**AGREEMENT**

**among**

**ASTRIS        ENERGI INC.**

**AND**

**MACNOR        CORPORATION**

**AND**

**2062540        ONTARIO INC.**

**JANUARY        20, 2005**

----

| 1. | **Definitions** |
|----|-----------------|

**“AEI        Shares”**

**“AEI        Technology”**

**“AEI        Warrants”**

**“Applicable        Law”**

**“Authorizations”**

**“Business        Day”. **

**“Claims”**

**“Closing”**

**“Date        of Closing”**

----

**“Counsel”**

**“CVS”**

**“Escrow        Agreement”**

**“Fairness        Opinion”**

**“GAAP”**

**“Governmental        Authority”**

**“Interim        Period”**

**“Misrepresentation”**

**“MOU”**

**“Person”**

**“Shareholder        Approval”**

**“SRO”**

**“SRO        Business”**

**“SRO        Financial Statements”**

**“Tax”**

----

**“Transaction”**

**“Purchased        Shares”**

**“Valuation        Report”**

| 2. | **Purpose** |
|----|-------------|

| 3. | **Sale                  and Purchase** |
|----|----------------------------------------|

| 4. | **Macnor                  Representations and                  Warranties** |
|----|-----------------------------------------------------------------------------|

|  | (a) | Macnor,                  Holdco and SRO are each validly subsisting corporations under the                  laws of                  their respective jurisdictions of incorporation and SRO is duly                  registered                  to carry on business in each jurisdiction where the failure to                  be so                  registered could reasonably be expected to have a material adverse                  effect                  on its business, properties or condition (financial or                  otherwise); |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (b) | Macnor,                  Holdco and SRO each has all requisite power and authority to conduct                  its                  business as is presently being conducted and to execute, deliver                  and                  perform this Agreement and any documents to which it is or is to                  be a                  party; |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | the                  execution, delivery and performance by Macnor and Holdco of this                  Agreement                  have been duly authorized by all necessary corporate action and                  will                  require approval at a meeting of shareholders of SRO and subsequent                  registration by the Court of Commerce in Czech                  Republic; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | this                  Agreement has been duly executed and delivered by Macnor and Holdco                  and                  constitutes their legal, valid and binding obligation, enforceable                  against                  them in accordance with its terms, except as such enforceability                  may be                  affected by bankruptcy, insolvency, arrangement, moratorium or                  other laws                  affecting the enforcement of creditors' rights generally and the                  fact that                  the availability of equitable remedies may be limited by equitable                  principles of general application; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | subject                  to clause (c), the execution and delivery by both parties of this                  Agreement and the performance by them of their obligations hereunder                  do                  not require any authorization under any Applicable Law or approvals,                  consents or waivers of third parties and are not inconsistent with                  and do                  not contravene any provision of or constitute a default under (i)                  their                  constating documents or by-laws, as applicable; (ii) any judgement,                  injunction, decree or order applicable to them or any of their                  properties;                  (iii) any Applicable Law or authorization applicable to it or any                  of its                  properties; or (iv) any indenture, mortgage, contract or other                  instrument                  to which they are a party or by which their or their property may                  be bound                  or affected; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | to                  the best of its knowledge there is no action, suit, investigation                  or                  proceeding pending (or, to their knowledge, threatened) against                  SRO before                  any Governmental Authority which, individually or in the aggregate,                  if                  determined adversely to its interests, could reasonably be expected                  to                  adversely affect the consummation of the transactions contemplated                  hereby                  to which it is a party or the performance by it of its obligations                  hereunder or thereunder, nor is it in default with respect to any                  order of                  any Governmental Authority which default could reasonably be expected                  to                  adversely affect the consummation of the transactions contemplated                  hereby                  to which it is a party or the performance by it of its obligations                  hereunder or thereunder; |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (g) | to                  the best of its knowledge the description of the SRO Business and                  all                  other information with respect to SRO contained in the Valuation                  Report,                  taken together with the SRO Financial Statements, constitutes full,                  true                  and plain disclosure of all material facts relating to the SRO                  Business                  and SRO and does not contain any material Misrepresentation with                  respect                  to the SRO Business or SRO; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (h) | Macnor                  is the registered owner of the Purchased Shares and will transfer                  and                  convey good and marketable title to the Purchased Shares to AEI                  at the                  Time of Closing free and clear of any liens, charges, security                  interests                  or other adverse claims or encumbrances of any nature                  whatsoever; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (i) | no                  Person has any agreement or option or any right or privilege capable                  of                  becoming an agreement or option for the purchase of the Purchased                  Shares                  or to the best of its knowledge for the purchase, subscription                  or issuance                  of any securities of SRO; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (j) | the                  SRO Financial Statements as of June 30, 2004 provided to prepare                  the                  Valuation Report have not been amended prior to the date                  hereof; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (k) | other                  than capital expenditures subsequent to September 30, 2004, to                  its                  knowledge: |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | there                  has not been any material change (financial or otherwise) in the                  business,                  affairs, operations, assets, liabilities (contingent or otherwise),                  capital or prospects of SRO; and |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | SRO                  has carried on, and will continue to carry on the SRO Business                  in the                  ordinary course; |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|  | (l) | to                  the best of its knowledge SRO has no material liabilities, contingent                  or                  otherwise other than as disclosed in the SRO Financial Statements                  as at                  September 30, 2004 or as otherwise disclosed in writing to                  AEI; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (m) | to                  the best of its knowledge there is no action, suit, investigation                  or                  proceeding pending (or, to their knowledge, threatened) against                  SRO before                  any Governmental Authority which, individually or in the aggregate,                  if                  determined adversely to the interest of SRO, could reasonably be                  expected                  to adversely affect the condition, financial or otherwise, of the                  SRO                  Business or the financial results or condition of SRO;                  and |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (n) | Macnor                  is not a non-resident of Canada for the purposes of the Income                  Tax Act                  Canada and regulations made                  thereunder. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (o) | At                  the Closing Time, Holdco will have no assets except the Purchased                  Shares                  and will have no liabilities. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | **AEI                  Representations and                  Warranties** |
|----|--------------------------------------------------------------------------|

|  | (a) | AEI                  is a validly subsisting corporation under the laws of its jurisdiction                  of                  incorporation and is duly registered to carry on business in each                  jurisdiction where the failure to be so registered could reasonably                  be                  expected to have a material adverse effect on its business, properties                  or                  condition (financial or otherwise); |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (b) | AEI                  has all requisite power and authority to conduct its business as                  is                  presently being conducted and to execute, deliver and perform this                  Agreement and any documents to which it is or is to be a party; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | the                  execution, delivery and performance by AEI of this Agreement have                  been                  duly authorized by all necessary corporate action, and do not require                  any                  consents or approvals other than those which have already been                  obtained or                  as disclosed in this Agreement; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | this                  Agreement has been duly executed and delivered by AEI and constitutes                  its                  legal, valid and binding obligation, enforceable against it in                  accordance                  with its terms, except as such enforceability may be affected by                  bankruptcy, insolvency, arrangement, moratorium or other laws affecting                  the enforcement of creditors' rights generally and the fact that                  the                  availability of equitable remedies may be limited by equitable                  principles                  of general application; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | the                  execution and delivery by it of this Agreement and the performance                  by it                  of its obligations hereunder do not require any authorization under                  any                  Applicable Law or approvals, consents or waivers of third parties                  and are                  not inconsistent with and do not contravene any provision of or                  constitute                  a default under (i) its constating documents or by-laws, as applicable;                  (ii) any judgement, injunction, decree or order applicable to it                  or any of                  its properties; (iii) any Applicable Law or authorization applicable                  to it                  or any of its properties; or (iv) any indenture, mortgage, contract                  or                  other instrument to which either of them is a party or by which                  they or                  their property may be bound or affected;                  and |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | the                  AEI Shares and the AEI Warrants will, at their date of issue, be                  validly                  issued securities of AEI. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6. | **Survival** |
|----|--------------|

| 7. | **Further                  Assurances** |
|----|-----------------------------------------|

----

| 8. | **Indemnity                  and Escrow Agreement** |
|----|-----------------------------------------------------|

|  | (a) | A                  claim for damages by AEI under this Section 8 must be delivered                  to Macnor                  and proven to the satisfaction of Macnor, acting                  reasonably; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | In                  the event a claim is properly made by AEI under this Section 8,                  then the                  amount of the claim shall be paid to AEI by the release of the                  equivalent                  amount of the 2,500,000 AEI Shares (the "Escrowed Shares") deposited                  into                  escrow under the terms of the Escrow Agreement attached hereto                  as Schedule                  "B". The number of Escrowed Shares required to pay such claim to                  AEI shall                  be in an amount equal to the damages based on the 5-day average                  closing                  AEI share price at the time of the claim being                  made; |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | In                  no event may the amount paid by Macnor in satisfaction of any amounts                  owing to AEI under this Section 8 exceed the Escrowed                  Shares; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | No                  claim may be made by AEI under this Section 8 unless such claim                  has been                  received by Macnor prior to January 2, 2006 (the "Escrow Termination").                  Any claim received after the Escrow Termination will be null and                  void and                  of no further force or effect; and |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | All                  Escrowed Shares remaining on the Escrow Termination shall be released                  to                  Macnor, and the indemnity provided under this Section 8 will thereafter                  terminate. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | A                  claim for damages by Macnor under this Section 8 must be delivered                  to AEI                  and proven to the satisfaction of AEI, acting                  reasonably; |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | In                  the event a claim is properly made by Macnor under this Section                  8, then                  the amount of the claim shall be paid to Macnor in AEI shares to                  be issued                  from treasury, with the amount of AEI Shares issued to Macnor to                  be of                  equivalent value to the claim, calculated based on the 5-day average                  closing AEI share price at the time of the claim being                  made; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | In                  no event may the amount paid by AEI in satisfaction of any amounts                  owing                  to Macnor under this Section 8 exceed 2,500,000 AEI shares;                  and |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | No                  claim may be made by Macnor under this Section 8 unless such claim                  has                  been received by AEI prior to January 2, 2006. Any claim received                  after                  January 2, 2006 will be null and void and of no further force or                  effect. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 9. | **Conditions                  Precedent** |
|----|-------------------------------------------|

|  | (a) | **Conditions                  Precedent - AEI** |
|--|-----|-------------------------------------------------|

|  | (i) | there                  shall have been obtained, from all appropriate governmental or                  administrative bodies, such licences, permits, consents, approvals,                  certificates, registrations and authorizations as are required                  to be                  obtained by the Vendor to permit the consummation of the Transaction                  and                  the consummation of the Transaction shall not violate or contravene                  any                  injunction, decree or order of any Governmental                  Authority; |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | Macnor                  shall have given or obtained all required notices, consents and                  approvals                  required to be obtained from or given to any third parties in order                  to                  consummate the Transaction; and |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | all                  representations and warranties of Macnor contained herein shall                  be                  accurate in all material respects as at the Time of Closing and                  AEI shall                  have received a certificate of Macnor to that effect signed by                  Macnor. |
|--|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | **Conditions                  Precedent - Macnor** |
|--|-----|----------------------------------------------------|

|  | (i) | there                  shall have been obtained, from all appropriate governmental or                  administrative bodies, such licences, permits, consents, approvals,                  certificates, registrations and authorizations as are required                  to be                  obtained by AEI to permit the consummation of the Transaction and                  the                  consummation of the Transaction shall not violate or contravene                  any                  injunction, decree or order of any Governmental                  Authority; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | the                  Purchaser shall have given or obtained all required notices, consents                  and                  approvals required to be obtained from or given to any third parties                  in                  order to consummate the Transaction; |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | all                  representations and warranties of AEI contained herein shall be                  accurate                  in all material respects as at the Time of Closing and Macnor shall                  have                  received a certificate of AEI to that effect signed on behalf of                  AEI by an                  officer thereof; and |
|--|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | any                  regulatory or stock exchange approval for listing of the AEI Shares                  or the                  common shares of AEI underlying the AEI                  Warrants. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10. | **Closing** |
|-----|-------------|

|  | (a) | Macnor                  shall table for delivery to AEI assignments whereby good and marketable                  title to the Purchased Shares free of encumbrance shall be transferred                  to                  AEI, subject to approval and execution of the transaction by the                  shareholders meeting of SRO and participation of AEI in it as outlined                  in                  4 (c); |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Macnor                  shall table for delivery to AEI a certificate attesting to the                  continued                  truth and validity of their representations and warranties contained                  in                  this Agreement; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | Macnor                  shall table for delivery to AEI a release of all claims against                  SRO; |
|--|-----|---------------------------------------------------------------------------------------------------------------|

|  | (d) | Macnor                  shall undertake to provide any required approvals or consents of                  the                  government of the Czech Republic to the completion of the Transaction                  if                  any; |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | AEI                  shall table for delivery to Macnor certificates representing the                  AEI                  Shares and the AEI Warrants; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | AEI                  shall table evidence that Shareholder Approval is still in effect,                  and                  that the Fairness Opinion is still in force unamended; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (g) | AEI                  shall table for delivery to Macnor a certificate attesting to the                  continued truth and validity of their representations and warranties                  contained in this Agreement; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (h) | there                  shall be tabled an opinion of Czech counsel on such matters related                  to SRO                  and the Transaction as AEI may reasonably                  request; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | Macnor                  shall deliver the Escrow Agreement, along with the 2,500,000 AEI                  Shares to                  be deposited thereunder, duly endorsed in blank for transfer;                  and |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (j) | there                  shall be tabled, executed and delivered such other documents as                  may be                  appropriate or necessary for the completion of the                  Transaction. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 11. | **Termination** |
|-----|-----------------|

|  | (a) | at                  any time by agreement between the                  parties; |
|--|-----|---------------------------------------------------------------------------------|

|  | (b) | by                  AEI in the event of (i) bankruptcy, insolvency or similar event                  affecting                  Macnor, or (ii) Macnor being in breach of any of its obligations                  which is                  not remedied within five days of notice of such default or which                  is not                  capable of being remedied; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | by                  Macnor and Holdco in the event of (i) bankruptcy, insolvency or                  similar                  event affecting AEI, or (ii) AEI being in breach of any of its                  obligations                  which is not remedied within five days of notice of such default                  or which                  is not capable of being remedied. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12. | **General                  and Miscellaneous** |
|-----|------------------------------------------------|

|  | (a) | Any                  notice or other communication required or permitted to be given                  hereunder                  shall be in writing and shall be effectively given if personally                  delivered                  or sent by telecopy transmission to the relevant party at the following                  address: |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | if                  to AEI: |
|--|-----|-----------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | 2175-6                Dunwin Drive |
|--------|--------|------------------------------------|
|   |   | Mississauga,                Ontario |
|--------|--------|-------------------------------------|
|   |   | L5L                1X2 |
|--------|--------|------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | Attention:Anthony                Durkacz, Vice President of Finance |
|--------|--------|---------------------------------------------------------------------|
|   |   | Facsimile:                (905) 608-8222 |
|--------|--------|------------------------------------------|

|  | (ii) | if                  to Macnor: |
|--|------|--------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | 318 Pinehurst Drive |
|--------|--------|---------------------|
|   |   | Oakville,                Ontario |
|--------|--------|----------------------------------|
|   |   | L6J                4X5 |
|--------|--------|------------------------|
|   |   | Attention:                President  |
|--------|--------|-------------------------------------------|
|   |   | Facsimile:                (905) 844-4522 |
|--------|--------|------------------------------------------|

|  | (iii) | if                  to Holdco: |
|--|-------|--------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | P.O.Box                480, 130 King Street West |
|--------|--------|--------------------------------------------------|
|   |   | Toronto,                Ontario |
|--------|--------|---------------------------------|
|   |   | M5X                1J5 |
|--------|--------|------------------------|
|   |   | Attention:                President  |
|--------|--------|-------------------------------------------|
|   |   | Facsimile:                (416) 365-1876 |
|--------|--------|------------------------------------------|

----

|  | (iv) | or                  to such other address or in care of such other Persons as a party                  may from                  time to time advise to each other party hereto by notice in writing.                  The                  date of receipt of any such notice of communication if delivered                  or sent                  by facsimile during normal business hours on a Business Day at                  the place                  of receipt shall be deemed to be the date of delivery thereof,                  or if                  delivered or sent by telecopy after normal business hours on a                  Business                  Day or on a day other than a Business Day, the date of receipt                  shall be                  deemed to be the next Business Day. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | **Waiver                  -** No failure on the part of any party in exercising any                  right or                  remedy hereunder shall operate as a waiver thereof, nor shall any                  single                  or partial exercise of any such right or remedy preclude any further                  or                  other exercise thereof, and no failure on the part of a party to                  complain                  of any act or failure to act of another party or to declare another                  party                  in default, irrespective of how long such failure continues, shall                  constitute a waiver by such first mentioned party of its rights                  hereunder.                  No waiver of any provision of this Agreement, including this Section,                  shall be effective otherwise than by an instrument in writing dated                  subsequent to the date hereof executed by the party entitled to                  give such                  waiver or its duly authorized representatives. No consent or waiver,                  expressed or implied, by a party to or of any breach of default                  by another                  party in the performance of such other party of its obligations                  hereunder                  shall be deemed or construed to be a consent or waiver to or of                  any other                  breach or default in the performance by such other party of the                  same or                  any other obligations of such other party                  hereunder. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | **Amendments                  -**No variation or amendment of any provision of this Agreement,                  including this Section, shall be effective otherwise than by an                  instrument                  in writing dated subsequent to the date hereof executed by all                  parties                  hereto, or their duly authorized representatives. Notwithstanding                  anything                  to the contrary herein. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | **Successors                  and Assigns -** All of the terms and provisions of this Agreement                  shall be binding upon the parties and their respective successors                  and                  shall enure to the benefit of and be enforceable by the parties                  and their                  respective successors, provided that none of the parties may assign                  any of                  their respective rights hereunder without the consent of the other                  parties. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | **Rights                  and Parties Independent -**The rights available to the parties                  under this Agreement and at law shall be deemed to be several and                  not                  dependent on each other and each such right accordingly shall be                  construed                  as complete in itself and not by reference to any other such right.                  Any                  one or more and/or any combination of such rights may be exercised                  by a                  party from time to time and no such exercise shall exhaust the                  rights or                  preclude another party from exercising any one or more of such                  rights or                  combination thereof from time to time thereafter or                  simultaneously. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | **Currency                  -**All amounts herein are expressed in Canadian                  currency. |
|--|-----|--------------------------------------------------------------------------------------------------------|

|  | (g) | **Time                  of Essence -**Time is of the essence of this                  Agreement. |
|--|-----|--------------------------------------------------------------------------------------------------|

----

|  | (h) | **Governing                  Law -**This Agreement shall in all respects be governed by and                  construed in accordance with the laws in force in the Province                  of Ontario                  and the laws of Canada in force in the Province of Ontario. There                  shall be                  no application of any conflict of laws or rules which would result                  in the                  laws of any other jurisdiction applying to this Agreement or the                  construction or interpretation                  hereof. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | **Attornment                  -**The parties hereto                  hereby: |
|--|-----|------------------------------------------------------------------------------|

|  | (i) | irrevocably                  submit and attorn to the non-exclusive jurisdiction of the Courts                  of the                  Province of Ontario for all actions, suits or proceedings arising                  out of                  or in connection with this Agreement or the transactions contemplated                  hereby; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | waive                  all right to object to jurisdiction in any action, suit or proceeding                  relative to this Agreement which they may now or hereafter have                  by reason                  of domicile or otherwise; |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | waive                  any objection to the laying of venue in such Courts of any such                  action,                  suit or proceeding; |
|--|-------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | waive                  and agree not to plead or claim that any such action, suit or proceeding                  has been brought in an inconvenient forum;                  and |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (v) | waive                  any right they may have to, or to apply for, trial by jury in connection                  with any matter arising out of or in connection with this Agreement                  or the                  transactions contemplated hereby. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (j) | **Severability                  -**If any provision of this Agreement or portion thereof,                  or the                  application thereof to any Person or circumstances shall, to any                  extent,                  be invalid or unenforceable in any jurisdiction, the remainder                  of this                  Agreement or the application of such provision or portion thereof                  to any                  other Person or circumstances or in any other jurisdiction shall                  not be                  affected thereby and each provision of this Agreement shall be                  valid and                  enforceable to the fullest extent permitted by                  law. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (k) | **Third                  Party Rights -**This Agreement is not intended to and does not                  create any rights in favour of any Person other than the parties                  hereto                  who hold such rights for their own behalf and they have not indicated                  and                  will not indicate to the contrary to any                  Person. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (l) | **Counterparts                  and Formal Date -**This Agreement may be executed in several                  counterparts, each of which when so executed shall be deemed to                  be an                  original and such counterparts together shall constitute one and                  the same                  instrument and, notwithstanding the date of execution, shall be                  deemed to                  bear date as of the date written at the beginning of this                  Agreement. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**ASTRIS        ENERGI INC.**

----

**MACNOR        INC.**

----

**2062540        ONTARIO INC.**

----

----

**SCHEDULE        A**

**AEI        Warrants**

| **No.                  of Warrants**               | **Exercise                  Price** | **Purchase                  Price Allocation** |
|----------------------------------------------------|-------------------------------------|------------------------------------------------|
|                                               |                                |                                           |
| 2,000,000“A”                  Warrants | $0.90                               | $124,000                                       |
| 2,000,000“B”                  Warrants | $1.10                               | $                  94,000                      |
| 1,000,000“C”                  Warrants | $1.30                               | $                  36,000                      |
|                                                    |                                     | $254,000                                       |

----

**SCHEDULE        B**

**ESCROW        REQUIREMENTS**

----

**ESCROW        AGREEMENT**

**THIS        ESCROW AGREEMENT **

**AMONG:**

**ASTRIS        ENERGI INC.,**

**"AEI"**

**OF        THE FIRST PART**

**MACNOR        CORPORATION, **

**"Macnor"**

**OF        THE SECOND PART**

**2062540        ONTARIO INC., **

**"Holdco"**

**OF        THE THIRD PART**

**"Escrow Agent"**

**OF        THE FOURTH PART**

**WHEREAS:**

| A. | AEI,                  Macnor and Holdco have entered into a share purchase agreement                  (the                  **"Purchase Agreement"**) dated January 20, 2005 for the sale                  by Macnor through Holdco of the remaining 70% of the issued and                  outstanding shares of Astris s.r.o. (**"SRO"**) not owned by                  AEI; |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| B. | All                  words and phrases defined in the Purchase Agreement and used in                  this                  Escrow Agreement but not otherwise defined shall have the meaning                  herein                  as therein; |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C. | Pursuant                  to the terms of the Purchase Agreement, Macnor has agreed to indemnify                  AEI                  (the **"Indemnity"**) for any breach of its representations                  or warranties as contained in the Purchase Agreement, for a period                  ending                  on January 2, 2006 (the **"Escrow Period"**), which indemnity                  shall be capped at a value equal to 2,500,000 AEI shares received                  by                  Macnor from AEI on Closing (the **"Escrowed Shares"**), which                  Escrowed Shares shall be released to AEI to the extent and for                  any amount                  owing under the Indemnity, provided such amount may never exceed                  the                  Escrowed Shares; |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| D. | Macnor                  and Holdco have agreed to direct that the Escrowed Shares be deposited                  and                  held by the Escrow Agent in accordance with and pursuant to the                  terms of                  this Escrow Agreement pending existence of and verification of                  the                  veracity of any claims under the Indemnity, failing which the Escrowed                  Shares shall be released at the end of the Escrow Period to                  Macnor. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**NOW        THEREFORE THIS AGREEMENT WITNESSETH**

**ARTICLE        1**

**INTERPRETATION**

**Definitions.**

**"Escrow        Agreement" **

**"Escrowed        Shares"**

**"Escrow        Amount Release Certificate" **

**"Termination        Date" **

**Headings.        **

----

**Number        and Gender.**

**Governing        Law. **

**Severability.        **

**Appendices.        **

**Appendix        "A" - Escrow Amount Release Certificate**

**ARTICLE        2**

**ESCROW        AGENT**

**Appointment        of Escrow Agent. **

**Escrow        Agent’s Fees and Expenses**

----

**Disclosure        by Escrow Agent**

**ARTICLE        3**

**DELIVERY        AND DEPOSIT OF THE ESCROWED SHARES**

**Delivery        of the Escrowed Shares.**

**ARTICLE        4**

**RELEASE        OF ESCROWED SHARES**

**Receipt        of Notice of Claim under the Indemnity.**

**Automatic        Release.**

**Greater        Certainty.**

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**ARTICLE        5**

**LIABILITY        AND INDEMNITY**

**Liability        of the Escrow Agent.**

**Indemnity        in Favour of the Escrow Agent.**

**Limitations        on Duties and Liabilities**

|  | (a) | The                  Escrow Agent shall have no duties except those which are expressly                  set                  forth herein and shall not be bound by any notice of a claim or                  a demand                  with respect thereto or any waiver, modification, amendment, termination                  or rescission of this Agreement unless received by it in writing                  and                  signed by all of the parties hereto other than the Escrow Agent                  (or, in                  the case of a waiver, the party so waiving) and in a form satisfactory                  to                  the Escrow Agent. No implied duties or obligations of the Escrow                  Agent                  shall be read into this Agreement. Moreover, the Escrow Agent shall                  not at                  any time be required to deal with any securities regulatory authority,                  securities exchange, transfer agent, or any other comparable entity                  with                  respect to the Escrowed Shares. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | The                  Escrow Agent shall not be bound in any way by, or have a duty to                  inquire                  into, any agreement or contract between the parties hereto (whether                  or not                  the Escrow Agent has any knowledge thereof), and the duties and                  responsibilities of the Escrow Agent shall be limited to those                  expressly                  set forth herein. Nothing herein contained shall impose any obligation                  on                  the Escrow Agent to see to or require evidence of the registration                  or                  filing or recording (or renewal thereof) of this Escrow Agreement,                  or any                  instrument ancillary or supplemental thereto, or to procure any                  further,                  other, or additional instrument or further assurance. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | (c) | The                  Escrow Agent shall comply with such notices or instructions as                  are                  provided for in this Escrow Agreement and orders or processes of                  any court                  having jurisdiction. If any part or all of the Escrowed Shares                  held in                  escrow by the Escrow Agent is at any time attached or seized under                  any                  court order or in case any judicial order, judgment or decree shall                  be                  made affecting this Escrow Agreement or any part hereof, then,                  in such                  event, the Escrow Agent is authorized to rely upon and comply with                  such                  order, judgment or decree. The Escrow Agent is not bound to inquire                  into                  the authority of any persons signing any instructions, directions                  or                  orders hereunder. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | The                  Escrow Agent may employ such counsel of its choosing as it may                  deem                  necessary for the proper discharge of its duties                  hereunder. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | The                  Escrow Agent shall not be liable for any act or omission to act                  hereunder                  if taken or omitted by it in good faith. The Escrow Agent shall                  also be                  fully protected in relying upon any written notice, demand, certificate                  or                  document which it considers, in good faith, to be                  genuine. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | In                  the event of any conflicting demands or claims with respect to                  the subject                  matter of this Escrow Agreement, including, without limitation,                  release of                  the Escrowed Shares or any portion thereof, the Escrow Agent shall                  have                  the right to discontinue all further acts until such conflicts                  are                  resolved, and the further right to commence or defend any action                  or                  proceeding for the determination of such conflict, including, without                  limitation of the foregoing, a suit or action in interpleader.                  In the                  event that the Escrow Agent should commence any action to determine                  any                  such conflict between the parties, including but not limited to                  an action                  in the nature of an interpleader, the Escrow Agent shall, upon                  delivery of                  the Escrowed Shares to a court of competent jurisdiction, be ipso                  facto                  released and discharged from any and all duties and obligations                  imposed                  upon the Escrow Agent hereunder with respect to the subject matter                  of such                  action. Notwithstanding the foregoing, the Escrow Agent shall provide                  Macnor and Holdco fifteen (15) days written notice prior to commencing                  any                  such action and during that period shall act reasonably and in                  good faith                  in facilitating a resolution of any such conflict between the                  parties. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (g) | Each                  party hereto (other than the Escrow Agent) waives any claims or                  demands                  against the Escrow Agent and its principals with respect to all                  acts taken                  by the Escrow Agent in conformance with this Escrow Agreement.                  The Escrow                  Agent shall have no duty to take any action other than as specifically                  provided for in this Escrow Agreement, and shall have no liability                  for any                  non-action if such action has been restrained by any order of any                  court or                  administrative agency or if, in its sole discretion, it determines                  that                  any such action would violate any law or governmental                  regulation. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | (h) | The                  Escrow Agent may, in relation to its obligations hereunder, act                  on the                  opinion, advice or information obtained from any lawyer or other                  expert,                  whether retained by the Escrow Agent, Macnor or Holdco, but shall                  not be                  bound to act upon such opinion, advice or information and shall                  not be                  held responsible for any loss occasioned for so acting or not so                  acting,                  as the case may be, except if such loss results from the gross                  negligence                  or wilful misconduct of the Escrow Agent, and the Escrow Agent                  may employ                  such agents as may be necessary to properly discharge its duties                  and may                  pay any reasonable monies required for legal or other advice as                  aforesaid. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | In                  the exercise of its rights and duties hereunder, the Escrow Agent                  shall                  not be in any way responsible for the consequence of any breach                  on the                  part of a party hereto of any of their respective covenants herein                  contained or of any acts of the agents or servants of any of                  them. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (j) | The                  Escrow Agent may resign its agency and be discharged from all duties                  and                  obligations hereunder by giving to AEI and Macnor thirty (30) days’ prior                  written notice of its resignation, or such shorter period as such                  parties                  shall accept as sufficient. If the Escrow Agent resigns its agency                  in                  accordance herewith, AEI and Macnor shall have the right and obligation                  to                  appoint a succeeding escrow agent who, upon accepting such appointment,                  shall assume all of the obligations and responsibilities and shall                  be                  entitled to enjoy the benefits and rights of the Escrow Agent hereunder.                  If a successor escrow agent is appointed as herein provided, the                  Escrow                  Agent shall deliver to such successor all of the Escrowed Shares                  then in                  its possession upon payment of its                  fees. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE        6**

**MISCELLANEOUS**

**Notices.**

|  | (a) | if                  to AEI: |
|--|-----|-----------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | 2175-6 Dunwin Drive |
|--------|--------|---------------------|
|   |   | Mississauga,                Ontario |
|--------|--------|-------------------------------------|
|   |   | L5L                1X2 |
|--------|--------|------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | Attention:Anthony                Durkacz, Vice President of Finance |
|--------|--------|---------------------------------------------------------------------|
|   |   | Facsimile:                (905) 608-8222 |
|--------|--------|------------------------------------------|

|  | (b) | if                  to Macnor: |
|--|-----|--------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | 318                Pinehurst Drive |
|--------|--------|------------------------------------|
|   |   | Oakville,                Ontario |
|--------|--------|----------------------------------|
|   |   | L6J                4X5 |
|--------|--------|------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | Attention:                President |
|--------|--------|-------------------------------------|
|   |   | Facsimile:                (905) 844-4522 |
|--------|--------|------------------------------------------|

|  | (c) | if                  to Holdco: |
|--|-----|--------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | P.O.Box 480, 130 King Street                West |
|--------|--------|--------------------------------------------------|
|   |   | Toronto, Ontario |
|--------|--------|------------------|
|   |   | M5X                1J5 |
|--------|--------|------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | Attention:                President |
|--------|--------|-------------------------------------|
|   |   | Facsimile: (416)                365-1876 |
|--------|--------|------------------------------------------|

|  | (d) | if                  to Escrow Agent: |
|--|-----|--------------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | Rogers,                Campbell, Mickleborough |
|--------|--------|------------------------------------------------|
|   |   | Lawyers ༠ Trade-Mark                Agents |
|--------|--------|--------------------------------------------------|
|   |   | 350                Bay Street |
|--------|--------|-------------------------------|
|   |   | 11th                Floor |
|--------|--------|---------------------------|
|   |   | Toronto,                Ontario |
|--------|--------|---------------------------------|
|   |   | M5H                2S6 |
|--------|--------|------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | Attention:                Mark D. Mickleborough |
|--------|--------|-------------------------------------------------|
|   |   | Facsimile:                (416) 366-2860 |
|--------|--------|------------------------------------------|

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**Successors        and Assigns.**

**Assignability.        **

**Counterparts.        **

**Entire        Agreement. **

**Further        Assurances. **

**If        Date Falls on a Weekend or a Holiday**

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**IN        WITNESS WHEREOF **

**ASTRIS        ENERGI INC.**

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**MACNOR        CORPORATION**

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**2062540        ONTARIO INC.**

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**ROGERS,        CAMPBELL, MICKLEBOROUGH**

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**APPENDIX        "A"**

**ESCROWED        SHARES**

**RELEASE        CERTIFICATE**

**TO: **,        as        Escrow Agent**

**"Escrow Agreement"**
**"AEI"**
**"Macnor"**
**"Holdco"**
**"Escrow Agent"**

**DATED        **

**MACNOR        CORPORATION**

**DATED        **

**2062540        ONTARIO INC.**

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