EXHIBIT 10.12 COOPERATION AGREEMENT

I.  

Astris Energi, Inc. (ASTRIS) is a Canadian based, publicly traded (ASRNF.OB) company with corporate offices in Mississauga, Ontario, Canada and an affiliated technology center (Astris s.r.o.) located in the Czech Republic, and

II.  

ASTRIS is a world leader in the development and practice of alkaline fuel cell (AFC) technology with more than twenty years of progressive experience, and

III.  

ASTRIS is intent on moving towards full commercialization of AFC technology with a key next step of developing pilot and then full scale manufacturing lines, and

IV.  

Electronic Machining s.r.l. (ELMA) ia an Italian based privately held company with corporate offices and technical development facilities in and around Roverto, Trento, Italy, and

V.  

ELMA has an established record of achievement in research activities and in the advancement of manufacturing processes, and

VI.  

ELMA desires to expand its field of interest to become a hydrogen/fuel cell center of expertise in Trento/Italy/Europe.

1.  

Cooperation. ASTRIS and ELMA (together, the Parties) agree to cooperate in the area of AFC technology. Such cooperation shall include, but not be limited to:

a.  

ASTRIS will licence the use of AFC technology by, and provide support for the AFC technology to, ELMA in the forms of documentation, technical services, equipment and materials (the “ Confidential Information ”) as determined by ASTRIS, with an objective of quickly and continuously bringing ELMA to an advanced state of AFC technical readiness.

b.  

ELMA will put in place facilities, equipment and personnel whereby a capability is established for working on specified research and development tasks (tasks to be recommended by ASTRIS and mutually agreed to by the Parties) related to AFC technology broadly, AFC electrode and stack issues, AFC power plant issues, manufacturing and assembly processes for AFC components and AFC testing equipment for manufactured AFC products.

c.  

ASTRIS and ELMA will work together/cooperatively to develop an AFC marketing and sales plan targeted to the Italian market; such a plan to include educational materials and promotional materials. The intent of the Parties is to cooperatively produce demonstration products and install them across several appropriately selected market applications (stationary, transportation, and portable).

2.  

Coordination. The Parties recognize the capabilities of Energie Rinnovabili Italia srl(ERI), based in Genova Via Sat’Elia 45-52, Italy, a privately held company focused on energy technology and whose Principal is Dr. Stefano Palma (an experienced fuel cell practitioner). The Parties agree to engage ERI as the coordinator of activity between ASTRIS and ELMA.

3.  

Compensation/Costs. The Parties agree that ELMA will be the beneficiary of ASTRIS’ licence of AFC technology and that compensation for such licence is due to ASTRIS as the licensor and to ERI as the coordinator.