Cooperative Research & Development Agreement

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.


Exhibit 10.19


A COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
Between
PLUG POWER, L.L.C.
and
U. S. ARMY BENET LABORATORIES


A. Whereas, the Federal Technology Transfer Act of 1986, 15 USC3710a, provides each Federal agency with the authority to permit the Directors of Government-operated Federal Laboratories to enter into Cooperative Research and Development Agreements (CRADA's) with Federal and non-Federal entities, including private firms and organizations. This authority allows Federal laboratories to accept, retain, and use funds, personnel, services, and property from collaborating parties and to provided personnel services, and property to collaborating parties. This authority also includes the disposition of patent rights in any inventions, which may result from such collaboration, or by delegation of the Assistant Secretary of the Army for Research, Development and Acquisition, other patent rights which are owned by the Government.


B. Whereas, the U.S. Army BENET Laboratories (BENET) has an installation and extensive state-of-the art infrastructure required to support an array of unique technologies, in Armaments, Munitions and in enabling technologies. BENET has the responsibility to make its procedures, processes and technologies available for use and transfer to the private sector. BENET has unique technologies and facilities in specialized materials, simulation and analysis for prototype fabrication, which PLUG POWER desires to adapt for commercial application.


C. Whereas, PLUG POWER, L.L.C. (PLUG POWER) desires to collaborate with BENET in the business of research, development, and engineering for the purpose of transferring unique process technologies from the United States Army for use and application by PLUG POWER for a commercial application.


NOW, THEREFORE, the parties agree as follows:


Article 1. Definitions.


As used in this Agreement, the following terms shall have the following meanings, and such meanings should be equally applicable to both the singular and plural forms of the terms defined:


1.1 "Agreement" means this Cooperative Research and Development Agreement.


1.2 "Invention" means any invention or discovery, which is or may be patentable or otherwise protected, under Title 35 of the United States Code.


1.3 "Made" in relation to any Invention means the conception or first actual reduction to practice of such Invention.


1.4 "Proprietary Information" means any patent rights, copyrights, trademark rights, trade secrets, mask works, proprietary information or data, moral rights, and know-how developed by PLUG POWER prior to, in the course of or subsequent to, this Agreement that: (i) is not generally known or available from other sources without obligation concerning its confidentiality; (ii) has not been made available by the owners to others without obligation concerning its confidentiality; and (iii) is not already available to the Government without obligation concerning its confidentiality, and does not constitute a Subject Invention, Subject Data or Protected CRADA Information.


1.5 "Subject Data" means all recorded information first produced in the performance of this Agreement.


1.6 "Subject Invention" means any invention made in the performance of work under this Agreement.


1.7 "Protected CRADA Information" means any patent rights, copyrights, trademark rights, trade secrets, mask works, proprietary information or data, moral rights, and know-how, developed in the course of this Agreement and directly related to the Statement of Work, by a BENET or PLUG POWER employee assigned to this project by his or her employer.


Article 2. Cooperate Research.


2.1 Statement of Work. Cooperative research performed under this Agreement shall be performed in accordance with the Statement of Work (SOW), incorporated as a part of this Agreement as Appendix A. Each party agrees to participate in the cooperative research and to utilize such personnel, resources, facilities, equipment, skills, know-how and information, as it considers necessary, consistent with its own policies, missions, and requirements. Work tasks will be added to Statement of Work and will become part of this Agreement and recorded as part of Appendix A. The work will be task-or-performance oriented.


2.2 Multiple Parties and Separate Technologies: BENET has unique technologies in several related but distinct areas to include, but not limited to: Mounts, Fire Control, and the enabling sciences and discipline. In addition, BENET has expertise located within Watervliet Arsenal.


2.3 Review of Work. Periodic conferences shall be held between BENET personnel and PLUG POWER personnel for the purpose of reviewing the progress of the work. It is understood that the nature of this cooperative research is such that completion within the limit of financial support allocated, cannot be guaranteed. Accordingly, it is agreed that all sponsored research is to be performed on a best efforts basis. It is agreed that individual work


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tasks incorporated into the Statement of Work will make use of project management techniques detailing where appropriate, cost, schedule and technical milestone considerations to mitigate and control risk.


2.4 Change in Scope. The parties shall make a good faith effort to agree on any necessary changes to the SOW and make the changes by written notice. The parties agree that increases and decreases in effort may by mutual agreement not be considered a change in scope, minimizing administrative delays in the execution of effort.


2.5 Research and Development (R&D) Team. To the extent that the conduct of sponsored research requires a joint technical effort, PLUG POWER and BENET agree to establish a joint research and development team (the "TEAM"). The Team shall conduct cooperative research in accordance with the SOW. Each party shall pledge to make available to the Team such resources, facilities, equipment, skills, know-how, and information, as it considers necessary and appropriate. Both parties pledge to support the Team in a mutually cooperative manner, on a best effort basis, consistent with their respective policies, missions, and requirements. Each party may support changes to the SOW or to the scope and direction of the effort which, if agreed to by the other party, shall first be made to the SOW, and then implemented by the Team. While assigned to the Team, members shall continue to remain employed by their respective employers with full benefits and salary, and will not be considered to be employees of the other party for any reason. Each parties shall be solely responsible for the composition their of Team members.


Article 3. Reports.


3.1 Progress Reports. After this Agreement enters into force, BENET and PLUG POWER shall exchange periodic written reports during the term of this Agreement on the progress of their work, and the results being obtained, and shall make available to the extent reasonably requested, other project information in sufficient detail to explain the progress of the work. Specific report content and timing will be defined in the Statement of Work.


3.2 Final Report. BENET and PLUG POWER shall prepare a written report within three (3) months after expiration of this Agreement. This report shall set forth the technical progress made, identifying such problems as may have been encountered, and establishing goals and objectives requiring further effort. Inclusion of Proprietary Information or Subject Information in deliverable reports shall be subject to the provisions of Article 7.2. In addition, a portion of the results not including Proprietary Information, may be prepared for publication in a journal or conference, as appropriate, by BENET or PLUG POWER, with co-authorship, as appropriate, subject to the provisions of 7.4.


Article 4. Financial Obligation


Salary and Travel. BENET and PLUG POWER shall provide support to their respective personnel in performance of this Agreement. Attached Statements of Work set forth


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in Appendix A will detail financial terms and conditions. If or when appropriate and required by a scope of work, reimbursement required by BENET will be provided by PLUG POWER. It is noted that reimbursement does not constitute a sale or transfer of ownership of property.


Article 5. Title to Property.


5.1 Equipment. All equipment first acquired under this Agreement, and all Government Furnished Equipment (GFE), if any, shall be the property of BENET except that title to items of equipment developed or purchased by PLUG POWER, or provided to BENET by PLUG POWER or acquired by BENET with funds supplied by PLUG POWER, shall remain or vest in PLUG POWER. ANY GFE shall be used solely for the performance of the effort contemplated by this Agreement. Upon completion of research under this Agreement, PLUG POWER shall be responsible for all costs attendant to the maintenance, removal, storage, and shipping of their equipment to their own facility. Prototype hardware, designed, produced and transferred by the Government to PLUG POWER will be considered GFE, with the Government retaining title. The applicable sections of Part 45 of the Federal Acquisition Regulations shall apply to PLUG POWER's management and disposition of GFE furnished under this Agreement.


5.2. Software


5.2.1. PLUG POWER Employee Software. Title to any copyright in software written by PLUG POWER employees necessary to perform this Agreement shall be held by PLUG POWER. PLUG POWER agrees to grant to the U.S. Government a non-exclusive, irrevocable, paid-up license for military applications only, to use or have used, throughout the world by, or on behalf of the U.S. Government, the copyright covering said software.


5.2.2. Joint Employee Software. Title to any copyright in software written jointly by BENET and PLUG POWER employees in the course of performance of this Agreement, shall be held by PLUG POWER. PLUG POWER agrees to grant to the U.S. Government a nonexclusive, irrevocable, paid-up license for military applications only, to use or have used, throughout the world by, or on behalf of the U.S. Government, the copyright covering said software.


5.2.3 Limited Scope. PLUG POWER shall retain ownership in any software or algorithms to which PLUG POWER has title prior to this Agreement, or written for its own requirements during the course of this Agreement which are not necessary for the performance of work under this Agreement.


5.2.4. BENET Employee Software. The U.S. Government hereby grants to PLUG POWER an exclusive, irrevocable, transferable, worldwide, paid-up license to make, use or sell any software written by BENET employees in the performance of this Agreement.


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5.2.5 BENET Laboratories may provide interface drawings and other technical data to collaborators as required or negotiated for purposes other than for production of Large Caliber Cannon. In this instance Cannon is defined as consisting of the Cannon Tube, to include thermal management assembles, the Breech, Mechanism, to include breech actuation assemblies, the Bore evacuator and the Muzzle Break.


Article 6. Inventions and Patents.


6.1 Reporting. The parties shall promptly report to each other all Subject Inventions made in the performance of work under this Agreement. All Subject Inventions made in the performance of work under this Agreement shall be listed in the Final Report required by this Agreement.


6.2 Employee Inventions. BENET, on behalf of the U.S. Government, agrees that PLUG POWER shall retain title to any PLUG POWER employee Subject Invention. PLUG POWER may file patent applications on such Subject Inventions at its own expense. PLUG POWER further agrees to grant to the U.S. Government on PLUG POWER Subject inventions a nonexclusive, irrevocable, paid-up license in the patents covering a Subject Invention, to practice or have practiced, throughout the world by, or on behalf of the U.S. Government, the Subject Inventions which are covered by a resulting patent except for any application related to fuel cells. Such non-exclusive license shall be evidenced by a confirmatory license agreement prepared by PLUG POWER in a form satisfactory to BENET.


6.3. BENET Employee Inventions. BENET, on behalf of the U.S. Government, shall have the initial option to retain title to, and file patents on, each Subject Invention made by its employees. BENET may file patent applications thereon at its own expense. BENET, on behalf of the U.S. Government, agrees to grant to PLUG POWER on those BENET employee Subject Inventions upon which the U.S. Government has exercised the option to retain title to, a nonexclusive, irrevocable, transferable, paid-up license in the patents covering a Subject Invention, to practice or have practiced, throughout the world by, or on behalf of PLUG POWER, the Subject Inventions, which are covered by a resulting patent. The license on Subject Inventions excludes the right to produce or have produced Large Caliber Cannon at any facility other than Watervliet Arsenal.


6.4 Joint Employee Inventions. PLUG POWER have the initial option to file patent applications at its own expense on joint inventions, subject to the conditions specified in Paragraph 6.5. PLUG POWER is hereby granted all rights to patents filed in its name for joint inventions for all applications related to fuel cells, and the U.S. Government is hereby granted an exclusive, irrevocable, paid-up U.S. Government license to practice or have practiced, throughout the world by, or on behalf of the U.S. Government, the invention which is covered by a resulting patent for all applications except those related to fuel cell applications.


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6.5 Filing of Patent Applications. The party having the right to retain title and file patent applications on a specific Subject Invention may elect not to file patent applications, provided it so advises the other party within 300 days from the date it reports the Subject Inventions to the other party. Thereafter, the other party may elect to file patent applications on the Subject Invention and the party initially reporting the Subject Invention agrees to assign its right, title, and interest in the Subject Invention to the other party. The assignment of the entire right, title, and interest to the other party, pursuant to this paragraph, shall be subject to the retention by the party assigning title of a nonexclusive, irrevocable, transferable, paid-up license to practice, or have practiced, the Subject Invention the world.


6.6 Patent Expenses. The expenses attendant to the filing of patent applications shall be borne by the party filing the patent applications. Each party shall provide the other party with copies of the patent applications it files on any Subject Invention along with the power to inspect and make copies of all documents retained in the official patent application files by the applicable patent office. The parties agree to reasonably cooperate with each other in the preparation and filing of patent applications resulting from this Agreement.


6.7 Maintenance Fees. The fees payable to the U.S. Patent and Trademark Office, in order to maintain the patent's enforcement, will be payable by the owner of the patent, at that party's option. In the event that BENET is the owner of the patent and PLUG POWER holds an exclusive license in said patent, PLUG POWER shall pay all maintenance fees for said patent, but shall not be required to pay any litigation fees for said patent. If deciding not to pay the maintenance fee, PLUG POWER must relinquish their exclusive license rights in said patent and must give BENET reasonable notification so as to permit BENET the option of paying said fee. In the event that PLUG POWER elects not to pay the maintenance fees and BENET elects to exercise it's option to pay said fee, PLUG POWER will retain a non-exclusive, irrevocable, transferable, paid-up license in said patent


6.8 Exclusive License


6.8.1 BENET, on behalf of the U.S. Government, agrees to grant to PLUG POWER a limited term exclusive, transferable, worldwide license in each U.S. patent application, and patents issued thereon, covering a BENET employee Subject Invention, which is filed by BENET on behalf of the U.S. Government subject to the reservation of a non-exclusive, irrevocable, paid-up license to practice and have practiced the Subject Invention on behalf of the U.S. Government.


6.8.2 Exclusive License Terms. PLUG POWER shall elect or decline to exercise its rights to acquire a limited term exclusive license to any Subject Invention(s) within six (6) months of being informed by BENET of the Subject Invention(s). A reasonable royalty rate and other terms of license shall be negotiated promptly in good faith and in conformance with the laws of the United States. Such exclusive license shall be for an initial term ending seven (7) years from the date of each patent and with respect to each such patent shall be


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automatically renewable for successive seven (7) year periods provided PLUG POWER or any PLUG POWER sublicensee:


(i) is then conducting related research, or


(ii) continues to commercialize the subject matter covered by
such patent(s).


6.8.3 Other BENET Inventions. This Agreement does not grant an implied license to PLUG POWER with respect to any other government inventions, including any BENET inventions not covered by Article 6.8.2. BENET agrees to grant an exclusive, transferable, worldwide license to PLUG POWER to such other BENET Inventions if requested by PLUG POWER at fair and reasonable terms, if such an exclusive license is necessary for PLUG POWER to practice, or have practice, any BENET Subject Invention under this Agreement, but only to the extent that BENET has an unencumbered right and/or authority to do so. Nothing in this Agreement shall be construed as a grant or an agreement to grant any license with respect to any invention made by any other U.S. Army laboratory or any other Government agency or laboratory.


6.8.4 Subsidiaries and Affiliates. The license to PLUG POWER under this Agreement also extend to PLUG POWER's United States subsidiaries.


6.8.5 Other PLUG POWER Inventions. This Agreement does not grant an implied license to BENET with respect to any other PLUG POWER inventions, including any PLUG POWER inventions not covered by Section 6 of this Agreement. PLUG POWER agrees to grant a nonexclusive, transferable, worldwide license to BENET to such other PLUG POWER inventions if requested by BENET at fair and reasonable terms, if such an nonexclusive license is necessary for BENET to practice, or have practiced, any PLUG POWER Subject Invention under this Agreement, but only to the extent that PLUG POWER has an unencumbered right and/or authority to do so. Nothing in this Agreement shall be construed as a grant or an agreement to grant any license with respect to any invention made by PLUG POWER.


Article 7. Data and Publication


7.1 Rights. Subject Data shall be individually owned by the parties hereto. Either party shall, upon request, have the right to review all Subject Data first produced under this Agreement which has not been delivered to the other party, except to the extent that such Subject Data is subject to a claim of confidence or privilege by a third party.


7.2 Proprietary Information. BENET agrees that any Proprietary Information furnished by PLUG POWER to BENET under this Agreement, or in contemplation of this Agreement, shall be used, reproduced and disclosed by BENET only for the purpose of carrying out this Agreement, and shall not be released by BENET to third parties unless


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consent to the release is obtained from PLUG POWER. Proprietary Information which is disclosed verbally by PLUG POWER shall be identified as proprietary at the time of disclosure and then summarized in writing. Such summary shall be marked as Proprietary information and provided to BENET within ten (10) days after the verbal disclosure. PLUG POWER shall place a proprietary notice on all information it delivers to BENET under this Agreement which it asserts is proprietary. All Proprietary Information shall be protected for a period of five (5) years from disclosure to BENET.


7.3 Release Restrictions. BENET shall have the right to use all Subject Data for military purposes only, and shall not release such Subject Data publicly except when: (i) BENET in reporting results of sponsored research, may publish Subject Data in technical articles and other documents to the extent it determines to be appropriate unless such disclosure will adversely affect PLUG POWER's rights; and (ii) BENET may release such Subject Data where such release is required by law or court order provided that prior notice is provided to PLUG POWER to allow Plug POWER to obtain a Protective Order.


7.4 Publication. BENET and PLUG POWER agree to confer prior to the publication of Subject Data to assure that no Proprietary Information or protected CRADA information are released and that patent rights are not jeopardized. Prior written approval is required from the other party before a party hereto can submit a manuscript for review, which contains the results of the research under this Agreement, or prior to publication if no such review is made. Each party shall be offered an ample opportunity to review such proposed manuscript and to file patent applications in a timely manner.


7.5 Obligations as to ...