Exhibit 10.2

LEASE

Between

LITHIUM NICKEL ASSET HOLDING COMPANY I, INC., Landlord

and

EEI ACQUISITION CO., LLC, Tenant

Premises

12801 NW Highway 441
Alachua, Florida 32615
[Sintering Building]

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INDEX

Article                      Caption Page

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1  Certain Definitions 1  2  Demise 2  3  Term 2  4  Commencement Date/Escrow
Funds 2  5  Rent 3  6  Tax Payment 3  7  Liability for Payments 5  8  Use and
Occupancy 6  9  Alterations 6  10  Liability of Landlord 8  11  Premises "As
Is"; Repairs and Maintenance; Environmental 8  12  Entry by Landlord 10  13 
Compliance with Legal Requirements and Insurance Requirements 10  14  Utilities
and Services 12  15  Insurance 12  16  Fire and other Casualty 14  17 
Condemnation 16  18  Assignment and Subletting 19  19  Default and Certain
Remedies of Landlord 21  20  Subordination and Non-Disturbance 25  21  Security
26  22  Surrender 27  23  No Waiver 27  24  Quiet Enjoyment 28  25  Assignment
of Subleases - Attornment 28  27  Shoring, Excavation of Adjoining Property,
Encroachments 29  28  Jury Waiver 29  29  Estoppel Certificates 30  30  Notices
31  31  Broker 31  32  Self-Help 32  33  Indemnification by Tenant 32  34 
Limitation of Liability 32  35  Arbitration 33  36  Non-Merger 33  37  Notice of
Purchase 34  38  Entire Agreement 34  39  No Oral Modification 34  40 
Successors and Assigns 34  41  Index and Paragraph Headings 34  42  Invalidity
of Particular Provisions 34  43  Mechanics' Liens and Other Liens 35  44 
Interpretations 35  45  No Offer 35  46  No Recording of Lease 35 

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EXHIBITS

Page

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Exhibit A General Site Plan of Project A-1  Exhibit A-1 Site Plan denoting
Premises A-1-1  Exhibit B Permitted Encumbrances B-1  Exhibit C Commencement
Date Certificate C-1  Exhibit D Prohibited Uses D-1  Exhibit E Lease Escrow
Agreement E-1  Exhibit F Landlord's Work F-1  Exhibit G Guaranty   Exhibit H
Subordination Non-Disturbance Agreement  

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               LEASE (this “Lease”) made as of April 5, 2006 (“Effective Date”),
between LITHIUM NICKEL ASSET HOLDING COMPANY I, INC., a Delaware corporation
(“Landlord”) having an address c/o Topspin Partners, L.P., Three Expressway
Plaza, Roslyn Heights, New York 11577, and EEI ACQUISITION CO., LLC, a Delaware
limited liability company (“Tenant”) having an address c/o Electro Energy Inc.,
30 Shelter Rock Road, Danbury, Connecticut 06810.

W I T N E S S E T H:

               WHEREAS, Landlord is the owner of the Premises (as defined in
subparagraph 1.1.10); and

               WHEREAS, Tenant desires to lease and hire the Premises from
Landlord, and Landlord desires to demise and lease the Premises to Tenant
pursuant to the terms and conditions contained herein.

               NOW, THEREFORE, in consideration of the mutual agreements herein
contained, Landlord and Tenant hereby covenant and agree as follows:

1.    CERTAIN DEFINITIONS.

        1.1 For the purposes of this Lease, unless the context otherwise
requires, the following words and terms shall have the meanings indicated:

  1.1.1 Fee Mortgage: Any mortgage from time to time on all or any part of the
fee estate in the Premises.

  1.1.2 Fee Mortgagee: The holder or holders from time to time of any Fee
Mortgage.

  1.1.3  Insurance Requirements: The terms, covenants, conditions and provisions
of all insurance policies required to be maintained hereunder and all present or
future requirements of any insurer of the Premises or any part thereof and the
rules, orders, regulations or requirements of the national and local Board of
Fire Underwriters, the State of Florida Fire Rating organization or any other
similar body having jurisdiction and those of any appropriate agency, office,
department, board or commission thereof.

  1.1.4 Interest Rate: The lesser of (a) twelve percent (12%) per annum, or (b)
the maximum amount permitted under applicable Legal Requirements.

  1.1.5  Lease Year: That period of twelve (12) full consecutive calendar months
beginning with the first full calendar month of the Term and each subsequent
period of twelve (12) consecutive calendar months during the Term, provided that
if the Term commences on a day other than the first day of a calendar month,
then the initial fractional month of the Term plus the next succeeding twelve
(12) full calendar months shall constitute the first Lease Year of the Term.

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  1.1.6  Legal Requirements: All laws, statutes, ordinances, building codes,
zoning regulations and ordinances and the orders, rules, regulations and
requirements of all federal, state, local and municipal governments, and the
appropriate agencies, officers, departments, boards and commissions thereof,
whether now or hereafter in effect which may be applicable or claimed to be
applicable to the Premises or any part thereof or the use or manner of use of
all or any part of the Premises or the sidewalks and curbs adjacent thereto.

  1.1.7 Permitted Encumbrances: Those items set forth on Schedule B annexed
hereto and made a part hereof.

  1.1.8  Premises: The sintering building and improvements commonly known as
12801 NW Highway 441, Alachua, Florida 32615 (the “Building”) and that certain
plot, piece or parcel of land situate, lying and being in the City of
Gainesville, County of Alachua and State of Florida (the “Land”) on which the
sintering building and improvements are situated, as defined and cross-hatched
in the site plan for the Premises annexed hereto as Exhibit A-1 and made a part
hereof.

  1.1.9  Project: Those certain plots, pieces or parcels of land situate, lying
and being in the City of Gainesville, County of Alachua and State of Florida,
together with the buildings and improvements situated thereon, as shown on the
general site plan annexed hereto as Exhibit A, including, without limitation,
the Premises.

  1.1.10 Term: The Term of this Lease as more particularly described in Section
3.1.

2.    DEMISE.

        2.1 Landlord hereby demises and leases the Premises to Tenant and Tenant
hereby leases and hires same from Landlord.

               TO HAVE AND TO HOLD the same subject to the terms and conditions
of this Lease and the Permitted Encumbrances.

3.    TERM; RENEWAL TERM.

        3.1 The initial term of this Lease (“Term”) shall be for six (6) years
commencing on the Commencement Date (as defined in Section 4.1 below) and
expiring on the last day of the month preceding the month in which the sixth
(6th) anniversary of the Commencement Date occurs (the “Expiration Date”),
unless sooner terminated as hereinafter provided.

        3.2 The originally named Tenant herein (the “Named Tenant”) shall have
the option to renew the Term of this Lease for the period(s) and upon the terms
contained in Section 3.3 hereof. Upon the commencement of any Renewal Term
described therein, (i) any applicable Renewal Term shall be added to and become
a part of the Term, (ii) any reference in this Lease to the “Term” shall be
deemed to include the applicable Renewal Term, and (iii) the “Expiration Date”
shall mean the date of expiration of the applicable Renewal Term.

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        3.3 (a) Named Tenant shall have the right (each a “Renewal Option”) to
extend the initial Term of this Lease (“Initial Term”) for two (2) periods of
six (6) years each (each such period being a “Renewal Term”), provided that
Named Tenant shall give Landlord notice of its election to renew the Term of
this Lease (the “Renewal Notice”), on or before the date (the “Renewal Term
Notice Date”) that is one (1) year prior to the applicable Expiration Date, and
upon the giving of such notice this Lease shall be deemed renewed for the
applicable Renewal Term with the same force and effect as if such Renewal Term
had initially been included in the Term. All of the terms, covenants and
conditions of this Lease shall continue in full force and effect during the
Renewal Term, except that the Fixed Rent for the Renewal Term shall be as set
forth in Article 5 below. All references in this Lease to “Term” shall include
the Renewal Term which is effective in accordance with the provisions of this
Section.

              (b) Each Renewal Option shall be conditioned upon no Event of
Default having occurred hereunder, and upon this Lease being in full force and
effect on the date of Landlord’s receipt of Named Tenant’s Renewal Notice and on
the commencement date of the applicable Renewal Term (“Renewal Term Commencement
Date”). Any termination, cancellation, surrender, assignment or sublet of the
interest of Named Tenant under this Lease at any time during the Term shall
terminate the Renewal Option hereunder.

4.    COMMENCEMENT DATE.

        4.1. The “Commencement Date” shall be the date of closing of the
transactions contemplated by and described in that certain Asset Purchase
Agreement dated March 31, 2006 by and between Landlord, as seller, and Tenant,
as buyer (the “Asset Purchase Agreement”). The “Delivery of Possession Date”
shall mean the date on which Landlord shall have delivered exclusive possession
of the Premises to Tenant, which date shall be the date that Landlord shall have
completed the required clean up in accordance with Exhibit F and as required
under the Asset Purchase Agreement dated March 31, 2006 by and between Landlord,
as seller, and Tenant, as buyer (the “Asset Purchase Agreement”). The “Delivery
of Possession Date” shall be deemed the “Rent Commencement Date” of the Lease
for purposes of this Lease. The Delivery of Possession Date and the Rent
Commencement Date shall each be confirmed by Landlord and Tenant in a
“Commencement Date Certificate” in the form attached hereto as Exhibit C. Such
certificate shall be executed and acknowledged by Tenant, and delivered to
Landlord, within ten (10) days after Tenant’s receipt thereof, provided, that
Tenant’s failure to execute, acknowledge and deliver such an instrument shall
not prevent the Rent Commencement Date from occurring.

5.    RENT.

        5.1 During the initial Term, Tenant shall pay to Landlord fixed annual
rent (“Fixed Annual Rent”) as follows:

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Lease Year Fixed Annual Rent Monthly Installments   1 $100,000.00 $8,333.33 2
$200,000.00 $16,666.67 3-5 $300,000.00 $25,000.00 6 $500,000.00 $41,666.67

        Fixed Annual Rent for the Renewal Terms shall be determined as
hereinafter set forth. Tenant shall pay Fixed Annual Rent during the first year
of the first Renewal Term (Lease Year 7), if any, in an amount equal to the fair
market rent as hereinafter determined (“Fair Market Rent”) for the Premises as
of the first day of the first Renewal Term. After the Fair Market Rent for the
seventh (7th) Lease Year (if any) has been determined as set forth below, the
Fixed Annual Rent shall increase by five percent (5%) for each Lease Year during
the first Renewal Term. Tenant shall pay Fixed Annual Rent during the first year
of the second Renewal Term (Lease Year 13), if any, in an amount equal to the
Fair Market Rent as of the first day of the second Renewal Term. After the Fair
Market Rent for the thirteenth (13th) Lease Year (if any) has been determined,
the Fixed Annual Rent shall increase by five percent (5%) for each Lease Year
during the second Renewal Term. For purposes of determining the Fair Market Rent
during the first Renewal Term and second Renewal Term, the following procedure
shall apply:

  (i)   The parties shall use commercially reasonable, good faith efforts to
attempt to agree on the Fair Market Rent of the Premises within ninety (90) days
following the Named Tenant’s Renewal Notice for the applicable Renewal Term. If
the parties shall be unable to agree in writing as to such Fair Market Rent
within such ninety (90) day period, the Fair Market Rent shall be determined in
the following manner. Within ten (10) days after the expiration of such ninety
(90) day period, each party shall appoint an appraiser who shall be a licensed
commercial MAI real estate appraiser having at least five (5) years’ experience
in the appraisal of commercial real property in the City of Gainesville, State
of Florida. If either party shall fail to timely appoint an appraiser, the sole
appointed appraiser shall proceed conclusively and unilaterally to determine
such Fair Market Rent. If the two appraisers are so timely appointed, they each
shall render a written determination of the Fair Market Rent within thirty (30)
days of such engagement. If the higher of such two appraisals is not greater
than 110% of the lower of such two appraisals, Fair Market Rent shall be deemed
to be the arithmetical mean of the amounts determined by such appraisers;
otherwise, the two appraisers shall agree, within ten (10) days of the receipt
of the second appraisal, upon a third appraiser of equal qualification. If the
two appraisers shall be unable to agree on the selection of a third appraiser
within such ten (10) day period, then either party may request such appointment
by the then President of the Gainesville Alachua County Association of Realtors,
or any successor organization of comparable function if such Association is not
in existence and if there is no such successor organization or if such President
shall fail or refuse to make such appointment within twenty (20) days after
being requested by either party to do so, then by a circuit court judge of the
Circuit Court of the State of Florida in the County of Alachua or any successor
court of similar jurisdiction. The decision of the third appraiser shall be
binding and conclusive upon the parties. The fees of the appraiser designated by
a party shall be borne by that party. The fees of the third appraiser shall be
borne equally by Landlord and Named Tenant.

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  (ii)   The appraisals shall be made based on the highest and best use of the
Premises, which the parties hereby agree is for use as a manufacturing and
distribution facility.

  (iii)   Notwithstanding anything contained herein to the contrary, the parties
acknowledge and agree that the current rental payable by Named Tenant under this
Lease is below the fair market rental value of the Premises, and that such
rental amount shall be completely disregarded by the parties and any appraisers
in computing the Fair Market Rent of the Premises. Further, the parties agree
that notwithstanding anything contained herein to the contrary, including, but
not limited to, any appraiser’s determination of the Fair Market Rent, (i) in no
event shall the Fair Market Rent of the Premises with respect to the first
Renewal Term be less than Fixed Annual Rent payable during the Initial Term, and
(ii) in no event shall Fair Market Rent of the Premises with respect to the
second Renewal Term be less than Fixed Annual Rent payable during the first
Renewal Term.

        After a determination has been made of the Fixed Annual Rent for the
first Renewal Term and second Renewal Term, if any, the parties shall execute
and deliver to each other an instrument setting forth the Fixed Annual Rent for
the applicable Renewal Term.

        5.2 Fixed Annual Rent shall be paid to Landlord commencing on the Rent
Commencement Date in consecutive, equal monthly installments in advance on the
first day of every month during the Term without demand and without any offset,
deduction or abatement whatsoever at Landlord’s address first set forth above or
at such other place as Landlord may from time to time designate, except that the
first monthly installment of Fixed Annual Rent in the amount of Eight Thousand
Three Hundred Thirty-Three and 33/100 Dollars ($8,333.33) plus the amount of
Eighty-Three Thousand Three Hundred Thirty-Three and 34/100 Dollars ($83,333.34)
representing payment of the last two (2) months of Fixed Annual Rent during the
last year of the Term shall be paid to Landlord upon Tenant’s execution and
delivery of this Lease. Fixed Annual Rent and all other charges payable by
Tenant hereunder shall be paid in lawful money of the United States which shall
be legal tender for the payment of all debts and dues, public and private, at
the time of payment. With respect to the Renewal Terms, Tenant shall, within ten
(10) days after Fair Market Rent has been determined, pay any such additional
sums required by Landlord representing payment of the balance due for the last
two (2) months of Fixed Annual Rent during the last year of the Term so that
Tenant shall have paid in full the last two (2) months of Fixed Annual Rent
during the last year of the Term, to Landlord in advance.

        5.3 If this Lease shall end on a day other than the last day of a
calendar month, except due to an Event of Default, the Fixed Annual Rent for
such month shall be prorated.

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        5.4 During the Term, Tenant shall also pay to Landlord additional rent
(herein called “Additional Rent”) consisting of all sums, costs, expenses,
payments and deposits required of Tenant pursuant to the terms of this Lease,
including, without limitation, the Tax Payments (hereinafter defined) and any
other payment as shall become due from and payable by Tenant to Landlord
hereunder; all to be paid to Landlord or to Landlord’s agent without set-off or
deduction at such place as Landlord shall designate by notice to Tenant from
time to time. Unless otherwise instructed by Landlord, Fixed Annual Rent and
Additional Rent (collectively, “Rent”) shall be paid by good and sufficient
check (subject to collection) or, at Landlord’s election, by wire transfer of
immediately available federal funds to Landlord or its designee.

        5.5 In addition to any other remedies Landlord may have under this
Lease, and without reducing or adversely affecting any of Landlord’s rights and
remedies hereunder, if any installment of Fixed Annual Rent or Additional Rent
payable hereunder is not paid within five (5) days after same is due, the same
shall bear interest at the Interest Rate from the due date thereof until paid.
Such interest shall be Additional Rent hereunder, payable on demand.

        5.6 Except as otherwise expressly provided in Article 6 of this Lease,
Tenant will pay the Rent without notice or demand, without regard to any
counterclaim, right of set-off, deduction or defense Tenant may have against
Landlord, and without abatement, suspension, deferment, diminution or reduction,
by reason of, and the obligations of Tenant hereunder shall not in any way be
affected by (a) any restriction, prevention or curtailment of or interference
with any use of the Premises or any part thereof as a result of any Legal
Requirement, condemnation or otherwise; or (b) any damage to or destruction of
the Premises or any part thereof; or (c) any title defect or encumbrance or any
eviction or prospective eviction from the Premises or any part thereof by title
paramount or otherwise; or (d) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Landlord, or any action taken with respect to this Lease by any
trustee or receiver of Landlord, or by any court in any such proceeding; or (e)
any claim which Tenant has or might have against Landlord; or (f) any failure on
the part of Landlord to perform or comply with any of the terms hereof or of any
other agreement with Tenant, including, without limitation, any obligations
(indemnification or otherwise) of Landlord under that the Asset Purchase
Agreement; or (g) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing; in each case whether or not Tenant shall have notice or
knowledge of any of the foregoing. Tenant hereby waives all rights now or
hereafter conferred upon it by statute or otherwise to quit, terminate or
surrender this Lease or the Premises, or any part thereof, or to any abatement,
suspension, deferment, diminution or reduction of Rent or any of the obligations
to be performed thereunder.

6.    TAX PAYMENT.

        6.1 For the purposes of this Article 6, the following terms shall have
the meanings set forth below.

               (a)    “Assessed Valuation” shall mean the amount for which the
Premises, if the Premises are separately assessed, or the Project, as the case
may be, is assessed by the County of Alachua, City of Gainesville and/or any
other municipality for the purpose of imposition of Taxes; provided, however
that Tenant is authorized to apply for a separate tax folio number for the
Premises, at Tenant’s sole cost and expense.

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               (b)    “Taxes” shall mean the aggregate amount of all real
estate, rental taxes, gross receipts taxes, general intangible taxes and any
general or special assessments imposed upon the Premises (or the Project if the
Premises are not separately assessed), including, without limitation, (i) taxes,
assessments and fees of any business improvement district or similar
association, and (ii) any taxes or assessments levied after the date of this
Lease in whole or in part for public benefits to the Premises (or the Project,
as the case may be), without taking into account any discount that Landlord may
receive by virtue of any early payment of Taxes; provided, that if because of
any change in taxation any other tax, fee or assessment, however denominated is
imposed upon Landlord or the owner of the Premises (or the Project, as the case
may be), or the occupancy, rents or income therefrom, in substitution for or in
addition to any of the foregoing Taxes, such other tax or assessment shall be
deemed part of Taxes computed as if Landlord’s sole asset were the Premises, or
the Project, as the case may be. With respect to any Tax Year, all expenses,
including attorneys’ fees and disbursements, experts’ and other witnesses’ fees,
incurred in contesting the validity or amount of any Taxes or in obtaining a
refund of Taxes shall be considered as part of the Taxes for such Tax Year.
Anything contained herein to the contrary notwithstanding, Taxes shall not be
deemed to include (i) any taxes on Landlord’s income, (ii) franchise taxes,
(iii) estate or inheritance taxes or (iv) any similar taxes imposed on Landlord,
unless such taxes are levied, assessed or imposed in lieu of or as a substitute
for or in addition to the whole or any part of the taxes, assessments, levies,
impositions which now constitute Taxes.

               (c)    “Tax Statement” shall mean a statement in reasonable
detail setting forth the Taxes for a Tax Year.

               (d)    “Tax Year” shall mean the fiscal year or years adopted by
the governmental authority imposing Taxes as its fiscal year for real estate tax
purposes, any portion of which occurs during the Term.

               (e)     During the Term of this Lease, Tenant shall pay to
Landlord or the appropriate governmental authority, within ten (10) days after
demand by Landlord, all current Taxes, specifically excluding any payment or
obligation with respect to Outstanding Taxes, as defined below, for which
Landlord shall be solely responsible (the “Tax Payment”) with respect to the
Premises, provided, however that if the Premises are not assessed as a separate
tax parcel, then Tenant shall pay Landlord, as the Tax Payment, Tenant’s pro
rata share of Taxes within ten (10) days after demand by Landlord. Tenant’s pro
rata share of Taxes shall be the ratio of the total square feet of floor area in
the Building to the total square feet of floor area in all buildings in the
Project. If the number of square feet of floor area in the Project changes
during the Term, then Tenant’s pro rata share shall be adjusted accordingly.
Tenant hereby waives any rights that Tenant may have to be exempt from the
payment of Taxes or the Tax Payment by virtue of diplomatic status or otherwise.
Notwithstanding anything to the contrary contained herein, solely with respect
to Taxes accrued and remaining unpaid prior to the Commencement Date
(collectively, the “Outstanding Taxes”), Tenant shall have the right, but not
the obligation to pay any portion of Outstanding Taxes, including without
limitation any installment due under any arrangement, contract, settlement or
understanding between the Landlord and the applicable taxing authority directly
to such taxing authority during the initial Term or any Renewal Term in lieu of
payment of such amount of Fixed Annual Rent to Landlord. Tenant shall submit to
Landlord copies of all such payments made to the applicable taxing authority as
and when paid. In addition to the foregoing, Tenant shall provide Landlord with
copies of all documents, invoices and correspondence related to payment of the
Outstanding Taxes within ten (10) days after Tenant’s receipt thereof. Upon
satisfaction of all Outstanding Taxes, Tenant shall resume payment of Fixed
Annual Rent as provided in Section 5.1 hereof. Except as specifically provided
in this Section, Tenant shall have no right whatsoever to offset, deduct or
abate any Rent due Landlord under this Lease. Notwithstanding anything herein,
Landlord shall be solely responsible for the payment Outstanding Taxes and shall
indemnify and hold tenant harmless from and against any loss, claim or liability
arising from Landlord’s failure to make any such payment.

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               (f)     Either Landlord or Tenant shall be eligible to institute
tax reduction or other proceedings to reduce the Assessed Valuation. In the
event that after a Tax Statement has been sent to Tenant, an Assessed Valuation
which had been utilized in computing the Taxes for a Tax Year is reduced (as a
result of settlement, final determination of legal proceedings or otherwise),
and as a result thereof a refund of Taxes is actually received by or on behalf
of Landlord, then, promptly after receipt of such refund, Landlord shall send
Tenant a Tax Statement adjusting the Taxes for such Tax Year (taking into
account the expenses mentioned in Section 6.1(c) hereof) and setting forth
Tenant’s pro rata share of such refund and Tenant shall be entitled to receive
such pro rata share either, at Landlord’s option, by way of a credit against the
Fixed Annual Rent next becoming due after the sending of such Tax Statement or
by a refund to the extent no further Fixed Annual Rent is due; provided,
however, that Tenant’s pro rata share of such refund shall be limited to the
portion of the Tax Payment, if any, which Tenant had theretofore paid to
Landlord attributable to Taxes for the Tax Year to which the refund is
applicable on the basis of the Assessed Valuation before it had been reduced.

        6.4 The expiration or termination of this Lease during any Tax Year
shall not affect the rights or obligations of the parties hereto respecting any
payments of Tax Payments for such Tax Year, and any Tax Statement relating to
such Tax Payment, may be sent to Tenant subsequent to, and all such rights and
obligations shall survive, any such expiration or termination. In determining
the amount of the Tax Payment for the Tax Year in which the Term shall expire,
the payment of the Tax Payment for the Tax Year shall be prorated based on the
number of days of the Term which fall within such Tax Year. Any payments due
under such Tax Statement shall be payable within twenty (20) days after such
Statement is sent to Tenant.

        6.5 Tenant shall pay before delinquency any and all taxes, assessments,
license fees and public charges or impositions levied, assessed or imposed upon
Tenant’s business, or the receipts or profits thereof, or based upon the use or
occupancy of the Premises as well as upon Tenant’s leasehold interest, trade
fixtures, furnishings and equipment. In the event any such items of property are
assessed with property of Landlord, then, and in such event, such assessment
shall be divided equitably between Landlord and Tenant. A tax levied or assessed
against or upon Tenant or Tenant’s business based upon such use or occupancy
shall be payable by Tenant notwithstanding that it is calculated on the basis of
rent payable by Tenant. Tenant, and not Landlord, shall pay, when due and
payable, any sales tax, or other excise tax or assessment, if any, now or
hereafter levied or assessed upon or against Tenant or Tenant’s business within
the Premises. Should the appropriate taxing authority require that any such
taxes, imposition, excise and/or assessment be collected by Landlord as agent
for or on behalf of such taxing authority, then such tax, excise and/or
assessment shall be paid by Tenant to Landlord as agent as Additional Rent in
accordance with the terms of any notice to Tenant to such effect. Tenant’s
obligations hereunder require, without limitation, that Tenant shall pay to
Landlord or the appropriate taxing authority any use or occupancy tax (or its
equivalent) imposed on Tenant, or by reason of Tenant’s use or occupancy of the
Premises. If Tenant’s non-payment of such use or occupancy tax or other tax,
imposition, assessment or excise shall result in a tax lien being filed against
the Premises or Project, Landlord shall have the same rights and remedies for
the non-payment of such use or occupancy tax, as well as any other tax,
imposition, assessment or excise, that it has upon Tenant’s failure to pay Fixed
Annual Rent hereunder. Nothing in this Subsection 6.5 is intended to require
double payment of any Taxes by Tenant and, to the extent any taxes or
assessments are included in Taxes and paid by Tenant as part of the Tax Payment,
Tenant shall have no obligation for payment of same under this Subsection 4.3.6,
and vice versa.

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        6.6 Landlord shall cooperate with Tenant in order to arrange for the
direct billing to Tenant of Taxes and all utilities and other services, if any,
to the extent furnished to and used solely by the Premises hereunder, provided,
however that Landlord does not incur any additional costs or charges hereunder.
Tenant shall provide Landlord with copies of all invoices, statements and
payments made by Tenant for all Taxes, utilities and other services directly
billed to Tenant. If any such Taxes, utilities and other services are unable to
be directly billed to Tenant, Tenant shall pay all such costs, charges, fees and
expenses to Landlord within ten (10) days after demand thereof.

        6.7 Taxes, all charges for steam, heat, gas, hot water, electricity,
light, power and other services furnished to the Premises, all other liabilities
and obligations required to be paid or assumed by Tenant hereunder (except for
Fixed Annual Rent), in each case to the extent not billed directly to Tenant by
the utility provider(s), shall be deemed Additional Rent. Notwithstanding
anything to the contrary contained herein, Landlord shall cooperate with Tenant
in order to arrange for the direct billing to Tenant of Taxes and all utilities
and other services, if any, furnished to the Premises hereunder, provided,
however that Landlord does not incur any additional costs or charges hereunder.
In addition, all damages, costs and expenses which Landlord may suffer or incur
by reason of any Event of Default under this Lease together with interest
thereon at the Interest Rate shall be deemed Additional Rent payable on demand.
In the event of non-payment of Additional Rent, Landlord shall have all of the
rights and remedies herein provided in the case of non-payment of Fixed Annual
Rent.

        6.8 It is the intention of the parties that the Fixed Annual Rent herein
reserved is absolutely net and that Landlord shall receive the same free from
all taxes that by provisions hereof are made payable by Tenant. Tenant shall pay
all costs, charges, expenses and damages which shall or may be chargeable during
the Term against the Premises and which, except for the execution and delivery
hereof, would have been payable by Landlord.

7.    LIABILITY FOR PAYMENTS.

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        7.1 Any liability for the payment by Tenant of any money hereunder,
including, without limitation, Additional Rent, shall survive the expiration of
the Term or earlier termination of this Lease.

8.    USE AND OCCUPANCY.

        8.1 Tenant shall use and occupy the Premises for battery manufacturing,
distributions and research and development operations, and incidental thereto
for general office use, all to the extent permitted by Legal Requirements
(collectively, the “Permitted Use”), and for no other use or purpose whatsoever.
Notwithstanding and without limiting the foregoing, or anything in this Lease to
the contrary, Tenant expressly agrees that it shall not use the Premises or
permit the Premises to be used for any of the uses or purposes set forth in
Exhibit D annexed hereto and made a part hereof (“Prohibited Uses”). Tenant
shall have the right to use the parking area shown on Exhibit A-1 only and no
other parking area.

               Tenant shall neither use or occupy, nor permit or suffer, the
Premises or any part thereof to be used or occupied for any disreputable, extra
hazardous, unlawful illegal business, use or purpose, nor in a manner as to
constitute a nuisance of any kind, nor in violation of any present or future
Legal Requirements or Insurance Requirements. Immediately upon the discovery of
any such unlawful, illegal, disreputable or extra hazardous use, or of any use
in violation of this Lease, Tenant shall take all necessary steps, legal and
equitable, to discontinue such use or to remove any subtenants, occupants or
other persons guilty of such use.

        8.2 Tenant shall not permit any portion of the Premises to be used by
any persons or entities at any time during the Term in such manner as might make
possible a claim or claims of adverse use, adverse possession, prescription,
dedication or other similar claims of, in, to or with respect to the Premises or
any part thereof.

        8.3 Tenant shall not enter into or agree to enter into any covenant or
declaration, or grant or agree to grant any easement, license, or restriction
with respect to the Premises without Landlord’s prior written consent, which
consent may be arbitrarily withheld, with or without cause.

        8.4 Landlord hereby grants to Tenant a temporary, revocable easement and
license for such access to and use of the areas of the Project as reasonably
necessary and solely for the purpose of (i) Tenant’s opening for business
thereat in accordance with the Permitted Use, and (ii) for any clean-up work to
be performed by Tenant which may be required or otherwise desired by Tenant.
Such easement and license shall be for a term of one (1) year commencing as of
the Commencement Date and expiring on the day before the first anniversary of
the Commencement Date, unless sooner terminated as provided herein, or
reasonably extended by mutual agreement between the parties in the event Tenant
is unable to complete the items set forth in (i) or (ii) above after
commercially reasonable efforts to do so. Tenant shall not materially interfere
with the use and occupancy of the Project (other than the Premises) by Landlord,
its agents, employees and/or contractors and other tenants of the Project. In
the event that Tenant materially interferes with Landlord’s or any other
tenant’s or other occupant’s use or occupancy thereof, Landlord shall have the
right, in addition to all other rights and remedies hereunder, at law, or in
equity, to terminate such temporary easement and license.

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9.    ALTERATIONS.

        9.1 Except as hereinafter provided, Tenant shall make no additions,
installations, improvements, replacements and/or alterations in or to the
Premises (hereinafter “Alterations”) without the prior written consent of
Landlord.

               (a)       Permitted Alterations. Notwithstanding the above,
Tenant shall have the right to make from time to time, at its expense,
non-structural Alterations to the interior of the Premises and/or reconfigure or
relocate the personal property or equipment of Tenant without obtaining
Landlord’s consent (“Permitted Alterations”), provided however, that such
Alterations do not impair Building systems, the structural integrity of the
Building or any part thereof, including the Premises or significantly and
adversely affect the Building or the business operations which may be conducted
in the Building, and that Tenant notifies Landlord of the intended Alterations
to the interior of the Premises in reasonable detail, together with an estimate
of the cost thereof, at least fifteen (15) days prior to its commencement of
such alterations.

               (b)       Material Alterations. Tenant*s Alterations other than
Permitted Alterations shall be deemed “Material Alterations” and shall not be
performed without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed, provided, however, that Landlord need not
grant approval if the Alteration for which is sought is not in compliance with
Legal Requirements or Insurance Requirements or impairs or adversely affects the
Building systems, the structural integrity of the Building or any part thereof.
All Alterations to the Premises (including fixtures and equipment) made by or
for Tenant shall be done in a good and workmanlike manner and diligently
prosecuted to completion, in compliance with applicable Legal Requirements. .

        9.2 In addition to the foregoing, Tenant shall, after obtaining
Landlord’s prior written consent if required pursuant to Section 9.1 above,
before commencing the Alterations, be in full compliance with this Lease and
shall, at its expense:

  9.2.1  if required by Legal Requirements, cause the plans and specifications
for any Alteration which have been reasonably approved by Landlord to be filed
with and approved by any and all municipal and other governmental authorities
and departments having jurisdiction thereof; and obtain any permit or permits
which may be required by such governmental authorities for such Alteration; and

  9.2.2 deliver to Landlord copies of such plans and specifications as so filed
and approved and all such permits; and

  9.2.3  furnish Landlord with certificates for such insurance as Landlord may
reasonably require covering all operations necessary or incidental to the
completion of the Alterations naming Landlord, Landlord’s managing agent and any
Fee Mortgagee as additional insureds including, without limitation the insurance
required by Article 15.

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        9.3 If any mechanic’s lien is filed against the Premises for work done
or claimed to be done or for materials furnished or claimed to be furnished to
Tenant the same shall be discharged by Tenant at its expense within fifteen (15)
days thereafter whether by payment, release, bond or otherwise.

        9.4 Nothing contained in this Lease shall constitute a consent or
request by Landlord, express or implied for the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Premises or any part thereof nor as giving Tenant any right, power or authority
to contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against Landlord in respect thereof. Notice is hereby
given that Landlord shall not be liable for any labor or materials furnished or
to be furnished to Tenant on credit and that no mechanic’s or other lien for any
such labor or material shall attach to or affect the reversion or other estate
or interest of Landlord in or to the Premises.

        9.5 All Alterations shall be done promptly and in a good and workmanlike
manner and shall be in quality and class equal to the original work or
installations in the Premises or, if same are not then available, same shall be
of a quality and class consistent with the then customs and practice for
alterations of similar premises. All Alterations shall be performed in
compliance with all Legal Requirements, Insurance Requirements and with the
terms of this Lease.

10.    LIABILITY OF LANDLORD.

        10.1 Landlord shall not be liable for any damage or injury to persons or
to personal property of Tenant, or property of any other person for any reason
whatsoever, except for any damage or injury caused by Landlord’s willful or
grossly negligent misconduct.

        10.2 Tenant shall make no claim against Landlord for any injury or
damage to Tenant or any other person, except for claims directly arising out of
Landlord’s willful or grossly negligent misconduct.

        10.3 Landlord shall not be liable for the cessation, interruption,
suspension, failure or adequacy of any utilities or other services furnished to
the Premises or any apparatus or appliance used in connection therewith.

        10.4 The parties agree and acknowledge that the foregoing in no way
limits or qualifies Tenant’s rights and remedies under and with respect to any
other agreement, document or instrument, including without limitation the Asset
Purchase Agreement and the documents referred to therein.

11.    PREMISES "AS IS"; REPAIRS AND MAINTENANCE; ENVIRONMENTAL.

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        11.1 Tenant acknowledges that it has inspected and examined the
Premises, and is thoroughly familiar and satisfied with the condition and value
thereof, that no representations or warranties have been made to Tenant by
Landlord and that Landlord is unwilling to make any representations and has held
out no inducements to Tenant. Tenant has inspected the Premises or caused an
inspection thereof to be made on its behalf. Tenant is thoroughly acquainted
with the condition of the Premises on the commencement of this Lease including,
without limitation, the foundations, structural beams and supports, retaining
walls, building walls, roof, cornices, ornamental projections, windows, heating
equipment, air-conditioning equipment, pipes, conduits, electrical equipment and
wiring and other equipment used in the operation and maintenance of the Premises
or appurtenant thereto and the sub-surface conditions beneath the Premises,
including, without limitation the environmental conditions of the Premises.
Tenant further acknowledges that it has accepted the Premises in their “as is”,
“where is” and “with all faults” condition as of the Rent Commencement Date.
Tenant warrants and represents that it has fully and completely investigated all
aspects of the Premises, and fully satisfied itself as to the suitability of the
conditions of the Premises, including, without limitation, the environmental
conditions thereof. The parties agree and acknowledge that the foregoing in no
way limits or qualifies Tenant’s rights and remedies under and with respect to
any other agreement, document or instrument, including without limitation the
Asset Purchase Agreement and the documents referred to therein.

        11.2 Without limiting the generality of paragraph 11.1, Tenant has not
relied on any representations or warranties, and Landlord has not made any
representations or warranties in either case express or implied, as to (i) the
current or future real estate tax liability, assessment or valuation of the
Premises; (ii) the potential qualification of the Premises for any and all
benefits conferred by federal, state or municipal laws, whether for subsidies,
special real estate tax treatment, insurance, mortgages, or any other benefits,
whether similar or dissimilar to those enumerated; (iii) the compliance of the
Premises, in its current or any future state with applicable zoning ordinances
and the ability to obtain a variance in respect to the Premises’ non-compliance,
if any, with said zoning ordinances; (iv) the availability of any financing for
the purchase, alteration, rehabilitation or operation of the Premises from any
source, including but not limited to State, City or Federal government or any
institutional lender; (v) the current or future use of the Premises; (vi) the
present and future condition and operating state of any machinery or equipment
on the Premises and the present or future structural and physical condition of
the Premises or its suitability for rehabilitation or renovation; (vii) the
ownership or state of title of any personal property on the Premises; (viii) the
presence or absence of any rules or notices of violations of law issued by any
governmental authority; (ix) the layout, leases, rents, income, expenses or
operation of the Premises; (x) financial statements; or (xi) any other matter or
thing affecting or relating to the Premises. The parties agree and acknowledge
that the foregoing in no way limits or qualifies Tenant’s rights and remedies
under and with respect to any other agreement, document or instrument, including
without limitation the Asset Purchase Agreement and the documents referred to
therein.

        11.3 Tenant shall, at its expense, throughout the Term, maintain in good
order and condition, and shall repair and replace the Premises, and keep the
same and all parts thereof, together with any and all appurtenances,
alterations, additions and improvements therein or thereto, in good order and
condition, suffering no waste or injury. Tenant, at its sole cost and expense,
shall be responsible for all repairs and replacements, interior and exterior,
structural and non-structural, ordinary and extraordinary, foreseen or
unforeseen, in and to the Building, the Premises and systems thereof.

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        11.4 All repairs, restorations, Alterations and replacements by Tenant
shall be in quality and class equal to the original work or installations, shall
be done in a good and workmanlike manner and shall be performed in compliance
with all Legal Requirements and Insurance Requirements. If Tenant shall fail to
commence the making of the repairs, restorations and replacements Tenant is
required to make within thirty (30) days after written request from Landlord, or
if after commencing them, shall fail to complete them with reasonable diligence,
Landlord may but shall not be obligated to perform same at Tenant’s expense. Any
costs incurred by Landlord on account of Tenant together with interest thereon
at the Interest Rate shall be deemed Additional Rent and shall be due and
payable together with the installment of Fixed Annual Rent next ensuing or on
demand, whichever is sooner. Nothing contained in this paragraph 11.4 shall be
deemed to require Landlord to make any repairs to the Premises.

        11.5 Tenant shall, at it own cost and expense, keep the Premises free of
all trash, refuse and rubbish and shall repair and replace any and all damaged
or broken window, door or other glass, together with the frames and supports
thereof on the inside and outside of the Premises.

        11.6 (a) Notwithstanding anything to the contrary contained in this
Lease, Tenant acknowledges that it has completed its due diligence investigation
of the Premises prior to the execution and delivery of this Lease, and has
obtained reasonable access to all files, records, documents, information and
correspondence pertaining to the Premises, including, without limitation, the
environmental condition of the Premises, and it has received and reviewed all
environmental reports pertaining to the Premises in Landlord’s possession
(collectively, the “Reports”). Tenant represents, warrants and acknowledges that
it has entered into this Lease notwithstanding the environmental conditions
disclosed in the Reports and as a result of Tenant’s due diligence. The parties
agree and acknowledge that the foregoing in no way limits or qualifies Tenant’s
rights and remedies under and with respect to any other agreement, document or
instrument, including without limitation the Asset Purchase Agreement and the
documents referred to therein.

                (b) Landlord acknowledges and agrees that, except as otherwise
specifically set forth herein, it has the sole and exclusive liability and
responsibility to implement, maintain, and complete any and all environmental
assessments, remediation, removal, decontamination and clean-up to the
satisfaction of any and all government entities having jurisdiction and/or
authority over such matters and in compliance with Environmental Law for all
Hazardous Materials Activity that (i) occurred or existed prior to the Effective
Date, including without limitation all conditions, facts and circumstances
described and disclosed in the Reports; and (ii) any Hazardous Materials
Activity that occurs or arises after the Effective Date as a result of or in
connection with the clean-up, remediation, removal or decontamination of any
such pre-exiting environmental condition, regardless of whether such are known
or unknown, or are, have been or will be the subject of any Environmental Claim
(collectively, “Pre-Existing Environmental Conditions”). In connection
therewith, Landlord agrees to perform the work set forth on Exhibit F annexed
hereto with respect to the sintering and waste treatment facility located on the
Premises. Tenant’s remedy for the non-completion of such work by Landlord shall
be to complete such work and to seek indemnification from Landlord for Tenant’s
costs and expenses with respect to such work as well as any other loss, claim or
liability arising from or related to Landlord’s failure to complete the same in
accordance with the provisions of the Asset Purchase Agreement and the
associated asset purchase escrow agreement among Landlord, as seller, Tenant, as
buyer, and Lev & Berlin P.C. and Westerman Ball Ederer Miller & Sharfstein, LLP,
as joint escrow agents.

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                (c) Except for the Pre-Existing Environmental Conditions,
Landlord shall have no obligation whatsoever for any Hazardous Materials brought
in, on, under or about the Premises. As of the Commencement Date, Tenant shall
be responsible for any and all Hazardous Materials brought, in, on or under the
Premises other than the Pre-Existing Environmental Conditions. Tenant shall, at
Tenant’s cost and expense, comply with all Environmental Laws applicable to
Tenant’s use of or operations at the Premises. The term “Hazardous Materials”
shall mean any amount of any substance, pollutant, or material that has been
designated by any governmental authority or by applicable law to be radioactive,
toxic, hazardous or otherwise a danger or potential danger to health or the
environment, for which clean up goals, standards and/or regulations are
provided, or regulated or controlled by an environmental law, including PCBs,
asbestos, petroleum or petroleum containing product, urea-formaldehyde and all
substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous or solid waste pursuant to the United States Resource
Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws ( other than office and janitorial supplies
properly and safely maintained) or, any other substance, chemical or material
that could be known as a pollutant or contaminant.

                (d) Tenant agrees not to manufacture, spill, discharge, store,
place or use any Hazardous Materials in, on, under or about the Premises, or
adjacent or nearby property of Landlord, or their environs, in violation of
Environmental Laws, and Tenant shall, if and when required, obtain all proper
permits relating thereto. In addition, other than Hazardous Substances that were
in use at the Premises by Landlord or its Affiliates as of or prior to the Rent
Commencement Date, Tenant shall not, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed, manufacture, store, place or use any other Hazardous Substances at the
Premises or adjacent or nearby property of Landlord in such a manner that is not
in compliance with Environmental Laws in all material respects. Further, Tenant
shall not cause or permit the exacerbation of any Pre-Existing Environmental
Conditions in, on, under or about the Premises or adjacent or nearby property of
Landlord.

                (e) Tenant shall notify Landlord within seven (7) days of any
notice of inquiry, test, investigation, or enforcement proceeding by, against or
directed at Tenant or the Premises, the Building or adjacent or nearby property
of Landlord, concerning any Hazardous Materials.

                (f) If after the Effective Date there is a spill, discharge,
placement or use of any Hazardous Substances in, on, under or about the Premises
or adjacent or nearby property of Landlord not related to any Pre-Existing
Environmental Condition or any activity of Landlord or its agents to clean up or
remediate same, but rather as the result of the action or omission of Tenant or
any agent, representative, employee or invitee of Tenant excluding however
Landlord and its agents (“Tenant Representative”) and such spill, discharge,
placement or use is required by law to be remediated and/or brought into
compliance pursuant to Environmental Laws, then, in addition to Landlord having
all rights available to Landlord under this Lease and by law, Tenant shall, at
Tenant’s own expense, undertake all action required by law and any Environmental
Law, including, without limitation, promptly: (i) preparing and submitting to
the appropriate governmental authority, all required sampling, assessment,
investigation and remedial action plans and reports; (ii) implementing, to the
satisfaction of Landlord and the appropriate governmental authority, the
approved assessment, investigation, sampling and remedial action plans and
reports; (iii) removing from the Premises or adjacent or nearby property of
Landlord, as the case may be, all such Hazardous Substances to the satisfaction
of Landlord and the appropriate governmental authority; (iv) establishing a
remediation funding source satisfactory to Landlord and the applicable
governmental authority; and (v) obtaining and delivering to Landlord a letter
from the appropriate governmental authority indicating that “no further action”
is required with respect to the remediation of such Hazardous Substances and
complying with any conditions of such letter. Notwithstanding anything to the
contrary set forth in this paragraph, in no event shall any of Tenant’s remedial
action (i) involve engineering controls or a deed notice, or involve remediation
to less than the most restrictive standard set forth in Environmental Laws,
without the prior written consent of Landlord, which Landlord shall not
unreasonably withhold; or (ii) exceed the requirements of applicable
Environmental Law.

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                (g) Promptly upon completion of all required investigatory and
remedial activities required hereunder, Tenant shall, at Tenant’s own expense,
restore the affected areas of the Premises or adjacent or nearby property of
Landlord, as the case may be, from any damage or condition caused by the
investigatory and remedial work, including, without limitation, closing,
pursuant to Law, any wells or piezometers installed by or on behalf of Tenant at
the Premises or adjacent or nearby property of Landlord, as the case may be.

                (h) For purposes of this paragraph, the term “Environmental
Documents” shall mean all environmental documentation concerning the Premises or
their environs, in the possession or under the control of Tenant, including,
without limitation, all plans and reports, correspondence to or from any
governmental authority, submissions to any governmental authority and approvals
and disapprovals issued by any governmental authority. During the term of this
Lease and subsequently, promptly upon receipt by Tenant or Tenant’s
Representatives, Tenant shall deliver to Landlord all Environmental Documents
concerning or generated by or on behalf of Tenant with respect to the Premises,
whether currently or hereafter existing.

                (i) Tenant shall notify Landlord in advance of all meetings
scheduled between Tenant or Tenant’s Representatives and any federal, state or
local environmental protection or conservation agency relating to the Premises
and Landlord and Landlord’s representatives shall have the right, without the
obligation, to attend and participate in all such meetings.

                (j) Notwithstanding any contrary provisions set forth in this
Lease (and other than in connection with any obligations of Landlord with
respect to Pre-Existing Environmental Conditions or as set forth in Section
11.6(b) herein), if Tenant is required under this Lease to undertake any
sampling, assessment, investigation or remediation with respect to the Premises
or adjacent or nearby property of Landlord, as the case may be, then following
reasonable advance written notice to Tenant of not less than five days (except
in the event of an emergency, in which case Landlord shall provide subsequent
written notice to Tenant within a reasonable period not to exceed five days),
then Landlord shall have the right, without the obligation, from time to time
during such sampling assessment, investigation or remediation activities, to
perform such sampling, assessment, investigation, or remediation activities at
Tenant’s expense, and all sums incurred by Landlord shall be paid by Tenant, as
additional rent, within ten days of demand; provided, however, in no event may
the rights of, or requirements by, Landlord herein exceed any requirements of
applicable Environmental Laws.

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                (k) Notwithstanding any other right of entry granted to Landlord
under this Lease, Landlord, its employees, agents and representatives shall have
the right to enter the Premises or to have consultants and contractors enter the
Premises throughout the Term, at reasonable times and with reasonable prior
written notice of not less than three business days, except in the event of an
emergency, for the purpose of (i) determining whether the Premises is in
conformity with Environmental Laws of the Premises; (ii) determining whether
Tenant has complied with this Article, (iii) determining the corrective
measures, if any, required of Tenant: (A) to ensure the safe use, storage and
disposal of Hazardous Substances; or (B) in connection with Tenant’s use of any
wastewater treatment system with respect to the Premises, and (iv) conducting an
environmental assessment, investigation and sampling or any remediation or any
repair and/or replacement of the wastewater treatment system, deemed necessary
by Landlord; provided, however, in each case, Tenant, or its representative,
shall have the right to be present during such entry. Such activities may
include, but are not limited to, entering the Premises with machinery for the
purpose of obtaining laboratory samples, provided all such activities and their
frequency shall be conducted in a commercially reasonable manner. Subject to the
foregoing requirements, Landlord shall not be limited in the number of such
entries during the Term. If a court with applicable jurisdiction shall determine
that Tenant has released Hazardous Substances in violation of this Lease, Tenant
shall be liable for the same and shall advise Landlord of its compliance
therewith. The right granted to Landlord under this Section shall not create a
duty on Landlord’s part to inspect the Premises, or any liability of Landlord
for Tenant’s release of Hazardous Substances.

                (l) If any Environmental Law or a governing authority thereunder
requires, in connection with a spill, discharge or placement of Hazardous
Substances by Tenant, Tenant shall, at Tenant’s own expense, hire a consultant
satisfactory to Landlord in accordance with such applicable Environmental Law or
mandate of governing authority thereunder to undertake an assessment,
investigation and sampling at the Premises sufficient, in Landlord’s reasonable
discretion, to determine whether there has been a spill, discharge or placement
of Hazardous Substances in, on, under or about, the Premises or adjacent or
nearby property of Landlord during the Term, as a result of the action or
omission of Tenant or a Tenant’s Representative. Notwithstanding anything to the
contrary contained herein, Landlord shall have the right to conduct annual
assessments, investigations and/or sampling at the Premises by a consultant
satisfactory to Landlord to determine whether there has been a spill, discharge
or placement of Hazardous Substances in, on, under or about, the Premises or
adjacent or nearby property of Landlord during the Term, as a result of the
action or omission of Tenant or a Tenant’s Representative. Such annual
assessment, investigation or sampling shall be at Tenant’s expense if such
assessment discloses a material spill, discharge or placement of Hazardous
Substances in or on or about the Premises or adjacent thereto which is not a
Pre-Existing Environmental Condition. Such annual assessment, investigation or
sampling shall be at Landlord’s expense if such assessment does not disclose
such material spillage, discharge or placement of Hazardous Substances.

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                (m) Tenant shall indemnify, defend (with legal counsel
reasonably acceptable to Landlord) and hold harmless Landlord from and against
any and all Claims, to the extent arising out of or in connection with:
(A) Tenant’s failure to comply with its obligations set forth in this Section,
other than consequential damages; or (B) any actual or threatened claims or
causes of action brought against Landlord or any Affiliate of Landlord or
against the property of either by third parties, including, without limitation,
governmental and quasi-governmental authorities, to the extent arising from or
relating to Tenant’s failure to comply with its obligations set forth in this
Section. The indemnity provisions of this Section shall survive the expiration
or termination of this Lease.

                (n) Tenant shall, at Tenant’s sole cost and expense, conduct all
cleaning and maintenance of the floors and the surface of the Premises as
required by applicable Laws.

                (o) Notwithstanding anything to the contrary contained herein,
Tenant recognizes that Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present health
risks to persons who are exposed to it over time. Levels of Radon that exceed
Federal and State guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from the local
County of Alachua Health Department. As such, Tenant recognizes such potential
hazards and thus indemnifies Landlord from any liability as associated with
radon gas, and notwithstanding anything to the contrary contained herein,
Landlord’s obligation hereunder shall exclude any removal or remediation of
radon gas.

12.    ENTRY BY LANDLORD.

        12.1 Landlord shall have the right to enter the Premises to make
emergency repairs as in Landlord’s sole opinion are necessary to protect the
Premises, whether or not same are for benefit of Tenant or to make repairs
Tenant may neglect or refuse to make. If the emergency situation permits,
Landlord shall give to Tenant oral or written notice of its intention to so
enter the Premises. Landlord shall be allowed to take all material into and
store the same upon the Premises as may be required for any such repairs without
the same constituting an eviction of Tenant in whole or in part, and the fixed
annual rent and additional rent shall not abate while such repairs are being
made, provided Landlord proceeds with reasonable diligence and continuity to
complete the same, subject to acts of God or unavoidable delays. Nothing
contained in this paragraph 12.1 shall be deemed to require Landlord to make any
repairs on or to the Premises or to increase any obligations on Landlord’s part
hereunder.

        12.2 During business hours, Landlord shall have the right to enter the
Premises to inspect them or exhibit them to prospective purchasers, lessees,
prospective Fee Mortgagees or assignees of any Fee Mortgagee, all Fee Mortgagees
or to their agents or designees. Neither the right and authority hereby
reserved, nor the exercise thereof, shall impose nor does Landlord assume by
reason thereof, any responsibility or liability for the care or supervision of
the Premises. Such right of entry and access shall not be considered as
exercising control of Premises, or as obligating Landlord to make repairs or
improvements not otherwise required under this Lease.

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13.    COMPLIANCE WITH LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS.

        13.1 Except as otherwise may be expressly provided in this Lease,
Tenant, at its expense, shall comply with all present or future Legal
Requirements and with any direction made or claimed to be made pursuant to law
by any public officer or officers regarding the Premises, the use or occupation
thereof or arising from conditions which have been created by or at the instance
of Tenant whether or not such compliance involves structural repairs or changes
or that same shall be required on account of any particular use to which the
Premises or any part thereof may be put and without regard to whether any such
Legal Requirement or order be of a kind now within the contemplation of the
parties hereto. However, if any Alteration or change shall be required to comply
with the foregoing and same would diminish the value of the Premises, change the
general plan or character of the Premises, or involve a structural Alteration,
Tenant shall first give written notice thereof to Landlord so that Landlord if
so advised may apply for modification of the requirements or seek appropriate
relief with respect thereto.

        13.2 Tenant shall not be entitled to any abatement, diminution or
reduction of the fixed annual rent or additional rent reserved herein for any
inconvenience, interruption, cessation or loss of business or otherwise caused
directly or indirectly by any present or future Legal Requirement, or by
priorities, rationing or curtailment of labor or materials, or by war, civil
commotion, strikes or riots, or any matter or thing resulting therefrom, or by
any other cause or causes beyond the control of Landlord, nor shall this Lease
be affected by any such causes.

        13.3 Tenant shall not do or permit to be done any act or thing upon the
Premises which will invalidate or be in conflict with the terms of any fire and
casualty insurance policies covering the Premises and the fixtures and property
therein. Tenant, at its own expense, shall comply with all present and future
Insurance Requirements, and shall not knowingly do or permit to be done in or
upon the Premises or bring or keep anything therein or use the same in a manner
which could result in denial of such fire and casualty insurance coverage.

14.    UTILITIES AND SERVICES.

        14.1 Tenant agrees to pay or cause to be paid all charges for gas,
water, sewer, electricity, light, heat, power, telephone or other communications
service and any other utility or service of every nature and kind used, rendered
or supplied to, upon or in connection with the Premises throughout the Term and
shall indemnify Landlord from and hold Landlord harmless against any claim,
liability, damages, loss, cost or expense in connection therewith.

        14.2 Tenant expressly agrees that Landlord is not nor shall it be
required to furnish to the Premises during the Term any water, sewer, gas, heat,
electricity, light, power or other facilities, equipment, labor, materials,
utilities or service of any kind whatsoever whether similar or dissimilar.

        14.3 Landlord shall not be liable to Tenant or by any other person in
damages or otherwise for any failure of Tenant to make arrangements for or to
obtain any utilities or services or for any failure of Tenant to heat or to
provide hot water for the Premises; Tenant shall not be released or excused from
the performance of any of its obligations under this Lease for any such failure
or for any interruption or curtailment of any such utilities or services, and no
such failure, interruption or curtailment shall constitute a constructive or
partial eviction. Tenant shall not permit or suffer any utility facility to be
overloaded.

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15.    INSURANCE

        15.1 Tenant shall throughout the Term:

  15.1.1  keep the Premises and equipment on, in and appurtenant thereto insured
against loss or damage by fire, with extended coverage including “all risk”,
“difference in condition” coverage, in an amount equal to one hundred (100%)
percent of the full replacement value thereof without diminution of such
replacement cost for depreciation or obsolescence, by policies containing the
usual co-insurance clause and written with a commercially reasonable deductible;
Landlord shall at all times be entitled to insurance in an amount sufficient to
avoid being a co-insurer;

  15.1.2  keep in effect commercial general public liability insurance against
claims for bodily injury or death and property damage occurring upon, in or
about the Premises, and on, in or about the adjoining streets, sidewalks and
passageways, providing coverage in the sum of at least Ten Million Dollars
($10,000,000.00) combined single limit per occurrence in respect of either
bodily injury or death to any number persons or for property damage. Tenant
shall cause a contractual liability endorsement of Tenant’s indemnification
undertaking set forth in Article 33 to be written in connection with such
commercial general public liability insurance. The aforesaid coverage
limitations shall be increased by Tenant from time to time at Landlord’s request
throughout the Term so that such coverage shall conform to the liability
coverage then customarily maintained for premises similarly situate;

  15.1.3  keep in effect boiler and machinery insurance, water damage insurance
(direct and legal liability); sprinkler leakage insurance (direct and legal
liability) and, in the event of war or threatened hostilities, appropriate forms
of war damage or war risk insurance if issued by the federal government or any
agency thereof and if appropriate, flood insurance;

  15.1.4  keep in effect environmental insurance in reasonable and customary
amounts maintained for premises engaged in the manufacture of batteries and
related materials and otherwise comparable to the Premises.

        15.2 Casualty and general liability insurance required to be maintained
by Tenant may be effected by a policy or policies of blanket insurance which may
cover other properties, provided that the protection and coverage afforded
thereunder shall not be less than the protection or coverage which would have
been afforded under a separate policy relating to the Premises only and that in
all other respects such policy shall comply with the other provisions of this
Article 15.

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        15.3 Tenant's insurance policies shall be for a term of not less than
one year and shall provide:

  15.3.1 a waiver of all right of subrogation against Landlord with respect to
all losses payable under such policies; and

  15.3.2  that such policies shall not be invalidated should the insured waive,
prior to a loss, any or all right of recovery against any party for losses
covered by such policies; and

  15.3.3  that losses thereunder, if any, shall be adjusted with and payable to
Landlord except as otherwise provided herein, or if requested by Landlord to any
or all Fee Mortgagees pursuant to a standard Florida State mortgagee
endorsement; and

  15.3.4  that such policies shall not be cancelled except upon at least thirty
(30) days’prior written notice to Landlord and any Fee Mortgagee.

        15.4 Tenant hereby waives any and all right of recovery which it might
otherwise have against Landlord, its servants, agents and employees, for loss or
damage to Tenant’s furnishings, trade fixtures, equipment, installations, and
other personal property, notwithstanding that such loss or damage may result
from the negligence or fault of Landlord, its licensees, invitees, servants,
agents or employees.

        15.5 All insurance required by this Article 15 shall be effected under
valid and enforceable policies issued by insurers of recognized responsibility,
licensed to do and doing business in the State of Florida, and shall name
Landlord and all Fee Mortgagees as additional insureds, as their interests may
appear. Before Tenant takes possession of the Premises (and thereafter not less
than fifteen (15) days prior to the expiration date of any expiring policies
theretofore furnished pursuant to this Article 15) originals, certified copies
or certificates of the policies for such insurance shall be delivered by Tenant
to Landlord. Tenant shall also furnish to Landlord from time to time upon
Landlord’s request, a certificate signed by an executive officer of Tenant or a
certificate of insurance certified by Tenant’s insurance carrier containing a
statement of insurance effected by Tenant pursuant to this Lease and then in
force and stating that the insurance then in force complies with the provisions
of this Lease and that the premiums thereon have been paid. Tenant shall
promptly notify Landlord of the cancellation or change of the terms of any such
insurance policy.

16.    FIRE AND OTHER CASUALTY.

        16.1 If the Premises shall be partially or totally damaged or destroyed
by fire or other casualty, then, whether or not resulting from the fault or
neglect of Tenant, or its servants, employees, agents, visitors or licensees,
Tenant shall immediately notify Landlord and shall, at its sole cost, promptly
take all steps required by Legal Requirements and Insurance Requirements to
render the Premises safe pending adjustment of the insurance loss and completion
of all Casualty Repairs (as defined below), including without limitation, making
temporary repairs, necessary to protect the Premises. Tenant shall promptly
following such damage or destruction, at its own cost and expense and without
regard to any insurance proceeds, commence to and diligently proceed to repair
the damage and to restore, replace, and rebuild the Premises, and the equipment
on, in or appurtenant thereto at least to the extent of the value and as nearly
as possible to the character thereof prior to such damage (“Casualty Repairs”).
In no event shall Landlord be obligated to repair, replace or rebuild the
Premises or to pay or provide for any of the expenses or costs thereof. However,
provided that no Event of Default has occurred, Landlord shall pay to Tenant any
net insurance proceeds actually received by Landlord and subject to the claims
of any third parties, including, without limitation, any Fee Mortgagee. If the
insurance proceeds shall be insufficient to complete the Casualty Repairs,
Tenant shall pay the additional sums required, and if the amount of the
insurance proceeds shall be in excess of the cost of the Casualty Repairs, the
excess shall be paid to Tenant.

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        16.2 Before beginning the Casualty Repairs or letting any contracts in
connection therewith, Tenant shall submit for Landlord’s approval, which
approval shall not be unreasonably withheld or delayed, complete and detailed
plans and specifications thereof. Any Casualty Repair or series of Casualty
Repairs having an aggregate estimated cost in excess of fifty thousand dollars
($50,000) shall be conducted under the supervision of a licensed architect or
engineer selected by Tenant and reasonably satisfactory to Landlord

        16.3 If the Premises or any part thereof is damaged by fire or other
casualty, the Fixed Annual Rent and Additional Rent payable hereunder shall not
abate or be diminished.

17.    CONDEMNATION.

        17.1 If at any time during the Term all or substantially all of the
Premises shall be taken for any public or quasi-public use or purpose by any
competent lawful power or authority by the exercise of the right of condemnation
or eminent domain, or by agreement among Landlord, Tenant and those authorized
to exercise such right, this Lease and the Term shall terminate and expire on
the later of (a) the date that title to the Premises vests in the condemning
authority or (b) the date of transfer of possession of the Premises to the
condemning authority. The Fixed Annual Rent and Additional Rent (other than
assessments) shall be apportioned as of the date of such termination. For the
purposes of this Article 17, a taking or condemnation of substantially all of
the Premises as distinguished from a taking of all or a portion of the Premises
shall mean a taking of such scope that the portion of the Premises not so taken
is insufficient to permit the improvements on the portion of the Premises not so
taken, to be repaired so as to constitute a complete tenantable, rentable
building. If, within thirty (30) days after title shall vest in the condemning
power or authority, Landlord and Tenant cannot agree upon whether or not
substantially all of the Premises shall have been taken, the dispute shall be
determined by arbitration in accordance with Article 35. If substantially all
but not all of the Premises shall be so taken, the portion of the Premises and
any improvements thereon not so taken shall be sold at a public sale (at which
Landlord and Tenant shall be free to bid) within three (3) months after the
vesting of title in the condemning power or authority. The net proceeds of such
sale shall be added to and deemed part of the net condemnation award. The
condemnation award or compensation, the proceeds of any such sale, all damages
accruing by reason of such taking and the interest thereon, if any, after
deduction of all of the costs of collection including attorneys’ fees (“Award”),
shall be distributed as provided in this Article 17.

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        17.2 If during Term, less than all or less than substantially all of the
Premises shall be taken in any condemnation or eminent domain proceeding, (a)
Tenant shall give prompt notice thereof to Landlord and shall at its sole cost
and expense immediately take all steps required by Legal Requirements and
Insurance Requirements to render the remainder of the Premises safe pending
repairs to the Premises, including without limitation making temporary repairs,
and shall, at its own cost and expense and without regard to any Award, promptly
after such taking restore and repair the portion of the Premises not so taken to
a complete architectural unit of substantially the same usefulness, design and
construction as same were immediately before such taking (“Restoration”), and
(b) this Lease shall continue in full force and effect (except as to the portion
of the Premises so taken as of the date of such taking). In such event, Tenant
shall continue to perform and observe all of the terms, covenants and conditions
of this Lease on its part to be performed and observed as though such taking had
not occurred provided, however, that the Fixed Annual Rent shall be adjusted as
of the date of such taking and thereafter shall be reduced equitably, in such
proportion and in such manner as Landlord and Tenant shall agree, or, if they
cannot so agree, the same shall be determined by arbitration in accordance with
Article 35. Until the reduced Fixed Annual Rent, if any, shall be determined as
provided herein, Tenant shall continue to pay Fixed Annual Rent in the same
amounts as would be due if there had not been any condemnation. When such
determination shall be made, Tenant shall pay to Landlord any deficiency, or
Landlord shall pay to Tenant any excess, of the amount of Fixed Annual Rent
which is paid after the later of (i) the date of the vesting of title in the
condemnor of that portion of the Premises so taken or (ii) the date of transfer
of the portion of the Premises to the condemning authority, under or over the
amount which shall have been so determined. If less than all or substantially
all of the Premises is so taken as contemplated by this paragraph 17.2, Landlord
shall be entitled to receive payment of the entire Award, without deduction
therefrom for the value of the unexpired Term of this Lease or for any other
estate or interest in the Premises now or hereafter vested in Tenant, and Tenant
hereby assigns to Landlord all of its right, title and interest in and to any
and all such Award or Awards with any and all rights, estate and interest of
Tenant now existing or hereafter arising in and to the same or any part thereof.

        17.3 Upon the taking by condemnation or eminent domain of all or
substantially all of the Premises, the rights of Landlord and Tenant in and to
the Award without any deduction therefrom for the value of the unexpired term of
this Lease or for any other estate or interest in the Premises now or hereafter
vested in Tenant shall be determined as follows and in the following order of
priority:

  17.3.1  Landlord or those claiming through Landlord shall always be entitled
to receive such portion of the Award with interest thereon equal to the greater
of (a) the amount of all unpaid principal together with accrued interest thereon
and other sums due to all Fee Mortgagees, or (b) the appraised value of the
Premises for its highest and best use, which the parties hereby agree is for use
as a manufacturing and distribution facility, free and clear of all liens,
restrictions and encumbrances including, without limitation, this Lease
(“Appraised Value”).

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  17.3.2  After payment of the portion of the Award specified in subparagraph
17.3.1, Tenant shall be entitled to receive that portion of the balance of the
Award as shall represent the unamortized portion of the actual cost of any
permanent leasehold improvements made to the Premises by Tenant, if any, as
amortized over the Initial Term of this Lease.

  17.3.3  After payment of the portions of the Award specified in subparagraphs
17.3.1 and 17.3.2, Landlord, or those claiming through Landlord, shall be
entitled to receive the entire balance of the Award with interest thereon.

  17.3.4  If any portion of the Award shall represent any additional or
consequential damages to the Premises taken or not so taken such portion of the
Award shall be paid to Landlord or those deriving through Landlord.

  17.3.5  The Appraised Value (as defined in subparagraph 17.3.1) shall be
determined by agreement between Landlord and Tenant, consistent with the
provisions of Section 37.3 below. If the parties shall be unable to agree in
writing as to such Appraised Value within thirty days after receipt by Landlord
or Tenant of notice of the taking by condemnation or eminent domain, the
Appraised Value shall in each instance be determined in the following manner.
Within thirty (30) days thereafter, each party shall appoint an appraiser who
shall be a licensed real estate broker having at least five (5) years’
experience in the appraisal of commercial real property in the City of
Gainesville, State of Florida. If either party shall fail to timely appoint an
appraiser, the sole appointed appraiser shall proceed conclusively and
unilaterally to determine such Appraised Value. If the two appraisers are so
timely appointed, within ten (10) days thereafter they shall select a third
appraiser of equal qualification. If the two appraisers shall be unable to agree
on the selection of a third appraiser within such ten (10) day period, then
either party may request such appointment by the then President of the
Gainesville Alachua County Association of Realtors, or any successor
organization of comparable function if such Board is not in existence and if
there is no such successor organization or if such President shall fail or
refuse to make such appointment within twenty (20) days after being requested by
either party to do so, then by a justice of the Circuit Court of the State of
Florida in the County of Alachua or any successor court of similar jurisdiction.
The decision of a majority of the three appraisers shall be binding and
conclusive upon the parties. The fees of the appraiser designated by a party and
the costs and expenses of that party’s proof, shall be borne by that party. The
fees of the third appraiser shall be borne equally by Landlord and Tenant.

        17.4 Without limiting the generality of the foregoing, Tenant shall not
be entitled to share in any Award made in such condemnation proceedings for the
taking of any appurtenances to the Premises, areas or projections outside of the
boundaries of the Land owned by Landlord, or rights in, under or above the
streets adjoining said Land, or the rights and benefits of light, air or access
to said streets, or for the taking of space, or rights therein, below the
surface of, or above, the Premises. If such taking results in physical damage to
the Premises, Tenant shall give prompt written notice thereof to Landlord and
Tenant shall proceed with reasonable diligence to conduct any necessary
Restoration, at Tenant’s own cost and expense. In no event shall any taking
contemplated by this paragraph 17.4 reduce, abate or affect in any way the Term
or the liability of Tenant to pay in full the Fixed Annual Rent, Additional Rent
herein provided to be paid by Tenant. Under no circumstances shall Tenant be
entitled to any portion of the Award which relates to the air rights for the
Premises.

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        17.5 If the temporary use of the whole or any part of the Premises shall
be taken at any time during the Term for any public or quasi-public purpose by
any lawful power or authority, by the exercise of the right of condemnation or
eminent domain, or by agreement between Tenant and those authorized to exercise
such right, the Term shall not be reduced or affected in any way and Tenant
shall continue to pay in full the fixed annual rent and additional rent herein
provided to be paid by Tenant, and, subject to the other provisions of this
Article 17 and except as hereinafter provided, Tenant shall be entitled to
receive any award or payment for such use. If such taking is for a period
extending beyond the Term and if any award or payment made for such use is made
in a lump sum, such award or payment shall be apportioned between Landlord and
Tenant as of the date of expiration of the Term. If such taking results in
changes or alterations in or to the Premises which would necessitate an
expenditure, after repossession, to restore the Premises to its former condition
and such award or payment includes an amount (whether or not specified) to
compensate for such expenditure, and if possession of the Premises shall revert
to Tenant prior to the expiration of the Term, Tenant shall promptly restore the
Premises at Tenant’s own cost, and in all respects indemnify Landlord against
and save Landlord harmless from the effects of such taking, and the portion, if
any, of the award or payment to compensate for such expenditure shall be made
available by Landlord for the purpose of paying the cost of such Restoration to
be performed by Tenant. If possession of the Premises shall revert to Landlord
after expiration of the Term, such portion of said award shall be paid and shall
belong solely to Landlord. In the event that the portion of such award which is
to compensate for such expenditure is not specified, and the parties are unable
to agree upon the amount of such portion within thirty (30) days after
possession of the Premises reverts to Tenant or Landlord, as the case may be,
the dispute shall be submitted to arbitration in accordance with Article 35.

18.    ASSIGNMENT AND SUBLETTING.

        18.1 (a) Tenant shall not, whether voluntarily, involuntarily, or by
operation of law or otherwise (i) assign in whole or in part or otherwise
transfer in whole or in part this Lease or the Term and estate hereby granted,
or offer or advertise to do so, (ii) sublet the Premises or any part thereof, or
offer or advertise to do so, or allow the same to be used, occupied or utilized
by anyone other than Tenant and upon thirty (30) days prior written notice to
Landlord, Electro Energy Inc. (“EEI”), Tenant’s parent company, or any other
wholly-owned subsidiary of EEI, or (iii) mortgage, pledge, encumber or otherwise
hypothecate this Lease or the Premises or any part thereof in a manner
inconsistent with any requirements by creditors or debtors in existence as of
the Commencement Date, without in each instance obtaining the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed, provided the conditions therefor set forth in subsection (b) below are
satisfied. Tenant, if it requests Landlord’s consent to an assignment of this
Lease or subletting of the Premises, shall not later than sixty (60) days prior
to the proposed effective date of the assignment or subletting, submit to
Landlord a written request (“Tenant’s Request”) for Landlord’s consent to such
assignment or subletting. Tenant’s Request shall include a copy of the proposed
assignment or sublease and information about the proposed assignee or subtenant,
including, without limitation, the name and character of its business, the terms
of the proposed assignment or sublease, information as to its financial
responsibility and standing and any other information as Landlord may reasonably
require.

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                (b) If no Event of Default has occurred hereunder, including,
without limitation, at the time of requesting Landlord’s consent and at the
effective date of the assignment, then Landlord’s consent to an assignment of
this Lease or subletting of the Premises shall not be unreasonably withheld or
delayed provided that:

  (i) The proposed assignee or subtenant shall use the Premise for the Permitted
Use, and has reasonable experience in the operation of the business to be
engaged in by the proposed assignee or subtenant;

  (ii) The proposed assignee or subtenant has sufficient financial worth
considering the responsibility involved and the principals of the proposed
assignee or subtenant are reputable, and Landlord has been furnished with
reasonable proof thereof;

  (iii) Neither (A) the proposed assignee or subtenant, nor (B) any person
which, directly or indirectly, controls, is controlled by or is under common
control with, the proposed assignee or subtenant, is then an occupant of any
part of the Building;

  (iv) The form of the proposed sublease or instrument or assignment (A) shall
be in form reasonably satisfactory to Landlord, and, without limitation, (1)
shall not provide for a rental or other payment for the, occupancy or
utilization of the space demised thereby based in whole or in part on the income
or profits derived by any person from the property so leased, used, occupies or
utilized other than an amount based on a fixed percentage or percentages of
gross receipts or sales and (2) shall provide that no person having an interest
in the possession, use, occupancy or utilization of the space demised thereby
shall enter into any lease, sublease, license, concession or other agreement for
use, occupancy or utilization of such space which provides for a rental or other
payment for such use, occupancy or utilization based in whole or in part on the
income or profits derived by any person from the property so leased, used,
occupies or utilized other than an amount based on a fixed percentage or
percentages of gross receipts or sales, and that any such purported lease,
sublease, concession or other agreements shall be absolutely void and
ineffective ab initio and (B) shall comply with the applicable provisions of
this Section 18;

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  (v) Within ten (10) days after receipt of a bill therefor, Tenant shall
reimburse Landlord for the reasonable costs that may be incurred by Landlord in
connection with said assignment or sublease, including without limitation, the
costs of making investigations as to the acceptability of the proposed assignee
or subtenant, and reasonable legal costs incurred by Landlord in connection with
the granting of any requested consent;

  (vi) Tenant shall not have advertised or publicized in any way (other than
listing with a broker) the availability of the Premises without prior notice to
and approval by Landlord; and

  (vii) The proposed subtenant or assignee shall not be entitled, directly or
indirectly, to diplomatic or sovereign immunity and shall be subject to the
service of process in, and the jurisdiction of the courts of the State of
Florida.

                (c) In no event shall any assignment or subletting to which
Landlord may have or may not have consented, release Tenant or any guarantor
from its obligations under this Lease, or constitute consent to any further
assignment or subletting.

                (d) If Landlord shall consent to any proposed assignment or
subletting, or shall decline to give its consent to any proposed assignment or
subletting, Tenant shall indemnify, defend and hold harmless Landlord against
and from any and all loss, liability, damages, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) resulting from any
claims that may be made against Landlord by the proposed assignee or subtenant
or by any brokers or other persons claiming a commission or similar compensation
in connection with the proposed assignment or subletting.

                (e) If Landlord has given its consent to any assignment or
subletting, with respect to each and every permitted assignment or subletting
there shall be delivered to Landlord at least seven (7) days prior to the
effective date of any such assignment or subletting, three (3) duplicate
original copies of the assignment and assumption agreement or sublease in form
and content satisfactory to Landlord, fully executed and acknowledged by the
assignee or subtenant, together with a certified copy of a properly executed
corporate resolution (if the assignee or subtenant is a corporation) authorizing
such assumption agreement or sublease. The assumption agreement or sublease
shall substantially provide that the assignee or subtenant shall assume all of
the terms, covenants, conditions and provisions of the Lease including, but not
limited to, the payment of all rentals and additional rentals under this Lease.

                (f) With respect to each and every sublease or subletting
authorized by Landlord under the provisions of this Lease, it is further agreed:

  (i) No subletting shall be for a term ending later than one (1) day prior to
the expiration date of this Lease;

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  (ii) No sublease shall be valid, and no subtenant shall take possession of the
Premises until an executed counterpart of such sublease has been delivered to
Landlord; and

  (iii) Each sublease shall be and shall provide that it is subject and
subordinate to this Lease and to the matters to which this Lease is or shall be
subordinate, and that in the event of termination, re-entry or dispossess by
Landlord under this Lease, Landlord may, at its option, take over all the right,
title and interest of Tenant, as sublessor under such sublease, and such
subtenant shall, at Landlord’s option, attorn to Landlord pursuant to the then
executory provisions of such sublease, except that Landlord shall not (A) be
liable for any previous act or omission of Tenant under such sublease, (B) be
subject to any offset, not expressly provided in such sublease, which
theretofore accrued, to such subtenant against Tenant, or (C) be bound by any
previous modification of such sublease or be any previous prepayment of more
than one month’s rent.

                (g) If Tenant is a corporation (other than a corporation whose
outstanding voting stock is listed on a “National Securities Exchange”, as
defined in the Securities Exchange Act of 1934), or a partnership, business
trust or other entity having transferable shares of interest, and if at any time
after the date of this Lease a transfer of the shares or other interests of the
Tenant (either in one transaction or a series of transactions or by virtue of
any proxy or proxies issued in respect of the shares) occurs by sale,
assignment, bequest, inheritance, operation of law or other disposition
(including a transfer to or by a receiver or trustee in Federal of state
bankruptcy, insolvency or other proceeding), and such transfer results in a
change of Control (hereinafter defined), such transfer shall be deemed to be an
assignment of this Lease for which Landlord’s prior written consent shall be
required.

                (h) and Tenant hereby waives any claim, for money damages, nor
shall Tenant claim any money damages by way of set-off, counterclaim or defense,
based upon any claim or assertion by Tenant that Landlord has unreasonably
withheld or unreasonably delayed any consent or approval to a proposed
assignment or subletting as provided for above, but Tenant’s sole remedy shall
be an action or proceeding to enforce any such provisions, or for specific
performance, injunction or declaratory judgment (provided, however, that Tenant
shall be entitled to damages if and only if a judgment from a court of competent
jurisdiction is obtained against Landlord holding that Landlord acted
maliciously and in bad faith in failing or refusing to grant its consent or
approval) and such remedy shall be available only in those cases where Landlord
has agreed in writing not to unreasonably withhold or delay its consent or
approval or where as a matter of law Landlord may not unreasonably withhold or
delay its consent or approval.

        18.2 If this Lease is assigned, whether or not in violation of the
provisions of this Lease, Landlord may collect rent from the assignee. If the
Premises or any part thereof are sublet or used or occupied by anybody other
than Tenant, whether or not in violation of this Lease, Landlord may, after an
Event of Default collect rent from the subtenant or occupant. In either event,
Landlord may apply the net amount collected to the Fixed Annual Rent and
Additional Rent herein reserved, but no such assignment, subletting, occupancy
or collection shall be deemed a waiver of any of the provisions of Section 18.1,
or the acceptance of the assignee, subtenant or occupant as tenant, or a release
of Tenant from the performance by Tenant of Tenant*s obligations tinder this
Lease. The consent by Landlord to a particular assignment, mortgaging,
subletting or use or occupancy by others shall not in any way be considered a
consent by Landlord to any other or further assignment, mortgaging or subletting
or use or occupancy by others not expressly permitted by this article.
References in this Lease to use or occupancy by others (that is, anyone other
than Tenant) shall not be construed as limited to subtenants and those claiming
under or through subtenants but shall also include licensees and others claiming
under or through Tenant, immediately or remotely.

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        18.3 Any assignment or transfer pursuant to this Article 18 shall be
made only if, and shall not be effective until, the assignee shall execute,
acknowledge and deliver to Landlord an agreement in form and substance
satisfactory to Landlord whereby the assignee shall assume the obligations of
this Lease on the part of Tenant to be performed or observed and whereby the
assignee shall agree that the provisions in Section 18.1 shall, notwithstanding
such assignment or transfer, continue to be binding upon it in respect of all
future assignments and transfers. The original named Tenant covenants that,
notwithstanding any assignment or transfer, whether or not in violation of the
provisions of this Lease, and notwithstanding the acceptance of Fixed Rent
and/or Additional Rent by Landlord from an assignee, transferee, or any other
party, the original named Tenant shall remain fully liable for the payment of
the Fixed Annual Rent and Additional Rent and for the performance and observance
of other obligations of this Lease on the part of Tenant to be performed or
observed.

        18.4 The joint and several liability of Tenant and any immediate or
remote successor in interest of Tenant and the due performance of the
obligations of this Lease on Tenant*s part to be performed or observed shall not
be discharged, released or impaired in any respect by any agreement or
stipulation made by Landlord extending the time of, or modifying any of the
obligations of, this Lease, or by any waiver or failure of Landlord to enforce
any of the obligations of this Lease.

19.    DEFAULT AND CERTAIN REMEDIES OF LANDLORD.

        19.1 Each of the following events shall be a default hereunder (each
event being referred to herein as an “Event of Default”):

  19.1.1  Tenant, while in possession, shall file a voluntary petition in
bankruptcy or insolvency or for reorganization or arrangement under the
bankruptcy laws of the United States or under any insolvency act of any state or
shall voluntarily take advantage of any such law or act by answer or otherwise
or shall be dissolved or shall make an assignment for the benefit of creditors.

  19.1.2  Involuntary proceedings under any such bankruptcy law or insolvency
act or for the dissolution of a corporation shall be instituted against Tenant
and the court having jurisdiction determines Tenant is generally not paying its
debts as they become due, or within one hundred twenty (120) days before the
date of the filing of the petition, a custodian or receiver (other than a
custodian or receiver appointed to take charge of less than substantially all of
Tenant’s property for the purposes of enforcing a lien thereon) was appointed
and took possession of Tenant’s property.

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  19.1.3  If Tenant shall fail to pay Landlord any Fixed Annual Rent or
Additional Rent reserved herein within ten (10) days after same shall become due
and payable, except for Tenant’s right to make payments directly to the utility
provider or appropriate taxing authority as provided in Article 6 hereof.

  19.1.4  If Tenant shall fail to perform or comply with any of the other
agreements, terms, covenants or conditions hereof on Tenant’s part to be
performed, and such non-performance or non-compliance shall continue for a
period of thirty (30) days after written notice or, if such performance cannot
reasonably be had within such thirty day period, Tenant shall not in good faith
have commenced such performance within such thirty day period and shall not
diligently proceed therewith to completion. Said thirty (30) day period shall
not apply if specific paragraphs of this Lease provide for a different time
period within which Tenant must perform or comply with its obligations
hereunder.

  19.1.5  Tenant shall vacate or abandon the Premises or cause or suffer the
Premises to be abandoned or vacated, unless such abandonment or vacation is
specifically mandated by governmental order as a direct result of Landlord’s
failure to clean up or remediate a Pre-existing Environmental Condition as
required by the Asset Purchase Agreement.

  19.1.6  This Lease or the estate of Tenant hereunder shall be transferred to
or shall pass to or devolve upon any other person or party, except in a manner
herein permitted whether such transfer was voluntary, involuntary, by operation
of law or otherwise.

  19.1.7 Any other event specified in this Lease as an Event of Default.

  19.1.8  If an “Event of Default” occurs under any other lease affecting the
Project, including, without limitation, that (i) certain lease between Landlord
and Tenant affecting the building designated as the lithium ion building shown
on Exhibit A-1 located at 12801 NW Highway 441, Alachua, Florida 32615 for the
operation of general battery manufacturing (the “Lithium Ion Building Lease”),
and (ii) that certain lease between Landlord and Tenant affecting the building
designated as the water treatment facility shown on Exhibit A-1 located at 12801
NW Highway 441, Alachua, Florida 32615 for the operation of bulk chemical, water
treatment and storage facility (the “Bulk Chemical/Water Treatment Facility
Building Lease”, together with the “Lithium Ion Building Lease” and this Lease
being hereinafter collectively referred to as the “Leases).

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        19.2 Upon the occurrence of an Event of Default:

  19.2.1  Landlord shall have the right to terminate any or all of the Leases,
and all of Tenant’s right, title and interest hereunder, by giving Tenant five
(5) days’notice of termination (which notice shall not in any way be deemed to
be a grant or extension of any grace period), and such Lease(s) and the Term(s)
and estate, of Tenant hereunder, shall expire on the date fixed in such notice
of termination except as to Tenant’s liability as if the date of termination
fixed in the notice of termination were the end of the Term.

  19.2.2  If this Lease shall be terminated as provided in subparagraph 19.2.1
all of the right, title, estate and interest of Tenant (a) in and to the
Premises, (b) in and to all rents, income, receipts, revenues, issues and
profits issuing from the Premises or any part thereof, whether then accrued or
to accrue (c) in and to all insurance policies and all proceeds thereof, and (d)
in the then entire undisbursed balance of any funds held by Landlord, the
Trustee, or any Fee Mortgagee on account of Casualty Repairs, or otherwise shall
automatically pass to and vest in and belong to Landlord without further action
on the part of any party free of any claim thereto by Tenant.

  19.2.3  Pursuant to the lease escrow agreement (the “Lease Escrow Agreement”)
among Landlord, Tenant, and Lev & Berlin P.C. and Westerman Ball Ederer Miller
&Sharfstein, LLP as joint escrow agents (collectively, the “Escrow Agent”)
annexed hereto as Exhibit F, Landlord shall have the right to the number of
shares of EEI equal to the Escrow Value (as defined in the Lease Escrow
Agreement) of any amounts then due Landlord under Article 19 of the Leases,
including, without limitation, any amounts as to which Tenant is in default, any
other sum which Landlord may expend or may be required to expend by reason of
such defaults, and any damages or deficiency accrued before or after summary
proceedings or other re-entry by Landlord. Upon the termination of any Lease(s)
as a result of any Event of Default, Landlord shall have the right to the number
of shares equal to the Escrow Value (as defined in the Lease Escrow Agreement)
of any amounts then due Landlord under Article 19 of such Leases, including,
without limitation, any Fixed Annual Rent and Additional Rent due under such
Leases until the expiration of the then current Term (less any advance rental
previously paid by Tenant under Section 5.2 of such Leases, in each case,
representing payment of the last two (2) months of Fixed Annual Rent during the
last year of the Term of such Leases) plus any other reasonable sum which
Landlord may expend or may be required to expend by reason of such defaults, and
any damages or deficiency accrued before or after summary proceedings or other
re-entry by Landlord. Such number of shares shall be determined and released
from escrow to Landlord pursuant to and in accordance with the terms of the
Lease Escrow Agreement. Provided that no Event of Default has occurred, all of
the then current Escrow Shares may be released from escrow to Tenant upon the
expiration of the Term pursuant to and in accordance with the Lease Escrow
Agreement. Tenant further covenants that it will not assign or encumber or
attempt to assign or encumber any shares issuable pursuant to the Lease Escrow
Agreement and Landlord and its successors or assigns shall not be bound by any
such assignment, encumbrance, attempted assignment or encumbrance. The
provisions of this paragraph are not intended to reduce or limit the rights and
remedies of Landlord in any manner whatsoever. In no event shall Landlord be
obligated to apply the Escrow Shares to cure any Event of Default, and
Landlord’s right to bring an action or special proceeding to recover damages or
otherwise to obtain possession of the Premises before or after Landlord’s
declaration of the termination of this Lease for non-payment of rent or for any
other reason shall not be affected by reason of the fact that the Escrow Shares
are held in escrow by Escrow Agent. The Escrow Shares and any amounts paid by
Tenant under this Lease will not be a limitation on Landlord’s damages or other
rights and remedies available under the Lease, or at law or equity, nor shall
the release of Escrow Shares and/or payment of advance rental set forth in this
Lease be a payment of liquidated damages.

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  19.2.4  Landlord at its option may, but shall not be obligated to, make any
payment required of Tenant or comply with any agreement, term, covenant or
condition, required hereby to be performed by Tenant. Landlord may enter the
Premises for the purpose of correcting or remedying any default by Tenant and
remain therein until such default has been corrected or remedied but such
performance by Landlord shall not be deemed to waive or release Tenant’s default
or the right of Landlord to take any action provided herein in the case of such
default, and any cost, expense or expenditure incurred by Landlord in connection
therewith together with interest thereon at the Interest Rate shall be deemed
additional rent, payable on demand.

  19.2.5  If this Lease is cancelled or terminated either by operation of law,
by issuance of a dispossessory warrant, by service of a notice of cancellation
or termination as herein provided or otherwise, or upon the occurrence of an
Event of Default, Tenant shall nevertheless remain and continue to remain liable
to Landlord for Fixed Annual Rent and Additional Rent reserved herein for the
remainder of the Term and shall pay to Landlord the damages reserved elsewhere
in this Lease. In such event Landlord may re-enter and repossess the Premises,
using such force for that purpose as may be necessary without being liable to
prosecution therefor. The word “re-enter” as used herein is not restricted to
its technical legal meaning. If Landlord shall so re-enter, Landlord may repair
and alter the Premises in such manner as to Landlord may seem necessary or
advisable, and let or relet the Premises or any parts thereof for the whole or
any part of the remainder of the Term or for a longer period, in Landlord’s name
or as the agent of Tenant. Out of any rent received as a result of such letting
or reletting, Landlord shall first pay to itself the cost and expense of
repossessing (including, without limitation, attorneys fees), repairing or
altering the Premises, and removing all persons and property therefrom; second,
the cost and expense of operating and maintaining the Premises; third, the cost
and expense of securing new tenants, and, fourth, any balance remaining on
account of the liability of Tenant to Landlord for the sum equal to all fixed
annual rent and additional rent reserved herein and unpaid by Tenant for the
remainder of the Term. No re-entry by Landlord, whether under summary
proceedings or otherwise, shall absolve or discharge Tenant from liability
hereunder. Landlord shall be entitled to retain all monies, if any, paid by
Tenant to Landlord whether as advanced rent, Fixed Annual Rent or Additional
Rent due from Tenant at the time of termination or re-entry, or at Landlord’s
option, said sums may be applied against any damages payable by Tenant as a
result of the cancellation or termination of this Lease as is provided for
herein.

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  19.2.6  Notwithstanding any provision in this Lease permitting Tenant to cure
any default within a specified period of time, if Tenant shall default (i) in
the timely payment of Fixed Annual Rent or Additional Rent, and such default
shall continue or be repeated for two (2) consecutive months or for a total of
four (4) months in any period of twelve (12) months, or (ii) in the performance
of any particular term, condition or covenant of this Lease more than two (2)
times in any period of six (6) months, then, notwithstanding that such defaults
shall have been cured within the period after notice, if any, as provided in
this Lease, any further similar default shall be deemed to be deliberate and
Landlord thereafter may serve a written five (5) day notice of termination of
this Lease to Tenant without affording to Tenant an opportunity to cure such
further default.

        19.3 Tenant hereby expressly waives service of any notice of intention
to re-enter, except as otherwise permitted or provided by statute. Tenant hereby
waives any and all rights to recover or regain possession of the Premises or to
reinstate or to redeem this Lease or other right of redemption, except as
otherwise permitted or provided by statute.

        19.4 Should any sums collected by Landlord after the payments referred
to in paragraph 19.2 be insufficient to fully pay to Landlord a sum equal to all
Fixed Annual Rent and Additional Rent reserved herein, the balance or deficiency
for each month shall be paid by Tenant to Landlord on the first day of the next
succeeding month, and Tenant shall be and remain liable for any such deficiency,
and Landlord shall be entitled to retain any surplus. Tenant hereby expressly
waives any defense that might be predicated upon the issuance of a dispossessory
warrant or other cancellation or termination of this Lease.

        19.5 If Landlord shall have the right to hold Tenant liable as provided
in paragraphs 19.2 and 19.4, Landlord shall have the option, in lieu thereof,
forthwith to recover against Tenant and Tenant shall pay to Landlord, on demand,
as and for liquidated and agreed final damages for Tenant’s default, an
aggregate sum which, at the time of termination of this Lease or of recovery of
possession of the Premises by Landlord, as the case may be, represents the then
present worth of the excess, if any, discounted at the rate of four (4%) percent
per annum, of the aggregate of the fixed annual rent and additional rent payable
by Tenant hereunder that would have accrued for the balance of the Term over the
then aggregate rental value of the Premises for the same period (such rental
value to be computed on the basis of a Tenant paying not only a fixed annual
rent to Landlord for the use and occupation of Premises, but also such
additional rent as is required to be paid by Tenant under the terms of this
Lease for the balance of the Term). If the Premises or any part thereof shall be
relet by Landlord for the unexpired Term or any part thereof before presentation
of proof of such liquidated damages to any court, commission or tribunal, the
amount of rent reserved upon such reletting shall be deemed ma facie to be the
fair and reasonable rental value for the part or the whole of the Premises so
relet during the term of the reletting.

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        19.6 Suit or suits for the recovery of any deficiency or damages, or for
a sum equal to any installment or installments of fixed annual rent and
additional rent reserved herein, may be brought by Landlord from time to time at
Landlord’s election. Nothing herein contained shall be deemed to require
Landlord to delay any such suit or suits until the date when the Term would have
expired had there been no default by Tenant and no cancellation or termination
of this Lease by Landlord.

        19.7 Nothing in this Article 19 shall limit or prejudice the right of
Landlord to prove and obtain as liquidated damages in any bankruptcy,
insolvency, receivership, reorganization or dissolution proceeding, or
otherwise, an amount equal to the maximum allowed by any statute or rule of law
governing such proceeding and in effect at the time when such damages are to be
proved, whether or not such amount be greater, equal to or less than the amount
of the damages referred to in either of the preceding paragraphs.

        19.8 Each and every covenant contained in this Article 19 shall be
deemed separate and independent and not dependent upon other provisions of this
Lease, and the performance of any such covenant shall not be considered to be
rent or other payment for the use of the Land or the Premises. The damages for
failure to perform the same shall be deemed in addition to and separate and
independent of the damages accruing by reason of the breach of any other
covenant contained in this Lease.

        19.9 In the event of a breach or a threatened breach of this Lease by
Tenant, Landlord shall have the right of injunction to restrain the same and the
right to invoke any remedy allowed by law or in equity, as if specific remedies
indemnity or reimbursement were not herein provided. The provision in this Lease
for any remedy shall not preclude Landlord from any other remedy at law or in
equity. The rights and remedies given to Landlord in this Lease are distinct,
separate and cumulative, and no one of them, whether or not exercised by
Landlord, shall be deemed to be in exclusion of any of the others herein or by
law or equity provided.

        19.10 In all cases hereunder, and in any suit, action or proceeding of
any kind between the parties, it shall be presumptive evidence of the fact of
the existence of a charge being due, if Landlord shall produce a bill, notice or
certificate of any public official entitled to give the same to the effect that
such charge appears of record on the books in his office and has not been paid.

        19.11 No receipt of monies by Landlord from Tenant, after the
expiration, cancellation or termination hereof shall reinstate, continue or
extend the Term, or affect any notice theretofore given to Tenant or operate as
a waiver of the right of Landlord to enforce the payment of fixed annual rent
and additional rent reserved herein or to recover possession of the Premises by
proper suit, action, proceedings or other remedy; it being agreed that, after
the service of notice to cancel or terminate as herein provided and the
expiration of the time therein specified, after the commencement of any suit,
action, proceedings or other remedy, or after a final order or judgment for
possession of the Premises, Landlord may demand, receive and collect any monies
due, or thereafter falling due, without in any manner affecting such notice,
suit, action, proceedings, order or judgment; and any and all such monies so
collected shall be deemed to be payments on account of the use and occupation of
the Premises, or at the election of Landlord, on account of Tenant’s liability
hereunder.

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        19.12 In the event of Termination, Tenant shall be granted access to the
property, during ordinary business hours, for the purpose of removing or
recovering all books, records, inventory, equipment and all other items of
personal property (but excluding fixtures) for a period of thirty (30) days
after termination.

20.    SUBORDINATION AND NON-DISTURBANCE.

        20.1 This Lease and all of the rights of Tenant hereunder are and shall
be subject and subordinate to the lien of any Fee Mortgage now existing or
hereinafter placed on the fee estate in the Premises, and to any and all
renewals, modifications, consolidations, replacements, extensions or
substitutions of any such Fee Mortgage(s), provided that with respect to Fee
Mortgages, (i) Landlord shall deliver to Tenant a “non-disturbance” agreement
from its current Fee Mortgagee on such Fee Mortgagee’s standard form
non-disturbance agreement attached hereto as Exhibit H, and (ii) with respect to
any future Fee Mortgages, Landlord shall use commercially reasonable efforts to
cause any such future Fee Mortgagee to deliver to Tenant a “non-disturbance”
agreement in form substantially similar to the form annexed hereto as Exhibit H,
so long as no Event of Default shall have occurred.

  20.1.1  Tenant agrees that, at the option of each Fee Mortgagee, neither the
foreclosure of any Fee Mortgage nor the institution of any foreclosure
proceedings shall, by operation of law or otherwise, result in cancellation of
this Lease. In the event any proceedings are brought for the foreclosure of any
such Fee Mortgage, Tenant shall attorn to the Fee Mortgagee, its designee or
assignee or any purchaser at such foreclosure sale or grantee of a deed given in
lieu of foreclosure (“Successor Landlord”) and recognize such Successor Landlord
as Landlord under this Lease, and all rights and obligations under this Lease
shall continue as though such foreclosure proceedings had not been brought;

  20.1.2  Tenant shall execute and deliver to such Successor Landlord such
further assurance and other documents, including a new lease upon the same terms
and conditions as this Lease confirming such attornment; and

  20.1.3  Tenant waives the provisions of any statute or rule of law now or
hereafter in effect which may give or purport to give it any right of election
to terminate or otherwise adversely affect this Lease and the obligations of
Tenant hereunder by reason of any such foreclosure proceeding.

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               Upon the Successor Landlord succeeding to the rights of Landlord
under this Lease and Tenant attorning and recognizing such Successor Landlord as
Landlord under this Lease, subject to subparagraph 20.1.2, this Lease shall
continue in full force and effect as a direct Lease between Tenant and the
Successor Landlord upon and subject to all then executory terms, covenants and
conditions of this Lease.

        20.2 The subordination of this Lease as provided in this Article 20
shall be automatic, without the execution of any further subordination agreement
by Tenant. If, however, a written subordination agreement, consistent with all
of the provisions of paragraph 20.1, is required by a Fee Mortgagee, Tenant
shall immediately on demand execute, acknowledge and deliver the same and in the
event of failure so to do, Landlord may, in addition to any other remedies for
breach of this Lease by Tenant, execute, acknowledge, and deliver the same as
the agent or attorney in fact of Tenant, and Tenant hereby irrevocably
constitutes Landlord its attorney-in-fact coupled with an interest for such
purpose.

        20.3 In no event shall any Fee Mortgagee which becomes a Successor
Landlord be:

  20.3.1  liable in any way to Tenant for any act or omission, neglect or
default on the part of Landlord prior to the date on which such Fee Mortgagee or
its nominee or designee becomes owner of the fee interest in the Premises;

  20.3.2  responsible for any monies owing by or on deposit with Landlord to the
credit of Tenant whether in the nature of security or otherwise unless and to
the extent such monies are delivered to such Fee Mortgagee;

  20.3.3 subject to any counterclaim or set-off against Landlord which
theretofore accrued to Tenant;

  20.3.4  bound by any previous modification of this Lease (made while its Fee
Mortgage was a lien against the Premises) or by any previous prepayment of fixed
annual rent for more than one month unless same was done with the prior written
consent of such Fee Mortgagee; or

  20.3.5  liable to Tenant or the holder of any permitted leasehold mortgage
beyond the interest of such Fee Mortgagee in the Premises and the rents,
incomes, receipts, revenues, issues and profits issuing therefrom.

        20.4 If any act or omission by Landlord would give Tenant the right to
terminate this Lease or to claim a partial or total eviction, Tenant will not
exercise such right unless Tenant has given written notice of such act or
omission to each Fee Mortgagee whose name and address shall have been furnished
to Tenant. If within ten (10) days after Tenant gives such notice, the Fee
Mortgagee does not notify Tenant that it will remedy the act or omission in
question, Tenant may exercise such rights. However, if Tenant receives such
notice from a Fee Mortgagee, Tenant will not exercise such rights until a
reasonable period for remedying such act or omission shall have elapsed
following the giving of such notice by the Fee Mortgagee during which time such
Fee mortgagee, with reasonable diligence, subject to unavoidable delays, has
commenced and is continuing to remedy such act or omission or is causing it to
be remedied.

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21.    INTENTIONALLY OMITTED.

22.    SURRENDER.

        22.1 Tenant shall on the last day of the Term or on the sooner
termination of this Lease peaceably and quietly surrender and yield up to
Landlord the entire Premises (including any Alterations thereon unless Landlord,
at its option, requires Tenant to remove same) vacant, free and clear of all
lettings, subleases, occupancies, security agreements, liens or encumbrances in
good order and condition, reasonable wear and tear and damage by insured
casualty excepted.

        22.2 If, on the last day of the Term or on the date of the sooner
termination of this Lease, provided that no Event of Default shall have occurred
hereunder, Tenant shall have the right to remove its personal property and
moveable trade fixtures, provided that Tenant immediately, at its sole cost,
repairs and restores the Premises to the condition existing prior to
installation thereof and repairs all damage to the Premises due to such removal.
Except as provided in paragraph 19.12 above, any property not removed by Tenant
prior to the expiration of the Term shall be deemed abandoned and may be
appropriated, sold, destroyed or otherwise disposed of by Landlord without
notice to Tenant and without obligation to account therefor and shall Tenant
shall pay to Landlord upon demand all costs and expenses incurred by Landlord in
removing, storing or disposing of same and in restoring the Premises.

        22.3 If this Lease shall be cancelled and terminated as provided in
subparagraphs 19.1.1, 19.1.2 or 19.1.3, Tenant, on or before the occurrence of
any such event, shall perform any covenant contained in this Lease for the
making of any Casualty Repairs, Restoration, Alteration or betterment to the
Premises, or for restoring any part thereof. Upon the expiration or sooner
termination of this Lease, the parties shall promptly conduct a joint inspection
of the Premises for purposes of determining the condition of the Premises. If
Tenant does not appear for the joint inspection within three (3) days after
notice and demand for the same by Landlord, Landlord may unilaterally inspect
the Premises or have such inspections conducted, and make determinations
regarding the costs, fees and expenses for any such repairs or restorations of
the Premises. For the breach of any such covenant Landlord shall be entitled to
recover from Tenant and Tenant shall pay to Landlord as and for liquidated
damages all costs, fees, and expenses for performing such covenant together with
interest thereon at the Interest Rate.

        22.4 If Tenant or any subtenant of Tenant or anyone holding by, through,
or under Tenant should fail to surrender possession of the Premises or any part
thereof at the expiration of the Term, same shall constitute a “holding over” by
Tenant for which Tenant is and shall be primarily liable, which possession shall
be, at the sufferance of Landlord, subject to all of the provisions of this
Lease, except that the Fixed Annual Rent shall be the greater of one hundred
fifty (150%) percent of the Fixed Annual Rent in effect during the last month of
the Term. Should Landlord incur any expense in removing Tenant or any such
subtenant or person holding by or through or under Tenant who has failed to so
surrender the Premises, Tenant shall and hereby agrees to reimburse Landlord for
the cost and expense, including attorneys’ fees of removing such subtenant or
such person, together with interest thereon at the Interest Rate, in addition to
any other damages as provided for elsewhere in this Lease. Nothing contained in
this Lease shall be deemed a consent or acquiescence by Landlord to any such
“holding-over.” Landlord shall not be required to perform any work, furnish any
materials or make any repairs within the Premises during the holdover period. If
Tenant shall hold-over or remain in possession of any portion of the Premises
beyond the Expiration Date, Tenant shall be subject not only to summary
proceedings, but also to all costs, losses and damages related thereto,
including, without limitation any damages arising out of any lost opportunities
(and/or new leases) by Landlord to re-let the Premises or any part thereof. All
damages to Landlord by reason of such holding over by Tenant may be the subject
of a separate action and need not be asserted by Landlord in any summary
proceedings against Tenant.

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        22.5 Notwithstanding anything to the contrary contained herein, all of
Tenant’s obligations that arise or accrue during the term of this Lease which
Tenant has not satisfied or has breached shall survive the termination or
expiration of the term of this Lease including, without limitation, Tenant’s
obligations in respect of compliance with laws, indemnity and insurance, removal
of liens, and repairs.

23.    NO WAIVER.

        23.1 One or more waivers of any covenant or condition by Landlord shall
not be construed as a waiver of a subsequent breach of the same or any other
covenant or condition, and the consent or approval by Landlord to or of any act
by Tenant requiring Landlord’s consent or approval shall not be construed to
waive or render unnecessary Landlord’s consent or approval to or of any
subsequent similar act by Tenant. No provision of this Lease shall be deemed to
have been waived by Landlord unless such waiver is in writing signed by
Landlord.

        23.2 The receipt by Landlord of Fixed Annual Rent or Additional Rent
reserved herein with knowledge of the breach of any covenant of this Lease shall
not be deemed a waiver of such breach. No receipt of money by Landlord from
Tenant or a person acting on behalf of Tenant after the cancellation or
termination hereof shall (a) reinstate, continue or extend the Term, (b) affect
any notice theretofore given to Tenant, (c) operate as a waiver of a right of
Landlord to enforce payment of fixed annual rent or additional rent due or
thereafter falling due or (d) operate as a waiver of the right of Landlord to
recover possession of the Premises or pursue any other remedy in this Lease or
at law provided.

        23.3 No payment by Tenant or receipt by Landlord of a lesser amount than
the Fixed Annual Rent or Additional Rent reserved herein shall be deemed to be
other than on account of the earliest stipulated fixed annual rent or additional
rent. No endorsement or statement on any check or any letter accompanying any
check or payment shall be deemed an accord and satisfaction and Landlord in
either instance may accept such check or payment without prejudice to Landlord’s
right to recover the balance of such Fixed Annual Rent or Additional Rent or
pursue any other remedy in this Lease or at law or equity provided. Receipt of
Fixed Annual Rent or Additional Rent due hereunder by Landlord from any third
party shall be without prejudice and shall not constitute a waiver by Landlord
of the provisions of Article 18 or operate as a consent to any purported sale,
assignment, mortgage, sublease or other transfer of this Lease, as a waiver of
any breach by Tenant or as a release of Tenant from its obligations hereunder.

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        23.4 If Tenant is in arrears in payment of Fixed Annual Rent, Tenant
waives Tenant’s right, if any, to designate the items to which any payments made
by Tenant are to be credited, and Landlord may apply any payments made by Tenant
to such items as Landlord sees fit, irrespective of and notwithstanding any
designation or request by Tenant as to the items to which any such payments
shall be credited.

24.    QUIET ENJOYMENT.

        24.1 Landlord covenants and agrees that upon Tenant’s paying the Fixed
Annual Rent or Additional Rent reserved herein and timely performing and
observing the covenants and provisions of this Lease on Tenant’s part to be
performed and observed, Tenant shall peaceably and quietly enjoy the Premises
without disturbance by or from Landlord, subject to terms and conditions of this
Lease and any instrument to which this Lease is subordinate. This covenant shall
be construed as running with the Premises to and against subsequent owners of
the Premises and successors in interest and is not, nor shall it operate or be
construed as a personal covenant by Landlord, except as to Landlord’s interest
in the Premises so long as such interest continues. Thereafter it shall be
deemed to be a covenant binding upon the successors in interest of Landlord to
the extent of their interest as and when they shall acquire the same and so long
as they may remain such successors in interest.

25.    ASSIGNMENT OF SUBLEASES - ATTORNMENT.

        25.1 Tenant hereby assigns, transfers and sets over to Landlord all of
Tenant’s right, title and interest in and to each and every sublease now or
hereafter executed and affecting the Premises or any part thereof, as well as
all of the rents or other sums of money now or hereafter due and payable
thereunder (“subrents”) and all security now held by or hereafter paid to Tenant
which has been or may hereafter be deposited for the payment of subrents or the
performance of any of the terms of such subleases, upon condition, however, that
Landlord shall not enforce its rights and remedies under this Article 25, except
upon the occurrence of an Event of Default. The provisions of this Article 25
shall be self-operative, provided that nothing contained in this Article 25
shall grant Tenant the right to sublease the Premises or any part thereof,
Tenant’s right to sublease being set forth in Article 18 hereof. Upon notice
from Landlord all subrents and other sums due under the sublease shall be paid
directly to Landlord. Upon curing of such default within applicable grace
periods, if any, the assignment with respect to the particular default in
question shall be deemed cancelled. In confirmation of the foregoing assignment,
Tenant shall execute, acknowledge and deliver to Landlord from time to time but
not more than once each Lease Year, a separate assignment of subleases and
subrents in recordable form and otherwise in form and substance satisfactory to
Landlord.

26.    INTENTIONALL OMITTED.

27.    SHORING, EXCAVATION OF ADJOINING PROPERTY, ENCROACHMENTS.

        27.1 If an excavation shall be made or authorized to be made for
building or other purposes, upon land or streets adjacent to the Premises,
Tenant shall afford to the person or persons causing such excavation license to
enter upon the Premises for the purpose of doing such work as shall reasonably
be necessary to protect or preserve the Premises from injury or damage and to
support the same by proper shoring. Landlord shall not be liable for any
inconvenience, annoyance, disturbance, loss of business or other damage arising
therefrom and Tenant’s obligations hereunder shall not thereby be affected.
Nothing contained in this Article 27 shall be construed as a waiver of any
rights of Tenant against persons other than Landlord.

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        27.2 If any adjoining building or structure encroaches or shall at any
time encroach upon the Premises, no claim or demand or objection of any kind
shall be made by Tenant against Landlord by reason of any such encroachment
(unless such encroachment shall have been willfully and intentionally caused or
approved by Landlord after the date hereof without Tenant’s consent) and no
claim for abatement of Fixed Annual Rent or Additional Rent which may become due
under this Lease shall be made by reason of any such encroachment or acts of or
in connection with the removal thereof, and the rights, liabilities and
obligations of the parties hereto shall be the same as if there were no such
encroachment. In any legal proceedings relating thereto the Premises may
properly and without prejudice be described according to the description herein
contained without reference to any such encroachments. Landlord agrees to
cooperate with Tenant in any proceedings brought by Tenant to remove any such
encroachments, provided that the same shall be without cost, liability or
expense to Landlord.

28.    JURY WAIVER.

        28.1 Tenant hereby waives trial by jury in any action or proceeding on
any matters whatsoever arising out of or in any way connected with this Lease,
the relationship of Landlord and Tenant, or Tenant’s use or occupancy of the
Premises. Regardless of the nature or ground of any summary proceeding or other
action brought by Landlord to recover possession of the Premises, Tenant will
not interpose any counterclaim (except for compulsory counterclaims) of any
nature whatsoever. Nothing herein contained shall be deemed to prohibit Tenant
from bringing a separate action against Landlord on account of any claim which
Tenant may have against Landlord, provided, however, that Tenant shall not in
the prosecution of any such claim (a) make a motion or otherwise request any
court to join such claim with any proceeding instituted by Landlord to recover
possession of the Premises, or (b) seek to have any such proceeding instituted
by Landlord and any action or proceeding commenced by Tenant to be tried
simultaneously. This Lease shall be construed and interpreted in accordance with
the laws of the State of Florida applicable to agreements made and to be
performed wholly within Florida. The parties consent to jurisdiction in the
County of Alachua, City of Gainesville, and State of Florida and waive any claim
of inconvenient forum. If Tenant is not a domestic or qualified Florida
corporation, the Tenant shall appoint and maintain the registered agent required
under Florida law as agent for service of process in Florida in any action
brought by Landlord against the Tenant. Tenant shall provide Landlord annually
with proof of such continued appointment. Notwithstanding such appointment,
Landlord may serve Tenant with process in any action by any other lawful means
or method. The failure to maintain the agent for service of process shall be a
material breach of the Lease and an Event of Default.

29.    ESTOPPEL CERTIFICATES.

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        29.1 Tenant shall at any time and from time to time, upon not less than
twenty (20) days prior request by the Landlord or any Fee Mortgagee execute,
acknowledge and deliver to the requesting party, a written certificate
certifying: (a) that this Lease is unmodified and in full force and effect (or
if there have been modifications that the same is in full force and effect as
modified and stating the modifications); and (b) the dates to which the fixed
annual rent and additional rent have been paid in advance, if any; and (c)
whether or not there is any Event of Default and, if so, specifying each such
default; and (d) whether or not any event has occurred or failed to occur which,
with the passage of time or the giving of notice or both, would constitute such
a default and, if so, specifying each such event; and (e) such other information
as may be reasonably requested by Landlord or any Fee Mortgagee.

        29.2 It is intended that any certificate delivered pursuant to paragraph
29.1 may be relied upon by Landlord and any prospective purchaser or assignee,
or Fee Mortgagees and their prospective assignees.

30.    NOTICES.

        30.1 Any notice or communication which either party is required to give
to the other shall be in writing and shall be deemed given either (i) three (3)
days after when sent by registered or certified mail, return receipt requested,
or (ii) one (1) business day after when sent by nationally recognized overnight
courier service providing for written evidence of delivery, addressed to the
other at the address below set forth or to such other address as either party
may from time to time direct by written notice given in the manner herein
prescribed:

  To Landlord at:

  c/o Topspin Partners, L.P.
Three Expressway Plaza
Roslyn Heights, New York 11577
Attention: Mr. Leo A. Guthart

  With a copy to:

  Westerman Ball Ederer Miller & Sharfstein, LLP
170 Old Country Road, Suite 400
Mineola, New York 11501
Attention: Alan C. Ederer, Esq.

  To Tenant at:

  c/o Electro Energy Inc.
30 Shelter Rock Road
Danbury, Connecticut 06810
Attention: Martin Klein

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  With a copy to:

  Lev & Berlin
200 Connecticut Avenue
Norwalk, CT 06854
Attention: Duane L. Berlin, Esq.

31.    BROKER.

        31.1 Each party represents that no broker or person, licensed or
otherwise, brought the Premises to Tenant’s attention, or had any communication
with Tenant in regard to the same, or was employed by either party. If any claim
is made for brokerage commissions with respect to the Premises as a result of
acts or actions of either party, such party, its successors and assigns, hereby
agree to hold the other harmless and defend the other party, with counsel
selected by such party, at the indemnifying party’s sole expense, from and
against any and all such claims. Each party agrees that the foregoing
representations shall inure to the benefit of the other, its successors or
assigns. Each party agrees to give testimony to this effect in case any action
or proceeding is instituted by any real estate broker or any person, licensed or
otherwise, in connection with this transaction.

        31.2 The provisions of this Article 31 shall survive the termination or
expiration of this Lease.

32.    SELF-HELP.

        32.1 If Tenant shall default in the performance of observance of any
agreement or condition in this Lease contained on its part to be performed or
observed other than an obligation to pay money and shall not cure such default
within the times provided in this Lease (or shall not within said period
commence to cure such default and thereafter prosecute the curing of such
default to completion with due diligence), Landlord may, at its option, without
waiving any claim for breach of this Lease, at any time thereafter cure such
default for the account of Tenant. Any amount paid by or on behalf of Landlord
in so doing shall be deemed paid or incurred for the account of Tenant, and
Tenant agrees to reimburse Landlord therefor or save Landlord harmless
therefrom. The foregoing notwithstanding Landlord may cure any such default as
aforesaid prior to the expiration of said grace period but after notice to
Tenant, if the curing of such default prior to the expiration of said grace
period is reasonably necessary to protect the Premises or any part thereof or
Landlord’s interest therein, or to prevent injury or damage to persons or
property. If Tenant shall fail to reimburse Landlord upon demand for any amount
paid for the account of Tenant hereunder, said amount together with interest
thereon at the Interest Rate shall be deemed additional rent and shall become
due on demand or together with the next installment of fixed annual rent due
hereunder, whichever is sooner.

        32.2 Bills for any expenses incurred by Landlord in connection with any
such performance by it for the account of Tenant, and bills for all costs,
expenses and disbursements of every kind and nature whatsoever, including
reasonable counsel fees and disbursements, involved in collecting or endeavoring
to collect the Fixed Annual Rent or Additional Rent or any part thereof or
enforcing or endeavoring to enforce any rights against Tenant or Tenant*s
obligations hereunder, under or in connection with this Lease or pursuant to
law, including any such cost, expense and disbursement involved in instituting
and prosecuting summary proceedings or in recovering possession of the Premises
after default by Tenant or upon the expiration or sooner termination of this
Lease, and interest on all sums advanced by Landlord under this Article at the
Interest Rate, may be sent by Landlord to Tenant monthly, or immediately, at its
option, and such amounts shall be due and payable as Additional Rent in
accordance with the terms of such bills.

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33.    INDEMNIFICATION BY TENANT.

        33.1 Except to the extent arising from Landlord’s negligence, willful
misconduct or breach of this Lease or the Asset Purchase Agreement, Tenant will
protect, indemnify and save Landlord harmless from and shall defend Landlord
against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, attorneys’ fees and
expenses) imposed upon or incurred by or asserted against Landlord by reason of:
(a) ownership of the Premises during the Term or any interest therein, or
receipt of any Rent or other sum therefrom (other than liabilities or claims
arising out of any Pre-Existing Environmental Condition or Landlord’s activities
in connection with the clean-up and/or remediation thereof); and (b) any
accident, injury to or death of persons or loss of or damage to property,
occurring during the Term or thereafter while Tenant is in possession of the
Premises, on or about the Premises, or any part thereof or the adjoining
sidewalks, curbs, streets or ways, vaults and vault space, if any; and (c) any
use, non-use or condition of or occurrence at the Premises or any part thereof
or the adjoining sidewalks, curbs, vaults and vault space, if any, streets or
ways; and (d) any failure on the part of Tenant to perform or comply with any of
the terms of this Lease; and (e) performance of any labor or services or the
furnishing of any materials or other property in respect of the Premises or any
part thereof. In case any action, suit or proceeding is brought against Tenant
by reason of any such condition or occurrence, Tenant, upon Landlord’s request,
will at Tenant’s expense resist and defend such action, suit or proceeding, or
cause the same to be resisted and defended by counsel designated by Tenant and
approved by Landlord; and (f) any work or thing whatsoever done, or any
condition created, at the Premises during the Term; and (g) any act, omission or
negligence of Tenant or any of its subtenants, licensees, agents, employees,
officers, directors or contractors.

        33.2 In case any action or proceeding is brought against Landlord or its
or their partners, joint venturers, directors, officers, agents or employees by
reason of any matter contemplated by this Article 33, Tenant, upon notice from
Landlord, shall, at Tenant’s sole cost and expense, resist and defend such
action or proceeding (by counsel reasonably satisfactory to Landlord).

        33.3 The obligation of Tenant under this Article 33 shall survive any
expiration or termination of this Lease.

34.    LIMITATION OF LIABILITY.

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        34.1 Notwithstanding anything contained to the contrary in this Lease,
whether express or implied, it is agreed that Tenant (and anyone claiming by,
through or under Tenant, including, without limitation, Tenant’s principals,
agents, representatives or employees) shall look only to Landlord’s estate,
property and interest in and to the Premises in the event of any claim against
Landlord arising out of or in connection with this Lease or the relationship of
Landlord and Tenant. No other property or assets of Landlord, or its directors,
officers, trustees, beneficiaries, shareholders, partners or other principals
(disclosed or undisclosed) shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any such judgment (or other
judicial process) or any other remedy of Tenant arising out of or in connection
with this Lease, the relationship of Landlord and Tenant or all of them or the
Premises. The interest in and to the Premises of Landlord under this Lease shall
include, without limitation, the rents, income, receipts, revenues, issues and
profits issuing from the Premises, any insurance policies required by this Lease
and the premiums or proceeds thereof, any money or securities deposited by
Tenant with Landlord, any surety or performance bonds provided by Tenant
hereunder the proceeds therefrom, and any Award in any condemnation proceedings
or by reason of a temporary taking of the Premises and any real estate tax
refunds, subject to the rights of third parties to all or any part of the
foregoing items. In confirmation of the foregoing, if Tenant or anyone claiming
through Tenant acquires a lien on any such other property or assets of Landlord
by judgment or otherwise, Tenant (or such party) shall promptly release such
lien by executing, acknowledging and delivering an instrument in recordable form
to that effect. If Tenant (or such party) fails to do so, Landlord may do so in
Tenant’s name (or the name of such party) and Tenant hereby irrevocably appoints
Landlord its attorney-in-fact, coupled with an interest to do so. Such
instrument of release shall not release any such lien on the interest of
Landlord in the Premises. Tenant hereby waives the right of specific performance
and any other remedy allowed in equity if specific performance of such other
remedy could result in any liability of Landlord for the payment of money to
Tenant, or to any court or governmental authority (by way of fines or otherwise)
for Landlord’s failure or refusal to observe a judicial decree or determination,
or to any third party. The parties agree and acknowledge that the foregoing in
no way limits or qualifies Tenant’s rights and remedies under and with respect
to any other agreement, document or instrument, including without limitation the
Asset Purchase Agreement and the documents referred to therein.

        34.2 If Tenant shall request Landlord’s consent, or the execution and
delivery by Landlord of any document, or the performance by Landlord of any act,
pursuant to this Lease, and Landlord shall fail or refuse to give such consent,
or execute and deliver such document, or perform such act, Tenant shall not be
entitled to any damages for any failure or refusal by Landlord, Tenant’s sole
remedy shall be an action for specific performance or injunction, and with
respect to any requested consent, such remedy shall be available only in those
cases where Landlord has expressly agreed in writing not to unreasonably
withhold its consent or where as a matter of law Landlord may not unreasonably
withhold its consent.

35.    ARBITRATION.

        35.1 In such cases where this Lease provides for the settlement of a
dispute by arbitration, such arbitration shall be conducted by the American
Arbitration Association (or any successor body of comparable function) in the
City of Gainesville, County of Alachua, and State of Florida in accordance with
the rules then obtaining of said Association (or such successor). The
arbitrator(s) shall be bound to render an award solely in accordance with the
terms of this Lease and shall not by such award increase, decrease or limit the
obligations of the parties hereunder. A judgment upon an award rendered in
accordance with the foregoing may be entered in any court, federal or state,
having jurisdiction there over. Any Fee Mortgagee whose mortgage expressly so
provides shall have the right to participate in any such arbitration, and prompt
notice thereof shall be given to each such Fee Mortgagee by the party requesting
such arbitration, provided and to the extent such party shall have been
previously notified of the name and address of such Fee Mortgagee. The fees and
expenses of any arbitration shall be borne by the parties equally, but each
party shall bear the expense of its own attorneys and experts and of presenting
its own proof.

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36.    NON-MERGER.

        36.1 There shall be no merger of this Lease, nor of the leasehold estate
created by this Lease, with the fee estate in the Premises by reason of the fact
that this Lease or the leasehold estate created by this Lease or any interest in
this Lease or any such leasehold estate may be held, directly or indirectly, by
or for the account of any person or persons who shall own the fee estate in the
Premises, or any interest therein. No such merger shall occur unless and until
all persons at the time having an interest in the fee estate in the Premises and
all persons having an interest in this Lease, or in the leasehold estate created
by this Lease, shall join in a written instrument effecting such merger and
shall duly record the same.

37.    NOTICE OF PURCHASE.

Landlord shall promptly inform Tenant, in writing, if Landlord has what may
deemed to be a serious expression of interest from a bona fide buyer to purchase
the Premises or any part thereof, which Landlord has determined to consider in
good faith. In such an event, Landlord shall provide Tenant with the opportunity
to make an offer to purchase the Premises, and Landlord shall consider such
offer(s) in good faith provided, however that Tenant shall be deemed to have
waived its rights in connection therewith if it fails to make a written offer to
Landlord within ten (10) business days of receipt of any such written notice by
Landlord. In connection with such offer from Tenant, Landlord shall cooperate
with Tenant with respect to any application or inquiry to propose a subdivision
of the Premises, provided however that (i) Landlord shall not be obligated to
undertake any expense in connection with applying for property subdivision or
meeting local requirements for such subdivision, and (ii) such cooperation shall
not be deemed to extend the ten (10) business day period in which Tenant shall
be required to make such written offer to Landlord.

38.    ENTIRE AGREEMENT.

        38.1 This Lease sets forth all of the agreements, conditions and
understandings between Landlord and Tenant relative to the Premises, and there
are no promises, agreements, conditions, understandings, warranties or
representations, oral or written, expressed or implied, between them other than
as herein set forth. Any agreements between Landlord and Tenant prior to the
date hereof are merged herein.

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39.    NO ORAL MODIFICATION.

        39.1 Any agreement hereafter made shall be ineffective to change, waive,
modify, discharge, terminate or effect an abandonment of this Lease in whole or
in part unless such agreement is in writing and signed by the party against whom
such change, waiver, modification, discharge, termination or abandonment is
sought to be enforced.

40.    SUCCESSORS AND ASSIGNS.

        40.1 The covenants and agreements herein contained shall be binding upon
and inure to the benefit of Landlord and Tenant their respective successors and
permitted assigns, provided, however, that no violation of the provisions of
Article 18 shall operate to vest any rights in any successor or assignee of
Tenant.

41.    INDEX AND PARAGRAPH HEADINGS.

        41.1 The index, paragraph headings and “Whereas” clauses are inserted
herein only for convenience and are in no way to be construed as a part of this
Lease or as a limitation in the scope of the particular paragraphs to which they
refer.

42.    INVALIDITY OF PARTICULAR PROVISIONS.

        42.1 If any term or provision of this Lease or the application thereof
to any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforced to the fullest extent permitted by law.

        42.2 Each covenant, agreement, obligation or other provision of this
Lease on Tenant’s part to be performed or observed is and shall be deemed to be
a separate and independent covenant of Tenant not dependent upon any other
provision of this Lease except as otherwise expressly provided.

        42.3 If any rate of interest herein provided to be paid shall exceed the
then maximum legal rate of interest, such interest rate shall be deemed to be
reduced so that same shall in no event exceed the then maximum legal interest
rate.

43.    MECHANICS' LIENS AND OTHER LIENS.

        43.1 Nothing contained in this Lease shall be deemed, construed or
interpreted to imply any consent or agreement on the part of Landlord to subject
Landlord’s interest or estate to any liability under any mechanic’s or other
lien law. If any mechanic’s or other lien or any notice of intention to file a
lien is filed against the Premises or any part thereof, for any work, labor,
services or materials claimed to have been performed or furnished for or on
behalf of Tenant or anyone holding any part of the Premises through or under
Tenant, Tenant shall cause the same to be cancelled and discharged of record by
payment, bond or order of a court of competent jurisdiction within fifteen (15)
days after notice by Landlord to Tenant.

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44.    INTERPRETATIONS.

        44.1 The terms “Landlord”and “Tenant” whenever used herein except as may
otherwise be provided herein shall mean only the owner at the time of Landlord’s
or Tenant’s interest herein, and, upon any sale or permitted assignment of the
interest of either Landlord or Tenant herein, their respective successors in
interest or assigns shall, during the term of their ownership of their
respective estates herein, be deemed to be Landlord or Tenant, as the case may
be.

45.    NO OFFER.

        45.1 This Lease shall neither be deemed to be an offer to lease or sell
all or any part of the Premises nor shall it be binding or effective for any
purpose whatsoever unless and until this Lease is executed and acknowledged by
Landlord and Tenant and originals thereof exchanged and delivered.

46.    MEMORANDUM OF LEASE.

        46.1 Tenant may not record this Lease or any memorandum hereof.

47.    GUARANTY.

        47.1 As a material inducement for Landlord to enter into the Leases,
Tenant’s obligations under all of the Leases are being guaranteed by Electro
Energy Inc. (“Guarantor”), pursuant to the Guaranty of Lease in the form annexed
hereto as Exhibit G, executed of even date herewith.

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               IN WITNESS WHEREOF, the parties hereto have duly executed this
Lease as of the day and year first above written.

  LANDLORD:         Lithium Nickel Asset Holding Company I, Inc.              
By:  /s/ Leo A. Guthart    

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  Name:  Leo A. Guthart   Title:  Chairman
Hereunto Duly Authorized

  TENANT:         EEI Acquisition Co., LLC               By:  /s/ Martin G.
Klein    

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  Name:  Martin G. Klein   Title:  Chief Executive Officer
Hereunto Duly Authorized

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