Subcontract No. 32162-SV
THALES COMMUNICATIONS, INC.
NEAH POWER SYSTEMS INC.
December 19, 2003
THIS AGREEMENT, effective as of the last date of signature hereto, by and between Thales Communications,
Inc. of 22605 Gateway Center Drive, Maryland 20871, hereinafter called "Thales", "TCI" or "Buyer", and Neah
Power Systems, Inc. of 22118 20th Avenue SE, Suite 142, Bothell, WA 98021, hereinafter called the "Neah",
"Seller" or "Subcontractor", collectively called the "Parties."
Whereas, Neah is an expert engaged in the development of small fuel cells for portable devices based upon
silicon technology and desires to enter a business arrangement with TCI to develop a tactical fuel cell version for
use with TCI's XXXX portable applications;
Whereas, TCI is a Government and defense contractor in the business of developing, producing and selling
XXXX portable radios and desires to enter into a business arrangement with Neah to have Neah develop a
tactical fuel cell power source for use with TCI's products;
Whereas, in consideration of the mutual promises, covenants, and agreements set forth herein, the Parties agree
that the Neah shall perform all the services and deliver all of the products required by this Agreement, for the
consideration calculated in accordance with this Agreement. This Agreement, hereinafter referred to as the
"Agreement" or "Subcontract". The rights and obligations of the Parties shall be governed by this Agreement, the
Supplemental Provisions and any other documents or specifications attached hereto or referenced herein or
within a document so referenced.
Now therefore, the parties agree as follows:
1. DEVELOPMENT PHASE I - PRICES AND DELIVERY SCHEDULE:
For a price of $344,000, Seller agrees to use commercially reasonable efforts to develop proof-of-concept fuel
cell power source prototypes in accordance with the Statement of Work (SOW) and Specification shown in
Attachment 1. The deliverables