Document:

<PAGE>   1
                                                                    EXHIBIT 10.4

                             HYDROGENICS CORPORATION

                                OPTION AGREEMENT

HYDROGENICS CORPORATION (the "COMPANY"), hereby grants to the Optionee named
below (the "OPTIONEE"), an option (the "OPTION") to purchase, in accordance with
and subject to the terms, conditions and restrictions of this Agreement together
with the provisions of the Stock Option Plan (the "PLAN") of the Company, the
number and class of shares of the Company at the price per share set forth
below:

Name of Optionee: ______________________________________________________________

Date of Grant: _________________________________________________________________

Class and Number of Shares subject to Option (the "Shares"): ___________________

Exercise Price: ________________________________________________________________

1.       The terms and conditions of the Plan are hereby incorporated herein by
         reference as terms and conditions of this Agreement and all capitalized
         terms used herein shall, unless expressly defined herein in a different
         manner, have the meanings ascribed thereto in the Plan. The Optionee
         acknowledges that the Optionee has received, read and understands the
         Plan.

2.       Subject to section 4.4 of the Plan, and unless otherwise determined by
         the Board at the time of granting an Option, each Option shall be
         exercisable in the instalments set forth in section 4.4 of the Plan.

3.       In no event shall the Option granted hereunder be exercisable after the
         expiration of the relevant Exercise Period.

4.       Each notice relating to the Option, including the exercise thereof,
         shall be in writing. All notices to the Company shall be delivered
         personally or by prepaid registered mail and shall be addressed to:
         Hydrogenics Corporation, 5985 McLaughlin Road, Mississauga, Ontario L5Y
         1B8, Attention: Treasurer. All notices to the Optionee shall be
         addressed to the principal address of the Optionee on file with the
         Company. Either the Company or the Optionee may designate a different
         address by written notice to the other. Such notices shall be deemed to
         be received, if delivered personally, on the date of delivery, and if
         sent by prepaid, registered mail, on the fifth (5th) business day
         following the date of mailing. Any notice given by either the Optionee
         or the Company shall not be binding on the recipient thereof until
         received.

5.       When the issuance of Shares on the exercise of the Option may, in the
         opinion of the Company, conflict or be inconsistent with any applicable
         law or regulation of any governmental agency having jurisdiction, the
         Company reserves the right to refuse to issue such Shares for so long
         as such conflict or inconsistency remains outstanding.
<PAGE>   2
                                     - 2 -

6.       Except as expressly provided in the Plan, during the lifetime of the
         Optionee, the Option granted pursuant to this Agreement may only be
         exercised by the Optionee personally and no assignment or transfer of
         the Option, whether voluntary, involuntary, by operation of law or
         otherwise, shall vest any interest or right in such Option whatsoever
         in any assignee or transferee, and immediately upon any assignment or
         transfer or any attempt to make the same, the Option granted hereunder
         shall terminate and be of no further force or effect.

7.       The Optionee hereby acknowledges and agrees that:

         (a)      any rule, regulation or determination, including the
                  interpretation by the Board of the Plan, the Option granted
                  hereunder and the exercise thereof, shall be final and
                  conclusive for all purposes and binding on all Persons
                  including the Company and the Optionee;

         (b)      the grant of the Option shall not affect in any way the right
                  of the Company or any affiliate of the Company to terminate
                  the employment of the Optionee or the Optionee's term as a
                  Director or Consultant; and

         (c)      the Optionee has been advised to seek independent legal advice
                  in connection with his or her participation in the Plan and
                  the entering into of this Agreement and has been given every
                  opportunity to do so.

8.       This Agreement has been made in and shall be construed under and in
         accordance with the laws of the Province of Ontario and the federal
         laws of Canada applicable therein.

                                                    HYDROGENICS CORPORATION

                                                    Per:
                                                    ____________________________
                                                    Name:
                                                    Title:

SIGNED, SEALED AND DELIVERED
In the presence of:

____________________________                        ___________________________
       Witness                                            Name of Optionee<PAGE>   1

                                                                   EXHIBIT 10.9

                        DEPARTMENT OF NATURAL RESOURCES

                   EFFICIENCY AND ALTERNATIVE ENERGY PROGRAM
                            CONTRIBUTION AGREEMENT

                      THIS AGREEMENT is made in duplicate

      BETWEEN:

                    HER MAJESTY THE QUEEN IN RIGHT OF CANADA
                    ("CANADA"), represented by the Minister of Natural
                    Resources,

      AND:

                    HYDROGENICS CORPORATION INCORPORATED, incorporated under
                    the laws of Canada (the "PROPONENT").

                    WHEREAS Canada wishes to encourage the adoption of energy
      efficiency and renewable energy technologies in all sectors of the
      Canadian economy and has established the Efficiency and Alternative
      Energy Program for this purpose;

                    WHEREAS Canada and the Proponent agree that for the
      Proponent to develop and implement the Project as described in Schedule
      A, the Proponent will require financial assistance from Canada;

                    AND WHEREAS Canada is willing to provide financial
      assistance towards the total Eligible Costs of the Project in the manner
      and upon the terms and conditions hereinafter set forth;

                    NOW, THEREFORE, Canada and the Proponent agree as follows:

      1.     INTERPRETATION

      1.1    In this Agreement:

             "AGREEMENT" means this Agreement and the attached Schedules A, B
             and C;

             "COMPLETION DATE" means the date specified in Article 3.2;

             "ELIGIBLE COSTS" means any costs incurred by the Proponent in the
             period between OCTOBER 1, 1996 and MARCH 31, 1997 in relation to
             the Project and which is listed in Schedule B;

             "FISCAL YEAR" means the period beginning on April 1 of any year and
             ending on March 31 in the next year;

             "INTELLECTUAL PROPERTY" means any information developed by the
             Proponent in performance of the Project including, without
             limitation, data, techniques, methods, processes, know-how,
             inventions, designs, formulae, photographs, drawings, plans,
             specifications, reports, studies, technical and procedural
             manuals, programs including computer hardware and software and
             source code, whether susceptible to copyright or not, and all
             patents, copyrights, trademarks, and industrial designs arising
             therefrom;

             "MINISTER" means the Minister of Natural Resources and includes
             any duly authorized officers or representatives;

             "PROJECT" means the Project described in Schedule A;

             "PROPOSAL" means a written proposal including at least a
             background, purpose, work description, results expected and a
             budget, which is accepted by the Minister for a specific
             Project; and

             "REVENUE" means all considerations received by the Proponent from
             any person or party in respect of the licensing, selling,
             marketing or commercialization of the Intellectual Property, less
             returns actually credited and any applicable sales taxes.

                                     - 1 -

<PAGE>   2

      2.     REPRESENTATIONS AND WARRANTIES

      2.1    The Proponent represents and warrants that all factual matters
             contained in the Proposal and all material submitted in support
             are true and accurate, and that all estimates, forecasts and other
             related matters involving judgement were prepared in good faith
             and to the best of its ability, skill and judgement.

      3.     CONDUCT OF PROJECT

      3.1    The Proponent shall carry out the Project promptly, diligently and
             in a professional manner and in accordance with the terms and
             conditions of this Agreement.

      3.2    The Proponent shall complete the Project by MARCH 31, 1997.

      3.3    The Proponent shall comply with all federal, provincial and
             municipal laws in relation to the Project.

      4.     CONTRIBUTIONS

      4.1    Notwithstanding any other provision of this Agreement, Canada's
             liability under this Agreement shall not in any circumstances
             exceed $100,000.

      4.2    Subject to the terms and conditions of this Agreement, Canada
             shall make a contribution to the Proponent towards the Eligible
             Costs of the Project in accordance with Article 5 and Schedule B.

      4.3    In order to be eligible to receive a full contribution as
             described herein, the Proponent must submit its final claim for
             payment on or before APRIL 10, 1997.

      4.4    Canada may reduce its contribution by such an amount as the
             Minister may decide if the Proponent receives contributions or
             payments in respect of the Project covered by this Agreement in
             addition to, or from sources other than, those named in its
             Proposal.

      5.     METHOD OF PAYMENT

      5.1    Subject to Article 5.2, following receipt of a claim, acceptable
             to the Minister, for payment of Eligible Costs paid by the
             Proponent, accompanied by copies of invoices, vouchers, and any
             other documents that the Minister may require, Canada shall pay
             its contribution towards the Eligible Costs of the Project.

      5.2    Canada shall withhold 10% from any payment under Article 5.1 until:

             (a)    the Project has been completed to the satisfaction of the
                    Minister;

             (b)    a final report documenting the completion of the Project
                    has been received and approved by the Minister; and

             (c)    the Minister has approved a final statement of Eligible
                    Costs paid in respect of the Project.

      5.3    The Proponent shall submit claims for payment at least on a
             quarterly basis and not more frequently than on a monthly basis.

      6.     REPAYMENT OF CONTRIBUTION

      6.1    The Proponent shall pay to Canada TWO PER CENT (2%) of the Revenue
             received by the Proponent.

      6.2    Notwithstanding any other provision of this Agreement, Article
             6.1 shall remain in effect for a period of 15 YEARS or until
             Canada has received $100,000 from any Revenue received by the
             Proponent, whichever occurs first.

      6.3    The Proponent shall submit Revenue reports and payments to Canada
             as described in Schedule C for the period set out in Article 6.2.

      6.4    The Proponent agrees that all considerations to be received by the
             Proponent in respect of the licensing, selling, marketing or
             commercialization of the Intellectual Property shall be
             established in a bona fide arm's length transaction between
             parties.

                                     - 2 -
<PAGE>   3

      7.     ACCOUNTS AND AUDIT

      7.1    Prior to the Completion Date of the Project and for three years
             after the period described in Article 6.2, the Proponent shall:

             (a)    keep proper books, accounts and records of its Revenue and
                    any contributions received and expenses incurred and paid
                    in connection with the Project and shall keep its invoices,
                    receipts and vouchers relating thereto;

             (b)    keep proper and accurate records relating to the
                    environmental impact (if any) of the Project; and

             (c)    on demand, make available to the Minister such books,
                    accounts, records, invoices, receipts and vouchers referred
                    to above and permit the Minister to examine and audit and
                    take copies and extracts from such documents.

      7.2    If any discrepancy is identified between the amounts paid by
             Canada and the amounts actually payable under this Agreement, the
             appropriate adjustments shall be promptly made between the
             parties. If there has been an overpayment by Canada, the amount of
             the overpayment shall constitute a debt due to Canada and may be so
             recovered.

      8.     INTELLECTUAL PROPERTY

      8.1    Subject to Articles 8.2, 8.3 and 12.1, title to all Intellectual
             Property shall be vested in the Proponent.

      8.2    The Proponent hereby grants to Canada a non-exclusive,
             royalty-free license in perpetuity to use or sublicense the use of
             any Intellectual Property for any purpose, which licence Canada
             may not exercise until three years after the Completion Date and
             then only if in the Minister's sole opinion the Proponent has
             failed to take reasonable steps to develop and market in Canada
             the products, processes or services to which the Intellectual
             Property relates.

      8.3    The Proponent shall supply to Canada copies of all reports,
             documents and publications arising out of the performance of the
             Project; and the right to the copyright in all such reports,
             documents and publications shall be vested in Canada which hereby
             grants to the Proponent a non-exclusive, royalty-free licence to
             copy and publish the material provided that Canada's financial
             support is prominently acknowledged in any publication.

      8.4    The Proponent shall ensure that any moral rights in the reports,
             documents and publications arising out of the performance of the
             Project are irrevocably waived in favour of Canada.

      8.5    Except with the written consent of the Minister, the Proponent
             shall not license the Intellectual Property to any government
             other than the Government of Canada or to any person, corporation,
             partnership or business for the purpose of manufacturing outside
             Canada the products or processes resulting from the Project, and
             shall place the same restrictions on any authorized licensee.

      8.6    If the Proponent elects not to retain ownership of or use any
             Intellectual Property, the Proponent shall notify the Minister of
             this election and shall, if the Minister so requires, assign and
             transfer the Intellectual Property to Canada, whereupon Canada
             will grant the Proponent a non-exclusive, royalty-free licence to
             use the Intellectual Property solely for internal purposes, if so
             requested by the Proponent.

      9.     INDEMNITY

      9.1    The Proponent shall indemnify and save harmless Canada and its
             Ministers, officers, employees and agents from and against any and
             all claims, damages, loss, costs and expenses which they or any of
             them may at any time incur or suffer as a result of or arising out
             of any injury to persons (including injuries resulting in death)
             or loss of or damage to property which may be or be alleged to be
             caused by or suffered as a result of the carrying out of the
             Project or any part thereof, except to the extent caused by a
             breach of duty of Canada or its Ministers, officers, employees or
             agents.

                                     - 3 -

<PAGE>   4

      9.2    The Proponent shall indemnify and save harmless Canada and its
             Ministers, officers, employees and agents from and against any and
             all claims, damages, loss, costs and expenses which they or any of
             them may at any time incur or suffer as a result of or arising out
             of any claim, demand or action for the infringement or alleged
             infringement of any patent, registered industrial design,
             copyright or other intangible property based upon the use thereof
             by the Proponent or upon the use of the Intellectual Property by
             Canada in accordance with the terms of this Agreement.

      9.3    The Proponent shall indemnify and save harmless Canada and its
             Ministers, officers, employees and agents from and against any and
             all claims, damages, loss, costs and expenses which they or any of
             them may at any time incur or suffer as a result of or arising out
             of any claim, demand or action made by a third party against them
             or any of them based upon Canadas capacity as a provider of
             financial assistance under this Agreement, including without
             limitation, any claim in respect of materials or services provided
             by a third party to the Proponent or to a subcontractor of the
             Proponent.

      10.    ACCESS

      10.1   The Proponent shall ensure that the Minister has access during
             normal working hours to any premises or place where the Project is
             being carried out for the purposes of inspecting and assessing the
             progress of the Project and all matters pertaining thereto.

      11.    REPORTS

      11.1   The Proponent shall submit Project reports satisfactory to the
             Minister in accordance with the provisions of Schedule C or as
             otherwise requested by the Minister.

      12.    DEFAULT

      12.1   If, in the opinion of the Minister, there has been a
             misrepresentation or a breach of warranty under Article 2, or the
             Proponent fails to proceed diligently with the Project, or is
             otherwise in default in carrying out any of the terms, conditions,
             covenants, or obligations of this Agreement, or if the Proponent
             becomes bankrupt or insolvent, or has a receiving order made
             against it (either under the Bankruptcy and Insolvency Act or
             otherwise), or a receiver is appointed, or the Proponent makes an
             assignment for the benefit of creditors, or if an Order is made or
             a Resolution passed for the winding up of the Proponent, or if the
             Proponent takes the benefit of any statute for the time being in
             force relating to bankrupt or insolvent debtors, the Minister may,
             by giving notice in writing to the Proponent, exercise any or all
             of the following remedies:

             (a)    terminate the whole or any part of this Agreement;

             (b)    terminate the obligation on the part of Canada to pay any
                    monies in respect of the Project, including monies due or
                    accruing due;

             (c)    direct the Proponent to repay forthwith all or any part of
                    monies paid by Canada pursuant to this Agreement and that
                    amount is a debt due to Canada and may be so recovered;

             (d)    request the Proponent to assign all rights in the
                    Intellectual Property and the Proponent shall, if so
                    requested, do so; and

             (e)    request the Proponent to transfer to Canada title to all or
                    any of the equipment and supplies purchased by the
                    Proponent to carry out the Project and funded by Canada
                    under this Agreement, and the Proponent shall, if so
                    requested, do so.

      12.2   In the event of a termination of this Agreement by the Minister
             under Article 12.1, Canada may, in the discretion of the MInister,
             pay to the Proponent Canada's share of the Eligible Costs of the
             Project completed to the date of termination.

      13.    SALE OF PROPERTY

      13.1   If, prior to the Completion Date of the Project, the Proponent
             sells, leases, or otherwise disposes of any property other than
             Intellectual Property, where the cost of the property is part of
             the Eligible Costs under the Project to which Canada has
             contributed under this Agreement, the Proponent shall immediately
             notify the Minister in writing of the disposition and, if the
             Minister so requires, the Proponent shall share with Canada the
             proceeds of the disposition in the same ratio as that of Canada's
             contribution to the purchase of the property, except that Canada's
             share shall not exceed its contribution under this Agreement.

                                     - 4 -

<PAGE>   5

      14.    SUBCONTRACTS AND CANADIAN CONTENT

      14.1   Except as provided in the Proposal, the Proponent shall not
             subcontract all or any part of the Project funded by Canada unless
             the Proponent has obtained the prior written consent of the
             Minister. Every subcontract entered into by the Proponent shall
             provide that the subcontractor shall comply with the terms and
             conditions of this Agreement which are applicable to the
             subcontract.

      14.2   Canadian goods and services shall be used in carrying out the
             Project to the full extent to which they are procurable,
             competitive and allow for the expeditious performance of the
             Project.

      15.    ACKNOWLEDGEMENT

      15.1   The Proponent will acknowledge the financial support of Canada in
             all public information produced as part of the Project.

      16.    NOTICES

      16.1   The claims for payment, requests, notices, and information
             referred to in this Agreement shall be sent in writing or by any
             method of telecommunication and, unless notice to the contrary is
             given, shall be addressed to the party concerned at the following
             address:

               TO CANADA:

                      Natural Resources Canada
                      CETC/Energy Technology Branch
                      580 Booth Street, 13th Floor
                      Ottawa, Ontario
                      K1A 0E4

                      ATTENTION:    DR. MARTIN HAMMERLI, P.ENG.
                                    SENIOR RESEARCH ADVISOR, HYDROGEN & FUEL
                                    CELLS

                      TELEPHONE:    (613)  996-5965
                      FACSIMILE:    (613)  996-9416
                      E-MAIL:       HAMMERLI@EMR.CA

               TO THE PROPONENT:

                      Hydrogenics Corporation
                      180 Geary Avenue
                      Toronto, Ontario
                      M6H 2B9

                      ATTENTION:    MR. JOE CARGNELLI
                                    DIRECTOR & VICE-PRESIDENT ENGINEERING

                      TELEPHONE:    (416)   535-8657
                      FACSIMILE:    (416)   535-2147
                      E-MAIL:       H2_GENX@PATHCOM.COM

      16.2   Notices, requests and documents are deemed to have been received,
             if sent by registered mail, when the postal receipt is
             acknowledged by the other party; by telegram, when transmitted by
             the carrier; by telex or facsimile, when transmitted and receipt
             is confirmed; and by messenger or specialized courier agency, when
             delivered.

      17.    LEGAL RELATIONSHIP

      17.1   Nothing contained in this Agreement shall create the relationship
             of principal and agent, employer and employee, partnership or
             joint venture between the parties.

      17.2   The Proponent shall not make any representation that the Proponent
             is an agent of Canada and shall ensure that the members of the
             Proponent do not make any representation that could reasonably
             lead any member of the public to believe that the Proponent or its
             members or contractors are agents of Canada.

                                     - 5 -
<PAGE>   6

      18.    TIME OF ESSENCE

      18.1   Time is of the essence of this Agreement.

      19.    MEMBERS OF THE HOUSE OF COMMONS

      19.1   No Member of the House of Commons shall be admitted to any share
             or part of this Agreement or to any benefit to arise therefrom.

      20.    CONFLICT OF INTEREST

      20.1   It is a term of this Agreement that no individual, for whom the
             post-employment provisions of the Conflict of Interest and
             Post-Employment Code for Public Office Holders or the Conflict of
             Interest and Post-Employment Code for the Public Service apply,
             shall derive a direct benefit from this Agreement unless that
             individual is in compliance with the applicable post-employment
             provisions.

      21.    FUNDS

      21.1   The Proponent shall not make any direct or indirect reference to
             this Agreement for the purpose of raising funds without the prior
             written approval of the Minister.

      22.    ASSIGNMENT

      22.1   This Agreement shall not be assigned in whole or in part by the
             Proponent without the prior written consent of the Minister and
             any assignment made without that consent is void and of no effect.

      22.2   Where an assignment of this Agreement is made pursuant to Article
             22.1, such assignment shall not relieve the Proponent of any
             obligation under this Agreement or impose any liability upon
             Canada.

      23.    DISPUTE RESOLUTION

      23.1   The parties agree to negotiate all disputes arising from this
             Agreement in good faith after receiving written notification of
             the existence of a dispute from any party.

      23.2   If a dispute arising out of this Agreement cannot be settled
             amicably through negotiation, then the parties agree that either
             party may submit the dispute to mediation as administered by the
             Arbitration and Mediation Institute of Canada Inc. upon written
             notice to the other party. The cost of mediation shall be borne
             equally by the parties.

      24.    GOVERNING LAW

      24.1   This Agreement shall be interpreted in accordance with the laws in
             force in Canada.

      25.    AMENDMENTS

      25.1   No amendment of this Agreement nor waiver of any of the terms and
             provisions shall be deemed valid unless effected by a written
             amendment signed by the parties.

      26.    ENTIRE AGREEMENT

      26.1   This Agreement constitutes the entire Agreement between the
             parties with respect to the subject matter of this Agreement and
             supersedes all previous negotiations, communications, and other
             agreements, whether written or verbal, between the parties.

      27.    SUCCESSORS AND ASSIGNS

      27.1   This Agreement shall enure to the benefit of and be binding on the
             parties and their respective representatives, successors and
             assigns.

                                     - 6 -
<PAGE>   7

      IN WITNESS WHEREOF this Agreement has been executed on behalf of HER
MAJESTY THE QUEEN IN RIGHT OF CANADA by an officer duly authorized by the
Minister of Natural Resources and on behalf of the PROPONENT, by an officer
duly authorized in that behalf.

<TABLE>
<CAPTION>

                                        HER MAJESTY THE QUEEN IN RIGHT OF CANADA

<S>                                  <C>
Oct 17/96                                  /s/ BERNIE JAMES
------------------                      ----------------------------------------
   Date                                 Bernie James, Manager
                                        Transportation Energy Technologies
                                        CETC/Energy Technology Branch
                                        Department of Natural Resources

                                        HYDROGENICS CORPORATION INCORPORATED

Oct 09/96                                   /s/ BOYD JOSEPH TAYLOR
------------------                      ----------------------------------------
  Date                                  Boyd Joseph Taylor, Principal and Director
                                        Hydrogenics Corporation Incorporated
</TABLE>

                                     - 7 -

<PAGE>   8
                                   SCHEDULE A

                               STATEMENT OF WORK

      BACKGROUND:

      Power sources are required for stationary and remote locations in Northern
      Canada for commmunications' equipment, etc. Current power sources, such as
      rechargeable batteries, must be derated because of the cold climate and
      they require frequent maintenance, which is expensive in many locations in
      this part of Canada.

      OBJECTIVE/PURPOSE:

      The main objective of this Project is to develop a prototype power
      generator, referred to as the Hydrogen ThErmoelectric Fuel Cell (HTEF)
      generator, with high reliability and a larger power output. The prototype
      will be a hybird system of a thermoelectric and a fuel cell generator with
      hydrogen as the common fuel. The prototype device is being

      DESCRIPTION/SCOPE:

      Task 1. Design a power source suitable for off-grid arctic applications
               (using  "off-the-shelf components") of at least 50 to 100 watts,
               consisting of a thermoelectric generator and fuel cell stack with
               hydrogen as the common fuel.

      Task 2. Construct a working prototype of the HTEF power source, which will
               include the following major components:

               a)    a fuel cell stack of 12 Volts and having a maximum current
                     rating of 9 Amperes;

               b)    a flameless catalytic hydrogen burner capable of sustaining
                     a temperature of at least +200 degrees C at the surface of
                     a heat sink;

               c)    a thermoelectric generator capable of producing electricity
                     at 12 Volts and 0.5 Amperes from a temperature differential
                     of at least 150 degrees C;

               d)    an enclosure protecting the HTEF inner components from
                     Arctic weather conditions;

               e)    a suitable stand for the HTEF plus enclosure.

      Task 3. Test the Prototype HTEF to at least - 40 degrees C, and make
               modifications as necessary.

      Task 4. Retest the Prototype HTEF.

      BENEFITS:

      The Prototype HTEF has no moving parts and uses hydrogen as the fuel.
      Therefore, there will be Zero Emissions from this device. Increased
      reliability, relative to rechargeble batteries and lower costs are
      expected benefits. The system can easily be scaled up in principle,
      thereby opening other marketing opportunities in off-grid applications.
      Canadian jobs will be created if the Project is successful.

                                      -8-

<PAGE>   9

                                   SCHEDULE B

                                 ELIGIBLE COSTS

      The Proponent shall be reimbursed for Eligible Costs paid following
      successful completion of Project requirements. Canada shall pay an amount
      equal to the lesser of the dollar or percentage amount of the Eligible
      Costs of the Project as indicated below. Eligible Costs shall be approved
      in accordance with Treasury Board Guidelines associated with the execution
      of the various Tasks as described in Schedule A. The reimbursable
      Provincial Sales Tax and the Goods and Services Tax costs must be net of
      any tax rebate to which the Proponent is entitled.

      TOTAL ELIGIBLE COSTS                                    $234,037

      CONTRIBUTORS:                            $                              %

      CANADA                                100,000                          43

      PROPONENT                             115,537                          49

      VIKING TOOL CO.                         6,500                           3

      HYDROGEN RESEARCH INSTITUTE, UQTR      12,000                           5

      Eligible Costs:

      1.     Salaries at competitive rates

      2.     Materials for the Project

      3.     Travel expenses provided Treasury Board Guidelines are observed,
             i.e., no first class or business class fares, etc.

      4.     Other expenses related to the Project with the Minister's approval.

      NON-ELIGIBLE COSTS:

      1.     Property Taxes

      2.     Purchase of Land

                                      -9-

<PAGE>   10

                                   SCHEDULE C

                               REPORTS & MEETINGS

      1.1    TECHNICAL REPORTS

             The Proponent shall prepare Monthly Reports on the Tasks listed in
             Schedule A. In addition, the Proponent shall prepare a Draft Final
             Report of the Project which shall be delivered to Canada on or
             before April 1, 1997. The Proponent shall make appropriate changes
             to the Draft Final Report as required and deliver the Final Report
             on or before May 30, 1997. All reports shall be to the satisfaction
             of the Minister.

      1.2    TECHNICAL MEETINGS,
             The Proponent shall hold one Technical Review Meeting to discuss
             the progress on the Project. The date for this Meeting shall be
             chosen in consultation with the Minister's representative and it
             shall be held on or before January 31, 1997.

      1.3    REVENUE REPORTS AND PAYMENTS

             The Proponent shall provide to the Minister not later than 30 days
             after the end of March and September in each calendar year, for the
             period of the payment obligation described in ARTICLE 6.2 of this
             Agreement, a complete and accurate report (including nil reports)
             of any Revenue received by the Proponent and shall include any
             payments due to Canada. The reports shall:

             (a)  contain a statement of the Revenue received by the Proponent;

             (b)  include a computation of any share of the Revenue, if any, due
                  and payable to Canada; and

             (c)  be certified as correct by the Treasurer or some other senior
                  officer of the Proponent.

                                      -10-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}]]