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Ballard Announces EBARA MOU for Co-Gen Fuel Cell

Ballard Power Systems Inc. (Vancouver, BC, Canada) announced the signing of a memorandum of understanding (MOU) with partner EBARA Corp. (Japan) and its jointly owned company, EBARA Ballard Corp., related to a transaction that will provide funding for the next generation of co-generation fuel cell stack and system technology. The transaction will provide Ballard with approximately $30 million in cash through development funding and equity contributions.

The MOU covers a broad range of activities that will enhance Ballard's competitive position and commitment to the Japanese stationary cogeneration market. Under its terms, Ballard will receive $18 million for the ongoing development of the current and next-generation 1 kW combined heat and power co-generation fuel cell stack, subject to the completion of the work pursuant to technical milestones under the development program. The funding would be received over the next four years.

EBARA Ballard will gain rights, over time, through an exclusive, royalty-bearing license, to assemble, service, develop, manufacture and sell stationary co-generation fuel cell stacks in Japan. Ballard will retain all rights related to stationary co-generation fuel cell markets outside of Japan. Ballard will receive an equity investment from EBARA of $11.7 million in two payments, one at closing and the other in 2006.