**Exhibit 4.4**

 

**DATED: June 23, 2000**

 

BETWEEN:

**ORLANDO CORPORATION**

- and **-**

**HYDROGENICS CORPORATION**

 

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**LEASE**

** **

**regarding 5985 McLaughlin Road, Mississauga, Ontario**

 

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**FRASER MILNER CASGRAIN**Barristers and Solicitors1 First Canadian Place100 King Street WestToronto, OntarioM5X 1B2

 

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**TABLE OF CONTENTS**

 
| ** **                                    | **Section** |
|-----------------------------------------------|-------------|
|                                          |        |
| **ARTICLE I - DEMISE AND TERM**               |
|                                          |        |
| Premises                                      | 1.01        |
| Term                                          | 1.02        |
| Acceptance  of Premises                       | 1.03        |
| Early  Access                                 | 1.04        |
| Option  to Renew                              | 1.05        |
| Letter  of Credit                             | 1.06        |
| Quiet  Enjoyment                              | 1.07        |
|                                          |        |
| **ARTICLE II - RENT**                         |
|                                          |        |
| Intent  of Lease                              | 2.01        |
| Basic  Rent                                   | 2.02        |
| Calculation  of Basic Rent                    | 2.03        |
| Additional  Rent                              | 2.04        |
| Deposit                                       | 2.05        |
| Payments  to Landlord                         | 2.06        |
| Overdue  Rent                                 | 2.07        |
| Set-Off                                       | 2.08        |
| Review  of Tenant’s Financial Statements | 2.09        |
|                                          |        |
| **ARTICLE III - TAXES**                       |
|                                          |        |
| Taxes  Payable by Landlord                    | 3.01        |
| Taxes  Payable by Tenant                      | 3.02        |
| Tenant’s  Business and Other Taxes       | 3.03        |
| Payment  of Taxes                             | 3.04        |
|                                          |        |
| **ARTICLE IV - HEATING AND UTILITIES**        |
|                                          |        |
| Utility  Charges                              | 4.01        |
| Heating                                       | 4.02        |
| Service  Contracts                            | 4.03        |
|                                          |        |
| **ARTICLE V - MAINTENANCE AND REPAIR**        |
|                                          |        |
| Repairs  and Replacements                     | 5.01        |
| Maintenance                                   | 5.02        |
| View  and Repair                              | 5.03        |
| Alterations                                   | 5.04        |
| Removal  of Fixtures and Improvements         | 5.05        |
| Construction  Liens                           | 5.06        |
| Exterior  Maintenance                         | 5.07        |
| Landlord’s  Repairs                      | 5.08        |
| Repairs  on Termination                       | 5.09        |
|                                          |        |
| **ARTICLE VI - ASSIGNING AND SUBLETTING**     |
|                                          |        |
| Assigning  or Subletting                      | 6.01        |
| Change  of Control                            | 6.02        |
| Sublet  of Part of Premises              | 6.03        |
| Excess  Rent                                  | 6.04        |

 

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| ** **                                          | **Section** |
|-----------------------------------------------------|-------------|
|                                                |        |
| Mortgage  of Leasehold                              | 6.05        |
| Advertising  Premises                               | 6.06        |
| Disposition  by Landlord                            | 6.07        |
|                                                |        |
| **ARTICLE VII - USE**                               |
|                                                |        |
| Use  of Leased Premises                             | 7.01        |
| Observance  of Law                                  | 7.02        |
| Waste  and Nuisance                                 | 7.03        |
| Signs                                               | 7.04        |
| Outside  Storage                                    | 7.05        |
| Overloading  Floors                                 | 7.06        |
| Parking                                             | 7.07        |
|                                                |        |
| **ARTICLE VIII - INSURANCE AND INDEMNITY**          |
|                                                |        |
| Tenant’s  Insurance                            | 8.01        |
| Landlord’s  Insurance                          | 8.02        |
| Limit  of Landlord’s Liability                 | 8.03        |
| Limit  of Tenant’s Liability                   | 8.04        |
| Indemnity                                           | 8.05        |
|                                                |        |
| **ARTICLE IX - DAMAGE AND DESTRUCTION**             |
|                                                |        |
| Abatement  of Rent                                  | 9.01        |
| Termination                                         | 9.02        |
|                                                |        |
| **ARTICLE X - DEFAULT**                             |
|                                                |        |
| Events  of Default                                  | 10.01       |
| Right  of Re-entry                                  | 10.02       |
| Reletting                                           | 10.03       |
| Distress                                            | 10.04       |
| Right  of Landlord to Cure Defaults                 | 10.05       |
| Remedies  Not Exclusive                             | 10.06       |
| Non-Waiver                                          | 10.07       |
| Recovery  of Adjustments                            | 10.08       |
|                                                |        |
| **ARTICLE XI - SUBORDINATION AND ACKNOWLEDGEMENTS** |
|                                                |        |
| Mortgages                                           | 11.01       |
| Certificates                                        | 11.02       |
|                                                |        |
| **ARTICLE XII - ACCESS BY LANDLORD**                |
|                                                |        |
| Entry  by Landlord                                  | 12.01       |
| Exhibiting  Leased Premises                         | 12.02       |
|                                                |        |
| **ARTICLE XIII - MISCELLANEOUS**                    |
|                                                |        |
| Notice                                              | 13.01       |
| Registration                                        | 13.02       |
| Planning  Act                                       | 13.03       |
| Obligations  as Covenants                           | 13.04       |
| Severability                                        | 13.05       |
| Overholding                                         | 13.06       |

 

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| ** **                   | **Section** |
|------------------------------|-------------|
|                         |        |
| Unavoidable  Delays          | 13.07       |
| Evidence  of Payments        | 13.08       |
| Lien                         | 13.09       |
| Goods  and Services Tax      | 13.10       |
| Time  of Essence             | 13.11       |
| Law                          | 13.12       |
| Captions/Headings            | 13.13       |
| Joint  and Several Liability | 13.14       |
| Tenant  Partnership          | 13.15       |
| Environmental  Assessments   | 13.16       |
| Easements                    | 13.17       |
| Landlord’s  Warranties  | 13.18       |
| Expansion  Premises          | 13.19       |
| Entire  Agreement            | 13.20       |
| Effect  of Lease             | 13.21       |

 

**SCHEDULES**

 

Schedule“A” - Description of Lands

Schedule“B” - Definitions

Schedule“C” - Exterior Maintenance/Repair Work

Schedule“D” - Landlord’s Work

Schedule“E” - Letter of Credit

Schedule“F” - Site Plan re Complex

Schedule“G” - Site Plan re Leased Premises

Schedule“H” - Outside Storage Area

 

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**THIS INDENTURE**made as of the 23rd day of June, 2000

 

BETWEEN:

 

**ORLANDO CORPORATION**

acorporation incorporated under the

lawsof the Province of Ontario

 

(Hereinaftercalled the **“Landlord”)**

 

OF THE FIRST PART;

 

-and -

 

**HYDROGENICS CORPORATION**

acorporation incorporated under the

federallaws of Canada

 

(Hereinaftercalled the **“Tenant”)**

 

OF THE SECOND PART;

 

**ARTICLE I - DEMISE AND TERM**

 

**1.01        Premises**

 

WITNESSETHthat in consideration of the rents, covenants and agreements hereinafterreserved and contained on the part of the Tenant to be paid, observed andperformed, the Landlord does demise and lease unto the Tenant and the Tenantleases from the Landlord, the Leased Premises.

 

**1.02        Term**

 

Tohave and to hold the Leased Premises for and during the term of five (5) yearscommencing on the 1st day of September, 2000 (the “Commencement Date”)and ending on the 31st day of August, 2005.

 

Ifthe Leased Premises are not ready for occupation by the Tenant on theCommencement Date by reason of a delay or delays not caused or contributed toby the Tenant or anyone acting for or on behalf of the Tenant, then Rent shallabate and shall not accrue or be payable until the Leased Premises are readyfor occupation by the Tenant. Any such abatement of Rent shall be accepted bythe Tenant as full and final settlement of any and all claims which the Tenantmay have by reason of the Leased Premises not being ready for occupancy on theCommencement Date. A certificate by the Landlord’s Architect certifying thatthe Leased Premises are ready for occupation shall be conclusive and bindingupon the Tenant.

 

**1.03        Acceptanceof Premises**

 

TheTenant shall examine the Leased Premises before taking possession thereof andsuch taking of possession shall be conclusive evidence as against the Tenantthat at the time thereof the Leased Premises were in good order andsatisfactory condition and that all promises, representations and undertakingsby or binding upon the Landlord with respect to any alteration, remodelling ordecorating of or installation of fixtures in the Leased Premises, have beenfully satisfied and performed by the Landlord. The Tenant acknowledges that theexisting leasehold improvements, if any, are acceptable and that the Tenant istaking possession of the Leased Premises “as is”, save and except only for (i) completionof the Landlord’s Work, and (ii) such items that the Tenant has notifiedthe Landlord in writing, prior to the Delivery Date, that are not in good orderand satisfactory condition.

 

 

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**1.04        Early Access**

 

Ifall of the following conditions are fulfilled:

 

(a)                                  this Lease hasbeen duly executed by the Tenant and delivered to the Landlord by no later thanAugust 4, 2000, together with the Letter of Credit and the Deposit Monies;and

 

(b)                                 the Building isavailable for access by the Tenant,

 

thenthe Tenant shall have the right to have access to the Building during normalbusiness hours prior to the Commencement Date for purposes of commencing to setup its business operations (but without interfering with the completion of theLandlord’s Work). During such period of access prior to the Commencement Date,the Tenant shall be bound by and comply with all of its obligations under thisLease, save and except only for the payment of Basic Rent, Taxes and chargesunder Section 5.07 hereof.

 

**1.05        Option toRenew**

 

If(i) the Tenant is not then in default under the Lease and (ii) therehas not been at any time any default by the Tenant under the Lease, then theTenant shall have the option (exercisable on one (1) occasion only) toextend the Term for a further consecutive period of five (5) yearscommencing on September 1, 2005 and ending on August 31, 2010 (the “ExtendedPeriod”) on the same terms and conditions contained in the Lease except andprovided that:

 

(a)                                  Sections 1.04,5.08(b), 13.18, this Section 1.05 and Schedule “D” hereto shall not apply;

 

(b)                                 there shall beno option to further extend the Term; and

 

(c)                                  the Basic Rentpayable by the Tenant during the Extended Period shall be the fair market baserent for the Leased Premises during the Extended Period based on similar term,premises and location as for the Leased Premises. If the Landlord and theTenant cannot agree in writing on the Basic Rent for the Extended Period atleast three (3) months prior to the aforesaid commencement date of theExtended Period, then it shall be determined by arbitration as hereinafter setout in this paragraph. In the case of dispute between the Landlord and theTenant in the determination of the amount of the Basic Rent for the ExtendedPeriod, each of the Landlord and Tenant shall at once agree upon theappointment of an arbitrator and shall submit such dispute to the arbitratorfor determination in accordance with the provisions of the *ArbitrationAct*(Ontario), as amended. The decision of the arbitrator so appointedshall be final and binding upon the Landlord and the Tenant who covenant onewith the other that such dispute shall be decided by arbitration alone and notby recourse to any court by action at law. If within a reasonable time, theLandlord and Tenant do not agree upon an arbitrator, the arbitrator may, uponpetition of either the Landlord or the Tenant, be appointed by a judge of theOntario Court (General Division). The cost of arbitration shall be apportioned betweenthe Landlord and the Tenant as the arbitrator may decide.

 

Inorder to exercise the aforesaid option to extend the Term, the Tenant shall berequired to give notice thereof in writing to the Landlord at least nine (9) months(but not more than twelve (12) months) prior to the aforesaid commencement dateof the Extended Period, failing which the Tenant’s option to extend the Termand the Tenant’s rights under this Section shall automatically become nulland void.

 

**1.06        Letter ofCredit**

 

Inorder to induce the Landlord to enter into this Lease the Tenant agrees withthe Landlord to deliver to the Landlord by no later than August 4, 2000,an irrevocable clear standby letter of credit from a Canadian Chartered Bankacceptable to the Landlord, acting reasonably, in the form annexed hereto asSchedule “E” and drawn in favour of the Landlord in the amount of

 

 

2

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**2.02        Basic Rent**

 

Yieldingand paying therefor in lawful money of Canada unto the Landlord as Basic Rentfor the Leased Premises during the Term the following amounts, without anydeduction, set-off or abatement whatsoever:

 

(a)                                  during thefirst two (2) years of the Term, being September 1,2000 to and including August 31, 2002, the sum of $667,038.07 per annum tobe paid in advance in equal consecutive monthly instalments of $55,586.51 onthe first day of each and every month during such period; and

 

(b)                                 during the nextthree (3) years of the Term, being September 1, 2002 to and includingAugust 31, 2005, the sum of $715,026.42 per annum to be paid in advance inequal consecutive monthly instalments of $59,585.54 on the first day of eachand every month during such period.

 

**2.03        Calculationof Basic Rent**

 

TheBasic Rent is calculated on the basis of the area of the Building (95,976.7square feet) multiplied by:

 

(a)                                  $6.95 persquare foot per annum during the first two (2) years of the Term (being September 1,2000 to and including August 31, 2002); and

 

(b)                                 $7.45 persquare foot per annum during the next three (3) years of the Term (being September 1,2002 to and including August 31, 2005).

 

Thecertificate of the Landlord’s Architect regarding the measurement of the areaof the Building shall be conclusive and binding upon the Tenant.

 

**2.04        AdditionalRent**

 

TheTenant shall pay Additional Rent due and owing to the Landlord within ten (10) daysof written demand therefor or as otherwise hereinafter expressly set out andall other Additional Rent on the due date thereof.

 

**2.05        Deposit**

 

TheTenant shall deliver $106,985.52 to the Landlord, by no later than August 4,2000, such monies to be held by the Landlord and applied as follows:

 

(a)                                  $55,586.51 tobe held by the Landlord and applied without interest on account of the BasicRent for the first month of the Term; and

 

(b)                                 $51,399.01 tobe held by the Landlord as security for the full and faithful performance bythe Tenant of all the agreements, terms, covenants and conditions herein setforth and applied without interest against expenses or other costs or damagesincurred by the Landlord and to be payable as liquidated damages and not aspenalty, upon forfeiture, default or early termination, without prejudice toany further claims by the Landlord for damages and/or any remedy for recoverythereof. If the Tenant duly observes and performs all of the terms, provisions,conditions and obligations on its part under the Lease, then such monies shallbe applied without interest on account of Basic Rent as full satisfactionthereof for the last month of the Term.

 

**2.06        Payments toLandlord**

 

Allpayments to be made by the Tenant to the Landlord under this Lease shall bemade at the address hereinafter designated or, at such other place or places asthe Landlord may designate in writing, or to such agent of the Landlord as theLandlord may from time to time direct.

 

 

3

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**2.07        Overdue Rent**

 

TheTenant covenants to pay the Basic Rent and all other charges provided for inthis Lease on their respective due dates in full. The Tenant shall pay theLandlord interest on all overdue Rent, all such interest to be calculated fromthe date upon which the amount is first due hereunder until actual paymentthereof and at a rate being the lesser of (i) five percent (5%) per annumin excess of the minimum lending rate charged to prime commercial borrowers bythe Landlord’s bank from time to time; and (ii) the maximum rate permittedby law.

 

**2.08        Set-Off**

 

AllRent payable by the Tenant to the Landlord shall be paid without any deduction,set-off or abatement whatsoever except as expressly hereinafter provided.

 

**2.09        Review ofTenant’s Financial Statements**

 

Ifthe Tenant is late in the payment of any Rent (or any part thereof) in any two (2) consecutivemonths or more than twice in any twelve (12) month period, then the Tenantshall, at its own cost and expense, forthwith provide the Landlord upon demandwith audited current financial statements and such other financial records andbooks of account of the Tenant as may be required by the Landlord so as toadequately enable it to determine to its satisfaction the financial status ofthe Tenant.

 

**ARTICLE III- TAXES**

** **

**3.01        TaxesPayable by Landlord**

 

TheLandlord shall pay the Taxes charged on the Complex to the applicable taxingauthority, subject to reimbursement by the Tenant as hereinafter set out. TheLandlord shall have no obligation to contest or litigate the imposition of anyTaxes. The Landlord may defer payment of Taxes to the extent permitted by lawif it diligently pursues or causes to be pursued the contest or appeal of theTaxes.

 

**3.02        TaxesPayable by Tenant**

 

(a)                                  If there is noseparate assessment for Taxes with respect to the Leased Premises, or if thereis a separate assessment, but such separate assessment, together with all otherseparate assessments relating to the Complex, do not aggregate the totalassessment for Taxes for the Complex, then until such time as there is aseparate assessment for Taxes with respect to the Leased Premises which,together with all other such separate assessments, aggregate the totalassessment for Taxes for the Complex, and the Landlord so directs as set out inparagraph (b) of this Section, the Tenant shallpay as Additional Rent its Proportionate Share of the Taxes for the Complex,adjusting the occupied tax rate for the Tenant’s specific use of the LeasedPremises, provided that the Landlord, at its option, may apportion the totalassessment for Taxes for the Complex amongst the leaseable premises of theComplex, including the Leased Premises, based on generally accepted real estateappraisal practices and adjusting the assessment based on the use of eachportion of the Complex, as if such premises are actually separately assessed.If there is no separate assessment for Taxes as herein provided and the Complexis not fully assessed as a commercial or industrial property for determinationof Taxes in any Year, then the Landlord shall adjust the Taxes to an amountthat would have been determined if the Complex were fully assessed as anoccupied commercial or industrial property. If the Leased Premises are at anytime during the Term assessed for the support of Separate Schools or if theTaxes are increased by reason of any installations made in or upon or anyalterations made in or to the Leased Premises by the Tenant or by the Landlordon behalf of the Tenant, then the Tenant shall pay the amount of such increaseforthwith to the Landlord upon receipt of notice thereof. If any lands orbuilding in the Complex (other than the Leased Premises) are assessed duringthe Term for the support of Separate Schools or if the Taxes are increased byreason of any alterations made during the

 

 

4

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Termto any building (other than the Building) in the Complex, then the amount ofsuch increase in the Taxes shall be deducted from the Taxes for the Complex forpurposes of determining the Tenant’s Proportionate Share thereof.

 

(b)                                 If there is aseparate assessment of Taxes with respect to the Leased Premises, whichseparate assessment shall be deemed to include the valuation of the LeasedPremises as determined, from time to time, by the assessor for realty taxationpurposes of the Complex, as evidenced by such documentation (including, withoutlimitation, the assessor’s valuation and/or working papers) that may be madeavailable to the Landlord, from time to time, and if such separate assessmenttogether with all other separate assessments for the Complex aggregate thetotal assessment for Taxes for the Complex, and if the Landlord so directs,then the Tenant shall pay as Additional Rent the amount calculated bymultiplying the assessment for the Leased Premises by the applicable tax ratepertaining to the Tenant’s use of the Leased Premises on an occupied basis,which amount shall, for the purposes of this paragraph only and notwithstandinganything else herein contained, be the Tenant’s “Proportionate Share” of Taxesfor the Complex.

 

**3.03        Tenant’s Business and Other Taxes**

 

Inaddition to the Taxes payable by the Tenant pursuant to Section 3.02hereof, the Tenant shall pay to the lawful taxing authorities or to theLandlord if the Landlord so directs:

 

(a)                                  all taxes,rates, duties, assessments and other charges that are levied, rated, charged orassessed against or in respect of all improvements, equipment and facilities ofthe Tenant on or in the Leased Premises or the Complex or any part thereof;

 

(b)                                 every tax andlicense fee which is levied, rated, charged or assessed against or in respectof and every business carried on in the Leased Premises or in respect of theuse or occupancy thereof or any part of the Lands or the Building by the Tenantand every subtenant or licensee of the Tenant or against the Landlord onaccount of its interest in the Complex, and whether in any case, any suchtaxes, rates, duties, assessments or license fees are rated, charged orassessed by any federal, provincial, municipal, school or other body during theTerm;

 

(c)                                  Capital Tax;and

 

(d)                                 the full amountof any taxes in the nature of a business transfer tax, value added tax, salestax or any other tax levied, rated, charged or assessed in respect of the Rentpayable by the Tenant under this Lease or in respect of the rental of spaceunder this Lease, whether characterized as a goods and services tax, sales tax,value added tax, business transfer tax or otherwise.

 

**3.04        Payment of Taxes**

 

(a)                                  The Landlordshall be entitled at any time or times in any Year, upon at least fifteen (15)days’ notice to the Tenant to require the Tenant to pay to the Landlord theTenant’s Proportionate Share of the Taxes for such Year in equal monthlyinstallments. Such monthly amount shall be determined by dividing the Tenant’sProportionate Share of Taxes by the number of months for the period from January 1stin each Year of the Term until the due date of the final installment of Taxesas established by the applicable taxing authority from time to time in eachYear (“Installment Period”) and shall be paid by the Tenant to the Landlord,monthly as Additional Rent, on the date for payment of monthly rental paymentsduring the Installment Period. The Landlord shall be entitled subsequentlyduring such Year, upon at least fifteen (15) days’ notice to the Tenant, torevise its estimate of the amount of increase of such Taxes and the saidmonthly installment shall be revised accordingly. All amounts received underthis provision in any Year on account of the estimated amount of such Taxesshall be applied in

 

 

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reductionof the actual amount of such Taxes for such Year. If the amount received isless than the Tenant’s Proportionate Share of the actual Taxes, the Tenantshall pay any deficiency to the Landlord as Additional Rent within fifteen (15)days following receipt by the Tenant of notice of the amount of such deficiency. Ifthe amount received is greater than the Tenant’s Proportionate Share of theactual Taxes, the Landlord shall either refund the excess to the Tenant as soonas possible after the end of the Year in respect of which such payments weremade or, at the Landlord’s option, shall apply such excess against any amountsowing or becoming due to the Landlord by the Tenant.

 

(b)                                 Taxes payable pursuant toparagraphs (a) and (b) of Section 3.03 shall be paid by the Tenantwhen due if separate tax bills are issued and otherwise shall be paid to theLandlord within ten (10) days’ written demand therefor.

 

(c)                                  Taxes payablepursuant to paragraphs (c) and (d) of Section 3.03 shall be paidto the Landlord within ten (10) days’ written demand therefor or at suchtime or times as the Landlord from time to time determines by notice in writingto the Tenant.

 

(d)                                 If the Term ofthis Lease commences or ends on any day other than the first or last day,respectively, of a Year, the Tenant shall be liable only for the portion of theTaxes for such Year as falls within the Term, determined on a per diem basis.

 

**ARTICLE IV- HEATING AND UTILITIES**

 

**4.01****                       ****Utility Charges**

 

TheTenant shall pay to the suppliers thereof on the due dates, all charges forelectric current and all other utilities supplied to or used in connection withthe Leased Premises.

 

**4.02****                       ****Heating**

 

TheTenant shall maintain the temperature in the Building at a reasonable level toavoid damage occurring in or to the Building.

 

**4.03****                       ****Service Contracts**

 

TheTenant covenants and agrees to take out a standard servicing contract with acapable and reputable company for the service and maintenance of the heatingunits and furnaces and air conditioning equipment serving the Building, suchcontract to include the monthly cleaning of exchangers and the replacement offilters, and to keep such contract in force at its own cost throughout theTerm. The Tenant agrees to provide the Landlord with a copy of such servicingcontract.

 

**ARTICLE V - MAINTENANCE AND REPAIR**

** **

**5.01        Repairs andReplacements**

 

Subjectonly to Sections 5.07 and 5.08 hereof, the Tenant shall at its own cost repair,replace, maintain and keep the Leased Premises and every part thereof,including without limitation the Leasehold Improvements and the heating,ventilating and air conditioning equipment serving the Building, fixtures andfurnishings (whether or not installed or furnished by the Tenant), in good andsubstantial repair and condition as a prudent owner would do, damage by fireand any other perils against which the Landlord is required under this Lease toinsure, only excepted. The Tenant agrees that the Landlord may enter and viewthe state of repair and condition and that the Tenant shall repair inaccordance with notice in writing from the Landlord; provided that if theTenant neglects to so maintain or to make such repairs or replacements promptlyafter notice, the Landlord may, at its option, do such maintenance or make suchrepairs or replacements at the expense of the Tenant, and in any and every suchcase the Tenant covenants with the Landlord to pay to the Landlord forthwith asAdditional Rent all sums which the Landlord may have expended in doing suchmaintenance and making such repairs and/or replacements; provided

 

 

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furtherthat the doing of such maintenance or the making of any such repairs orreplacements by the Landlord shall not relieve the Tenant from its obligationto maintain, repair and replace.

 

**5.02        Maintenance**

 

TheTenant shall at all times during the Term at its own expense keep or cause tobe kept, the Leased Premises well maintained, clean and tidy, including withoutlimiting the generality of the foregoing, keeping the Building properly paintedand decorated and otherwise presentable and of good appearance, the drivewaysand parking areas free and clear of snow and ice, and the lawn, trees andshrubs in good order and condition, all in accordance with all the requirementsof this Lease and the reasonable requirements of the Landlord, its insurers andgovernmental authorities having jurisdiction.

 

**5.03        View and Repair**

 

TheTenant shall allow the Landlord or its duly appointed agent and work people atreasonable times on request to enter the Leased Premises and view the state ofrepair and the Tenant shall repair as aforesaid according to notice in writing,provided always that if the Tenant shall not within fifteen (15) days of suchnotice, commence and proceed diligently with the execution of the repairs andworks mentioned in such notice, it shall be lawful for the Landlord to enterupon the Leased Premises and execute such repairs and works and to charge thecost thereof to the Tenant.

 

**5.04        Alterations**

 

TheTenant shall not, without the prior written approval of the Landlord, make anyinstallations, alterations, additions, partitions, repairs or improvements inor to the Leased Premises, including, without limitation, doing anything whichmight affect the roof or any structural portion or portions of the Building(the “Structure”) or the electrical, mechanical, lighting, heating,ventilating, air-conditioning, sprinkler, fire protection or other systemstherein (the “Systems”). The Tenant’s request for approval shall be in writingand accompanied by an adequate description of the contemplated work, and whereappropriate, working drawings and specifications therefor; the Landlord’s costsof having its architects, engineers or others examine such drawings andspecifications shall be payable by the Tenant upon demand as Additional Rent.All such work shall be done at the Tenant’s cost by competent, reputable andduly licensed contractors/workmen. All such work shall be subject to inspectionby and the reasonable supervision of the Landlord and shall be performed inaccordance with all applicable laws and any reasonable conditions (includingbut not limited to a reasonable supervision fee of the Landlord to be paid bythe Tenant) and regulations imposed by the Landlord, and shall be completed ina good and workmanlike manner and with reasonable diligence in accordance withthe approvals given by the Landlord. The Landlord may require that any workwhich might affect the roof or the Structure (or any part thereof) or theSystems (or any part thereof) be done, at the Landlord’s option, by (i) theLandlord’s contractors or workmen or (ii) contractors or workmen engagedby the Tenant but first approved by the Landlord. Any connections of apparatusto the base electrical, plumbing, heating, ventilating or air-conditioningsystems shall be deemed to be an alteration within the meaning of this Section.The Tenant shall, at its own cost and before commencement of any work, obtainall necessary building or other permits and keep same in force.

 

TheTenant shall not be required by the foregoing provisions of this Section toobtain the prior written consent of the Landlord for minor, non-structuralalterations and installations (collectively the “Work”) by the Tenant to theBuilding if all of the following conditions apply:

 

(a)                                  the Work doesnot cost more than $20,000.00 in total to complete;

 

(b)                                 the Work doesnot require a building permit, work permit or other permit from anygovernmental authority;

 

(c)                                  the Work doesnot affect the roof, the Structure or the Systems, or any part thereof; and

 

 

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theBuilding, provided that (i) the Tenant enters into and maintains at itsown cost a maintenance service contract approved in advance by the Landlord forsuch system during the said period, and (ii) the said system is duly andproperly maintained and repaired at the Tenant’s sole cost throughout the saidperiod. The Tenant acknowledges that any and all replacements arising from anyfailure to properly maintain and repair the said system (or any part thereof)or from the willful acts or omissions of the Tenant, its employees, agents,contractors, invitees, representatives or others for whom at law it isresponsible, shall be the responsibility of the Tenant.

 

**5.09        Repairs onTermination**

 

Atthe expiration or sooner termination of the Term the Tenant shall, at its ownexpense:

 

(a)                                  deliver uppossession of the Leased Premises to the Landlord in the same condition inwhich the Tenant is required under this Lease to repair and maintain the LeasedPremises, together with all Leasehold Improvements which the Tenant is requiredor permitted to leave therein or thereon free and clear of all encumbrances andin a clean and tidy condition and free of all rubbish and to deliver to theLandlord all keys and security devices;

 

(b)                                 remove from theLeased Premises, at the option of and to the satisfaction of the Landlord, allmachine bases, cabling (electrical or otherwise), piping (pneumatic, water orotherwise) and wiring (electrical, computer or otherwise) installed by or onbehalf of the Tenant;

 

(c)                                  remove any andall materials which may be deemed by any applicable legislation as contaminatedor hazardous (and which have been brought onto the Leased Premises by or onbehalf of the Tenant or which are a result of the Tenant’s use or occupation ofthe Leased Premises), and clean up any and all resultant contamination incompliance with all applicable laws and regulations; and

 

(d)                                 remove from theLeased Premises at the option of the Landlord, in compliance with allapplicable laws and regulations, any and all storage and/or holding tanks(whether above or below ground) installed by or on behalf of the Tenant and allpits and trenches created by or on behalf of the Tenant.

 

Thecovenants contained in this Section shall survive the expiry or other terminationof the Term.

 

**ARTICLE VI - ASSIGNING AND SUBLETTING**

 

**6.01        Assigning orSubletting**

 

(a)                                  The Tenantshall not assign this Lease or sublet or franchise, license, grant concessionsin, or otherwise part with or share possession of the Leased Premises or anypart thereof (hereinafter referred to as a “Transfer”) without the priorwritten consent of the Landlord. If the Tenant is not in default under theLease, then the Landlord shall not unreasonably withhold its consent to theTenant’s written request to assign the Lease or sublease the Building. At thetime the Tenant requests such consent the Tenant shall deliver to the Landlordsuch information in writing as the Landlord may reasonably require, including,without limitation, a copy of the proposed offer or agreement, if any, toTransfer and the name, address and nature of business and evidence as to thefinancial strength of the proposed assignee or subtenant or other user(hereinafter referred to as a “Transferee”). Notwithstanding anything else hereincontained, in no event shall any Transfer release or relieve the Tenant in anyregard whatsoever from any of its obligations or liabilities under or inrespect of the Lease.

 

 

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**PROVIDED**however, and it is made acondition to any Transfer that:

 

(i)                                     The proposedTransferee shall agree in writing to assume and perform all of the terms,covenants, conditions and agreements by this Lease imposed upon the Tenantherein in a form to be approved by the solicitor for the Landlord;

 

(ii)                                  The Tenantshall pay to the Landlord all reasonable legal fees incurred by the Landlord inconnection with the Transfer;

 

(iii)                               The consent ofthe Landlord is not a waiver of the requirement upon the Tenant for theLandlord’s consent for any subsequent Transfer;

 

(iv)                              The acceptanceby the Landlord of Rent from a Transferee without the Landlord’s consent tosuch Transfer shall not constitute a waiver of the requirement of such consentnor shall it constitute an acceptance of such party as the Tenant;

 

(v)                                 The Landlordmay, at its option, cancel (i) any options to renew the Lease or extendthe Term and/or (ii) any rights of first refusal or first opportunityregarding additional space;

 

(vi)                              If the Transferdoes not take place within sixty (60) days of the giving of consent by theLandlord, then the Landlord’s consent to such Transfer shall, at the Landlord’soption, expire and become null and void; and

 

(vii)                           If the Lease isdisaffirmed, disclaimed or terminated by any trustee in bankruptcy of aTransferee, then the original Tenant named in this Lease will be deemed onnotice from the Landlord given within sixty (60) days from the date of suchdisaffirmation, disclaimer or termination to have entered into a Lease with theLandlord containing the same terms and conditions as in this Lease.

 

(b)                                 If a Transferoccurs without the consent of the Landlord when required, then the Landlord maycollect Rent from the party in whose favour the Transfer was made and apply thenet amount collected to the Rent herein reserved but no such Transfer will beconsidered a waiver of this covenant or the acceptance of the party in whosefavour the Transfer was made as a tenant hereunder.

 

(c)                                  The Landlordshall not be liable for any claims or actions by or for any damages,liabilities, losses or expenses of the Tenant arising out of the Landlordunreasonably withholding its consent to any Transfer and the Tenant’s onlyrecourse shall be to bring an application for a declaration that the Landlordshall grant its consent to such Transfer.

 

**6.02        Change ofControl**

 

Ifthe Tenant is a private corporation and any part or all of the corporate sharesshall be transferred by sale, assignment, amalgamation, bequest, inheritance,operation of law or other disposition or dispositions so as to result in achange in the control of the corporation, such change of control shall beconsidered a Transfer and shall be subject to the provisions of Section 6.01hereof. The Tenant shall make available to the Landlord upon its request forinspection and copying, all books and records of the Tenant, any assignee orsubtenant and their respective shareholders which, alone or with other data,may show the applicability or inapplicability of this Section.

 

**6.03        Sublet of Part ofPremises**

 

Notwithstandinganything else to the contrary provided in this Lease and/or any act or rule oflaw or regulation now or hereafter in force to the contrary, the Landlord mayin its sole and

 

 

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unfettereddiscretion refuse to give its consent to any Transfer by the Tenant of lessthan the whole of the Building resulting in more than two (2) separatepremises therein.

 

**6.04        Excess Rent**

 

Inthe event that the Basic Rent payable under any Transfer is in excess of theBasic Rent reserved hereunder or is in excess of the proportionate Rentreserved in the event of a sublease of part of the Leased Premises, whether theexcess be in the form of cash, goods or services from the Transferee or anyoneacting on its behalf, the Tenant shall pay all of such excess to the Landlordimmediately upon receipt thereof; in the event that such excess is representedby goods or services rendered to the Tenant or its nominee, the value of thosegoods or services shall be determined by the Landlord and Tenant and that valueshall be paid in cash to the Landlord immediately upon such determination.

 

**6.05        Mortgage ofLeasehold**

 

TheTenant shall not mortgage, pledge, hypothecate or otherwise encumber all or anyportion of the Tenant’s interest in this Lease or the Leasehold Improvements.

 

**6.06        AdvertisingPremises**

 

TheTenant shall not advertise or allow the Leased Premises or a portion thereof tobe advertised as being available for assignment, sublease or otherwise withoutthe prior written approval of the Landlord as to the form, size, content andlocation of such advertisement, which approval shall not be unreasonablywithheld, provided that (i) no such advertising shall contain anyreference to the Rent for the Leased Premises and (ii) any suchadvertising shall be on a standard ground-mounted real estate sign.

 

**6.07        Dispositionby Landlord**

 

Ifthe Landlord sells or leases the Leased Premises or any part thereof, orassigns this Lease, and to the extent that the covenants and obligations of theLandlord under this Lease are assumed by the purchaser, lessee or assignee, theLandlord, without further written agreement, will be discharged and relieved ofliability under the said covenants and obligations.

 

**ARTICLE VII - USE**

 

**7.01        Use ofLeased Premises**

 

(a)                                  Subject toparagraph (b) of this Section, the Tenant shall not use the LeasedPremises nor allow the Leased Premises to be used for any purpose other thanthe manufacture, testing, assembly, warehousing and distribution of fuel cell systems(and ancillary office) and outside storage as set out in paragraph (b) of Section 7.05hereof, but only to the extent (i) all in compliance with the provisionsof this Lease and (ii) permitted by all applicable laws, by-laws and othergovernmental regulations, directions and orders from time to time in force.

 

(b)                                 The Tenantcovenants to not use or permit the Leased Premises to be used for any retailsales whatsoever.

 

**7.02        Observanceof Law**

 

TheTenant shall comply promptly with and conform to the requirements of allapplicable statutes, by-laws, laws, regulations, ordinances and orders fromtime to time or at any time in force during the Term and affecting thecondition, maintenance, repair, use or occupation of the Leased Premises (orequipment therein) and with every applicable regulation, order and requirementof the Insurance Advisory Organization or any body having similar functions orof any liability or fire insurance company by which the Landlord and the Tenantor either of them may be insured at any time during the Term, and, in the eventof the default of the Tenant under the provisions of this Section, the Landlordmay itself comply with any such requirements as aforesaid and the Tenant willforthwith pay all costs and expenses incurred by the Landlord in

 

 

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thisregard and the Tenant agrees that all such costs and expenses shall berecoverable by the Landlord as if the same were Additional Rent reserved and inarrears under this Lease.

 

**7.03        Waste and Nuisance**

 

(a)                                  The Tenantshall not do or suffer any waste, damage, disfiguration or injury to the LeasedPremises or the fixtures and equipment thereof and shall not use or permit tobe used any part of the Leased Premises for any dangerous, noxious or offensivetrade or business nor use the Leased Premises in any manner which, in theopinion of the Landlord acting reasonably, is detrimental to the LeasedPremises or any part thereof.

 

(b)                                 The Tenantshall not keep, sell, use, handle or dispose of any goods or things which maybe objectionable nor cause or maintain any nuisance in, at or on the LeasedPremises nor cause any annoyance, nuisance or disturbance to the occupiers orowners of any adjoining lands and/or premises and shall keep the LeasedPremises free of hazardous waste and contamination.

 

(c)                                  The Tenantcovenants and agrees to utilize the Leased Premises and operate its business ina manner so that no part of the Leased Premises or surrounding lands are usedto generate, manufacture, refine, treat, transport, store, handle, dispose of,transfer, produce or process any Hazardous Substances, except in strictcompliance with all applicable federal, provincial and municipal statutes,by-laws and regulations, including without limitation, environmental, land useand occupational and health and safety laws, regulations, requirements,permits, statutes, by-laws and regulations. The Tenant hereby further covenantsand agrees to indemnify and save harmless the Landlord and those for whom the Landlordis in law responsible from and against any and all losses, costs, claims,damages, liabilities, expenses or injuries caused or contributed to by anyHazardous Substances which are at any time located, handled, placed, stored orincorporated in any part of the Leased Premises. The Tenant hereby agrees thatthe Landlord or its authorized representatives shall have the right at theTenant’s expense, payable as Additional Rent within fifteen (15) days ofreceipt of an invoice therefor, to conduct such environmental site reviews andinvestigations as it may deem necessary for the purposes of ensuring the Tenant’scompliance with the foregoing provisions of this Section. The Tenant’sobligations pursuant to this Section shall survive the expiration or earliertermination of the Term.

 

**7.04        Signs**

 

TheTenant covenants and agrees not to affix or display or cause to be affixed ordisplayed any sign or signs on any part of the exterior of the Building(including, without limitation, the windows), without the prior writtenapproval of the Landlord and subject to applicable municipal and othergovernmental regulations. The Tenant shall at its own cost remove all suchsignage at the expiration of the Term, or other sooner termination thereof, andforthwith repair all damage which may be caused or occasioned by such affixingand/or removal and this covenant shall survive the expiry or other terminationof the Term.

 

**7.05        Outside Storage**

 

(a)                                  Subject only toparagraph (b) of this Section, the Tenant shall not store any goods ormatter of any kind outside the Building without the express written consent ofthe Landlord first had and obtained.

 

(b)                                 Subject toSections 7.02 and 7.03 hereof, the Tenant may store outdoor storage tanks inthe Storage Area, provided that:

 

(i)                                     such storage isapproved (as to the manner and configuration of such storage, including but notlimited to any contemplated stacking) in advance by the Landlord in writing;

 

 

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(ii)                                  all items beingstored in the Storage Area are concealed from view at all times in decorative,protective fencing approved in advance by the Landlord, in its sole andunfettered discretion, in writing (as to dimensions (including but not limitedto height), design, construction, layout and materials); and

 

(iii)                               such storage ispermitted by and in compliance with all Applicable Laws from time to time inforce.

 

(c)                                  In the eventthat there has been any breach of any part of paragraphs (a) or (b) ofthis Section and such breach remains unremedied for more than seven (7) daysafter notice to the Tenant, then the Landlord may, without prejudice to any ofthe Landlord’s other rights and/or remedies under the Lease, remove any or allitems stored on the Lands outside the Building and dispose of such items as theLandlord, in its sole and unfettered discretion, may deem appropriate under thecircumstances. Any and all costs incurred by the Landlord in respect of suchremoval and/or disposal (including but not limited to the Landlord’s legal feeson a solicitor-and-client basis) shall be payable by the Tenant to the Landlordforthwith upon demand therefor as Additional Rent.

 

**7.06        OverloadingFloors**

 

TheTenant covenants that it will not bring upon the Leased Premises or any partthereof any machinery, equipment, article or thing that, by reason of itsweight, size, configuration, operation or otherwise, might damage the LeasedPremises and will not at any time overload or damage the floors of the LeasedPremises. The Tenant shall remove any such machinery, equipment (including butnot limited to mobile equipment such as a forklift), article or thing withinfive (5) days’ written notice thereof and if any damage is caused to theLeased Premises by any machinery, equipment, article or thing or byoverloading, the Tenant shall forthwith repair such damage at its own expenseto the satisfaction of the Landlord.

 

**7.07        Parking**

 

TheTenant shall not park or permit to be parked any vehicles (cars, trucks,trailers or otherwise) anywhere on the Lands at any time other than in suchareas so designated by the Landlord. The Tenant may park cars in the area ofthe Lands outlined in blue (and trucks in the area of the Lands outlined inred) on Schedule “G” hereto.

 

**ARTICLE VIII - INSURANCE AND INDEMNITY**

** **

** **

**8.01        Tenant’sInsurance**

 

The Tenant shall, at its expense, maintain in force during the Term in thename of the Tenant (with the Landlord and the Landlord’s mortgagee, if any, asadditional insureds) the following insurance:

 

(a)                                  comprehensivegeneral liability insurance against claims for personal injury, death orproperty damage (including but not limited to tenants’ legal liability,personal injury liability, products liability, property damage and contractualliability to cover all indemnities) with respect to the business or operationscarried on in and from the Leased Premises, in amounts required by the Landlordand any mortgagee of the Building or any part thereof from time to time but inno event less than Five Million Dollars ($5,000,000.00) per occurrence;

 

(b)                                 insurancecovering all contents of the Leased Premises and all other property for whichthe Tenant is responsible pursuant to this Lease and/or which has beeninstalled by or on behalf of the Tenant (including without limitation allchattels, equipment, machinery, furniture, inventory, fixtures and allLeasehold Improvements) in an amount equal to the full replacement valuethereof; and

 

 

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(c)                                  such otherforms of insurance as may be reasonably required by the Landlord and itsmortgagee from time to time.

 

Anypolicy written pursuant to paragraph (a) of this Section shallcontain a severability of interest clause and a cross liabilityclause. All policies shall contain an undertaking by the insurersto notify the Landlord and its mortgagee, if any, in writing not less thanthirty (30) days prior to any material change, cancellation or terminationthereof and shall be subject only to such deductibles and exclusions as theLandlord may approve, acting reasonably. The Tenant shall promptly furnish uponrequest from the Landlord verification of compliance with the provisions ofthis Section.

 

**8.02        Landlord’sInsurance**

 

TheLandlord shall, throughout the Term, keep at the sole cost and expense of theTenant, the Building and appurtenances thereto, insured to the followingextent:

 

(a)                                  against suchloss or damage as are customarily insured against under a policy of insurancecommonly known as a Multi-Peril or All-Risk policy;

 

(b)                                 blanket broadboiler and pressure vessel insurance including repair or replacement;

 

(c)                                  loss of rentalincome insurance with respect to fire and other usual perils for which suchinsurance is customarily issued for a period (as selected by the Landlord) ofnot less than six (6) months and not more than twelve (12) months for theBasic Rent and other sums payable as Additional Rent under this Lease; and

 

(d)                                 othercasualties as are customarily insured against under insurance contractsnormally entered into from time to time during the Term by owners of buildingsin the area of a character similar to the Leased Premises in such amounts as inthe reasonable opinion of the Landlord is necessary to protect the Landlordagainst loss or damage.

 

Notwithstandinganything contained in this Lease, including but not limited to the covenant ofthe Landlord to take out the aforesaid insurance or the contribution of theTenant to the cost of such insurance, nothing in this Lease shall confer anyinsurable interest upon the Tenant in respect of such insurance and the Tenantacknowledges that it has no right to receive the proceeds or any part thereoffrom such insurance policies.

 

**8.03        Limit ofLandlord’s Liability**

 

TheLandlord shall not be responsible in any way for any injury to any person(including but not limited to death) or for any loss of or damage to anyproperty belonging to the Tenant or to other occupants of the Leased Premisesor to their respective employees, agents, invitees, licensees or other personsfrom time to time attending at the Leased Premises while such person orproperty is in or about the Leased Premises, including without limiting theforegoing, any loss of or damage to any property caused by theft or breakage,or by steam, water, rain or snow or for any loss or damage caused by orattributable to the condition or arrangements of any electrical or other wiringor for any damage caused by smoke or for any other loss whatsoever with respectto the Leased Premises, goods placed therein or any business carried ontherein, save and except only to the extent all of the following conditions areapplicable:

 

(i)                                     such loss ordamage is caused by the grossly negligent misconduct of the Landlord at theLeased Premises during the Term;

 

(ii)                                  the Tenant isnot required by the terms of the Lease to insure against such loss or damage;

 

(iii)                               the Tenant hasnot breached its obligations under Section 8.01 hereof; and

 

 

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(iv)                              the Tenantcannot recover for such loss or damage under its insurance.

 

**8.04        Limit ofTenant’s Liability**

 

TheTenant shall not be liable to the Landlord for any direct injury, loss ordamage required to be insured by the Landlord pursuant to paragraphs (a) or(b) of Section 8.02 hereof to the extent of the proceeds that areactually recovered by the Landlord under such policies of insurance or thatwould have been recovered if the Landlord had insured as required underparagraphs (a) and (b) of Section 8.02 hereof.

 

**8.05        Indemnity**

 

TheTenant shall promptly indemnify and save the Landlord harmless from any and allliabilities, damages, costs, expenses, claims, suits or actions arising out ofany breach, violation or non-observance by the Tenant of any of its obligationsunder the Lease; from any damage to property while such property shall be in orabout the Leased Premises including but not limited to the systems, furnishingsand amenities thereof, as a result of the willful or negligent act or omissionof the Tenant, its employees, agents, invitees or licensees; and from anyinjury to any employee, agent, invitee or licensee, of the Tenant, includingbut not limited to death resulting at any time therefrom, occurring on or aboutthe Leased Premises or any part thereof, save and except only in the case ofsuch injury where all of the following conditions are applicable:

 

(i)                                     such injury iscaused by the grossly negligent misconduct of the Landlord at the LeasedPremises during the Term;

 

(ii)                                  the Tenant isnot required by the terms of the Lease to insure against such injury;

 

(iii)                               the Tenant hasnot breached its obligations under Section 8.01 hereof; and

 

(iv)                              the Tenantcannot recover for such injury under its insurance.

 

Notwithstandinganything else herein contained, this indemnity shall survive the expiry orearlier termination of the Term.

 

**ARTICLE IX- DAMAGE AND DESTRUCTION**

** **

**9.01        Abatement ofRent**

 

Ifthe Building or any portion thereof is damaged or destroyed by fire or by othercasualty against which the Landlord is required to insure under this Lease,Rent shall abate in proportion to the area of that portion of the Buildingwhich, in the reasonable opinion of the Landlord, is thereby rendered unfit forthe purposes of the Tenant bears to the area of the entire Building (but onlyto the extent to which the Landlord actually receives proceeds under its lossof rental income insurance, provided that the Landlord makes timely andreasonable efforts to claim such loss of rental income from the insurer) untilthe Building is repaired and rebuilt as certified by the Landlord’s Architectand the Landlord agrees that it will, with reasonable diligence, repair andrebuild the Building, subject to Section 9.02. The Landlord’s obligationto rebuild and restore the Building shall not include the obligation torebuild, restore, replace or repair any chattel, fixture, LeaseholdImprovements, or any other thing that is the property of the Tenant and/or forwhich the Tenant is to maintain insurance under paragraph (b) of Section 8.01(in this Section collectively called “Tenant’s Improvements”); theBuilding shall be deemed repaired and rebuilt when the Landlord’s Architectcertifies that the Building has been substantially repaired and rebuilt to thestate where the Tenant could occupy it for the purpose of rebuilding,restoring, replacing or repairing the Tenant’s Improvements. The issuance ofthe certificate of the Landlord’s Architect shall not relieve the Landlord ofits obligation to complete the repairing and rebuilding as aforesaid, but theTenant shall forthwith after issuance of such certificate proceed to rebuild,restore, replace and repair the Tenant’s Improvements, and the provisions of Section 5.04shall apply to such work, *mutatis mutandis.*

 

 

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**9.02****        Termination**

 

(a)                                  Notwithstandingthe provisions of Section 9.01 hereof, if the Building or any portionthereof is:

 

(i)                                     damaged ordestroyed by an insured peril and cannot in the reasonable opinion of theLandlord’s Architect be rebuilt or made fit for the purposes of the Tenant asaforesaid within one hundred and eighty (180) days of the date of such damageor destruction; or

 

(ii)                                  damaged ordestroyed by an uninsured peril,

 

theneither the Landlord (in either of the cases of subparagraphs (i) or (ii) above)or the Tenant (in the case of subparagraph (i) above only) may, at itsoption, terminate this Lease by giving to the other, within sixty (60) daysafter the Landlord’s delivery to the Tenant of the certificate referenced inparagraph (b) of this Section, notice of termination and thereupon Rentshall be apportioned and paid to the date of such damage or destruction and theTenant shall immediately deliver up possession of the Leased Premises to theLandlord.

 

(b)                                 The Landlordshall deliver to the Tenant within forty-five (45) days of the date of damageor destruction referred to in paragraph (a) of this Section, a certificateof the Landlord’s Architect setting out whether the Building can be repairedwithin one hundred and eighty (180) days from the date of such damage ordestruction and/or whether the Building has been damaged or destroyed by anuninsured peril.

 

(c)                                  If neither theLandlord nor the Tenant elects to terminate the Lease pursuant to paragraph (a) ofthis Section, as applicable, then the Landlord shall, with reasonablediligence, repair and rebuild the Building in accordance with the provisions ofSection 9.01 hereof.

 

**ARTICLE X- DEFAULT**

 

**10.01      Events of****Default**

 

An“Event of Default” shall occur whenever:

 

(a)                                  the Tenantfails to pay the Rent hereby reserved or any part thereof on the day appointedfor payment thereof, whether lawfully demanded or not;

 

(b)                                 the Tenantshall have breached or failed to comply with any of its covenants andagreements contained in this Lease (save for non-payment of Rent) and shallhave failed to remedy such breach or non-compliance within fifteen (15) days(or such longer period as the Landlord may reasonably determine, having regardto the nature of the default) after written notice thereof given by the Landlordto the Tenant;

 

(c)                                  the Tenantshall make any assignment for the benefit of creditors or become bankrupt orinsolvent or take the benefit of any Act now or hereinafter in force forbankrupt or insolvent debtors;

 

(d)                                 the Tenant is acorporation and any order shall be made for the winding-up of the Tenant orother termination of the corporate existence of the Tenant;

 

(e)                                  the Tenantmakes or attempts to make a bulk sale of assets not in the ordinary course ofthe Tenant’s business;

 

(f)                                    a trustee, receiver,interim receiver, receiver and manager, custodian or liquidator is appointedfor the business, property, affairs or revenue of the Tenant;

 

 

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(g)                                 this Lease orany of the Tenant’s assets on the Leased Premises are taken or seized underwrit of execution, an assignment, pledge, charge, debenture or other securityinstrument;

 

(h)                                 the Tenantabandons or attempts to abandon the Leased Premises;

 

(i)                                     the LeasedPremises shall be used by any person other than the Tenant or the Tenant’spermitted assignees or sublessees or for any purpose other than as set out in Section 7.01;

 

(j)                                     any insurancepolicy on the Building or any part thereof shall be cancelled or shall bethreatened by the insurer to be cancelled or the coverage thereunder reduced inany way by the insurer by reason of the use or occupation of the LeasedPremises or any part thereof by the Tenant and the Tenant shall have failed toremedy the condition giving rise to such cancellation, threatened cancellationor reduction of coverage within forty-eight (48) hours’ written notice given bythe Landlord to the Tenant;

 

(k)                                  the Tenantshall at any time during the Term use the Leased Premises, whether within theuse permitted by Section 7.01 or not, in a manner which imposes upon theLandlord any obligation to modify, extend, alter or replace any part of the Leased Premisesor any of the machinery, equipment or other facilities used in connectionwith the Leased Premises, which obligation is not fulfilled by the Tenant atits own cost in a timely manner; or

 

(1)                                  the LeasedPremises are vacant for any period in excess of fifteen (15) days other thanduring repairs or renovations.

 

Notwithstandingthe Bankruptcy and Insolvency Act (Canada) or otherwise, upon the occurrence ofan Event of Default, the then current month’s Rent and next ensuing three (3) months’Rent shall immediately become due and be paid by the Tenant to the Landlord asaccelerated Rent and the Landlord may immediately distrain for the sametogether with any Rent arrears then unpaid.

 

**10.02      Right ofRe-entry**

 

(a)                                  Upon theoccurrence of an Event of Default, the Landlord may at any time thereafter,without notice to the Tenant, re-enter the Leased Premises or any part thereofin the name of the whole and terminate this Lease and all the rights of theTenant thereunder.

 

(b)                                 If and wheneverthe Landlord exercises its option to re-enter the Leased Premises and terminatethis Lease pursuant to paragraph (a) of this Section:

 

(i)                                     the Tenantshall immediately vacate the Leased Premises and the Landlord may remove orcause to be removed from the Leased Premises the Tenant and/or any otheroccupant or occupants thereof and may remove all property therefrom and sell ordispose of such property as the Landlord considers appropriate withoutliability for loss or damage and without prejudice to the rights of theLandlord to recover arrears of Rent or damages incurred by the Landlord;

 

(ii)                                  the Landlordshall be immediately entitled to the payment of Rent up to the date oftermination together with all expenses incurred by the Landlord in respect ofsuch termination and the value of the Rent, calculated at the date oftermination, for the unexpired portion of the Term.

 

**10.03      Reletting**

 

Atany time when the Landlord is entitled to re-enter the Leased Premises orterminate this Lease, the Landlord may without notice to the Tenant and withoutterminating the Lease enter upon and take custody of theLeased Premises in the name of and as agent of the Tenant,

 

 

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togetherwith all of the Tenant’s improvements, fixtures and furnishings, and sublet theLeased Premises in the name of and as the agent of the Tenant on whatever termsthe Landlord may deem appropriate but no such action by the Landlord shallwaive any of the obligations of the Tenant or limit the subsequent exercise ofany of the Landlord’s remedies for default. If the Landlord shall sublet theLeased Premises as aforesaid, the Landlord shall be entitled to receive all sublease rentand apply the same in its discretion to any indebtedness of the Tenant to theLandlord under this Lease and/or to the payment of any costs and expenses ofreletting, and the Landlord shall be liable to account to the Tenant only forthe excess, if any, of monies actually received by it. If the sublease rent isless than is necessary to pay and discharge all the then existing andcontinuing obligations of the Tenant hereunder, the Tenant shall pay suchdeficiency to the Landlord upon demand from time to time. Notwithstanding anysuch re-entry and subletting without termination, the Landlord may at any timethereafter terminate this Lease by reason of the previous or any other defaultunder the Lease and the provisions of Section 10.02 shall apply.

 

**10.04      Distress**

 

TheTenant waives and renounces the benefit of any present or future statute takingaway or limiting the Landlord’s right of distress, and covenants and agreesthat notwithstanding any such statute, none of the goods and/or chattels of theTenant on the Leased Premises at any time during the Term shall be exempt fromlevy by distress for rent in arrears.

 

**10.05      Right of Landlord to Cure Defaults**

 

Ifthe Tenant fails to perform or cause to be performed any of the covenants orobligations of the Tenant herein, the Landlord shall have the right (but shallnot be so obligated) to perform or cause to be performed and to do or cause tobe done such things as may be necessary or incidental thereto (includingwithout limiting the foregoing, the right to make repairs, installations,erections and expend monies), and all payments,expenses, charges, fees and disbursements incurred or paid by or on behalf ofthe Landlord in respect thereof shall be paid by the Tenant to the Landlordwithin ten (10) days’ written demand therefor together with all reasonablelegal and administrative costs of the Landlord in respect thereof.

 

**10.06      Remedies Not Exclusive**

 

Mentionin this Lease of any particular remedy or remedies in respect of any default orthreatened default by the Tenant in the performance of its obligations shallnot preclude the Landlord from exercising, or limit the extent of, any otherremedy in respect thereof, whether at law, in equity or pursuant to any expressprovision hereof. No remedy shall be interpreted as exclusive or dependent uponany other remedy, and the Landlord may from time to time exercise any one ormore of such remedies independently or in combination.

 

**10.07      Non-Waiver**

 

Nocondoning, excusing or overlooking by the Landlord of any default, breach ornon-observance by the Tenant at any time or times in respect of any covenant,proviso or condition herein contained shall operate as a waiver of the Landlord’srights hereunder in respect of any continuing or subsequent default, breach ornon-observance, or so as to defeat or affect in any way the rights of theLandlord herein in respect of any such continuing or subsequent default orbreach, and no waiver shall be inferred from or implied by anything done or omittedby the Landlord, save only an express waiver by the Landlord in writing.

 

**10.08      Recovery of Adjustments**

 

TheLandlord shall have (in addition to any other right or remedy of the Landlord)the same rights and remedies in the event of default by the Tenant in paymentof any amount payable by the Tenant hereunder as the Landlord would have in thecase of default in payment of Rent.

 

 

17

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**ARTICLE XI - SUBORDINATION AND ACKNOWLEDGEMENTS**

** **

**11.01      Mortgages**

 

Atthe option of the Landlord, this Lease shall be subject and subordinate to anyand all mortgages, charges and deeds of trust, which may now or at any timehereafter affect the Leased Premises in whole or in part, or the Lands, or theBuilding whether or not any such mortgage, charge or deed of trust affects onlythe Leased Premises or the Lands or the Building or affects other premises aswell. On request at any time and from time to time of the Landlord or of themortgagee, chargee or trustee under any such mortgage, charge or deed of trust,the Tenant shall promptly, at no cost to the Landlord or mortgagee, chargee ortrustee:

 

(a)                                  attorn to suchmortgagee, chargee or trustee and become its tenant of the Leased Premises orthe tenant of the Leased Premises of any purchaser from such mortgagee, chargeeor trustee in the event of an exercise of any permitted power of sale containedin any such mortgage, charge or deed of trust for the then unexpired residue ofthe Term on the terms herein contained; and/or

 

(b)                                 postpone andsubordinate this Lease to such mortgage, charge or deed of trust to the intentthat this Lease and all right, title and interest of the Tenant in the LeasedPremises shall be subject to the rights of such mortgagee, chargee or trusteeas fully as if such mortgage, charge or deed of trust had been executed andregistered and the money thereby secured had been advanced before the executionof this Lease (and notwithstanding any authority or consent of such mortgagee,or trustee, express or implied, to the making of this Lease), provided that theapplicable mortgagee, chargee or trustee thereunder has agreed in writing withthe Tenant that the Tenant shall have undisturbed possession of the LeasedPremises as long as it is not in default under the Lease.

 

Anysuch attornment or postponement and subordination shall extend to all renewals,modifications, consolidations, replacements and extension of any such mortgage,charge or deed of trust and every instrument supplemental or ancillary theretoor in implementation thereof. The Tenant shall forthwith execute anyinstruments of attornment or postponement and subordination which may be sorequested to give effect to this Section.

 

**11.02      Certificates**

 

TheTenant and the Landlord shall, within not more than ten (10) days’ writtenrequest therefor, execute and return to the other party from time to time andwithout cost to the Landlord, a statement in writing certifying that this Leaseis unmodified and in full force and effect (or if modified, stating themodifications and that the Lease is in full force and effect as modified), theamount of the annual Basic Rent then being paid hereunder, the dates to whichthe same, by instalment or otherwise, and other charges hereunder have beenpaid, whether or not there is any existing default on the part of the Landlordor the Tenant, of which the other party has notice, and any other informationreasonably required.

 

**ARTICLE XII - ACCESS BY LANDLORD**

** **

**12.01      Entry byLandlord**

 

TheTenant shall permit the Landlord and its agents, employees and workmen to enterupon the Leased Premises at any time and from time to time for the purpose ofinspecting and making repairs, alterations or improvements to the LeasedPremises and the Tenant shall not be entitled to any compensation for anyinconvenience, nuisance or discomfort occasioned thereby.

 

**12.02      ExhibitingLeased Premises**

 

TheTenant shall permit the Landlord or its agents to exhibit the Leased Premisesto prospective tenants during the last six (6) months of the Term duringnormal business hours upon at least 24 hours advance notice.

 

 

18

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**ARTICLE XIII - MISCELLANEOUS**

 

**13.01      Notice**

 

(a)                                  Any notice,request, statement or other writing pursuant to this Lease shall be deemed tohave been given if mailed by registered prepaid post or by facsimiletransmission as follows:

 

Inthe case of the Landlord, to:

 

ORLANDOCORPORATION

6205Airport Road

5thFloor

Mississauga,Ontario

L4V1E3

 

Attention:President

 

FacsimileNo.: (905) 677-2824

 

Andin the case of the Tenant, to:

 

HYDROGENICSCORPORATION

atthe Leased Premises

 

Attention:Director of Engineering Operations

 

FacsimileNo.: (905) 851-2328

 

andsuch notice shall be deemed to have been received by the Landlord or the Tenant(as applicable) on the third business day after the date on which it shall havebeen so mailed (provided that in the event that there is an interruption ofpostal service, the aforesaid period shall be extended for a period equivalentto the period of such interruption) or on the date of the facsimiletransmission.

 

(b)                                 Notice shallalso be sufficiently given if and when the same shall be delivered, in the caseof notice to the Landlord, to an executive officer of the Landlord, and in thecase of notice to the Tenant, to him personally or to an officer or manager ofthe Tenant if the Tenant is a corporation. Such notice, if delivered, shall beconclusively deemed to have been given and received at the time of suchdelivery. If in this Lease two or more persons are named as Tenant, such noticeshall also be sufficiently given if and when the same shall be deliveredpersonally to any one of such persons.

 

Eitherthe Landlord or the Tenant may from time to time, by notice to the other asaforesaid, designate another address in Canada and/or facsimile number to whichnotices issued more than ten (10) days’ thereafter shall be addressed.

 

**13.02      Registration**

 

TheTenant covenants and agrees with the Landlord that the Tenant will not registeror record this Lease or any part thereof against the title to the Lands or anypart thereof except by way of notice which shall be subject to the priorwritten approval of the Landlord and which shall only describe the parties, theLeased Premises and the Term and any options to renew or extend the Term (asapplicable). The Tenant covenants to execute and return to the Landlord suchnotice, prepared by the Landlord in registrable form setting out the aforesaiddetails, within ten (10) days’ written request therefor.

 

 

19

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**13.03      Planning Act**

 

Whereapplicable, this Lease shall be subject to the condition that it is effectiveonly if the *Planning Act*(Ontario) iscomplied with. Pending such compliance, the Term and any extension periods shallbe deemed to be for a total period of one (1) day less than the maximumlease term permitted by law without such compliance.

 

**13.04      Obligations as Covenants**

 

Eachobligation or agreement of the Landlord or the Tenant expressed in this Lease,even though not expressed as a covenant, is considered to be a covenant for allpurposes.

 

**13.05      Severability**

 

Anyprovision of this Lease that is determined to be illegal or unenforceable atlaw shall be considered separate and severable from the remaining provisionswhich shall remain in force and be binding upon the Landlord and the Tenant.

 

**13.06      Overholding**

 

Ifthe Tenant shall continue to occupy all or part of the Leased Premises afterthe expiration of the Term with the consent of the Landlord, and without anyfurther written agreement, the Tenant shall be a monthly tenant at one hundredand fifty percent (150%) of the monthly Basic Rent payable during the last yearof this Lease and otherwise on the terms and conditions herein set out exceptas to length of tenancy.

 

**13.07      Unavoidable Delays**

 

Wheneverand to the extent the Landlord is unable to fulfil or shall be delayed orrestricted in the fulfilment of any obligation hereunder by reason of beingunable to obtain the material, goods, equipment, service, utility or labourrequired to enable it to fulfil such obligation or by reason of any statute,law, regulation, by-law or order or by reason of any other cause beyond itsreasonable control, whether of the same nature as the foregoing or not, theLandlord shall be relieved from the fulfilment of such obligation for so longas such cause continues and the Tenant shall not be entitled to compensationfor any inconvenience, nuisance or discomfort thereby occasioned. There shallbe no deduction from the Rent or other monies payable under this Lease byreason of any such failure or cause.

 

**13.08      Evidence of Payments**

 

TheTenant shall produce to the Landlord upon request, satisfactory evidence of duepayment by the Tenant of all payments required to be made by the Tenant underthis Lease.

 

**13.09      Lien**

 

Assecurity for the due payment by the Tenant of the Rent reserved hereunder andthe performance by the Tenant of all covenants, agreements, provisos andconditions of the Tenant to be performed hereunder, the Tenant hereby grants tothe Landlord a first lien and charge on all goods, chattels, trade fixtures,furniture, equipment and inventory of the Tenant situate on, in or about theLeased Premises or elsewhere. Such lien and charge shall constitute a securityagreement within the meaning of the *Personal Property Security Act*(Ontario) andon default of the Tenant hereunder the Landlord shall have, in addition to anyother rights and remedies it may be entitled to under this Lease or otherwise,all the rights and remedies of a secured party under such Act.

 

**13.10      Goods and Services Tax**

 

Anyamount which is, by the terms of the Lease payable by the Tenant to theLandlord and which is subject to Goods and Services Tax (“GST”) pursuant to the*Excise Tax Act*(Canada) shallbe deemed to be exclusive of GST with the intent that GST shall be calculatedthereon and

 

 

20

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paidby the Tenant to the Landlord at the time such amount is payable pursuant tothe terms of the Lease.

 

**13.11      Time ofEssence**

 

Timeshall be of the essence of this Lease and every part thereof.

 

**13.12      Law**

 

ThisLease shall be governed by and construed in accordance with the laws of theProvince of Ontario.

 

**13.13      Captions/Headings**

 

Thecaptions appearing in the margin of this Lease and in the headings to theArticles of this Lease have been inserted as a matter of convenience ofreference only and do not in any way whatsoever define, limit or enlarge thescope or meaning of this Lease or any part thereof.

 

**13.14      Joint andSeveral Liability**

 

Ifthe Tenant shall be comprised of more than one (1) party, the liability ofeach such party under this Lease shall be joint and several.

 

**13.15      TenantPartnership**

 

Ifthe Tenant shall be a partnership, each person who shall be a member of suchpartnership or successor thereof shall be and continue to be jointly andseverally liable for the performance and observance of all covenants,obligations and agreements of the Tenant under this Lease even if such personceases to be a member of such partnership or successor thereof.

 

**13.16      EnvironmentalAssessments**

 

(a)                                  The Landlord orits agent shall have the right to enter upon the Leased Premises and conductenvironmental assessment audits from time to time during the Term.

 

(b)                                 The Tenantcovenants and agrees to execute, forthwith upon demand therefor, at its owncost and expense, the complete remediation/clean-up of any and allcontamination of the Leased Premises arising after the date that the Tenanttakes occupancy of the Building or any part thereof. The aforesaid covenantcontained in this paragraph (b) shall survive the expiry or othertermination of the Term.

 

**13.17      Easements**

 

TheTenant agrees to postpone the Lease, upon request by the Landlord, to:

 

(i)                                     such easementsin favour of adjoining lands for purposes of ingress and egress as may bereasonably requested by the Landlord from time to time; and

 

(ii)                                  such easementsregarding utilities and/or other services as may be required from time to time,

 

providedin each case that any such contemplated easement does not materially interferewith the Tenant’s use of the Leased Premises.

 

**13.18      Landlord’sWarranties**

 

(a)                                  The Landlordwarrants that, to its knowledge and belief (but without having conducted anyenquiry, study or investigation), the Leased Premises comply, as at June 23,2000, with all applicable municipal requirements or regulations, or recommendationsor orders of the Canadian Fire Underwriters Association or any

 

 

21

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governmentalbody having similar functions, or any liability or fire insurance company bywhich the Landlord may be insured.

 

(b)                                 The Landlordwarrants that, to its knowledge and belief (but without having conducted anyenquiry, study or investigation), (i) there is no contamination or anyother environmental hazard or non-compliance at the Lands as at June 23,2000 above the Ontario Ministry of the Environment clean-up guidelines as atthe said date, and (ii) there are no underground tanks or piping (otherthan utility piping) on or under the Lands as at the said date. The Landlordagrees that any cost in regard to any environmental issues that precede theDelivery Date and adversely affect the Lands shall not be the Tenant’sresponsibility.

 

(c)                                  The Landlordwarrants that it is not aware of any structural or major repairs required to beeffected to the Building and parking area and that it has not received anynotice of non-compliance in respect of the condition of the Leased Premises,which has not been remedied.

 

(d)                                 The Landlordwarrants that the heating, ventilation and air-conditioning system serving theBuilding and the electrical, mechanical (including dock levellers, overheaddoors, shipping doors), plumbing, roof membrane and sprinkler systems of theBuilding will be in good working condition as at the Delivery Date.

 

(e)                                  The Landlordwarrants that the mechanical, heating and air-conditioning system serving theBuilding is currently capable of maintaining (i) an indoor air temperatureof 23°C when the outdoor air temperature is -20°C, and (ii) an indoor airtemperature of 24°C in the office area of the Building when the outdoor airtemperature is 30°C.

 

(f)                                    The Landlord warrants thatthe Building shall, as at the Commencement Date, have a minimum electricalservice of 600 volts, 1200 amps.

 

**13.19      ExpansionPremises**

 

(a)                                  Should theTenant wish to relocate from the Leased Premises into and lease from theLandlord larger premises owned by the Landlord having an area measuring atleast approximately 145,000 square feet (the “Replacement Premises”), then theTerm of the Lease shall, subject to paragraphs (b) and (c) of thisSection, end as at the date of the commencement of the term of the Tenant’slease from the Landlord regarding the Replacement Premises (the “ReplacementLease”), provided that all of the following conditions are fulfilled:

 

(i)                                     the ReplacementLease is a formal written lease in form fully satisfactory to the Landlord, asdetermined by the Landlord in its sole and unfettered discretion;

 

(ii)                                  there has notbeen any default by the Tenant under the Lease; and

 

(iii)                               at the time ofthe Tenant’s negotiation with the Landlord regarding the Replacement Premises(but in any event, **prior to**the negotiationof the base rental rate for the Replacement Premises), the Tenant notifies theLandlord in writing of the Tenant’s intention that the Term of the Lease end asat the commencement of the term of the Replacement Lease.

 

(b)                                 The Tenantacknowledges that upon the occurrence of a default by the Tenant under theLease, paragraph (a) of this Section shall automatically become nulland void and of no further force and effect.

 

(c)                                  Upon theassignment of the Lease by the Tenant, paragraph (a) of this Section shallautomatically become null and void and of no further force and effect.

 

 

22

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**13.20      Entire Agreement**

 

TheTenant acknowledges that there have been no representations made by theLandlord to the Tenant which are not set out in this Lease and that this Leaseconstitutes the entire agreement between the Landlord and Tenant regarding theLeased Premises. For greater certainty, but without limiting the foregoingprovisions of this Section, the Tenant acknowledges that Offer to Lease dated June 6,2000 is null and void for all purposes and is of no further force and effect.The Tenant further acknowledges that the Lease may not be modified except asherein explicitly provided or by subsequent agreement in writing duly signed bythe Landlord and the Tenant.

 

**13.21      Effect of Lease**

 

ThisIndenture and everything herein contained shall extend to and bind and may betaken advantage of by the respective heirs, executors, administrators,successors and assigns, as the case may be, of each of the parties hereto, subjectto the granting of consent by the Landlord asprovided herein to any assignmentor sublease, and where there is more than one tenant or there is a female partyor a corporation, the provisions hereof shall be read with all grammaticalchanges thereby rendered necessary and all covenants shall be deemed joint andseveral.

 

**INWITNESS WHEREOF** the parties hereto have duly executed this Lease.

 

 

 
| LANDLORD: | **ORLANDO  CORPORATION**                       |
|-----------|------------------------------------------------|
|      |                                           |
|      |                                           |
|      | Per:                                           | /s/  Doug Kilner |
|      |                                           | Authorized  Signing Officer |
|      |                                           | Name:  DOUG KILNER |
|      | Title:  PRESIDENT                              |
|      |                                           |
|      |                                           |
| Per:      | /s/  William O’ Rourke                    |
|      | Authorized  Signing Officer                    |
|      |                                           | Name:  WILLIAM O’ ROURKE |
|      |                                           | Title:  VICE PRESIDENT,  FINANCE |
|      |                                           |   |
|      | We  have the authority to bind the Corporation |

 

 
| TENANT: | **HYDROGENICS  CORPORATION**                     |
|---------|--------------------------------------------------|
|    |                                             |
|    |                                             |
|    | Per:                                             | /s/  Pierre Rivard |
|    |                                             | Authorized  Signing Officer |
|    |                                             | Name:  PIERRE RIVARD |
|    |                                             | Title:  PRESIDENT |
|    |                                             |   |
|    |                                             |   |
|    | Per:                                             | /s/  Robert Edwards |
|    |                                             | Authorized  Signing Officer |
|    |                                             | Name:  ROBERT EDWARDS |
|    |                                             | Title:  VP FINANCE |
|    |                                             |   |
|    | I/We  have the authority to bind the Corporation |

 

23

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**SCHEDULE “A”**

** **

**DESCRIPTION OF LANDS**

 

Part ofBlocks 1 and 2, Plan 43M-900, in the City of Mississauga, Regional Municipalityof Peel, designated as Parts 1, 2, 3, 4 and 5 on Plan 43R-17625.

 

 

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**SCHEDULE “B”**

 

**DEFINITIONS**

 

Forthe purposes of this Lease:

 

(a)**                                 ****“Applicable Laws”**means any and all statutes, laws, by-laws,regulations, ordinances, and requirements of governmental and other publicauthorities having jurisdiction over or in respect of the Lands or theBuilding, or any portion thereof, at any time and from time to time, andincluding but not limited to the *Environmental Protection Act,*R.S.O.1990, c.E.l9,as amended, and the *CanadianEnvironmental Protection Act,*R.S.C. 1985, as amended.

 

(b)**                                ****“Additional Rent”**means all amounts payable by the Tenant underthe provisions of this Lease, whether payable to the Landlord or otherwise,over and above Basic Rent.

 

(c)**                                 ****“Basic Rent”**means those amounts set out as Basic Rent in Section 2.02of this Lease.

 

(d)**                                ****“Building”**means the building erected on the Lands andmunicipally known as 5985 McLaughlin Road, in the City of Mississauga, RegionalMunicipality of Peel.

 

(e)**                                 ****“Buildings”**means the buildings in the City of Mississaugamunicipally known as 5985 McLaughlin Road, 5925 McLaughlin Road and 5970Chedworth Way.

 

(f)**                                   ****“Capital Tax”**means the taxes or excises, imposed by any and alltaxing authorities having jurisdiction, upon the Landlord and/or the owners ofthe Building based upon or computed by reference to the capital employed orinvested by the Landlord and/or the owners of the Building in the Lands, theBuilding and improvements thereto.

 

(g)**                                ****“Commencement Date”**has the meaning ascribedthereto in Section 1.02 hereof.

 

(h)**                                ****“Complex”**means the lands described as Parts of Blocks 1, 2and 8, Plan 43M-900, in the City of Mississauga, designated as Parts 1, 2, 3, 4and 5 on Plan 43R-17625; Parts 1, 2, 3, 4, 8, 9, 10, 11 and 12 on Plan43R-17840; and Parts 6, 7 and 8 on Plan 43R-19512, together with all buildingsand improvements located thereon, municipally known as 5985 McLaughlin Road,5925 McLaughlin Road and 5970 Chedworth Way.

 

(i)**                                    ****“Delivery Date”**means such date being the earlier to occur of(i) such date that the Tenant takes occupancy of the Building or any partthereof; and (ii) the Commencement Date.

 

(j)**                                    ****“Deposit Monies”**means the monies referenced in Section 2.05of this Lease.

 

(k)                                  **“Hazardous Substances”**means, without limitation,any and all hazardous substances, hazardous waste, dangerous goods, toxicwaste, toxic substances, contaminants, pollutants or related materials,including without limitation, heavy oil, pesticides, flammables, explosives,radioactive materials, asbestoses, urea formaldehyde foam insulation, radongas, PCB, any products of waste, or any other contaminants, pollutants,substances or products declared to be hazardous or toxic under the ApplicableLaws.

 

(l)**                                     ****“Landlord’s Architect”**means a qualified architect,engineer or Ontario Land Surveyor from time to time chosen by the Landlord.

 

(m)**                              ****“Landlord’s Work”**has the meaning ascribed thereto in Schedule “D”****hereto.

 

(n)**                                ****“Lands”**means the parcel of land described in Schedule “A”hereto.

 

(o)**                                ****“Lease”**means this Lease and any schedules attached heretoand any amendments from time to time made to this Lease in accordance with theprovisions herein set out.

 

 

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(p)                                 **“LeasedPremises”** means the Lands and the Building.

 

(q)                                 **“LeaseholdImprovements”** means all fixtures (save for trade fixtures),installations, additions, improvements and alterations made, erected orinstalled in or on the Leased Premises by or on behalf of the Tenant.

 

(r)                                    **“NetWorth”** means the amount of the Tenant’s net shareholders equity (being thedollar amount of the Tenant’s total assets in excess of the amount of theTenant’s total liabilities) less the Tenant’s goodwill and other intangibleassets, as confirmed by the Tenant’s audited financial statements.

 

(s)                                  **“ProportionateShare”**means such share as determined by the Landlord in accordance with Section 3.02of this Lease.

 

(t)                                    **“Rent”**means BasicRent and Additional Rent.

 

(u)                                 **“StorageArea”**means such area of the Lands outlined in blue on Schedule “H” hereto(measuring approximately 1,000 square feet).

 

(v)                                 **“Taxes”**means alltaxes, rates, duties, levies and assessments whatsoever (imposed by any and alltaxing authorities having jurisdiction) levied, charged or assessed upon theComplex or upon any part or parts thereof and all improvements now orhereafter erected or placed thereon, or charged against the Landlord on accountthereof, including but not limited to local improvement charges (but excludingprofit and excess profit taxes and taxes assessed upon the income of theLandlord). In addition to the foregoing, Taxes shall include any and all taxes,charges, levies or assessments which may in the future be levied, charged orassessed in lieu thereof or in addition thereto. Taxes shall also include allcosts and expenses incurred by the Landlord in obtaining or attempting toobtain a reduction or prevent an increase in the amount thereof and the cost ofall consultants, solicitors and accountants retained by the Landlord withrespect thereto.

 

(w)                               **“Term”**means thatperiod of time set out in Section 1.02 of this Lease (and any and allextensions or renewals thereof, as may be applicable).

 

(x)                                   **“Transfer”**has the meaningascribed thereto in paragraph (a) of Section 6.01 of this Lease.

 

(y)                                 **“Transferee”**has the meaningascribed thereto in paragraph (a) of Section 6.01 of this Lease.

 

(z)                                   **“Year”**means eachcalendar year, the whole or part of which is included within the Term.

 

 

2

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**SCHEDULE “C”**

 

**EXTERIOR MAINTENANCE/REPAIR WORK**

 
| Building  Repairs – General: |   | Minor  exterior caulking, clean-up and repairs of a general nature.                                                                                                                                                                           |
|-----------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   |                                                                                                                                                                                                                                          |
| Roof  Repairs:                    |   | Maintain  and repair roof as required to keep the roof in a well-maintained condition.                                                                                                                                                        |
|                              |   |                                                                                                                                                                                                                                          |
| Painting:                         |   | Paint  outside doors and frames, bollards, roof flashing and rooftop units as  required.                                                                                                                                                      |
|                              |   |                                                                                                                                                                                                                                          |
| Electrical  Repairs:              |   | Maintain  and repair outside lights, replace ballasts and lamps as required.                                                                                                                                                                  |
|                              |   |                                                                                                                                                                                                                                          |
| Paved  Areas:                     |   | Maintain  and repair all asphalt and paved areas (including but not limited to pavement  surface, curbs, sidewalks, catchbasins and concrete dolley pads).                                                                                    |
|                              |   |                                                                                                                                                                                                                                          |
| Parking  Lot Sweeping:            |   | Sweep  entire parking lot.                                                                                                                                                                                                                    |
|                              |   |                                                                                                                                                                                                                                          |
| Parking  Lot Striping:            |   | Line  paint parking areas.                                                                                                                                                                                                                    |
|                              |   |                                                                                                                                                                                                                                          |
| Landscaping:                      |   | Fertilizing,  weed spraying, lawn cutting, till and edge all beds and tree pits, pruning  all shrubs as required, spraying of insects on trees and shrubs. Pruning and  root feeding all trees and replacing dead plant material as required. |
|                              |   |                                                                                                                                                                                                                                          |
| Lawn  Sprinklers:                 |   | Start-up  and winterize irrigation system, replace sprinkler heads as required and  maintain system.                                                                                                                                          |
|                              |   |                                                                                                                                                                                                                                          |
| Spring  Clean-Up:                 |   | General  spring clean-up of debris accumulated over the winter months.                                                                                                                                                                        |
|                              |   |                                                                                                                                                                                                                                          |
| Window  Cleaning:                 |   | Clean  exterior windows six (6) times per year.                                                                                                                                                                                          |
|                              |   |                                                                                                                                                                                                                                          |
| Snow  Removal:                    |   | Snow  ploughing and removal, and salting of parking areas, loading docks and  driveways.                                                                                                                                                      |

 

 

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**SCHEDULE “D”**

 

**LANDLORD’S WORK**

 

TheLandlord will perform at its own expense the following work to the LeasedPremises (the “Landlord’s Work”) in a good and workmanlike manner:

 

1.                                                               Repair andrepaint all office walls and interior doors (in colour chosen by Tenant fromthe Landlord’s samples).

 

2.                                                               Replace allcoloured and/or stained ceiling tiles.

 

3.                                                               Replace alloffice floor coverings with either carpet or vinyl composition tiles (in colourchosen by Tenant from Landlord’s samples).

 

4.                                                               Repair parkinglot and driveways.

 

5.                                                               Ensure that allwindow coverings are in good working order.

 

6.                                                               Ensure that allinterior and exterior lights throughout the Building are in good working order,including the replacement of all burned-out bulbs, tubes and ballasts.

 

7.                                                               Ensure that theoffices, washrooms and warehouse areas of the Building are in a clean and/orbroom-swept condition and that the grounds are clear and free of debris andgarbage.

 

8.                                                               Coat plantfloor with a clear sealer.

 

TheLandlord shall complete the Landlord’s Work within four (4) weeks of theTenant’s delivery to the Landlord of the following:

 

(i)              this Lease dulyexecuted by the Tenant;

 

(ii)             the DepositMonies; and

 

(iii)            the Letter ofCredit referenced in Section 1.06 of this Lease.

 

TheTenant shall not interfere with the Landlord’s completion of the Landlord’s Work.

 

Thecertificate of the Landlord’s Architect regarding the completion of theLandlord’s Work shall be conclusive and binding upon the Tenant.

 

 

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**SCHEDULE “E”**

 

**IRREVOCABLE STANDBY LETTER OF CREDIT**

 

(NAME OF BANK)

 
| **APPLICANT:**        |   | (Name  and Address of Tenant)       |
|-----------------------|--------|-------------------------------------|
| ** **            |   |                                |
| **BENEFICIARY:**      |   | (Name  and Address of Beneficiary)  |
| ** **            |   | Attention:  Vice President, Finance |
| ** **            |   |                                |
| **AMOUNT:**           |   | $650,000.00                         |
| ** **            |   |                                |
| **DATE  OF EXPIRY:**  |   |                                |
| ** **            |   |                                |
| **PLACE  OF EXPIRY:** |   | at  our counters in Toronto         |

 

We hereby authorize you to draw on the                                                 (“Bank”)for account of the Applicant the sum of $650,000.00 Canadian Dollars which maybe drawn by you at any time upon written demand for payment made upon the Bankand which demand we shall honour without inquiring whether you have a right asbetween yourself and the Applicant to make such demand and without recognizingany claim of the Applicant.

 

Youshall deliver to the Bank at such time as written demand for payment is madeupon us, a sight draft drawn on the Bank, the original of this Letter of Creditand a certificate signed by an officer of Orlando Corporation in the formannexed as Appendix I hereto confirming that monies drawn under this Letter ofCredit are pursuant to an agreement between the Applicant and OrlandoCorporation.

 

ThisLetter of Credit is payable notwithstanding any bankruptcy, receivership,liquidation, winding-up or other form of insolvency proceedings by or againstthe Applicant.

 

ThisLetter of Credit shall continue up to the close of business on the 31st day of August, 2005, and will expire on thatdate and you may call for payment of the full amount outstanding under thisLetter of Credit at any time up to the close of business on that date. It is acondition of this Letter of Credit that it shall be deemed to be automaticallyextended in accordance with Section 1.06 of the Lease from the present orany future expiration date hereof unless thirty (30) days prior to such date weshall notify you in writing by registered mail that we elect not to considerthis Letter of Credit renewed for any such additional period. The Beneficiarymay request the Bank to confirm in writing, during the thirty (30) day periodprior to any expiry of this Letter of Credit, that this Letter of Credit hasbeen renewed for such additional period and the Bank shall so confirm inwriting within five (5) business days from receipt of such request fromthe Beneficiary but in any event no later than one (1) business day priorto the expiry of this Letter of Credit. The Beneficiary may also request theBank, at any time, to confirm in writing that this Letter of Credit has notexpired and is in good standing provided such is the case. Thereafter the Bankwill confirm in writing to the Beneficiary within five business days fromreceipt of such request from the Landlord, that this Letter of Credit has notexpired and is in good standing provided such is the case. Any failure by theBank to so confirm in writing within the applicable period shall be deemed tobe a confirmation that this Letter of Credit has not been so renewed or isexpired and is not then in good standing.

 

Thisstandby Letter of Credit is subject to the uniform customs and practice forDocumentary Credits as most recently published by the International Chamber ofCommerce and engages us in accordance with the terms thereof.

 

(Signature of an Authorized Signing Officer of the Bank)

 

 

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**APPENDIX I**

 

TO:                                 (Name andAddress of Bank)

 

We refer you to your Irrevocable Standby Letter of Credit No.                                   whichaccompanies this Certificate and which was issued by you at the request of(Name of Applicant).

 

Wehereby certify, intending that the same may be relied upon by you withoutfurther inquiry, that we are entitled to draw under the Letter of Credit inaccordance with an agreement between Orlando Corporation and the Applicant andwe hereby request that you honour the accompanying draft in accordance with theLetter of Credit.

 

 

Yoursvery truly

 

ORLANDOCORPORATION

 

 
| Per:   |                        |   |
|--------|-----------------------------|--------|
|   | Authorized  Signing Officer |

 

 

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**SCHEDULE “F”**

 

**SITE PLAN RE COMPLEX**

 

 

 

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DATED:         February 10,2005

 

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BETWEEN:

 

 

**ORLANDOCORPORATION**

 

 

-and-

 

 

**HYDROGENICSCORPORATION**

 

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LEASE EXTENSION AGREEMENT

 

Regarding 5985 McLaughlin Road

Mississauga, Ontario

 

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THIS AGREEMENT DATED the 10th day ofFebruary, 2005

 

BETWEEN:

 

**ORLANDO CORPORATION**

 

(Hereinafter called the “Landlord”)

 

OF THE FIRST PART

 

-and -

 

**HYDROGENICS CORPORATION**

 

(Hereinafter called the “Tenant”)

 

OF THE SECOND PART

 

**WHEREAS** by a lease dated the 23rd day of June,2000 made between the Landlord and the Tenant (the “Lease”), the Landlorddemised and leased unto the Tenant the premises described therein and beingmunicipally known as 5985 McLaughlin Road, Mississauga, Ontario (the “LeasedPremises”);

 

**AND WHEREAS** the parties have agreed to extend the Lease ashereinafter set forth.

 

**NOW THEREFORE THIS AGREEMENT WITNESSES** that in consideration ofthe premises and covenants hereinafter contained and other good and valuableconsideration, the parties hereto agree as follows:

 

1.                                       The Lease isextended for a term of five (5) years to be computed from the 1st day of September, 2005 and fully to becompleted and ended on the 31st day of August, 2010 (the “FirstExtended Term”).

 

2.                                       The FirstExtended Term shall be upon the same terms and conditions as are contained inthe Lease, save and except for the following:

 

(i)           The followingsections of the Lease are deleted in their entirety:

 
| Section 1.04       |   | Early  Access               |
|-------------------------|--------|-----------------------------|
| Section 1.05       |   | Option  to Renew            |
| Section 1.06       |   | Letter  of Credit           |
| Section 5.08  (b)  |   | Landlord’s  Repairs    |
| Section 13.18      |   | Landlord’s  Warranties |
| Schedule  “D” |   | Landlord’s  Work       |
| Schedule  “E” |   | Letter  of Credit           |

 

(ii)                                  The Basic Rentpayable by the Tenant pursuant to Section 2.02 of the Lease for the FirstExtended Term shall be as follows:

 

(a)                                  from andincluding the 1st day of September, 2005 to and including the 31st day of August, 2007 (the “First Rental Period”)the sum of $599,856.25 per annum to be paid in advance, in equal consecutivemonthly installments of $49,988.02 on the first day of each and every monthduring the First Rental Period to the Landlord, the first of such payments tobe made on the 1st day of September, 2005; and

 

(b)                                 from andincluding the 1st day of September, 2007 to and including the 31st day of August, 2010 (the “Second Rental Period”)the sum of $633,448.20 per annum to be paid in advance, in equal consecutivemonthly installments of $52,787.35 on the first day of each and every monthduring the Second Rental Period to the Landlord, the first of such payments tobe made on the 1st day of September, 2007.

 

(iii)                               The Calculationof Basic Rent pursuant to Section 2.03 of the Lease for the First ExtendedTerm shall be 95,977 square feet multiplied by: (a) $6.25 per square footper annum during the First Rental Period; and (b) $6.60 per square footper annum during the Second Rental Period.

 

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3.                  It is understood and agreedthat prior to the First Extended Term the Landlord shall supply and install atits expense one 12’-0” x 14’-0” drive-in electrically operated overhead door ina location to be mutually agreed upon, complete with ramp. This installationdoes not include any mechanical or electrical or special requirements of thelocal municipal building or fire departments, all of which shall be the Tenant’sresponsibility.

 

4.                  It is agreed that nothingcontained in this Agreement shall be deemed to alter, vary or change anyprovision of the Lease, save as expressly set forth herein, and the partieshereby confirm that the Lease and this Agreement shall henceforth be read andconstrued together and are in full force and effect.

 

5.                  This Agreement shall enure tothe benefit of and be binding upon the parties hereto, their respectivesuccessors and permitted assigns.

 

IN WITNESS WHEREOF theparties hereto have executed this agreement as of the day and year first abovewritten.

 
|   | **ORLANDO CORPORATION**                    |
|--------|--------------------------------------------|
|   |                                       |
|   |                                       |
|   | Per:                                       | /s/ Doug Kilner |
|        |                                       | Authorized signing  officer |
| Name:  | DOUG KILNER                                |
| Title: | CHIEF EXECUTIVE OFFICER                    |
|   |                                       |
| Per:   | /s/ William O’ Rourke                 |
|   | Authorized signing  officer                |
| Name:  | WILLIAM O’ ROURKE                     |
|   | Title:                                     | SENIOR VICE PRESIDENT,  FINANCE |
|   |                                       |   |
|   | We Have Authority to  Bind the Corporation |

 

 
|   |   | **HYDROGENICS CORPORATION**                  |
|--------|--------|----------------------------------------------|
|   |   |                                         |
|   |   | Per:                                         | /s/ R. Randall MacEwen |
|   |   |                                         | Authorized signing  officer |
|   |   | Name:                                        | R. Randall MacEwen |
|   |   | Title:                                       | VP, Corporate  Development |
|   |   |                                         |
|   |   | Per:                                         |   |
|   |   |                                         | Authorized signing  officer |
|   |   | Name:                                        |   |
|   |   | Title:                                       |   |
|   |   |                                         |
|   |   | I/We Have Authority to  Bind the Corporation |
|        |        |                                              |  |  |

 

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