EXHIBIT 10.9
CONSORTIUM AGREEMENT
This Consortium Agreement (the "Agreement ") is made as of May 1, 2005
(the "Effective Date") by and between Atlantic Hydrogen Inc. ("AHI"), a private
corporation, and Hydrogen Engine Center ("HEC") a private corporation.
IN CONSIDERATION of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the parties hereto covenant and agree as
follows:
1. Interpretation
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Capitalized terms used herein and not defined herein shall have the meanings
ascribed thereto in the Contribution Agreement (as hereinafter defined).
2. Project
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This Agreement relates to a project entitled CARBONSAVERTM: GHG-Free
Methane-to-Hydrogen System Integration (hereinafter referred to as the "Project"
or the "Eligible Project") and assigned contract number SDTC-2004-A-649. The
Project is described in the proposal (the "Proposal") dated July 21, 2004, and
any updates to the Proposal as set out in the Contribution Agreement, submitted
to Sustainable Development Technology Canada ("SDTC") by AHI (the "Eligible
Recipient") to develop and demonstrate the technology described therein for the
purpose of commercializing it, for which the Eligible Recipient has applied to
SDTC for financial assistance.
3. The Consortium Agreement
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The parties hereto are members of the Consortium described in the Proposal.
4. Contribution Agreement
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4.1 AHI is hereby authorized by the other members of the Consortium to submit
the Proposal to SDTC and to apply for funding from SDTC as described in the
Proposal.
4.2 AHI, as the Eligible Recipient, is hereby authorized by each member of the
Consortium to enter into an agreement (the "Contribution Agreement") with SDTC
relating to the Project and the funding for the Project to be provided by SDTC,
on such terms and conditions, and containing such covenants, representations and
warranties as the Eligible Recipient, in its sole discretion, may agree upon
with SDTC.
4.3 Each member of the Consortium hereby authorizes the Eligible Recipient to
receive funds from SDTC pursuant to the Contribution Agreement and to perform,
on its own behalf, and on behalf of the Consortium, all of the obligations of
the Eligible Recipient contained therein.
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5. Project Management
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AHI will act as the lead proponent on the project and will coordinate, via the
project work plan and budget, all activities with, SDTC, sub-contracted parties
and consortium participants.
HEC will ship agreed genset assemblies to the AHI contracted facilities at UNB
in Fredericton N.B. where the bulk of assembly, integration, testing, tuning and
benchmarking of CS systems coupled with HEC modified internal combustion engines
and PrecisionH2 Power assemblies will be carried out under this agreement.
In addition, under the terms of this agreement, it is understood that HEC will
send its technical support personnel to the AHI facility during critical
integration periods, as defined in the project work plan, as well as provide
required training to on site personnel. In addition, HEC shall supply remote
technical support services via telephone and Internet to ensure that proper
operation of supplied equipment is maintained at all times.
Once in lab integration, testing and configuration work is completed the final
assemblies will be put into commercial demonstration at a client site in New
Brunswick (to be determined). It is understood that HEC will provide required
field support for these demonstration sites under this agreement.
In the event that any of the equipment supplied by HEC should fail during the
course of the project, during the course of its operation as provided for in the
project work plan, EEC agrees to repair or replace required sub-assemblies at
its expense within a timeframe that will ensure that the project work plan
timing is not obstructed.
The table below summarizes the equipment and services to be supplied by HEC to
the project along with a breakdown of billable vs. in-kind activities.
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Modified Internal HEC Designated Financial Schedule Schedule of
Combustion Engines Supply Installation of charges to AHI eligible in-kind
to be provided as Date to location contributions by
follows: AHI HEC
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Supply of a 5kW Q3 UNB - AHI $ 58,022 $ 58,021
genset and related 2005 lab demo
engineering, travel,
materials & software
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Supply of a 10W Q3 AHI/UNB test $ 49,016 $ 49,018
genset and related 2006 facility
engineering, travel,
materials & software
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Supply of a 50kW Ql Integration $ 54,000 $ 54,000
genset and related 2007 testing demo site
engineering, travel, TBD
materials & software
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Supply of 3 50kW Q3 OPTIONAL $ 25,000 $ 25,000
gensets (to be 2007 Installation at
configured in 2+1 selected site
assembly for
commercial
demonstration of
125kW capacity
system)
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$ 186,039 $186,039
Total $ 372,078
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It is understood that HEC will supply the above goods and services to the
project with the intention of taking part in initial integration, demonstration
and benchmarking of the novel technology configuration that is the subject of
this collaboration. In recognition of the fact that there is an important
element of research in the designated project plan, for which this consortium
has been brought together, the parties to this agreement acknowledge that
results may vary over the course of the project, calling for adjustments to the
targets within the project plan, budget, and timing. In the event that
significant changes are called for, the eligible recipient will submit required
updates to consortium members, including HEC, for review and agreement.
6. Market Representation Agreement
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This consortium agreement is not intended as a market representation agreement.
However, it is understood that if the demonstrations contemplated in the project
plan result in a product configuration that is deemed to be commercially
attractive, AHI and HEC will undertake to put in place a non-exclusive market
representation agreement at that time to govern the manufacturing, marketing,
licensing and certification of a possible combined product offering to their
mutual benefit.
It is understood that SDTC is actively redefining its policy with respect to a
possible rapid market adoption of all or part of the company and project IP,
prior to the conclusion of the planned demonstration. Any market representation
to be drawn up during the three year life of the project will be defined within
the context of the refinement SDTC will publish to its guidelines on early
commercialization.
7. Confidential Information
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7.1 "Confidential Information" means all information and data, including,
without limitation, all business, planning, performance, financial, product,
trade secret, technical, sales, marketing, contractual, employee, supplier and
customer information and data, disclosed orally, in writing or electronically to
either party (the "disclosing party") to the other (the "receiving party")
hereunder. Confidential Information shall not include information which (i) is
generally known or in the public domain at the time of disclosure; (b) was in
the receiving party's possession before receipt from the disclosing party; (c)
though originally Confidential Information, subsequently becomes a matter of
public knowledge through no fault of the receiving party, as of the date of its
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becoming part of the public knowledge; or (d) is rightfully received by the
receiving party without obligations of confidence from a third party who is free
to disclose the information.
7.2 The receiving party shall maintain the confidentiality of all Confidential
Information disclosed to it and shall take all necessary precautions against
unauthorized disclosure of the Confidential Information. The receiving party
shall not directly or indirectly disclose, allow access to, transmit or transfer
any Confidential Information to any third party without the prior written
consent of the disclosing party except that the receiving party may disclose
Confidential Information to those employees and contractors who (i) have a need
to know the information for the purposes of this Agreement; (ii) have been
informed of the receiving party's obligations hereunder; and, (iii) have entered
into a confidentiality agreement with the receiving party that contains
confidentiality and restricted use obligations that are consistent with the
terms and conditions of this Agreement and which are reasonably calculated to
protect the confidential or proprietary nature of the Confidential Information
and prohibit its unauthorized use and disclosure. The receiving party shall not
use or copy any Confidential Information except as may be reasonably required in
connection with this Agreement. All copies, records, notes or reproductions, in
whole or in part, shall contain notices identifying them as containing the
Confidential Information of the disclosing party and shall be protected from
unauthorized disclosure and access.
7.3 Upon the request of the disclosing party, and in any event upon the
termination or expiration of this Agreement, the receiving party shall
immediately return to the disclosing party all materials, including all copies
in whatever form, containing any Confidential Information which are in the
disclosing party's possession or under its control.
7.4 Each party acknowledges and agrees that monetary damages may not be an
adequate remedy to compensate the disclosing party for any breach of the
receiving party's obligations hereunder in respect of Confidential Information.
Accordingly, each party agrees that, in addition to any and all other remedies
available to the disclosing party under this Agreement or at law or in equity,
the disclosing party shall be entitled to seek injunctive relief against the
breach, or threatened breach of the confidentiality provisions of this
Agreement, and specific performance of its obligations hereunder, without being
required to post a bond. The injunctive relief contemplated hereunder is in
addition to any other legal or equitable remedies available.
8. General Provisions
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8.1 Any charges or expenses incurred by either party in preparation for or as a
result of this Agreement or the parties' meetings and communications or any work
done hereunder are to the sole account of the party incurring same unless
otherwise agreed in writing.
8.2 The parties will not disclose the detailed content of this Agreement to any
third party without the prior written approval of both parties, which approval
may be withheld in the sole discretion of either party.
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8.3 This Agreement shall be governed by the laws of the Province of New
Brunswick and the laws of Canada applicable therein, except for its conflict of
laws provisions.
8.4 Except with respect to a breach of the confidentiality provisions set out in
Section 7 hereof and each party's obligation to negotiate in good faith, in no
event shall any party hereto be liable to the other for any claim, damage,
injury or loss of any nature arising out of or related to this Agreement.
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES ARISING FROM OR CONNECTED WITH THIS AGREEMENT.
ALL TANGIBLES AND INTANGIBLES PROVIDED PURSUANT TO THIS AGREEMENT ARE PROVIDED
"AS IS" AND THE PARTIES MAKE NO WARRANTIES OR CONDITIONS, WHETHER EXPRESS,
IMPLIED, STATUTORY, OR. OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES OR
CONDITIONS OF MERCHANTABILITY, MERCHANTABLE QUALITY AND FITNESS FOR A PARTICULAR
PURPOSE.
8.5 Neither party shall assign or transfer this Agreement, in whole or in part,
except to a subsidiary or affiliated company, without the prior written consent
of the other, which consent shall not be unreasonably withheld.
8.6 Nothing contained herein shall be construed as prohibiting either party from
entering into a business arrangement with any other third party, whether or not
such third party is in a similar line of business to the other party to this
Agreement.
8.7 If, in the opinion of AHI, any member of the Consortium is not complying
with the work plan, budget, and/or milestone objectives set out in this
agreement, AHI, as the Eligible Recipient, shall have the right, upon 30 days
written notice, to terminate this agreement, without penalty, and to replace
that member of the Consortium with another entity. AHI will endeavor to work
with the Consortium member for a period of 30 days in an effort to resolve the
problem prior to exercising this right to terminate the agreement; however, AHI
reserves the right to determine what is best for the overall project and shall
have the final right to terminate this agreement, and replace a member of the
Consortium at its sole discretion without penalty.
IN WITNESS WHEREOF this Agreement has been executed by the parties as of the
Effective Date.
By: s/Xxxxxxx Xxxxxxx
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Chairman, Atlantic Hydrogen, Inc.
By: s/Xxx Xxxxxxxxx
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President & CEO, Hydrogen
Engine Center
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