Safety Assurance Program" when used herein shall have the meaning
ascribed in Section 6.9 of this Agreement.
1.14 Products. The term "Products" when used herein shall have the
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meaning described in Schedule A-1, attached hereto.
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1.15 Services. The term "Services" when used herein shall mean those
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services listed on Schedule A-2 of this Agreement, attached hereto.
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1.16 Term. The term "Term" when used herein shall mean the term of this
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Agreement as defined pursuant to Section 4.1, including all extensions and
renewals thereof.
1.17 Territory. The term "Territory" when used herein shall mean every
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country, province, territory or other principality in the world, except the
States of Michigan, Indiana, Ohio, and Illinois while Edison Development
Corporation has exclusive rights to market and sell products similar to
Products and provide services similar to Services therein. In the event that
Edison Development Corporation ("EDC") shall cease to have exclusive rights to
market and sell similar products and provide similar services in the States of
Michigan, Indiana, Ohio and Illinois in the United States of America (the "EDC
Territory"), this definition of "Territory" shall be expanded to include the
EDC Territory and DISTRIBUTOR shall have the rights to market and sell Products
and provide Services in the EDC Territory on a non-exclusive basis.
ARTICLE II -- APPOINTMENT AND SCOPE
2.1 Appointment. Subject to the terms and conditions and for the Term of
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this Agreement, SUPPLIER hereby appoints DISTRIBUTOR, and DISTRIBUTOR accepts
such appointment, as SUPPLIER's distributor in the Territory to exclusively
market, distribute, sell, lease, and finance (collectively referred to herein
as "Sell" or "Sale") Products and the output of Products (e.g., capacity,
energy, heat) to Customers for their own use or resale, and to exclusively
provide Services to Customers.
2.2 SUPPLIER's Non-Compete. During the term of this Agreement and except
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as otherwise provided herein, SUPPLIER and its Affiliates shall not, directly
or indirectly, Sell Products or PEM Fuel Cell-Powered Generator Sets,
components, replacement parts, upgrades, accessories, or improvements that
compete with Products, Sell the output of PEM Fuel Cell-Powered Generator Sets
that compete with the Products, or provide Services to Customers in the
Territory, except that (i) SUPPLIER may, for the sole purpose of Product
testing and research
and development, deal directly with and provide Product and Services to
governmental entities (e.g., State of New York, NYSERDA, U.S. Department of
Energy), (ii) SUPPLIER may, for the sole purpose of Product testing and
research and development, deal directly with, sell Product to, and provide
Services to, quasi-public entities (e.g., Long Island Power Authority, Los
Angeles Department of Water and Power) provided that SUPPLIER and DISTRIBUTOR
mutually agree to allow SUPPLIER to enter into such transactions and SUPPLIER
and DISTRIBUTOR agree on appropriate compensation to GE MicroGen or its
Affiliate, and (iii) if the Parties mutually agree that a specific market
opportunity (e.g., applications, geographic market) may be better served by a
distributor (including SUPPLIER) other than DISTRIBUTOR, the Parties will
negotiate in good faith to determine the compensation that should be paid to GE
MicroGen or its Affiliate for DISTRIBUTOR forgoing its exclusive distribution
rights to that opportunity.
2.3 DISTRIBUTOR's Non-Compete. During the term of this Agreement and
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except as otherwise provided herein, DISTRIBUTOR will (i) utilize SUPPLIER as
its sole supplier of PEM Fuel Cell-Powered Generator Sets, components,
replacement parts, upgrades, accessories, and improvements therefor, and (ii)
will not, directly or indirectly, Sell PEM Fuel Cell-Powered Generator Sets
manufactured by or on behalf of any Person other than Supplier, nor the output
thereof, nor any components, replacement parts, upgrades, accessories or
improvements therefor.
2.4 Third Parties. DISTRIBUTOR may appoint or contract with third
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parties (e.g., agents, distributors, sub-distributors) in connection with the
Sale of Products, and the provision of Services, so long as any compensation to
such third parties shall be the sole responsibility of DISTRIBUTOR. DISTRIBUTOR
will use reasonable efforts to consult with SUPPLIER regarding any such
appointments or contracts prior to entering into such appointments or
contracts.
2.5 Independent Contractor Status. DISTRIBUTOR is an independent
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purchaser and seller of the Products. Nothing contained in this Agreement shall
be construed to constitute DISTRIBUTOR as a partner, employee, agent or joint
venturer of SUPPLIER, nor shall DISTRIBUTOR and SUPPLIER have any authority to
bind the other in any respect, it being intended that each shall remain an
independent contractor responsible for its own actions. Each party shall be
responsible for all of its own expenses and employees, except as provided
otherwise in this Agreement.
2.6 Provision of Services. To the extent SUPPLIER is engaged in
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providing any Services, SUPPLIER hereby agrees to make available such Services
requested by DISTRIBUTOR, in accordance with the provisions set forth in this
Agreement, including Section 3.3 hereof. SUPPLIER hereby agrees that
DISTRIBUTOR shall be the sole provider of Services to DISTRIBUTOR's Customers
with respect to the Products and that DISTRIBUTOR may utilize any service
provider to provide such Services.
2.7 Resale of Products by DISTRIBUTOR or Customer. Other than as
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expressly set forth in this Agreement, the DISTRIBUTOR and its Customers shall
not have any restrictions, in any manner, with respect to the resale of any
Product acquired pursuant to this Agreement, including restrictions as to the
price at which they elect to resell any such Product.
2.8 Modifications to MGPP.
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(a) DISTRIBUTOR and SUPPLIER have agreed to the MGPP dated August
____ , 2001. Subsequent to the date of this Agreement, DISTRIBUTOR and SUPPLIER
shall review the MGPP from time to time as necessary but no less often than
every 6 months, and, in the context of such reviews, DISTRIBUTOR and SUPPLIER
may consider modifications to the MGPP. Modifications may be made to the MGPP
by mutual agreement of DISTRIBUTOR and SUPPLIER and shall result in a new MGPP
effective the date of its modification.
(b) If at any time after the date of this Agreement, either Party
determines that there has occurred a significant deviation from the MGPP when
considered in its entirety, then such Party has the right to require that the
Parties promptly meet in good faith to discuss the deviation and consider
potential remedies therefor and/or any necessary modifications to the MGPP.
2.9 Observance of the Territory.
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(a) Company shall include in any other agreements with distributors
of the Products a provision for the benefit of DISTRIBUTOR that any such
distributor shall not sell or deliver Products to any other party outside of
the Territory if such distributor has knowledge that the Products to be sold or
delivered are to be sold or distributed by or through another party in the
Territory.
(b) DISTRIBUTOR shall not sell or deliver Products to any other
party in the Territory if DISTRIBUTOR has knowledge that the Products to be
sold or delivered are to be sold or distributed by or through another party
outside of the Territory.
ARTICLE III -- TERMS AND CONDITIONS OF SALE OF THE PRODUCTS
3.1 Product Purchase Orders; Terms and Conditions. The terms and
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conditions for all Product orders shall be subject to all of the provisions set
forth in this Article III and in Schedules B and C, attached hereto.
3.2 Service Orders; Terms and Conditions. The terms and conditions for
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all orders for the provision of Services shall be subject to all the provisions
set forth in this Article III, in Schedule B, and as otherwise negotiated
between the parties.
3.3 Prices; Products and Services.
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(a) The prices charged to DISTRIBUTOR for all Products purchased
hereunder shall be as established pursuant to Schedule C, attached hereto. With
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respect to each Product and during the Term, unless and until the price for
such Product is established pursuant to Schedule C, SUPPLIER and DISTRIBUTOR
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shall each be prohibited from Selling such Product, except pursuant to Section
2.2 hereof.
(b) The prices charged to DISTRIBUTOR for all Services ordered
hereunder shall be the lower of (i) the prices charged by SUPPLIER to any other
person or entity for the same such Services in similar quantities during the
four months preceding an order, or (ii) SUPPLIER's actual, fully loaded cost to
provide such Services; provided, however, in the event
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that any Services are included in the price of a Product or are not charged
for, a reasonable price allocation shall be made with respect to such Services
for purposes of this pricing formula.
(c) All prices for the Products and Services shall be expressed
in United States Dollars. All payments for Products and Services shall be made
in United States Dollars.
ARTICLE IV -- TERM AND TERMINATION
4.1 Term. Except as otherwise provided in this Agreement, the term of
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this Agreement began on February 2, 1999 upon the execution of the Original
Agreement and shall continue until December 31, 2014. On or before June 30,
2013, SUPPLIER or DISTRIBUTOR may give notice, in writing, that it will
terminate the Agreement on December 31, 2014; otherwise, the Agreement will be
automatically renewed for an additional year (e.g., through December 31, 2015).
Automatic renewals will occur annually thereafter unless either SUPPLIER or
DISTRIBUTOR provides notice, in writing, no less than 180 days prior to the
termination date, of its decision to terminate the Agreement at the end of the
term.
4.2 Termination for Cause. This Agreement shall terminate immediately in
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the event that DISTRIBUTOR is dissolved or the Limited Liability Company
Agreement under which DISTRIBUTOR is governed terminates, whichever occurs
first. This Agreement may be terminated by a Party hereto prior to expiration
of the Term by furnishing prior written notice to the other Party, as follows:
(a) Termination by SUPPLIER if (i) DISTRIBUTOR does not achieve
an annual total dollar value of purchases from SUPPLIER sufficient to make
DISTRIBUTOR one of the three largest (based on revenues) wholesalers of PEM
Fuel Cell-Powered Generator Sets comparable to the Products (e.g., based on
output, cost of energy, fuel type, application) in the Territory, and (ii)
SUPPLIER has met all of its obligations as set forth in the Agreement;
provided, that no such termination shall be effective unless DISTRIBUTOR shall
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fail to remedy any such nonperformance within 120 days after receiving written
demand therefor.
(b) Termination by DISTRIBUTOR if (i) after the conclusion of the
process described in Section 2.8(b) hereof, a mutually agreeable remedy and/or
modification to the MGPP has not been agreed to by the Parties, and DISTRIBUTOR
determines, in its good faith judgment, that there has been a material
deviation from the MGPP when considered in its entirety, or (ii) SUPPLIER fails
to provide DISTRIBUTOR with Products which are, in the reasonable judgment of
GEMG, materially competitive with alternative PEM Fuel Cell-Powered Generator
Sets on the basis of cost of energy, output, fuel flexibility, combined heat
and power capability, first cost, lifecycle cost, reliability, emissions and
application, when viewed in the aggregate, provided that no such termination
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shall be effective unless SUPPLIER shall fail to remedy any such nonperformance
within 120 days after receiving written demand therefor.
(c) Termination by a Party, in the event (i) the other Party
should fail to perform any of its material obligations hereunder and such
failure results in a material adverse effect to the terminating Party, (ii) the
terminating Party provides written notice of such
nonperformance to the other Party, and (iii) such other Party shall fail to
remedy any such nonperformance within 120 days after receiving written demand
therefor.
(d) Termination by a Party, if the other Party should become a
subject of any voluntary or involuntary bankruptcy, settlement, receivership,
reorganization or other insolvency proceedings, unless such proceedings are
terminated within one month from their formal opening.
(e) Termination by a Party, if the other Party should attempt to
sell, assign (in violation of this Agreement), delegate or transfer any of its
rights and obligations under this Agreement without having obtained the other
Party's prior written consent thereto.
4.3 Rights of Parties on Termination or Expiration. The following
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provisions shall apply on the termination or expiration of this Agreement (the
date of termination or expiration being the "Termination Date"):
(a) DISTRIBUTOR shall cease all purchases from SUPPLIER and shall
return to SUPPLIER and immediately cease all use of Confidential Information
previously furnished by SUPPLIER and then in DISTRIBUTOR's possession;
provided, however, notwithstanding the foregoing, (i) SUPPLIER shall fulfill
any and all orders for Products or Services firmly committed to by DISTRIBUTOR,
in accordance with Schedule D, and (ii) DISTRIBUTOR shall have the right to
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continue to use such Confidential Information in connection with such orders.
SUPPLIER shall return to DISTRIBUTOR and immediately cease all use of any
Confidential Information previously furnished by DISTRIBUTOR, except as needed
to fulfill orders for Products or Services firmly committed to by DISTRIBUTOR,
in accordance with Schedule D.
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(b) Except as otherwise provided herein, all rights granted to
DISTRIBUTOR under or pursuant to this Agreement shall cease, and where
appropriate, revert to SUPPLIER; similarly, all rights granted to SUPPLIER
under or pursuant to this Agreement shall cease, and where appropriate, revert
to DISTRIBUTOR.
(c) The provisions of this Agreement that are expressed to
survive this Agreement or to apply notwithstanding termination or expiration
hereof shall be followed by the Parties hereto.
(d) Termination or expiration of this Agreement shall not
prejudice or otherwise affect the rights or liabilities of the Parties with
respect to the Products or Services theretofore sold or rendered hereunder, or
any indebtedness then owing by either Party to the other; nor shall termination
or expiration relieve the Parties of any obligations imposed by the provisions
of this Agreement which are expressed to survive the termination or expiration
of this Agreement or any liability for damages resulting from breach of such
provisions.
ARTICLE V -- OBLIGATIONS OF DISTRIBUTOR
5.1 Sales and Promotion; Services; Facilities, Personnel and Advertising.
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DISTRIBUTOR shall (a) use best efforts to Sell Products and provide Services
within the Territory; and (b) maintain, at its own expense, such office space
and facilities, and hire and train
such personnel as DISTRIBUTOR may deem necessary to carry out its obligations
under this Agreement.
5.2 Purchase Forecast. After the commencement of the Commercial Period
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with respect to such Product or Products, DISTRIBUTOR shall provide SUPPLIER
with a 12-month rolling forecast of monthly purchases in accordance with
Schedule D.
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5.3 Expenses. Except as otherwise provided in this Agreement,
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DISTRIBUTOR shall bear all expenses associated with DISTRIBUTOR's Sale of
Products and provision of Services under this Agreement.
5.4 DISTRIBUTOR Intelligence. DISTRIBUTOR shall make intelligence (e.g.,
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Product applications, customer demand) related to the sale and use of Products
available to SUPPLIER.
5.5 ECAT Units. DISTRIBUTOR will make reasonable efforts to have its
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Customers for Early Customer Acceptance Test ("ECAT") units perform certain
testing as prescribed by SUPPLIER, provide SUPPLIER with all data generated by
such testing, and provide SUPPLIER with reasonable on-site access to the ECAT
units.
5.6 Assistance. DISTRIBUTOR shall, if required by SUPPLIER, provide
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SUPPLIER with reasonable access to and assistance of its sales and marketing
personnel. Such assistance shall be without charge to SUPPLIER except as may be
otherwise mutually agreed.
5.7 Regulatory Approvals. In conjunction with SUPPLIER's obligations in
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Section 6.6, DISTRIBUTOR shall be responsible for the administration and field
work necessary to obtain any regulatory approvals for DISTRIBUTOR to conduct
its operations in the Territory. DISTRIBUTOR shall provide assistance to
SUPPLIER in order to assist SUPPLIER in complying with registration
requirements in the Territory, obtain such other approvals from governmental
authorities of the Territory as may be necessary to comply with any and all
governmental laws, regulations, and orders that may be applicable to
DISTRIBUTOR by reason of the execution of this Agreement, and assist SUPPLIER
in taking those actions necessary for DISTRIBUTOR to be registered as
SUPPLIER's independent distributor with any governmental authority. Without
limiting the foregoing, DISTRIBUTOR shall furnish SUPPLIER with such
documentation as SUPPLIER may request to confirm DISTRIBUTOR's compliance with
this Section, and DISTRIBUTOR agrees that it shall not engage in any course of
conduct that would cause SUPPLIER to be in violation of the laws of any
jurisdiction within the Territory. DISTRIBUTOR shall comply fully with, and
shall be solely responsible for, all safety standards, health code requirements
and regulations, specifications, and other requirements imposed by law,
regulation, or order in the Territory and applicable to the Sale of the
Products, and to the provision of Services provided by DISTRIBUTOR.
ARTICLE VI -- OBLIGATIONS OF SUPPLIER
6.1 Sales Support. SUPPLIER shall, at its expense, provide DISTRIBUTOR
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with reasonable amounts of technical materials (e.g., drawings, schematics,
installation manuals, operating procedures, available marketing materials,
field test results, training materials) and available information regarding
Product applications and customer demand pertaining to the
Products, as requested by DISTRIBUTOR from time to time. All such information
and materials will be furnished in the English language.
6.2 Training. SUPPLIER shall develop Product training
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programs and materials, provide such training programs and materials to
DISTRIBUTOR and its Customers (e.g. sub-distributors), and qualify
DISTRIBUTOR's Services personnel to conduct such training, on SUPPLIER's
behalf, for DISTRIBUTOR's and its Customers' field personnel (i.e., SUPPLIER
will offer "train-the-trainer" programs). SUPPLIER will conduct training for
DISTRIBUTOR's Customers for the first 500 of each Product type, as outlined in
the MGPP (e.g. SU1, SU2, SU3) purchased by DISTRIBUTOR hereunder.
6.3 Notification of Changes. SUPPLIER shall notify DISTRIBUTOR of any
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material changes in, or affecting, the Products, including changes to projected
delivery dates, regulatory approvals, performance, and SUPPLIER's Product
costs, that may reasonably be expected to affect the business of DISTRIBUTOR;
provided, that no such notification shall relieve SUPPLIER of any of its
obligations hereunder.
6.4 Assistance. SUPPLIER shall, if required by DISTRIBUTOR, provide
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DISTRIBUTOR with reasonable access to and assistance of its technical support
personnel (e.g., to enable DISTRIBUTOR to respond to Customer and Service
provider technical questions). Such assistance shall be without charge to
DISTRIBUTOR except as may be otherwise mutually agreed.
6.5 Insurance. SUPPLIER shall maintain in effect at all times product
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liability insurance with policy limits as described in Schedule E attached
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hereto, as such exhibit may be revised from time to time upon the mutual
agreement of SUPPLIER and DISTRIBUTOR, and DISTRIBUTOR shall be named as an
additional insured to each such policy.
6.6 Third Party Inquiries. If SUPPLIER is contacted, or has been
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contacted, by third parties concerning purchase of the Products by Customers in
the Territory, SUPPLIER will refer such persons to DISTRIBUTOR, provided that
SUPPLIER has not named any additional distributors to the relevant market area
in accordance with this Agreement.
6.7 Governmental Approvals; Compliance. SUPPLIER shall comply with all
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registration requirements in the Territory that are applicable to SUPPLIER,
obtain such other approvals from governmental authorities of the Territory as
may be necessary to comply with any and all governmental laws, regulations, and
orders that may be applicable to SUPPLIER by reason of the execution of this
Agreement, and take those actions necessary for DISTRIBUTOR to be registered as
SUPPLIER's independent distributor with any governmental authority. At
DISTRIBUTOR's request, SUPPLIER shall perform all tests for all certifications
(regulatory or otherwise) required to certify use of the Products sold by
DISTRIBUTOR for stand-alone and/or grid-interconnected stationary power
applications. Without limiting the foregoing, SUPPLIER shall furnish
DISTRIBUTOR with such documentation as DISTRIBUTOR may request to confirm
SUPPLIER's compliance with this Section, and SUPPLIER agrees that it shall not
engage in any course of conduct that would cause DISTRIBUTOR to be in violation
of the laws of any jurisdiction within the Territory. To the extent compliance
with this Section 6.7 requires SUPPLIER to incur cost specific to a particular
market within the Territory, SUPPLIER will
incur such cost only if the Parties mutually agree that it is commercially
reasonable to do so. Such determination for any Product shall be made by the
end of NPD Phase 3.0.
6.8 Production Capability; Minimum Volume. SUPPLIER will use best
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efforts to maintain a minimum annual Product supply necessary to fill all of
DISTRIBUTOR'S firm purchase orders in a commercially reasonable delivery period.
6.9 Legal Standards. SUPPLIER shall comply fully with, and shall be
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solely responsible for, all safety standards, health code requirements and
regulations, specifications, and other requirements imposed by law, regulation,
or order in the Territory, that are applicable to the design, manufacturing,
and testing of the Products and the provision of Services by SUPPLIER. SUPPLIER
shall establish and maintain a program, to the mutual satisfaction of SUPPLIER
and DISTRIBUTOR, in order to create ongoing product design, manufacturing,
testing, inspection, and other safety and quality-related processes that are
adequate to assure the safety and reliability of SUPPLIER's Products (the
"Product Quality and Safety Assurance Program").
6.10 Replacement Parts. SUPPLIER shall sell replacement parts to
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DISTRIBUTOR for those prices established pursuant to Schedule C, attached
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hereto. SUPPLIER shall maintain a reasonable supply of replacement parts for
the Products throughout the design life of the Products, as set forth in
SUPPLIER's Product specifications.
ARTICLE VII -- CONFIDENTIAL INFORMATION AND PROPRIETARY RIGHTS
7.1 Confidentiality. SUPPLIER and DISTRIBUTOR agree to follow the
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following requirements regarding confidentiality:
(a) Each Party hereto expects to furnish to the other Party
certain confidential information which will constitute trade secrets or other
proprietary business or technical information belonging to the disclosing Party
(including, but not limited to, components, processes, financial information,
drawings, specifications and other data, whether in written, printed, oral or
other form) and will be marked "Confidential" or "Proprietary" (such
information is hereinafter referred to as "Confidential Information") at the
time it is disclosed. Oral information which is confidential or proprietary
shall be reduced to writing by the disclosing Party within ten (10) working
days after disclosure, which writing shall specifically reference the date of
disclosure and otherwise conform to the requirements of this paragraph. Any
information which is disclosed in any other manner shall be deemed to be
non-confidential. The receiving Party shall not disclose Confidential
Information to anyone except its employees who have a need to know such
Confidential Information in order to perform their work and shall inform such
individuals of the confidential nature of the Confidential Information. Subject
to the provisions of subsection (b) below, the receiving Party shall use the
Confidential Information only for the purpose of such work and shall use
efforts to protect the confidentiality of such Confidential Information
commensurate with those which it employs for the protection of its own
confidential information, but it shall not be liable for unauthorized
revelations of such Confidential Information which occur in spite of such
efforts.
(b) Notwithstanding the provisions of subsection (a) above, (i)
the receiving Party shall not be subject to any restriction hereunder with
respect to any part of such Confidential Information which appears in issued
patents or publications, which is known or becomes generally known to the
relevant public through no fault of the receiving Party, which is independently
generated by the receiving Party without use of the Confidential Information,
which is furnished to others by the disclosing Party without restriction on
disclosure, which was or becomes known to the receiving Party through other
sources free of any confidentiality restriction, which must be disclosed by
requirements of law or valid legal or regulatory process, in which case the
Party intending to make such disclosure shall notify the Party which designated
the material as confidential in advance of any such disclosure and reasonably
cooperate with any attempt to maintain the confidentiality of such materials;
and (ii) any and all restrictions with respect to Confidential Information
provided hereunder will expire three (3) years after the date that such
Confidential Information is first disclosed to the receiving Party.
(c) When one Party no longer desires to use the Confidential
Information of the other Party, it shall return to the other Party any such
Confidential Information and shall destroy all copies of such Confidential
Information with the exception of one copy which may be retained exclusively
for the purpose of documenting the disclosures made hereunder.
(d) The receiving Party will restrict access to any Confidential
Information made available or disclosed by the disclosing Party to the
receiving Party hereunder only to those employees of the receiving Party with a
need to know such information in performance of their jobs with the receiving
Party.
7.2 SUPPLIER's Trademark. All of the Products sold by DISTRIBUTOR shall
--------------------
bear one or more of SUPPLIER's trademarks, copies of which are set forth on
Schedule F, attached hereto. Such trademarks shall be affixed to the Products
----------
by SUPPLIER, in a manner to be mutually determined, with the understanding that
SUPPLIER's trademarks will be readily visible, but less prominent than
DISTRIBUTOR's trademarks. All resulting use of SUPPLIER's trademarks shall
inure solely to the benefit of SUPPLIER. DISTRIBUTOR shall not directly or
indirectly use SUPPLIER's trademarks (or part thereof), or any ▇▇▇▇ or name
confusingly similar thereto, as part of its corporate or business name, except
that (a) DISTRIBUTOR shall co-brand (i.e., affixing DISTRIBUTOR's Trademark
(defined below), a copy of which is also set forth on Schedule F, to a Product
----------
that also bears the trademark of SUPPLIER) each of the Products with its own
trademark or otherwise identify itself as an "authorized distributor" of
SUPPLIER and (b) DISTRIBUTOR shall use SUPPLIER's trademarks relating to the
Products for display, promotional, or advertising purposes in connection with
solicitation of orders for Products from Customers in the Territory and in any
other manner approved by SUPPLIER in writing. In addition, DISTRIBUTOR shall
not register or attempt to register any of SUPPLIER's trademarks or any ▇▇▇▇ or
name closely resembling them, unless requested to do so by SUPPLIER in writing.
SUPPLIER represents and warrants to DISTRIBUTOR that (a) SUPPLIER's
trademarks pertaining to the Products are subject to and protected by United
States trademark law, applications for registration of trademarks pertaining to
the Products have been filed in the United States, and similar applications
will be filed by SUPPLIER in other countries of the
Territory designated by DISTRIBUTOR; provided that in the event that SUPPLIER
does not agree to file any such application in any country or other
jurisdiction in the Territory, DISTRIBUTOR shall, in SUPPLIER's sole
discretion, (i) sell the Products in such country or other jurisdiction without
SUPPLIER's trademark affixed, (ii) sell the Products in such country or other
jurisdiction with a different SUPPLIER trademark affixed (in which event, all
of SUPPLIER's representations, warranties, covenants, and indemnities herein
shall apply to such substitute trademark and the use thereof), or (iii)
continue to sell the Products in such country or other jurisdiction with
SUPPLIER's trademark affixed (in which event, SUPPLIER shall indemnify
DISTRIBUTOR against any and all damages resulting from such sale in accordance
with Sections 7.5 and 8.1(f); (b) to SUPPLIER's knowledge, the trademarks set
forth on Schedule F are owned by SUPPLIER; (c) to SUPPLIER's knowledge,
----------
SUPPLIER owns free and clear of any mortgage, security interest, financing
statement, royalty obligation, lien, encumbrance, charge, option, equity or
restriction, all right, title and interest in and to the trademarks set forth
on Schedule F and all patents that it owns or uses in connection with the
----------
Products as of February 3, 1999 and as of the date hereof (except for a patent
royalty obligation to the Los Alamos National Laboratory); and (d) to
SUPPLIER's knowledge, none of such trademarks or patents infringes any existing
intellectual property right of any third party and there are no trademarks or
trademark applications included in such intellectual property rights which are
invalid or unenforceable.
7.3 Intellectual Property. Each Party's patents, trademarks, trade
---------------------
names, inventions, copyrights, know-how, trade secrets, licensed rights or
other intellectual property rights ("Intellectual Property") in existence as of
February 3, 1999 and in existence as of the date hereof, or, in either case,
thereafter lawfully acquired or developed by such Party shall not be deemed to
be transferred to any other party by virtue of this Agreement. DISTRIBUTOR
shall not have the right pursuant to this Agreement to manufacture, duplicate,
or otherwise copy or reproduce any of the Products, or any parts thereof. The
use by either Party of any Intellectual Property of the other Party is
authorized only for the purposes herein set forth; and upon termination of this
Agreement for any reason, such authorization shall cease. Notwithstanding the
foregoing provisions of this Section 7.3, DISTRIBUTOR hereby grants to SUPPLIER
a perpetual non-exclusive, non-transferable, irrevocable, royalty-free, fully
paid up license to use Product information regarding market size, demographics,
demand, segmentation, design parameters sought by the market, and contact
information (names, addresses, telephone numbers) for customers, resellers,
service providers, code bodies, and similar information acquired or developed
by DISTRIBUTOR under this Agreement.
7.4 DISTRIBUTOR's Trademark. At the election of DISTRIBUTOR, SUPPLIER
-----------------------
shall (a) identify DISTRIBUTOR as an "authorized distributor" of SUPPLIER, (b)
affix to the Products the General Electric Company trademark licensed to
DISTRIBUTOR ("DISTRIBUTOR's Trademark") as directed by DISTRIBUTOR for the
purpose of co-branding Products sold by DISTRIBUTOR (i.e., affixing
DISTRIBUTOR's Trademark to a Product that also bears the trademark of
SUPPLIER), and (c) permit DISTRIBUTOR's Sale of co-branded Products. In the
event that DISTRIBUTOR elects not to have SUPPLIER affix DISTRIBUTOR's
Trademark to the Products, DISTRIBUTOR will affix DISTRIBUTOR's Trademark to
the Products. DISTRIBUTOR shall use DISTRIBUTOR's Trademarks for display,
promotional, or advertising purposes in connection with solicitation of orders
for Products from Customers in the Territory. The only Products that may bear
DISTRIBUTOR's Trademark are
those that are sold by DISTRIBUTOR. SUPPLIER acknowledges that it is not
authorized to use DISTRIBUTOR's Trademark for any purpose unless expressly
permitted in writing to do so by DISTRIBUTOR. All resulting use of
DISTRIBUTOR's Trademark shall inure solely to the benefit of General Electric
Company.
DISTRIBUTOR represents and warrants to SUPPLIER that (a) DISTRIBUTOR's
Trademark is subject to and protected by United States trademark law; (b) to
DISTRIBUTOR's knowledge, DISTRIBUTOR's Trademark is owned by General Electric
Company, and DISTRIBUTOR has a valid license to use DISTRIBUTOR's Trademark;
(c) to DISTRIBUTOR's knowledge, General Electric Company owns free and clear of
any mortgage, security interest, financing statement, royalty obligation, lien,
encumbrance, charge, option, equity or restriction, all right, title and
interest in and to DISTRIBUTOR's Trademark set forth on Schedule F; and (d) to
----------
DISTRIBUTOR's knowledge, DISTRIBUTOR's Trademark does not infringe on any
existing intellectual property right of any third party and is not invalid or
unenforceable.
7.5 Protection of Intellectual Property. In addition to any obligation
-----------------------------------
SUPPLIER may have under Article VIII hereof, SUPPLIER shall take all actions
reasonably necessary to enforce and protect its trademarks, patents, and
Intellectual Property Rights relating to the Products. Without limiting the
generality of the foregoing, SUPPLIER shall defend and indemnify DISTRIBUTOR
against any suit, claim, or proceeding brought against DISTRIBUTOR that is
based on a claim that any trademark owned or used by SUPPLIER directly in
connection with any Product, or any part thereof (except for DISTRIBUTOR's
Trademark, as such trademark was affixed to such Product, or part thereof, in
accordance with Section 7.2), infringes any intellectual property right of any
third party in any country or other jurisdiction in the Territory, if notified
promptly in writing and given authority, information, and assistance (at
SUPPLIER's expense) for the defense of same, and provided that such
infringement did not arise as a result of DISTRIBUTOR's unauthorized use of
such trademark. SUPPLIER shall pay all damages and costs awarded with respect
to any suit, claim, or proceeding for which SUPPLIER is required to provide
indemnification pursuant to this Section 7.5. Without limiting the generality
of the foregoing, SUPPLIER shall defend and indemnify DISTRIBUTOR against any
suit, claim or proceeding brought against DISTRIBUTOR that is based on a claim
that any Product, or any part thereof, furnished under this Agreement, as well
as any device or process necessarily resulting from the use thereof,
constitutes an infringement of any patent of the United States (or any other
country or other jurisdiction in the Territory), if notified promptly in
writing and given authority, information, and assistance (at SUPPLIER's
expense) for the defense of same, and provided that such infringement did not
arise as a result of (a) DISTRIBUTOR's developments, misuse, or modifications
that were not approved by SUPPLIER, or (b) DISTRIBUTOR's combination,
operation, or use with devices, data, equipment, systems, programs, or products
not furnished by SUPPLIER, contemplated by the MGPP or approved by SUPPLIER,
SUPPLIER shall pay all damages and costs awarded with respect to any suit,
claim, or proceeding for which SUPPLIER is required to provide indemnification
pursuant to this Section 7.5. In the event a claim is made or appears likely to
be made that any Product, or any part thereof, furnished under this Agreement,
as well as any device or process necessarily resulting from the use thereof,
infringes upon a third party's patent, SUPPLIER shall, at its own expense and
at its option, and in addition to all other rights or remedies which the
DISTRIBUTOR may have pursuant to this Agreement, (a) procure for DISTRIBUTOR
the right to continue using said Product, part, device, or process;
(b) replace same with a non-infringing equivalent; or (c) remove said Product,
part, device, or process and refund the purchase price and the transportation
and installation costs thereof.
ARTICLE VIII -- INDEMNIFICATION
8.1 SUPPLIER's Indemnification of DISTRIBUTOR. SUPPLIER agrees to
-----------------------------------------
indemnify, defend and hold the DISTRIBUTOR, its officers, directors, employees,
successors, and permitted assigns harmless against all third party claims,
losses, costs, liabilities, judgments, damages, or expenses of whatever form or
nature, including attorneys' fees and other costs of legal defense, whether
direct or indirect, that they, or any of them, may sustain or incur as a result
of any acts or omissions (except for acts or omissions caused by the acts or
omissions of DISTRIBUTOR) of SUPPLIER or any of its directors, officers,
employees, Affiliates, or agents, including, but not limited to, (a) material
breach of any of the provisions of this Agreement; (b) negligence or other
tortious conduct; (c) representations or warranties made by SUPPLIER herein;
(d) violation by SUPPLIER or any of its directors, officers, employees, agents,
dealers, or subdistributors of any applicable law, regulation, or order of the
United States of America or of other countries in the Territory or other
applicable law; (e) competition by SUPPLIER or any of its Affiliates in the
Territory; (f) trademark infringement claims brought against DISTRIBUTOR
pertaining to DISTRIBUTOR's use of SUPPLIER's trademarks in accordance with
Section 7.5 hereof; or (g) patent infringement claims brought against
DISTRIBUTOR in accordance with Section 7.5 hereof.
8.2 DISTRIBUTOR's Indemnification of SUPPLIER. DISTRIBUTOR agrees to
-----------------------------------------
indemnify, defend and hold the SUPPLIER, its officers, directors, employees,
successors, and permitted assigns harmless against all third party claims,
losses, costs, liabilities, judgments, damages, or expenses of whatever form or
nature, including attorneys' fees and other costs of legal defense, whether
direct or indirect, that they, or any of them, may sustain or incur as a result
of any acts or omissions (except for acts or omissions caused by the acts or
omissions of SUPPLIER) of the DISTRIBUTOR or any of its directors, officers,
employees, Affiliates, or agents, including, but not limited to, (a) material
breach of any of the provisions of this Agreement; (b) negligence or other
tortious conduct; (c) representations or warranties made by DISTRIBUTOR herein;
(d) violation by DISTRIBUTOR or any of its directors, officers, employees or
agents, agents, dealers, or sub-distributors of any applicable law, regulation,
or order of the United States of America or of other countries in the Territory
or other applicable law; (e) competition by DISTRIBUTOR in the Territory; or
(f) trademark infringement claims brought against SUPPLIER pertaining to
DISTRIBUTOR's Trademark.
8.3 Scope of Indemnity. The Parties' foregoing obligations to indemnify
------------------
each other shall include, but not be limited to, indemnification against all
expenses, including reasonable attorneys' and paralegals' fees at trial, on
appeal or otherwise, incurred in investigating and/or defending against any
claims, actions or liabilities for which indemnification is provided herein.
Each Party hereto agrees to defend the other Party hereto against any and all
claims, actions, and liabilities for which indemnification is provided herein,
whether such claims or actions are rightfully or wrongfully brought or filed.
Each Party hereto further agrees to pay the amount of any compromise or
settlement. No indemnifying Party shall be required to pay the indemnified
Party any amount under this Article VIII unless and until the aggregate of such
amounts payable to such indemnified Party shall reach $25,000, at which time
the indemnifying party shall
become responsible for all such amounts (including the initial $25,000); and
the indemnification obligations of each Party hereunder shall be limited to
$1,000,000; provided, that this sentence shall not apply to the indemnification
obligations set forth in Section 8.1 (f) and (g) and Section 8.2 (f). The
foregoing indemnification shall not in any manner limit a Party's legal
remedies under applicable law against the other Party for breaches of this
Agreement.
ARTICLE IX - GENERAL PROVISIONS
9.1 Disclosure. This Agreement may be discussed with, shown to, and
----------
filed with any government agency or official as determined to be appropriate by
either Party, so long as the Party making such disclosure, filing or discussion
of this Agreement provides the other Party with ten (10) days prior written
notice of such proposed action.
9.2 Waiver. Each Party agrees that the failure of the other Party at any
------
time to require performance of any of the provisions herein shall not operate
as a waiver of the right of the other Party to request strict performance of
the same or like provisions, or any other provisions hereof, at a later time.
9.3 Expenses. Except as otherwise provided herein, each Party hereto
--------
shall bear its own costs and expenses associated with the negotiation,
preparation, delivery and performance of this Agreement.
9.4 Notices and Consents. All notices or consents hereunder shall be in
--------------------
the English language and shall be in writing and shall be deemed given (a) when
delivered personally, (b) five (5) days after deposit, postage prepaid, if
mailed by registered or certified mail, return receipt requested, or (c) upon
transmission if transmitted by telex or facsimile (with an electronic
confirmation thereof to the transmitter), to the parties at their respective
addresses set forth in the preamble of this Agreement (or at such other address
for a party as shall be specified by notice given hereunder):
If to SUPPLIER : PLUG POWER, INC.
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to DISTRIBUTOR: GE FUEL CELL SYSTEMS, L.L.C.
▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
9.5 Severability of Provisions. Wherever possible, each provision of
--------------------------
this Agreement shall be interpreted in such manner as to be effective and
valid, but if any provision of this Agreement shall be prohibited by applicable
law, unenforceable in any jurisdiction or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition,
unenforceability, or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement, or affecting the
validity or enforceability of such provision in any other jurisdiction.
9.6 Survival. Sections 4.3 and Articles VII, VIII and IX of this
--------
Agreement shall continue and survive the termination hereof.
9.7 Language. The English language text, and American usage thereof,
--------
shall govern and control the interpretation of this Agreement and all writings
between the parties.
9.8 Entire Agreement; Amendment. This Agreement (including the exhibits
---------------------------
hereto and all documents and papers delivered pursuant hereto and any written
amendments hereof executed by the parties to this Agreement, as specified
herein) constitutes the entire agreement and replaces and supercedes all prior
agreements and understandings, oral and written, among the Parties hereto with
respect to the subject matter hereof, except to the extent provided herein and
except to the extent either Party may have liability to the other resulting
from conduct, or its consequences, undertaken in good faith, relying on the
provisions of the Original Agreement, the July 31 Amendment and the March 27
Amendment during the periods of their effectiveness. No course of prior
dealings between the Parties and no usage of trade shall be relevant or
admissible to supplement, explain or vary any of the terms of this Agreement.
This Agreement may be amended only by written agreement executed by both of the
Parties hereto. Time is of the essence of this Agreement and each of its
provisions, and no extension of any time period shall be binding upon the
Parties hereto unless expressly provided herein or in writing and signed by
both of the Parties hereto.
9.9 Governing Law. The validity, construction, interpretation and
-------------
performance of this Agreement and all transactions under it shall be governed
by the laws of the State of New York exclusively (except that if any choice of
law provision under New York law would result in the application of the law of
a state or jurisdiction other than New York, such provision shall not apply).
The Parties hereto expressly agree and acknowledge that the United Nations
Convention for the International Sale of Goods shall not apply to this
Agreement.
9.10 Miscellaneous. This Agreement may be executed in any number of
-------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The Parties hereto shall
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements or other instruments as the other
Party or its counsel may reasonably request from time to time for purposes of
carrying out the transactions contemplated by this Agreement. The article and
section headings contained herein are for reference only and shall not be
considered as substantive parts of this Agreement. The use of the singular or
plural form shall include the other form and the use of the masculine, feminine
or neutered gender shall include the other gender. The words "hereof,"
"herein," and "hereunder" and words of similar import when used in this
Agreement, shall refer to this Agreement as a whole, including all exhibits
hereto, and not to any particular provision of this Agreement unless otherwise
specified; all references herein to paragraphs, sections, schedules or exhibits
shall refer to paragraphs or sections of this Agreement, or schedules or
exhibits to this Agreement. The parties hereto acknowledge and agree that the
recitals immediately following the preamble of this Agreement are true and
correct and are incorporated herein as a part of this Agreement. This Agreement
shall be binding upon the Parties hereto and their successors and permitted
assigns and shall inure to the benefit of their successors and permitted
assigns.
9.11 Force Majeure. If the performance by either Party of any non-monetary
-------------
obligation under this Agreement is delayed or prevented in whole or in part by
any cause not reasonably within its control (including, without limitation,
acts of God, war, civil disturbances, accidents, damage to its facilities,
labor disputes, acts of any governmental body not attributable to such Party's
failure to comply with this Agreement or failure or delay of third parties), it
shall be excused, discharged, and released of performance to the extent such
performance is so limited or prevented, without liability of any kind. Each
Party shall use its reasonable efforts to minimize the duration and
consequences of any failure of or delay in performance resulting from a "Force
Majeure" event.
9.12 Limitation of Liability. In no case will SUPPLIER or DISTRIBUTOR be
-----------------------
liable to the other for special, incidental, or consequential damages,
including, but not limited to, personal injury, property damage, loss of profit
or revenues, or business interruption arising out of the manufacture, Sale, or
supplying of the Products or Services.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
SUPPLIER:
PLUG POWER, INC.
By:_________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President & CEO
DISTRIBUTOR:
GE FUEL CELL SYSTEMS, L.L.C.
By:_________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
TABLE OF SCHEDULES
------------------
Schedule A-1 - Products
------------
Schedule A-2 - Services
------------
Schedule B - Terms and Conditions of Purchase/Sale
----------
Schedule C - Product Prices
----------
Schedule D - DISTRIBUTOR's Purchase Forecast
----------
Schedule E - SUPPLIER's Insurance
----------
Schedule F - Trademark Registrations
----------
SCHEDULE A-1
------------
DEFINITION OF PRODUCTS
The term "Products" (or "Product") shall mean the following items
manufactured by or on behalf of SUPPLIER: Proton Exchange Membrane ("PEM") Fuel
Cell-Powered Generator Sets, without changes or additions (other than standard
installation materials - e.g., ducting, pipe, wire), and components (e.g., fuel
processor, fuel cell stack, power electronics), replacement parts, upgrades,
accessories (e.g., combined power and hot water packages), and improvements, of
any power output, for use in any stationary power applications (e.g., base load
power, peaking power, emergency back-up power, enhanced power quality,
uninterruptible power, cogeneration, trailer-mounted units for temporary
stationary power and/or rental power use for residential, commercial,
industrial, and/or utility customers).
"Products" includes commercial and pre-commercial (i.e., Early Customer
Acceptance Test or "ECAT") versions of PEM Fuel Cell-Powered Generator Sets,
components, replacement parts, upgrades, accessories, and improvements,
manufactured by or on behalf of SUPPLIER.
"Products" excludes the following, regardless of their manufacturer: PEM
Fuel Cell-Powered Generator Sets and/or components designed for use in
propulsion applications (e.g., a fuel cell-powered electric drive motor for
automobile propulsion).
SCHEDULE A-2
------------
DEFINITION OF SERVICES
The term "Services" shall include the following activities associated with
the Products:
Installation
Permitting
Application Engineering
Operation
Routine Maintenance
Unscheduled Maintenance
Repair
Overhaul (e.g., stack replacement)
Upgrade Services
Remote Monitoring, Diagnostics, and/or Control (i.e., dispatch)
Service Provider, Operator, and Customer Training
Customer Service
Customer Support
Extended Warranty (e.g., sale of, performance of)
Long-Term Service Agreement (e.g., sale of, performance of)
Replacement Parts (e.g., sale of, installation of)
SCHEDULE B
----------
TERMS AND CONDITIONS OF PURCHASE/SALE
1. ACCEPTANCE OF TERMS AND CONDITIONS. (a) DISTRIBUTOR and SUPPLIER agree
to be bound by and to comply with all the terms and conditions in and referred
to in this Schedule B, as well as those appearing elsewhere in the Agreement
----------
(to which the section references contained herein apply), in any supplements
hereto and in all specifications and other documents referred to herein. (b) An
order by DISTRIBUTOR or the acceptance of an order by SUPPLIER does not
constitute an acceptance by the DISTRIBUTOR or SUPPLIER of any offer to sell,
any quotation, or any proposal, other than under the terms and conditions
contained in this Agreement. ANY PURCHASE ORDER, ATTEMPTED ACKNOWLEDGMENT OF AN
ORDER, OR ANY DOCUMENT CONNECTED THEREWITH, CONTAINING TERMS AND CONDITIONS
INCONSISTENT WITH OR IN ADDITION TO THE TERMS AND CONDITIONS IN THIS SCHEDULE B
----------
IS NOT BINDING UPON DISTRIBUTOR OR SUPPLIER UNLESS SPECIFICALLY ACCEPTED BY
DISTRIBUTOR AND SUPPLIER IN WRITING.
2. PRICES AND PAYMENTS. SUPPLIER's prices are as established pursuant to
Schedule C and shall not be subject to change, except as provided in this
----------
Agreement and Schedule C. SUPPLIER's total price is FOB SUPPLIER's designated,
----------
continental U.S. manufacturing facility, unless otherwise agreed in writing by
SUPPLIER and DISTRIBUTOR. All prices are exclusive of any applicable federal,
state, or local sales, use, excise, or other similar taxes, provided, however,
that any such taxes to which SUPPLIER becomes subject as a result of
manufacturing, having manufactured, or procuring Products shall be borne by
SUPPLIER. No extra charges of any kind will be allowed unless specifically
agreed to in writing by DISTRIBUTOR. Unless otherwise agreed between SUPPLIER
and DISTRIBUTOR, payments shall become due 45 days from receipt of invoice. In
the event of delay in payment, DISTRIBUTOR will pay SUPPLIER a late fee equal
to the lesser of 1.5%, or the maximum rate allowable by law, of any unpaid
balance per month of delay or the maximum rate allowable by law. DISTRIBUTOR
must make payment when due, without offset, deduction, or counterclaim,
regardless of any claim by DISTRIBUTOR.
3. DELIVERY AND PASSAGE OF TITLE. Time is of the essence of all purchase
orders, except that delivery dates will be framed in terms of calendar months
and orders will not be deemed late until after the end of such calendar month.
If SUPPLIER fails to deliver the Products or to complete any Services furnished
hereunder, then DISTRIBUTOR shall be entitled, in addition to the remedies
available elsewhere under the Agreement, to assess an amount, as liquidated
damages for delay, equal to 1% of the total dollar value of DISTRIBUTOR's order
for the first month of delay and 2% of the total dollar value of DISTRIBUTOR's
order per subsequent month of delay; provided, (a) that such remedy will be
capped at 6%, (b) if the order is more than three months late, then DISTRIBUTOR
may cancel the order, and (c) such liquidated damages will only be available to
DISTRIBUTOR for those orders to the extent that DISTRIBUTOR has provided such
remedy to its Customer. SUPPLIER agrees that such amounts are a reasonable
pre-estimate of the damages which DISTRIBUTOR may suffer as a result of such
delay, and are to be assessed as liquidated damages and not as a penalty. Where
such liquidated damages are available to DISTRIBUTOR, they shall be
DISTRIBUTOR's only remedy for SUPPLIER's failure to make timely delivery, other
than the remedies for non-performance expressly set forth in this Agreement.
Products which will be shipped from within the United States for delivery
within the United States shall be delivered FOB SUPPLIER's designated,
continental U.S. manufacturing facility, unless otherwise agreed in writing by
SUPPLIER and DISTRIBUTOR. Products delivered to DISTRIBUTOR in advance of
schedule may be returned to SUPPLIER at SUPPLIER's expense. Title shall pass to
DISTRIBUTOR upon delivery to DISTRIBUTOR FOB SUPPLIER's designated, continental
U.S. manufacturing facility.
4. CHANGES. The DISTRIBUTOR may at any time, in writing, request changes
within the general scope of a purchase order in (a) specifications, where the
Products to be furnished are to be specifically manufactured in accordance
therewith, (b) method of shipment or packing, or (c) place and time of
delivery. Any such change shall be authorized only by an amendment executed by
SUPPLIER and DISTRIBUTOR, with such amendment to specify any additional
expense, to be borne by DISTRIBUTOR.
5. INSPECTION: (a) All Products shall be subject to inspection and test by
DISTRIBUTOR at reasonable times and places upon reasonable notice, including
the place of manufacture (which SUPPLIER shall use reasonable efforts to
arrange, including providing for such access in SUPPLIER's purchase orders to
the manufacturer); (b) If any inspection or test is made on the premises of
SUPPLIER, then SUPPLIER, without additional charge, shall provide reasonable
facilities and assistance for the safety and convenience of the inspectors in
the performance of their duties, provided that the inspectors must execute
SUPPLIER's standard confidentiality agreement, must abide by such facility's
rules and regulations, and must be covered by insurance for occurrences other
than due to SUPPLIER's negligence or willful misconduct; and (c) SUPPLIER shall
provide and maintain a program, to the mutual satisfaction of SUPPLIER and
DISTRIBUTOR, in order to create ongoing product design, manufacturing, testing,
inspection, and other safety and quality-related processes that are adequate to
assure the safety and reliability of SUPPLIER's Products (the "Product Quality
and Safety Assurance Program"). Records of all inspection work by SUPPLIER
shall be kept complete and available to DISTRIBUTOR during the performance of a
purchase order and for three (3) years from the date of such inspection.
SUPPLIER will allow representatives of DISTRIBUTOR access to the facilities
involved in performing an order for purposes of reviewing the status and
progress of production.
6. REJECTION. If any of the Products or Services ordered are found by
DISTRIBUTOR within 30 days of delivery to be defective, or otherwise not in
conformity with the requirements of the order, including any applicable
specifications, SUPPLIER, at its option and sole discretion may: (a) instruct
DISTRIBUTOR to return such goods at SUPPLIER's expense; (b) request that
DISTRIBUTOR, with DISTRIBUTOR's written approval, take such actions as may be
required to cure all defects and/or bring the Products into conformity with all
requirements, in which event any reasonable costs and expenses thereby incurred
by DISTRIBUTOR, including material and handling charges, will be at SUPPLIER's
expense; and (c) re-perform, at SUPPLIER's own expense, any defective portion
of the Services performed. DISTRIBUTOR must notify SUPPLIER in writing of such
defect or non-conformity within 30 days after delivery of the Products or
performance of Services, if applicable, or DISTRIBUTOR's rights under this
Section
6 shall be waived. The remedies in this Section 6 shall be DISTRIBUTOR's
exclusive remedies under this Section 6.
7. WARRANTIES. (a) SUPPLIER will convey clear title to all Products to
DISTRIBUTOR as provided hereunder; (b) SUPPLIER warrants and represents that all
Products and Services sold hereunder or pursuant hereto will be free from all
material defects in workmanship and material, and that the Products and Services
are provided in strict accordance with the specifications as established by
mutual agreement of SUPPLIER and DISTRIBUTOR, and (c) Except as provided by this
Agreement, any attempt by SUPPLIER to limit, disclaim, or restrict any such
warranties or any remedies of DISTRIBUTOR, except as limited by this Agreement,
by acknowledgment or otherwise, in accepting or performing an order, shall be
null, void and ineffective without DISTRIBUTOR's written consent. For Products
or Services purchased under this Agreement, the foregoing warranties shall apply
for (a) Products to a period of the lesser of twelve (12) months from the date
of installation or eighteen (18) months from delivery to DISTRIBUTOR, and (b)
Services to a period twelve (12) months from the date such Services are
completed. For any components purchased by SUPPLIER with a warranty in excess of
the terms described above, SUPPLIER will make such extended warranty coverage
available to DISTRIBUTOR for the relevant components. The foregoing warranties
are conditioned upon (a) proper storage, handling, transportation, installation,
use, repair, and maintenance, and conformance with any reasonable
recommendations of SUPPLIER, and (b) DISTRIBUTOR's promptly notifying SUPPLIER
of any defects and, if required, promptly making the Product available for
correction. The foregoing warranties are provided at no cost to DISTRIBUTOR or
Customers.
If any Product or Service fails to meet the foregoing warranties during the
warranty periods set forth above, SUPPLIER shall thereupon correct any such
failure by either (with such choice to be solely SUPPLIER's) (a) repairing the
defective Product, (b) replacing the defective Product, or (c) re-performing
the defective portion of the Services performed. All costs associated with such
repair, replacement, or re-performance, including any transportation costs,
shall be the sole responsibility of SUPPLIER, subject to the limitations set
forth in a Service Agreement as mutually agreed to by SUPPLIER and DISTRIBUTOR.
The Service Agreement will set forth limits on SUPPLIER's reimbursement to
DISTRIBUTOR for labor, transportation, and other Services. The Service
Agreement will also set forth a warranty approval process that will include
pre-approval of major warranty claims prior to commencement of work, submission
of all warranty claims for review and approval by SUPPLIER, and return of all
parts subject to warranty claims to SUPPLIER.
For commercial Products, SUPPLIER will provide DISTRIBUTOR with the option of
purchasing an extension to the initial warranty period. Such additional warranty
period will be for a period of at least * years beyond the termination of the
initial warranty period, and will cover the entire Product. The price for such
warranty extension will be established pursuant to Schedule C, and
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made available as an option to DISTRIBUTOR.
THE WARRANTIES SET FORTH IN THIS SECTION 7 ARE IN LIEU OF ALL OTHER WARRANTIES,
WHETHER ORAL, WRITTEN, EXPRESS, OR IMPLIED, INCLUDING WITHOUT LIMITATION
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
SUPPLIER'S WARRANTY OBLIGATIONS
AND DISTRIBUTOR'S REMEDIES UNDER THIS SECTION 7 (EXCEPT AS TO TITLE) ARE SOLELY
AND EXCLUSIVELY AS STATED HEREIN.
8. PROPER BUSINESS PRACTICES. SUPPLIER and DISTRIBUTOR shall comply with
all laws dealing with improper or illegal payments, gifts or gratuities, and
SUPPLIER and DISTRIBUTOR agree not to pay, promise to pay or authorize the
payment of any money or anything of value, directly or indirectly to any person
for the purpose of illegally or improperly inducing a decision or obtaining or
retaining business in connection with a purchase order.
9. COMPLIANCE WITH LAWS. SUPPLIER and DISTRIBUTOR agree to comply with the
applicable provisions of any federal, state, provincial or local law or
ordinance and all lawful orders, rules, and regulations issued thereunder. No
forced or prison labor may be used in manufacturing the Products to be supplied
under this Agreement. If forced or prison labor is determined to have been used
in the manufacture of the Products supplied hereunder, the DISTRIBUTOR shall
have the right to immediately terminate the purchase order and this Agreement
without further compensation to the SUPPLIER; and, in such case, DISTRIBUTOR
shall return to SUPPLIER any Products for which it has not yet made payment.
Provisions applicable to orders for work to be performed, goods to be produced,
or services to be rendered within the United States. (a) SUPPLIER shall comply
with any provisions, representations or agreements or contractual clauses
required thereby to be included or incorporated by reference or operation of
law in the contract resulting from acceptance of this order and dealing with:
(i) Equal Opportunity (Executive Order 11246 as amended by Executive Orders
113575 and 10286 and applicable regulations promulgated pursuant thereto); (ii)
Employment of Veterans (Executive Order 11701 and applicable regulations
promulgated pursuant thereto); (iii) Employment of the Handicapped (Executive
Order 11758 as amended by Executive Order 11867 and applicable regulations
promulgated pursuant thereto); (iv) Employment Discrimination Because of Age
(Executive Order 11141 and applicable regulations promulgated pursuant
thereto); and (v) Utilization of Disadvantaged and Business Enterprises
(Executive Order 11625, Public Law 95-507 and applicable regulations
promulgated pursuant thereto). (b) SUPPLIER certifies that with respect to
orders which exceed $10,000 it is in compliance with the requirements for
non-segregated facilities set forth in 41 CFR Chapter 60-1.8. (c) SUPPLIER
warrants that each chemical substance constituting or contained in goods sold
or otherwise transferred to DISTRIBUTOR hereunder is on the list of chemical
substances compiled and published by the Administrator of the Environmental
Protection Administration pursuant to the Toxic Substances Control Act (P.L.
92-573 as amended, and the Federal Hazardous Substances Act (P.L. 92-516) as
amended and lawful standards and regulations thereunder. (d) In accepting an
order SUPPLIER represents that the goods to be furnished thereunder were or
will be produced in compliance with the requirements of the Fair Labor
Standards Act of 1938, as amended, including Section 12 (a) and SUPPLIER shall
insert a certificate to that effect on all invoices submitted in connection
with such order.
10. PACKING, PRESERVATION AND MARKING. Packing, preservation and marking
requirements will be in accordance with the specification drawing or as
otherwise agreed by SUPPLIER and DISTRIBUTOR. If none are specified, SUPPLIER
shall use the commercially accepted practice.
11. LIMITATION OF LIABILITY. In no case will SUPPLIER or DISTRIBUTOR be
liable for the other's special, incidental, or consequential damages,
including, but not limited to, personal injury, property damage, loss of profit
or revenues, or business interruption arising out of the manufacture, Sale, or
supplying of the Products or Services.
The remedies available to DISTRIBUTOR hereunder may be asserted only by
DISTRIBUTOR and by no other party. DISTRIBUTOR may not expand warranty coverage
to Customers beyond the coverage specifically described herein, except as
agreed in writing by SUPPLIER.
SCHEDULE C
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PRODUCT PRICES - APPLICABLE TO COMPLETE SYSTEMS AND
REPLACEMENT PARTS
The Parties will mutually agree on prices (including prices for ECAT units, the
extended warranty for commercial Product, and Product replacement parts) for
the first two production years (including ECAT units) of each Product version
(e.g., SU1, SU2, SU3), no later than the completion of SUPPLIER's Design and
Verification phase (i.e., NPD Stage 3) for such Product. SUPPLIER's NPD process
stages are as set forth in the Business Plan. In the event that the Parties
cannot agree on the price for a given Product, both Parties shall be prohibited
from Selling such Product. Distributor and Supplier will use general pricing
principles as guidelines to be considered in negotiating pricing. These
principles will include, among others, the following:
. Both GEFCS and Plug Power must be profitable
. GEFCS to target X%-X% EBIT for X and beyond
. Plug Power to target X% gross margin for X and beyond, reflecting
higher capital and R&D investment
. Both Parties must see a path toward target profitability
. Plug Power to benefit from decreases in manufacturing costs
. GEFCS to benefit from increase in sales volumes and reduced selling
costs
SCHEDULE D
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DISTRIBUTOR'S PURCHASE FORECAST
Provided that the Commercial Period has commenced prior to such dates:
1. On or before January 1, 2002, DISTRIBUTOR will provide SUPPLIER with a
forecast of DISTRIBUTOR's monthly purchases for the 12 months beginning
April 1, 2002. Each of the first 3 months of DISTRIBUTOR's forecast
(i.e. April 1, 2002 to June 30, 2002) will be a firm order.
DISTRIBUTOR's forecast for the final 9 months of the forecast period
(i.e. July 1, 2002 to March 31, 2003) is for SUPPLIER's planning
purposes only. DISTRIBUTOR, at its sole discretion, may change the
monthly purchase forecast in any month in the final 9-month forecast
period by any amount.
2. On the first business day of each month beginning February 1, 2002,
DISTRIBUTOR will provide SUPPLIER with a 12-month rolling forecast of
monthly purchases for the period beginning 3 months hence. Each of the
first 3 months of DISTRIBUTOR's forecast will be a firm order.
DISTRIBUTOR's forecast for the final 9 months of each forecast period
is for SUPPLIER'S planning purposes only. DISTRIBUTOR, at its sole
discretion, may change the monthly purchase forecast in any month in
the final 9-month forecast period by any amount.
In the event that SUPPLIER makes material changes to the Product commercial
introduction dates set forth in the MGPP, then the Parties will mutually agree
to modify the January 1, 2002 start date for DISTRIBUTOR's purchase forecast.
In addition, purchase forecasts shall be modified to the extent Distributor
determines necessary on the occasion of each modification to the MGPP.
Any Products that DISTRIBUTOR is obligated to purchase, but otherwise unable to
sell, may be held in SUPPLIER's inventory at the request of DISTRIBUTOR,
provided that SUPPLIER has reasonably available space. Electing to have
SUPPLIER hold DISTRIBUTOR's inventory does not relieve DISTRIBUTOR of its
obligation to purchase and take delivery of any of DISTRIBUTOR's units held in
inventory. DISTRIBUTOR will reimburse SUPPLIER for its fully loaded inventory
carrying cost, including warehouse expenses, interest, and any inventory
carrying cost charged to SUPPLIER by SUPPLIER's vendors as a direct result of
DISTRIBUTOR's request for SUPPLIER to hold inventory.
On or before September 1, 2001, SUPPLIER will provide DISTRIBUTOR with a firm
price for the monthly inventory carrying charge for 2002. On or before August 1
of each subsequent year, SUPPLIER will provide DISTRIBUTOR with a firm price
for the monthly inventory carrying charge for the upcoming year.
SCHEDULE E
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SUPPLIER'S INSURANCE
SUPPLIER shall maintain in effect at all times during the Term of this
Agreement products liability insurance as set forth on the following
certificate, with DISTRIBUTOR named as additional insured:
(See Attached)
SCHEDULE F
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COPIES OF TRADEMARK REGISTRATIONS
(See Attached)