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                                                                   Exhibit 10.64

                           SECOND AMENDED AND RESTATED
                      FUEL CELL PRODUCT OPERATING AGREEMENT
                                  BY AND AMONG
   ECO FUEL CELLS, LLC, H POWER CORP. AND H POWER ENTERPRISES OF CANADA, INC.

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     This Second Amended and Restated Fuel Cell Product Operating Agreement
(this "Agreement") is made this 10 day of April 2002, by and among ECO Fuel
Cells, LLC, a Delaware limited liability company, with its principal offices at
2201 Cooperative Way, Herndon, Virginia 20171-3025 ("ECO Fuel Cells"), H Power
Corp., a Delaware corporation, with its principal offices at 1373 Broad Street,
Clifton, New Jersey 07013 and H Power Enterprises of Canada, Inc., a Canadian
corporation with its principal offices located in Montreal, Province of Quebec
(together with H Power Corp., "H Power"). ECO Fuel Cells and H Power are
individually referred to herein as "Party" and collectively as the "Parties".

WHEREAS: Energy Co-Opportunity, Inc. ("ECO") was formed on behalf of its member
rural electric Cooperatives to provide them with assistance as they diversify
into new products and services;

WHEREAS: ECO and its member Cooperatives wish to build on their long-standing
reputation for providing innovative energy solutions and reliable customer
services;

WHEREAS: ECO formed ECO Fuel Cells, to assist ECO's members in creating new
business opportunities in distributed power generation provided by Fuel Cell
Power Systems (as defined herein);

WHEREAS: H Power is a technological leader in commercializing low-power Fuel
Cell systems with a highly-skilled management and technical team and has been
developing high-power Fuel Cell systems for various uses, including stationary
power applications;

WHEREAS: The Parties entered into a Fuel Cell Product Operating Agreement on
July 29, 1999, (as modified and amended on August 25, 1999 and as subsequently
amended and restated on March 9, 2000 (the "Operating Agreement") in order to
create a strategic relationship in which ECO Fuel Cells agreed to purchase,
market and service H Power Corp's Fuel Cell Power Systems in exchange for
exclusive marketing, distribution and servicing rights in all those areas in the
United States now served by rural electric Cooperatives; and

WHEREAS: The Parties entered into a Memorandum of Agreement, dated December 12,
2001 (the "Memorandum of Agreement" or "MOA"), pursuant to which, among other
things: i) the Parties reaffirmed their support for each other in the
development and marketing of Fuel Cell

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Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted materials have been filed separately with
the Securities and Exchange Commission.

                                  Page 1 of 28

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Products (as defined herein); ii) ECO Fuel Cells, in consideration for the
payment of $2.1 million, among other things (a) relinquished to H Power certain
of its Exclusive Rights under Article 3.A.1. of the Operating Agreement, (b)
agreed that, with certain exceptions, H Power shall no longer be bound by or
subject to the non-competition covenants set forth in Article 3.A.4.(a) of the
Operating Agreement, and iii) the Parties agreed to amend and restate the
Operating Agreement and negotiate and enter into various support agreements; and

WHEREAS: The Parties desire to further amend and restate the Operating Agreement
as hereinafter set forth, in order: i) to further encourage the marketing of H
Power's Fuel Cell Products (as defined herein); ii) to provide the Parties with
additional marketing and distribution opportunities; and iii) to explore other
products and services offered by H Power including new Fuel Cell products and
applications;

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the Parties hereby agree as follows:

ARTICLE 1.        PURPOSE AND DEFINITIONS.

         The purpose of this Agreement is to reaffirm the close relationship
between ECO, ECO Fuel Cells and H Power, whereby H Power will use its best
efforts to develop, design and manufacture Fuel Cell Power Systems that meet
ECO's Cooperative Members' reasonable requirements, as well as Other Fuel Cells
(defined below). ECO and ECO Fuel Cells will purchase Fuel Cells (defined below)
exclusively from H Power and market them, all in accordance with the terms of
this Agreement. For the purpose of this Agreement the following definitions
shall apply:

                  "Cooperative(s)" are rural electric cooperatives, their
         affiliates, subsidiaries and associations.

                  "Cooperative Member(s)" are any rural electric Cooperative and
         members of ECO's corporate family, including corporate affiliates of
         both.

                  "Fuel Cell Power System(s) for Stationary Applications (also
         called "Fuel Cell Power Systems" herein) shall mean fuel cell system(s)
         from 1kW to 25kW (of all types except for direct methanol fuel cells),
         manufactured by H Power, that are affixed and hard-wired to the
         premises or facility for the purpose of providing primary or backup
         electric power for the premises or facility or their appurtenances.
         Each Fuel Cell Power System listed under Schedule A to ship after
         January 1, 2002, shall meet the specifications in Schedule C attached
         hereto, and such other specifications to which the Parties may agree in
         writing, be ready for installation to customers' lines and shall
         contain all the electronic and mechanical and other components required
         for normal operation, including if necessary, but not limited to, the
         following: reformer, H2 purification unit, H2 storage unit, heat and
         water management system, batteries, controls and a power management
         system; as well as all subsystems, components, sub-components, parts
         and accessories for the Fuel Cell Power Systems.

                  "Fuel Cell(s)" are proton exchange membrane fuel cells up to
         25kW.

                                  Page 2 of 28
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                  "Fuel Cell Product(s)" are Fuel Cell Power Systems and Other
         Fuel Cells taken together.

                  "Licensed Member(s)" are ECO's Cooperative Members that have
         been assigned exclusive or non-exclusive Distribution Rights to the
         Fuel Cell Products by ECO Fuel Cells under Article 3.

                  "Other Fuel Cell(s)" means all other H Power Fuel Cell
         products other than Fuel Cell Power Systems, but does not include
         "Specialty Fuel Cell Products."

                  "Specialty Fuel Cell Product(s)" are fuel cell products that
         are designed and sold by H Power as a component or sub-system for use
         in equipment such as but not limited to, vehicles, portable computers,
         or other types of equipment.

ARTICLE 2.        COOPERATION BETWEEN THE PARTIES.

         In view of the purpose set forth above and because the Parties believe
that their individual strengths can create valuable synergies to achieve their
mutual goals, they believe that it is important to cooperate with each other in
the following areas:

         A.       INFORMATION SHARING. H Power will share with ECO Fuel Cells,
                  market and technical data on the Fuel Cell Products in test
                  and in the field, and ECO Fuel Cells will, and will require
                  the Licensed Members to share with H Power information they
                  may receive or develop with respect to field operation of the
                  Fuel Cell Products. In response to requests, H Power agrees to
                  advise ECO Fuel Cells of sales information, including volumes,
                  types of units and purchasers and information developed on
                  competitors' products and strategies and other information
                  available to it that could assist ECO Fuel Cells in marketing
                  and servicing the Fuel Cell Products and in training Licensed
                  Members to market and service the Fuel Cell Products. Both
                  Parties shall otherwise be responsive to requests from the
                  other for information pertinent to the purposes of this
                  Agreement.

         B.       FUEL CELL PRODUCTS THAT MEET COOPERATIVES' NEEDS. H Power
                  recognizes that it is important to meet the needs of the
                  Licensed Members with respect to quantity, quality, design,
                  price, serviceability and other standards for the Fuel Cell
                  Products that are the subject of this Agreement. To this end,
                  the Parties agree to cooperate with each other so as to enable
                  H Power to develop, design and manufacture Fuel Cell Products
                  that meet these needs.

         C.       FIELD-TESTING. ECO Fuel Cells will use its best efforts: 1. to
                  place that number of Alpha, Beta, and pre-commercial Fuel Cell
                  Product test units in the field with the Licensed Members in
                  various Territories (as defined below) as specified in
                  Schedule A; and 2. to arrange for the Licensed Members to
                  monitor Fuel Cell Product performance and otherwise assist H
                  Power in field testing the units in order to improve the Fuel
                  Cell Products.


                                  Page 3 of 28
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         D.       WAREHOUSING. ECO Fuel Cells will encourage the Licensed
                  Members to make available warehouse facilities for H Power's
                  use in order to facilitate the distribution of the Fuel Cell
                  Products to ECO Fuel Cells and the Licensed Members.
                  Reasonable cost-based fees may be negotiated by ECO Fuel Cells
                  or Licensed Members for such services.

         E.       MARKETING, ADVERTISING, AND COMMUNICATION MATERIALS. ECO Fuel
                  Cells and H Power will work together in a spirit of
                  cooperation to produce effective marketing, advertising and
                  communication materials with respect to the Fuel Cell Products
                  that are the subject of this Agreement ("Marketing
                  Materials"). Each Party will bear its own Marketing Materials
                  costs and will own the Marketing Materials for which it pays,
                  except as otherwise provided by the Parties. Each Party grants
                  the other the right to use its Marketing Materials for the
                  purposes of this Agreement.

                  ECO Fuel Cells and the Licensed Members shall be required to
                  prominently display in their Marketing Materials which refer
                  to the Fuel Cell Products the following phrase, "an H Power
                  System", or such other words or phrases to which the Parties
                  may hereafter agree. Additionally, H Power shall have the
                  right to have its name, or the same or similar words and
                  phrases utilized in ECO's, ECO Fuel Cells' and the Licensed
                  Members' Marketing Materials, prominently displayed on the
                  Fuel Cell Products.

                  ECO, ECO Fuel Cells and the Licensed Members shall have the
                  right to display their name in their respective Marketing
                  Materials and have such name affixed on the Fuel Cell
                  Products, provided that H Power's name is also displayed per
                  the immediately preceding paragraph.

         F.       TRAINING AND SERVICING. ECO Fuel Cells may provide information
                  and recommendations to H Power with respect to appropriate
                  training for Fuel Cell Product installers and service
                  personnel, and H Power agrees to consider all such information
                  and recommendations submitted to it.

         G.       PRODUCTS PROVIDED. H Power shall provide the following
                  products and services by the dates specified in Schedule A (as
                  well as other products specified there):

                  1.       Fuel Cell Power Systems that heat water in addition
                           to generating electricity; and

                  2.       H Power shall develop Fuel Cell Power Systems with
                           the necessary controls and other equipment to allow
                           full integration and interface with the electric
                           transmission and distribution grid, including
                           delivering electric power into the grid; and

                  3.       Other Fuel Cells.



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         H.       ADDITIONAL COOPERATION. The Parties shall cooperate with each
                  other to execute such additional documents and take such
                  additional actions as are necessary to carry out the
                  provisions of this Agreement.

ARTICLE 3.        GRANT AND ACCEPTANCE OF DISTRIBUTION RIGHTS.

         A.       TERRITORY AND TRANSFER OF DISTRIBUTION RIGHTS.

                  1.       DISTRIBUTION RIGHTS.

                           a.       GRANT OF NON-EXCLUSIVE RIGHTS. Except as set
                                    forth in clause b. below, H Power grants to
                                    ECO Fuel Cells the non-exclusive right to
                                    sell, distribute, lease, finance, service,
                                    and otherwise handle the Fuel Cell Products
                                    (except for Specialty Fuel Cell Products
                                    designed and sold by H Power as a component
                                    or sub-system for use in equipment such as,
                                    but not limited to, vehicles, portable
                                    computers, or other types of equipment) as
                                    provided below (the "Distribution Rights").
                                    These Fuel Cell Products are to be sold to
                                    ECO Fuel Cells and its Licensed Members on
                                    such terms and conditions as are agreed to
                                    by the Parties; provided that they shall
                                    always receive best pricing on Fuel Cell
                                    Power Systems and they shall never pay more
                                    for Other Fuel Cells than others pay for
                                    similar quantities or levels of service,
                                    except that for Other Fuel Cells, U.S. and
                                    foreign government contract pricing is
                                    excluded from this provision. ECO Fuel
                                    Cell's Distribution Rights shall apply to
                                    all of the United States except as otherwise
                                    specifically provided for in this Agreement.
                                    ECO Fuel Cell's and its Licensees' sales of
                                    Fuel Cell Power Systems and Other Fuel Cells
                                    shall be credited against ECO Fuel Cell's
                                    Fuel Cell Products purchase obligations
                                    hereunder.

                           b.       EXCLUSIVE AGREEMENTS. Either H Power or ECO
                                    Fuel Cells may initiate exclusive agreements
                                    for Fuel Cell Products. However, before such
                                    exclusive agreements are finalized, they
                                    shall be brought to the other Party for
                                    discussion and approval by that other Party,
                                    which approval shall not be unreasonably
                                    withheld or delayed, except in the following
                                    situations:

                                    i.       Where H Power has initiated, or
                                             intends in the future to initiate,
                                             an agreement for a "National
                                             Account" for Other Fuel Cells it
                                             need not bring it to ECO Fuel Cells
                                             for discussion and approval but
                                             shall notify ECO Fuel Cells within
                                             thirty (30) days of such
                                             discussions to prevent a
                                             duplication of efforts by the
                                             Parties.

                                    ii.      For the purposes of this Agreement,
                                             a "National Account" includes, but
                                             is not limited to, the national
                                             accounts of telecommunications
                                             companies (such as Lucent and
                                             Motorola) for systems that power
                                             telecommunications equipment,
                                             either as the primary power source
                                             or as a backup thereto. However, a
                                             National


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                                             Account does not include any
                                             account that will distribute, sell
                                             or handle Fuel Cell Products to or
                                             for a retail customer, such as
                                             providing Fuel Cell Products to a
                                             local business office of Lucent or
                                             Motorola.

                                    iii.     The Parties recognize that H Power
                                             currently has pending an exclusive
                                             agreement for Other Fuel Cells in
                                             Virginia, Delaware, Maryland, West
                                             Virginia and the District of
                                             Columbia. The Parties shall work
                                             together constructively to find an
                                             appropriate role for ECO Fuel
                                             Cells' Cooperatives in this
                                             agreement.

                                    iv.      Specialty Fuel Cell Products are
                                             excluded from the above
                                             requirements in this section b.

                           Notwithstanding the above, in all cases each Party
                           shall report to the other Party within thirty (30)
                           days of execution, any exclusive agreements that have
                           been executed.

                  c.       DISTRIBUTION AGREEMENTS. ECO Fuel Cells has entered
                           into numerous Distributive Generation Products and
                           Fuel Cell Licensing Agreements ("Distribution
                           Agreements") under which exclusive distribution
                           rights for H Power's Fuel Cell Power Systems have
                           been granted to Licensed Members and other parties,
                           (the "Licensees"). Licensees shall be notified by ECO
                           Fuel Cells that ECO Fuel Cells wishes to cancel and
                           renegotiate their Distribution Agreements and convert
                           them to non-exclusive Distribution Agreements. If the
                           Licensee nevertheless desires to continue with an
                           Exclusive Distribution Agreement, then H Power's
                           obligations shall continue and shall be no greater
                           than under the existing or pending Distribution
                           Agreement as of the date hereof. Any existing,
                           pending as of the date of this Agreement, or
                           renegotiated exclusive Distribution Agreements are
                           called "Grandfathered Distribution Agreements"
                           herein. ECO Fuel Cells shall provide a list of
                           Grandfathered Distribution Agreements to H Power once
                           they have been renegotiated but not later than March
                           31, 2002. Otherwise, all obligations and liabilities
                           of H Power with respect to Distribution Agreements
                           shall be assumed by ECO Fuel Cells and H Power shall
                           have no further obligations thereunder. No fees shall
                           be paid to H Power for those Licensees that have
                           selected or will select the "Fuel Cell Distribution
                           Option" or who select a Non-Exclusive Option as
                           defined in the Distribution Agreement.

                  d.       DISTRIBUTION AGREEMENT FEES. Regarding those ECO Fuel
                           Cell Licensees that continue with a Grandfathered
                           Distribution Agreement, ECO Fuel Cells shall pay the
                           OHU fees to H Power that are specified in Article
                           3.B. of this Agreement within sixty (60) days after
                           the Commercial Date.


                                     Page 6
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                  e.       TESTING AGREEMENTS. In addition, ECO Fuel Cells shall
                           be responsible for renegotiating the "Fuel Cell
                           Testing Agreements Between the Cooperatives and ECO
                           Fuel Cells" (the "Testing Agreements") with its
                           Licensees. All obligations and liabilities of H Power
                           with respect to these Testing Agreements (including,
                           but not limited to, those set forth in Attachment 3
                           thereto) shall be assumed by ECO Fuel Cells and H
                           Power shall have no further obligations thereunder.
                           It is anticipated that the Parties will continue a
                           Fuel Cell testing program and new Fuel Cell testing
                           agreements will be executed on such terms as are
                           agreed to by the Parties.

         2.       ECO FUEL CELLS' ASSIGNMENT RIGHTS. It is ECO Fuel Cells'
                  intention to assign to Cooperative Members all or some of the
                  Distribution Rights granted herein. ECO Fuel Cells intends to
                  work with Cooperative Members to develop marketing
                  arrangements, which may result in several different
                  strategies. Therefore, to provide ECO Fuel Cells with the
                  necessary marketing and corporate structure flexibility, ECO
                  Fuel Cells shall have the right to assign, sell, license, or
                  otherwise transfer, all or any part of the Distribution Rights
                  to ECO, Licensed Members or to any other entity affiliated
                  with them. All assignments of Distribution Rights by ECO Fuel
                  Cells shall be in writing and consistent with this Agreement.
                  ECO Fuel Cells shall inform H Power in writing forty-five (45)
                  days prior to effecting any assignment pursuant to the terms
                  hereof.

         3.       NON-COMPETITION.

                  a.       H Power agrees that in any Territory where ECO Fuel
                           Cells or its Licensee has exclusive rights from a
                           Grandfathered Distribution Agreement or any exclusive
                           agreement entered into after the date of this
                           Agreement, it will not sell the Fuel Cell Products
                           either directly or knowingly indirectly for use in
                           the Territory except to ECO Fuel Cells or to the
                           Licensee.

                  b.       ECO Fuel Cells agrees that it will not sell the Fuel
                           Cell Products either directly or knowingly indirectly
                           for use outside the United States; or to any future
                           exclusive Licensee of H Power, except as may
                           otherwise be provided in the license terms.

                  c.       This paragraph c. applies only to Grandfathered
                           Distribution Agreements.

                           i        H Power agrees that it will not sell the
                                    Fuel Cell Products either directly or
                                    knowingly indirectly for use in the
                                    "Territory" (defined below) except to ECO
                                    Fuel Cells or to Licensed Members.

                           ii       ECO Fuel Cells agrees that it will not sell
                                    the Fuel Cell Products either directly or
                                    knowingly indirectly for use outside the
                                    Territory. "Territory" is defined as all of
                                    the counties or part thereof in the



                                     Page 7
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                                    United States (including the District of
                                    Columbia; and areas that are not a part of
                                    any county, such as Arlington, VA) in which
                                    Cooperative Members were providing energy
                                    services as of August 15, 1999 (including,
                                    but not limited to electricity, natural gas,
                                    propane and other fuels), as set forth in
                                    Schedule B of this Agreement. ECO Fuel Cells
                                    also agrees that it will not sell Fuel Cell
                                    Power Systems that compete with H Power's
                                    Fuel Cell Power Systems; that it will not
                                    sell such Fuel Cell Power Systems (unless
                                    otherwise agreed to by the Parties) in
                                    counties of Cooperative Members to which no
                                    Distribution Rights have been assigned; and
                                    that it will include the terms set forth in
                                    this paragraph in all assignments of
                                    Distribution Rights to Cooperative Members.

                           iii      In the event that ECO Fuel Cells or the
                                    Licensed Members are able to purchase from
                                    third parties Fuel Cell Power Systems that
                                    are: (1) comparable or superior in quality
                                    and performance to H Power's Fuel Cell
                                    Products; (2) at Unit prices that are at
                                    least [*] H Power's Unit prices; and (3) on
                                    terms and conditions that otherwise are
                                    comparable to H Power's terms and
                                    conditions, then ECO Fuel Cells shall so
                                    notify H Power in writing of such event and
                                    if H Power does not, within 30 days after
                                    receipt of said notice from ECO Fuel Cells,
                                    [*], ECO Fuel Cells and the Licensed Members
                                    may purchase those Fuel Cell Power Systems
                                    from third parties and the restrictions
                                    against selling fuel cells that compete with
                                    H Power as set forth in paragraph ii) above
                                    shall not apply. Thereafter, if the Licensed
                                    Members that maintain Grandfathered
                                    Distribution Agreements [*] H Power during
                                    any subsequent [*] then the exclusive rights
                                    granted under such Grandfathered
                                    Distribution Agreements shall terminate and
                                    all Territory under those distribution
                                    agreements shall convert to non-exclusive
                                    status.

                  d.       DIRECT SALES. Because of ECO Fuel Cell's expertise in
                           distributive generation products and services, and
                           because ECO Fuel Cell's electric Cooperative
                           customers are also ECO Fuel Cell's owners, H Power
                           agrees that ECO Fuel Cells will be its preferred
                           provider of Fuel Cell Products to the U.S. electric
                           Cooperative industry. Therefore, H Power agrees not
                           to enter into any agreement with a U.S. Cooperative
                           (including its affiliate, or a Cooperative
                           association) to sell as a distributor,
                           sub-distributor, marketer, or sales representative of
                           H Powers' Fuel Cell Products, except as may otherwise
                           be provided under this Agreement.

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* Confidetial

                                     Page 8
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                           However, ECO's members and ECO Fuel Cell's Licensees
                           shall have the option of purchasing Fuel Cell
                           Products from any H Power distributor,
                           sub-distributor, sales representative or similar
                           sales entity of their choice. H Power shall not make
                           direct sales to Cooperatives except through this
                           Agreement, or through its existing third party
                           distribution associates' independent sales efforts.
                           ECO Fuel Cell's Licensees (but not ECO or ECO Fuel
                           Cells) that do not elect to retain or enter into a
                           Grandfathered Distribution Agreement shall have the
                           right to sell Fuel Cell Products other than H
                           Power's. Both ECO Fuel Cells and ECO, however, will
                           exclusively purchase Fuel Cells from H Power.

                  e.       Notwithstanding anything to the contrary contained in
                           this Agreement (including all schedules, appendices
                           and exhibits hereto), subject only to H Power's
                           compliance with its covenants and agreements
                           contained herein, ECO Fuel Cells will purchase or
                           will arrange to have Licensed Members purchase Fuel
                           Cell Products totaling $81,186,000 as provided in
                           Article 4.A. below.

                  4.       FAIR PRICING.
                           In no event shall ECO Fuel Cells or Licensed Members
                           pay more for any of H Power's Fuel Cell Power
                           System(s) and services under this Agreement than
                           others pay for similar quantities or levels of
                           service.

         B.       PAYMENTS UPON ASSIGNMENT OF DISTRIBUTION RIGHTS BY ECO FUEL
                  CELLS TO ECO'S COOPERATIVE MEMBERS. This paragraph only
                  applies to Grandfathered Distribution Agreements in which the
                  Licensee has selected the Territory Purchase Option. ECO Fuel
                  Cells has assigned or intends to assign its Distribution
                  Rights to ECO's Cooperative Members on a county by county
                  basis (the District of Columbia and other areas, e.g.,
                  Arlington, VA, that are not a part of any county will be
                  treated as a county for this purpose). All or part of a county
                  may be assigned. The Cooperative Member to which the
                  Distribution Rights have been assigned shall be deemed to be a
                  "Licensed Member". For exclusive Territory only, within sixty
                  (60) days after the Commercial Date, ECO Fuel Cells will make
                  a one time payment of [*] to H Power for each Occupied Housing
                  unit within each assigned county, or portion thereof, as
                  reflected in (a) the Census of Population and Housing,
                  published by the U.S. Bureau of the Census, or (b) if updated
                  census statistics are published by the U.S. Bureau of the
                  Census before a particular sale of Distribution Rights occurs,
                  then the latest statistics available for Occupied Housing
                  units in that area; except that, within Schedule B
                  Territories, the amount will be [*] for each Occupied Housing
                  unit in any area in which ECO's Cooperative Members were not
                  providing electric service as of August 15, 1999. If a portion
                  of a county is purchased, the payment shall be the greater
                  amount of: (a) a reasonable determination by ECO Fuel Cells
                  and H Power of the percentage of the assigned county being
                  purchased and multiplying that percentage by the number of
                  Occupied Housing units in that county according to the latest
                  census data; or (b) the total number of the Licensed Member's

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* Confidetial

                                     Page 9
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                  customers that receive electric, natural gas or propane
                  service in the area purchased (without any double counting of
                  any customer) as reflected in the books and records of the
                  Licensed Member as of the time of the assignment. This number
                  shall be verified in writing by the independent auditors of
                  the Licensed Member at its next regular audit, and such
                  writing shall be provided to H Power and ECO Fuel Cells

         C.       OTHER H POWER PRODUCTS. H Power, upon written application by
                  ECO Fuel Cells, will give favorable consideration to granting
                  to ECO Fuel Cells and its Licensed Members distribution rights
                  to H Power products or services other than Fuel Cell Products,
                  on an individual product or service basis. It shall be in H
                  Power's sole discretion whether or not to grant such rights.
                  In the event rights are granted by H Power, then ECO Fuel
                  Cells or Licensed Members shall not pay more to H Power for
                  those products to which rights have been granted than others
                  pay for similar quantities or levels of those products or
                  services.

         D.       IMPROVEMENTS. Any new or improved Fuel Cell Products, design,
                  concept, or other invention (in whole or part thereof) made or
                  developed by H Power, jointly by H Power with others, or
                  jointly by H Power and ECO Fuel Cells in the course of
                  creation, development, distribution or operation of the Fuel
                  Cell Products, will be promptly and completely disclosed to
                  ECO Fuel Cells by H Power. The foregoing sentence is intended
                  to include services and methods of operation. H Power will
                  always make available to ECO Fuel Cells, at no greater than
                  the same cost made available to any others, all improvements
                  (in whole or part) to the Fuel Cell Products, all improved
                  Fuel Cell Products, any accessories for the Fuel Cell
                  Products, and any distribution or operational improvements.

         E.       TRAINING. H Power and ECO Fuel Cells may develop a standard
                  program of training, to be held at H Power's expense at
                  mutually agreed upon intervals and locations. If so, travel
                  and living expenses incurred by ECO Fuel Cells, and Licensed
                  Members' personnel attending training seminars shall be the
                  full responsibility of ECO Fuel Cells and the Licensed
                  Members. The training seminars shall cover the sale, care,
                  maintenance and use of the Fuel Cell Products. Extra training,
                  beyond the standard program, shall be provided by H Power on a
                  consulting basis for an additional, reasonable charge.

ARTICLE 4.         FUEL CELL PRODUCT PURCHASES.

          A.      PURCHASES. ECO Fuel Cells will purchase or will arrange to
                  have Licensed Members purchase Fuel Cell Products from H Power
                  for an aggregate purchase price of $81,186,000, in accordance
                  with the delivery schedule set forth in Schedule A. Fuel Cell
                  Products meeting the specifications of Schedule C and defined
                  as "Commercial Units" in Schedule A are "Commercial Units" for
                  the purposes of this Agreement. The Parties shall consult with
                  one another and mutually agree to review and update Schedules
                  A and C on a quarterly basis. Any changes in Schedules A and C
                  shall be agreed to by both Parties.



                                     Page 10
<PAGE>

         Notwithstanding any other provisions in this Agreement;

                  1.       If ECO Fuel Cells fails to purchase the Fuel Cell
                           Products as required by Schedule A, and those Fuel
                           Cell Products meet Schedule C requirements, H Power
                           shall so notify ECO Fuel Cells in writing; and if not
                           cured within fifteen (15) days, this shall constitute
                           a "breach of any other material term or condition"
                           for the purposes of Article 15.B and H Power shall
                           have the right to terminate this Agreement, following
                           that Article's cure and other provisions.

                  2.       If any of the following events occur, ECO Fuel Cells
                           shall notify H Power in writing, and if not cured
                           within fifteen (15) days, such events shall be
                           considered a "breach of any other material term or
                           condition" for the purposes of Article 15.B, and ECO
                           Fuel Cells shall have the right to terminate this
                           Agreement following that Article's cure and other
                           provisions.

                           a.       If H Power fails to comply with the terms of
                                    Schedules A and/or C, or fails to produce
                                    the first five (5) Commercial Units that
                                    meet Schedule C specifications, by December
                                    31, 2002; or

                           b.       If H Power fails to provide to ECO Fuel
                                    Cells the following "Quarterly Report." By
                                    the fifteenth day after the close of each
                                    calendar quarter during the term of the
                                    Agreement, H Power shall provide to ECO Fuel
                                    Cells a written Quarterly Report on the
                                    status of the design, engineering,
                                    performance, production, and sales of Fuel
                                    Cell Products and products by others that
                                    compete with such Fuel Cell Products.

                           c.       This Quarterly Report shall include, but not
                                    be limited to, information related to H
                                    Power's and the Fuel Cell Products'
                                    performance under Schedules A and/or C, in
                                    such detail as ECO Fuel Cells shall require.
                                    Such Quarterly Report at minimum shall
                                    include:

                                    i.       progress on the Fuel Cell Products
                                             meeting the specifications in
                                             Schedules A and C;

                                    ii.      a summary of the field results of
                                             any units installed and operated;

                                    iii.     delivery/shipping schedules, prices
                                             and price trends, and improvements
                                             or development problems in the Fuel
                                             Cell Products;

                                    iv.      competitive analyses and
                                             intelligence information on
                                             stationary and portable products
                                             that compete with Fuel Cell
                                             Products;

                                    v.       developments that may result in any
                                             acceleration or delay of Fuel Cell
                                             Products and/or other changes in
                                             Schedules A and C; and

                                    vi.      such other information as the
                                             Parties may agree to include.

                  3.       Any material false statement in such Quarterly
                           Reports (except, that as to information on fuel cell
                           products that compete with H Power's, H Power shall
                           only be required to provide information to ECO Fuel
                           Cells to the best of H Power's knowledge and belief).



                                     Page 11
<PAGE>

              The Parties shall consult with one another and mutually agree to
              review and update Schedules A and C on a quarterly basis. July 1,
              2006 shall be called the "Commercial Date" herein.

              Alpha units, Beta units and all other Fuel Cell Products
              previously purchased or to be purchased by ECO Fuel Cells shall be
              credited toward ECO Fuel Cell's purchase obligations under this
              Agreement including Schedule A. Future Beta units shall have the
              minimum specifications and delivery times as agreed to by the
              Parties within twenty (20) days after the execution of this
              Agreement and ECO Fuel Cells shall pay for shipment of them to
              locations selected by ECO Fuel Cells.

         B.       INSPECTION.

                  1.       DURING ALPHA AND BETA FUEL CELL PRODUCT STAGES.
                           During Alpha and Beta Fuel Cell Products stages, such
                           Fuel Cell Products may be shipped to ECO Fuel Cells
                           or the Licensed Members in single units or larger
                           quantities. Purchasers shall have a reasonable
                           opportunity to inspect the Fuel Cell Products for
                           compliance with the standards in Schedule C.
                           Therefore, once a Fuel Cell Product is received, the
                           purchaser will have thirty (30) days in which to
                           inspect the Fuel Cell Product for defects and to
                           notify H Power in writing of such defects.

                  2.       FOLLOWING ALPHA AND BETA FUEL CELL PRODUCTS STAGES.
                           At such time as any individual Fuel Cell Product has
                           passed through its Alpha and Beta stages and is
                           commercialized, the purchaser of such Fuel Cell
                           Product will have seven (7) calendar days from
                           receipt in which to inspect the Fuel Cell Product for
                           any visible defects in the packaging for the units
                           and to notify H Power in writing of such defects.

                  3.       DEFECTS. If the Fuel Cell Product is damaged or
                           otherwise does not pass inspection and H Power has
                           received written notice of such fact within the time
                           periods set forth in Subparagraphs 1. and 2. above,
                           whichever may be applicable, then H Power will have
                           thirty (30) days to cure the problem at its own
                           expense (including shipping, servicing, parts, labor
                           and all other expenses). Notwithstanding the payment
                           requirements as set forth in Paragraph C, immediately
                           hereinbelow, the purchaser need not pay for a Fuel
                           Cell Product that does not pass inspection until the
                           Fuel Cell Product is repaired, replaced or shown to
                           be operable by H Power to the purchaser's reasonable
                           satisfaction. H Power is not responsible for any
                           obvious external shipping damage that has not been
                           reported within the time requirements for valid
                           freight damage claims or other standard commercial
                           freight damage claims practices in effect in the
                           location where the Fuel Cell Product has been
                           delivered.

         C.       PAYMENTS FOR FUEL CELL PRODUCTS.


                                     Page 12
<PAGE>

                  1.       DURING ALPHA AND BETA FUEL CELL PRODUCT STATES.
                           During Alpha and Beta stages, invoices submitted by H
                           Power to ECO Fuel Cells and the Licensed Members for
                           Fuel Cell Products purchased from H Power shall be
                           paid within sixty (60) days of the date of the
                           invoices unless otherwise agreed to by the Parties.
                           Any invoices or portions thereof, not paid within
                           this 60-day period are subject to interest at the
                           rate of 1.5% per month. Should ECO or a Licensed
                           Member fail to pay any amounts due to H Power within
                           the prescribed sixty (60) days, and the failure is
                           not cured within fifteen (15) days after written
                           notice of such failure, H Power may commence
                           collection procedures or judicial action, at law or
                           in equity, to collect such sums, damages, costs,
                           liabilities and expenses, including court costs and
                           reasonable attorney's fees.

                  2.       FOLLOWING ALPHA AND BETA FUEL CELL PRODUCT STAGES.
                           Following the Alpha and Beta Fuel Cell Product
                           stages, and after the Commercial Date, then invoices
                           submitted by H Power to ECO Fuel Cells and the
                           Licensed Members for Fuel Cell Products purchased by
                           them shall be paid within thirty (30) days of the
                           date of the invoices unless otherwise agreed to by
                           the Parties. Any invoices or portions thereof, not
                           paid within this 30-day period are subject to
                           interest at the rate of 1.5% per month. Should ECO
                           Fuel Cells or Licensed Members fail to pay any
                           amounts due to H Power within the prescribed thirty
                           (30) days, and the failure is not cured within
                           fifteen (15) days after written notice of such
                           failure, H Power may commence collection procedures
                           or judicial action, at law or in equity, to collect
                           such sums, damages, costs, liabilities and expenses,
                           including court costs and reasonable attorneys' fees.
                           In the event of two (2) or more consecutive failures
                           to make timely payments, or in the event of three
                           failures in any preceding twelve (12) month period, H
                           Power shall have the right to require the defaulting
                           purchaser to prepay for all other purchases made.

                  3.       ROYALTY PAYMENTS. ECO Fuel Cells and the Licensed
                           Members shall be entitled to deduct from the per Unit
                           invoice price an amount equal to the per Unit royalty
                           payment, if any, for license of the [*] U.S. Patent.
                           Should the royalty payments be a lump sum or upfront
                           payment, the per Unit royalty shall be calculated
                           based on projected sales for the period of four
                           years, or as the parties may otherwise agree.

                  4.       PAYMENTS DUE ECO FUEL CELLS FROM H POWER. The same
                           payment procedures outlined above shall apply for any
                           payments that are to be made by H Power to ECO Fuel
                           Cells.

                  5.       FAILURE TO DELIVER. If 1. H Power fails to deliver
                           Fuel Cell Products and services within the time
                           specified in Schedule A, Fuel Cell Products and
                           Purchases; and 2. a purchase order has been issued by
                           ECO Fuel Cells or a Licensed Member and accepted by H
                           Power (which acceptance shall not

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* Confidetial

                                     Page 13
<PAGE>

                           be unreasonably withheld); and 3. failure to deliver
                           is not cured to ECO Fuel Cells' satisfaction within
                           30 days (unless otherwise agreed to by the Parties),
                           then H Power shall pay, upon demand, to ECO Fuel
                           Cells a late fee of [*], of the price of such late
                           Unit, not to exceed [*] of the Unit price, in
                           addition to any other damages.

ARTICLE 5.        FUEL CELL PRODUCT PERFORMANCE.

         In order to maintain the excellent reputation rural electric
Cooperatives have for quality and service to their customers/owners, it is
essential that any Fuel Cell Products H Power sells to ECO Fuel Cells or the
Licensed Members meet the performance standards contained in the attached
Schedule C, Performance Standards.

ARTICLE 6.        PUBLIC COMMUNICATIONS.

         ECO Fuel Cells will have the right to review, in advance, published
materials (in any medium) prepared by H Power or at its direction, that are
distributed to the public by H Power, that discuss ECO, ECO Fuel Cells, ECO's
Cooperative Members, or the National Rural Utilities Cooperative Finance
Corporation (CFC). Once the language in such materials has been agreed to, such
approval will not be required for subsequent materials using substantially
similar language. ECO Fuel Cells agrees to provide similar review and consent
privileges to H Power for materials it publishes discussing H Power.

ARTICLE 7.        TERM.

         This Agreement will be effective on the date specified in the first
paragraph of the Agreement and will remain in effect for a period of ten (10)
years following the Commercial Date . ECO Fuel Cells shall have an option to
renew this Agreement with the same terms for an additional ten (10)-year term
provided it notifies H Power in writing that it is exercising its option to
renew at least eighteen (18) months prior to the expiration of the initial term.

ARTICLE 8.        INTELLECTUAL PROPERTY.

         A.       H POWER'S TRADEMARKS, LICENSE AND LITERATURE.

                  1.       H POWER'S REPRESENTATIONS. H Power represents and
                           warrants to ECO Fuel Cells that to the best of its
                           knowledge, neither the Fuel Cell Products nor ECO
                           Fuel Cells (in connection with performing marketing,
                           distribution, and services as authorized by H Power
                           and by this Agreement) infringes any patent,
                           copyright, any other party's trade secret, and
                           trademark of any person. H Power further represents
                           and warrants to ECO Fuel Cells, that to the best of
                           its knowledge, it is not using any unauthorized trade
                           secrets or confidential or proprietary information
                           owned by any third party in developing the Fuel

-------------
* Confidetial

                                     Page 14
<PAGE>

                           Cell Products, or in assisting ECO Fuel Cells in
                           marketing, installing and servicing the Fuel Cell
                           Products, unless the trade secrets and confidential
                           information had been previously developed by H Power
                           on its own accord. H Power further represents and
                           warrants that neither H Power nor any company or
                           individual performing services or developing the Fuel
                           Cell Products is under any obligation to assign or
                           give any development work done to any third party. H
                           Power further warrants that it shall have in force
                           valid assignment agreements with any of its employees
                           or subcontractors who may perform services or
                           development of the Fuel Cell Products.

                           By January 1, 2004, H Power shall provide to ECO Fuel
                           Cells an opinion of counsel as to whether the Fuel
                           Cell Products infringe any intellectual property
                           rights. ECO shall receive a copy of such opinion
                           letter. If infringement is suggested, H Power shall
                           cure. Such opinion shall be in sufficient detail that
                           H Power could rely on it to avoid a charge of willful
                           infringement.

                  2.       LICENSE OF REQUIRED INTELLECTUAL PROPERTY. H Power
                           hereby grants to ECO Fuel Cells and the Licensed
                           Members the right to utilize, reproduce and
                           distribute H Power literature relating to the
                           marketing, use and maintenance of the Fuel Cell
                           Products. Such literature may include, but not be
                           limited to, training manuals, maintenance manuals,
                           Fuel Cell Product use instructions, and warranties.
                           All technical and other proprietary information
                           furnished to ECO Fuel Cells and the Licensed Members
                           shall be utilized solely for the purposes of the
                           Distribution Rights granted in this Agreement and not
                           for any other purposes.

                           To the extent that any other intellectual property
                           rights of H Power are needed for ECO Fuel Cells, the
                           Licensed Members, or their subcontractors to market,
                           install and service Fuel Cell Products or carry out
                           the intent of any part of the Agreement, H Power
                           grants to all of them a non-exclusive license in the
                           intellectual property to be used solely for the
                           purposes of this Agreement.

                  3.       ECO FUEL CELLS' TRADEMARK RIGHTS. Subject to the
                           provisions in Article 2.E. hereof, ECO Fuel Cells
                           will have the right to determine and own a name,
                           logo, and other marks ("Marks") under which the Fuel
                           Cell Products will be sold, assigned, licensed, or
                           otherwise distributed to Licensed Members and others
                           in the territories to which ECO Fuel Cells has or may
                           obtain Distribution Rights under this Agreement. ECO
                           Fuel Cells may obtain trademark protection for its
                           Marks and will notify H Power at least thirty (30)
                           days prior to placing any mark in commerce or filing
                           for any trade or service mark protection.

ARTICLE 9.        MANUFACTURER'S INDEMNIFICATION AND HOLD HARMLESS.


                                     Page 15
<PAGE>

         A.       Subject to the provisions in section B of this Article 9, H
                  Power will indemnify, defend, hold harmless ECO, ECO Fuel
                  Cells, and (Licensed Members but only under the Grandfathered
                  Distribution Agreements) for any loss, liability, damages,
                  demands, cost, judgment, award, expense, or claims, including
                  reasonable attorney fees, which may at any time be suffered or
                  incurred by ECO Fuel Cells, or Licensed Members arising out of
                  the use, operation or failure to operate, repair, and
                  maintenance of the Fuel Cell Products and accessories, or
                  arising out of the use of marketing and promotional material
                  prepared by H Power, designations, names, brands, insignia, or
                  trademarks which identify the Fuel Cell Products, accessories
                  or components thereof, or by reason of or in consequence of
                  defects or design flaws in the Fuel Cell Products or
                  accessories, or arising out of any claim of infringement of
                  intellectual property rights or misappropriation of
                  proprietary rights, use, operation or failure to operate,
                  repair and maintenance, or components thereof, or by reason of
                  or in consequence of defects or design flaws in the Fuel Cell
                  Products or accessories, or arising out of any claim of
                  infringement of intellectual property rights or
                  misappropriation of proprietary rights, or arising out of any
                  claim for damages in connection with the use by anyone of any
                  Fuel Cell Product or accessory except not the extent that any
                  such claim is based upon the alleged gross negligence,
                  including the unauthorized warranties, of ECO, ECO Fuel Cells,
                  Licensed Members, or their distributors, subcontractors or
                  sublicensees. In the event royalty damage, or punitive damage
                  payments are payable to Humboldt State University Foundation,
                  its assignee or Lichen on account of U.S. Patent 5,879,826 to
                  Lehman et al., entitled Proton Exchange Membrane Fuel Cell,
                  such payments will be borne exclusively by H Power.

         B.       The provisions of Article 9.A. above, shall apply only to:

                  1.       ECO and ECO Fuel Cells in their respective companies'
                           capacities, (including their successors,
                           representatives, subrogees, and assigns, provided
                           that they are Cooperative Members); for example, H
                           Power will continue to indemnify, etc. ECO and ECO
                           Fuel Cells for claims, etc. relating to the
                           infringement of intellectual property rights relating
                           to this Agreement for any Fuel Cell Products covered
                           by this Agreement; and

                  2.       Grandfathered Distribution Agreements (as defined in
                           Article 3.A.1.c. of this Agreement) but only to the
                           extent that Licensed Members retain their exclusive
                           rights thereunder (see Article 3.A.3.c) and

                  3.       First sales by ECO or ECO Fuel Cells but only to
                           their Cooperative Members and not to any resales by
                           those Cooperative Members.

                  IN ALL OTHER CASES ARTICLE 9.A. DOES NOT APPLY AND ONLY THE
                  STANDARD H POWER MANUFACTURER'S WARRANTY, REMEDIES AND
                  LIMITATIONS ON DAMAGES, SHALL APPLY TO ANY FUEL CELL PRODUCT
                  SALES THAT ARE MADE AFTER THE EFFECTIVE DATE OF


                                     Page 16
<PAGE>

                  THIS AGREEMENT. SUCH WARRANTY SHALL BE REASONABLY COMPETITIVE
                  WITH OTHER MANUFACTURERS' WARRANTIES FOR REASONABLY SIMILAR
                  PRODUCTS.

ARTICLE 10.       ENVIRONMENTAL LIABILITIES.

         A.       As used in this Agreement, "hazardous material" means: (1) any
                  chemical, substance, material, mixture, contaminant or
                  pollutant, now or hereafter defined as a "hazardous substance"
                  under the Comprehensive Environmental Response, Compensation
                  and Liability Act, as amended from time to time, and all
                  regulations thereunder, as amended from time to time; (2)
                  petroleum, crude oil, or any fraction thereof; (3) any
                  pollutant, contaminant, special waste or toxic substance now
                  or hereinafter listed, defined by or subject to regulation
                  under any federal, state or local statute, ordinance, rule,
                  regulation, standard, policy, guidance, permit, order,
                  administrative or judicial decision or pronouncement,
                  previously, currently, or hereafter in effect, as amended from
                  time to time, pertaining to health, safety, or the
                  environment, including without limitation, natural resources,
                  environmental regulation, contamination, pollution, cleanup,
                  or disclosure.

         B.       Subject to the provisions in section C of this Article 10, H
                  Power agrees to indemnify, hold harmless, and defend ECO, ECO
                  Fuel Cells and their successors, representatives, subrogees,
                  assigns, customers and all Licensed Members from any
                  liability, claim, demand, cause of action, suit, loss, damage,
                  injury, expense, cost, settlement or judgment of any kind or
                  nature including but not limited to demands, fines,
                  remediations, or penalties asserted by any governmental
                  entity, as a result of the treatment, storage, disposal,
                  handling, spillage, leakage, or presence in any form in soils,
                  surface waters, groundwater, air, or property, of any wastes
                  or "hazardous materials" directly caused by Fuel Cell Products
                  or operations, unless such actions are caused by the willful
                  conduct of ECO Fuel Cells or its Licensed Members.

         C.       The provisions of Article 10. B. above shall apply only to:

                  1.       ECO and ECO Fuel Cells in their respective companies'
                           capacities (including their successors,
                           representatives, subrogees, and assigns, provided
                           that they are Cooperative Members); and

                  2.       Grandfathered Distribution Agreements (as defined in
                           Article 3.A.1.c. of this Agreement) but only to the
                           extent that Licensed Members retain their exclusive
                           rights thereunder (see Article 3.A.3.c); and

                  3.       First sales by ECO or ECO Fuel Cells but only to
                           their Cooperative Members and not to any resales by
                           those Cooperative Members.

                  IN ALL OTHER CASES, ARTICLE 10.B. DOES NOT APPLY. HOWEVER, H
                  POWER SHALL PROVIDE APPROPRIATE WARNING LANGUAGE WITH ITS FUEL
                  CELL PRODUCTS REGARDING THE TREATMENT, STORAGE,


                                     Page 17
<PAGE>

                  DISPOSAL, HANDLING, SPILLAGE, LEAKAGE, OR PRESENCE OF ANY
                  "HAZARDOUS MATERIALS."

ARTICLE 11.       GENERAL REPRESENTATIVES, WARRANTIES AND COVENANTS.

         A.       PERFORMANCE AND MERCHANTABILITY. H Power warrants that the
                  Fuel Cell Products will be built in a workmanlike manner and
                  that the Fuel Cell Products will perform according to
                  Performance Standards in Schedule C. H Power will correct any
                  errors or discrepancies in the Fuel Cell Products that are
                  identified by ECO Fuel Cells, the Licensed Members or by H
                  Power as soon as possible after ECO Fuel Cells or a Licensed
                  Member informs H Power of any breach of this warranty. H Power
                  further warrants that the Fuel Cell Products have been
                  designed by H Power without reliance on ECO, ECO Fuel Cells or
                  Licensed Members and are provided to ECO, ECO Fuel Cells and
                  Licensed Members with appropriate warnings and instructions.

                  H Power expressly warrants that the Fuel Cell Products are
                  merchantable and fit for the particular purpose for which they
                  are designed, and these warranties and H Power's remedies and
                  limitations on damages with respect thereto, will be extended
                  to the end users of the Fuel Cell Products; however this
                  paragraph applies only to the following:

                  1.       ECO and ECO Fuel Cells in their respective companies'
                           capacities (including their successors,
                           representatives, subrogees, and assigns, provided
                           that they are Cooperative Members); and

                  2.       Grandfathered Distribution Agreements (as defined in
                           Article 3.A.1.c. of this Agreement) but only to the
                           extent that Licensed Members retain their exclusive
                           rights thereunder (see Article 3.A.3.c); and

                  3.       First sales by ECO or ECO Fuel Cells but only to
                           their Cooperative Members and not to any resales by
                           those Cooperative Members.

         B.       AUTHORITY. Each Party represents and warrants to the other
                  that it has provided truthful answers to due diligence
                  questions and has all requisite power and authority: 1. to
                  execute, deliver and perform this Agreement and all
                  agreements, documents and instruments executed and delivered
                  by each in connection with it; and that it has no conflicting
                  arrangements or agreements with any other party; 2. to own,
                  lease or operate its property and assets; and 3. to carry on
                  its business as presently conducted.

         C.       LIABILITIES. Each Party represents to the other that to the
                  best of its knowledge, there is no outstanding or threatened
                  judgment, litigation or proceeding of any type involving or
                  affecting the transactions described in this Agreement, except
                  as previously disclosed in writing to the other Party on or
                  before the date hereof.

         D.       LEGAL COMPLIANCE. Each Party represents that the other Party
                  has fulfilled all of its obligations under the Operating
                  Agreement. Each Party shall comply with all


                                     Page 18
<PAGE>

                  governmental (whether international, federal, state,
                  municipal, or otherwise) statutes, laws, rules, regulations,
                  ordinances, codes, directives and orders or any such
                  governmental agency, body, or court applicable to it,
                  including, but not limited to, environmental, worker safety,
                  codes and standards, and hazardous materials.

         E.       AUDIT. Each Party at its own expense, shall have the right to
                  audit the other's books and records at reasonable times and
                  places, for information that is directly related to the
                  subject matter of this Agreement.

ARTICLE 12.       INSURANCE.

                  H Power agrees to maintain the following minimum levels of
                  insurance: personal liability: $2,000,000; property liability:
                  $1,000,000; directors and officers liability: $2,000,000;
                  product liability: $10,000,000 and shall include ECO and ECO
                  Fuel Cells as named insureds. H Power shall provide ECO Fuel
                  Cells at closing with copies of the applicable policies
                  covering these lines and written proof from carriers that such
                  policies are in force. ECO and ECO Fuel Cells agree to carry
                  appropriate insurance at levels that are acceptable to H Power
                  and shall include H Power as named insured.

ARTICLE 13.       CONFIDENTIALITY.

                  The Parties shall hold in confidence all provisions of this
                  Agreement and all information provided by either Party to the
                  other in connection with it. The Parties agree that all
                  information related to this Agreement, not otherwise known to
                  the public, is confidential and proprietary and is not to be
                  disclosed to third persons (other than to affiliates,
                  officers, directors, employees and agents of the Parties, each
                  of whom is bound by this provision) without the prior written
                  consent of the other Party, except:

         A.       At the written direction of the other Party;

         B.       To the extent necessary to comply with law (including, without
                  limitation, the disclosure requirements of the U.S. securities
                  laws and any mandatory requirements of the NASDAQ Stock
                  Market, Inc. or NASD) or valid order of a court of competent
                  jurisdiction, in which event the party shall notify the other
                  Party as promptly as practicable (and, if possible, prior to
                  making any disclosure) and shall use its reasonable discretion
                  in determining whether to seek confidential treatment of the
                  information;

         C.       As part of its normal reporting or review procedures to its
                  parent company, Board of Directors, its auditors and its
                  attorneys who agree to be bound by this provision;

         D.       In order to enforce any rights pursuant to this Agreement;


                                     Page 19
<PAGE>

         E.       To obtain appropriate insurance, provided the insurance
                  company agrees in writing to be bound by this provision;

         F.       To obtain financing, provided that any person or entity
                  providing financing agrees in writing to be bound by this
                  provision.

                           All provisions in this Agreement relating to the
                           confidentiality of information shall survive the
                           termination, expiration, cancellation or rescission
                           of this Agreement for a period of five (5) years
                           thereafter.

ARTICLE 14.       ARBITRATION.

                  Except as otherwise provided in Article 4.C. herein, the
                  Parties agree that any and all controversies or claims arising
                  out of or relating to this Agreement, or any alleged breach
                  hereof, shall be resolved by binding arbitration as prescribed
                  herein, if both Parties agree. In that event, the Parties
                  shall mutually agree upon one or more arbitrator(s), not to
                  exceed three, who will conduct the arbitration under the then
                  current rules of the American Arbitration Association ("AAA"),
                  unless otherwise provided herein. The arbitrator(s) will be
                  selected in accordance with AAA procedures from a list of
                  qualified arbitrators maintained by AAA. The arbitration will
                  be conducted in Washington, D.C. and all expedited procedures
                  prescribed under AAA rules will apply. Unless the Parties
                  otherwise agree, the proceedings will be completed within
                  forty-five (45) days of the Parties' receipt of notice of
                  arbitration. Each Party will bear its own costs and attorney's
                  fees and disbursements; and shall share equally the costs of
                  the arbitrators.

ARTICLE 15.       TERMINATION.

         Either Party may terminate this Agreement under the following
circumstances:

         A.       If the other Party hereto shall become bankrupt or insolvent
                  or shall file any debtor relief proceedings, or if there shall
                  be filed in Court against the other Party legal proceedings in
                  bankruptcy or insolvency or reorganization or for the
                  appointment of a receiver or trustee of all or a portion of
                  such other Party's property, or if the other Party makes an
                  assignment for the benefit of creditors or petitions for or
                  enters into an agreement for debtor relief, the other Party
                  immediately shall notify the Party; and if such proceedings
                  are not dismissed within a period of one hundred and fifty
                  (150) days after the institution thereof. Any warranties and
                  guarantees made to the terminating Party shall still survive
                  such termination.

                  H Power Corp. acknowledges and agrees that ECO Fuel Cells has
                  assigned all of its right, title and interest in and to the
                  Agreement to the National Rural Utilities Cooperative Finance
                  Corporation ("CFC"), and that upon the occurrence of an event
                  of default under the Agreement by ECO Fuel Cells, CFC shall
                  have the right, but not the obligation, to exercise and
                  perform all of the rights and obligations of ECO Fuel Cells
                  under the Agreement.


                                     Page 20
<PAGE>

         B.       Except for failure to perform due to force majeure events, in
                  the event that the other Party breaches any other material
                  term or condition of this Agreement and fails to cure such
                  breach within sixty (60) days after receipt of written notice
                  of the breach from the non-breaching Party, the non-breaching
                  Party may terminate this Agreement upon sixty (60) days'
                  advance written notice. In the event that either Party
                  terminates, CFC shall immediately be notified in writing by
                  the terminating Party.

ARTICLE 16.       OTHER.

         A.       NOTICES. All notices or other documents that are required by
                  this Agreement shall be in writing, and shall be personally
                  served upon the Parties entitled thereto or mailed, postage
                  prepaid, by certified or registered mail, or sent via
                  established and reliable courier or overnight service (e.g.,
                  FedEx), or by FAX or other electronic or telecommunications
                  transmission in written form (with telecommunications
                  confirmation of receipt in a clearly legible copy) to the
                  recipient's business addressed to such person at the address
                  specified in this Agreement, or address later specified by
                  written notice by and to the Parties. Any notice or other
                  communication by this method shall be deemed given at the time
                  of sending or certification, except for a notice changing a
                  Party's address, which shall be deemed given at the time of
                  receipt.

         B.       GOVERNING LAW. This Agreement, including any arbitration,
                  shall be governed, construed, and interpreted in accordance
                  with the internal laws of the Commonwealth of Virginia
                  (without giving effect to principles of conflicts of law).

         C.       WAIVER. Any waiver by either Party of a breach of this
                  Agreement shall not operate as a waiver of any other
                  provision. The failure of a Party to insist upon strict
                  adherence to any term of this Agreement shall not be
                  considered a waiver or deprive that Party of the right
                  thereafter to insist on strict adherence to that term or any
                  other term of the Agreement. Any waiver must be in writing.

         D.       SEVERABILITY. Nothing contained in this Agreement shall be
                  construed to require the commission of any act contrary to
                  law, and wherever there is any conflict between any provision
                  of this Agreement and any law, such law shall prevail;
                  provided however, that in the event of any such conflict, the
                  provisions of this Agreement shall be curtailed and limited
                  only to the extent necessary to permit compliance with the
                  minimum legal requirement, and no other provisions shall be
                  affected thereby and all other provisions shall continue in
                  full force and effect.

         E.       TAXES. Each Party is solely and entirely responsible for
                  payment of any and all taxes (including, but not limited to,
                  income, real property, personal property and gross receipts
                  taxes) and contributions to government programs, that are
                  applicable or related to the systems, operations, facilities
                  and/or customers of such Party.

         F.       PARTY'S RELATIONSHIP. Neither Party by this Agreement makes
                  the other Party its legal representative or agent. In
                  addition, neither Party shall assign this Agreement to


                                     Page 21
<PAGE>

                  any other third party, without the other Party's written
                  permission, except that ECO Fuel Cells may assign it to a
                  Cooperative Member.

         G.       FORCE MAJEURE. Any failure of delay of performance shall not
                  be deemed a breach of this Agreement if it results from any
                  acts of God, civil disorders, insurrections, riots, or wars,
                  Year 2000 failures, terrorism, weather, fire, flood, national
                  emergencies declared after the date of this Agreement,
                  government order or regulation, blockade, embargo, strike,
                  work stoppage or similar causes beyond the reasonable control
                  of the Parties.

         H.       INTEGRATION OF AGREEMENT PROVISIONS. All Schedules and any
                  other attachments to this Agreement are incorporated as part
                  of this Agreement. This Agreement supercedes all previous and
                  contemporaneous understandings, commitments and
                  representations, whether oral or written, including the prior
                  Operating Agreement and the MOA, concerning the subject matter
                  hereof. Each Party acknowledges that the other Party has not
                  made any representations other than those provided in this
                  Agreement.

         I.       CUSTOMS DUTIES. H. Power will be responsible for any customs
                  documentation, labeling, processing, duties, charges, and
                  taxes related to the importation of goods by H Power into the
                  U.S. market in connection with this Agreement.

         J.       MODIFICATION. This Agreement may be modified only by a written
                  instrument signed by the Parties.

         K.       NO RIGHTS IN THIRD PARTIES. Except as to Grandfathered
                  Distribution Agreements, nothing contained in this Agreement
                  shall be construed as giving rise to any rights to enforce its
                  provisions to any person or entity not a Party to this
                  Agreement under any legal theory.

         L.       COUNTERPARTS. This Agreement and any document or instrument
                  required or permitted hereunder, may be executed in
                  counterparts, each of which shall be deemed an original and
                  all of which together shall constitute but one and the same
                  instrument.



                                     Page 22
<PAGE>



IN WITNESS WHEREOF, the undersigned hereby execute this Agreement.


Attest:                              ECO FUEL CELLS, LLC

By:/s/ David Muchow                      By: /s/ William C. Cetti
   ------------------------------            ----------------------------------


                                         Title: President/ CEO
                                                -------------------------------





                                     Page 23
<PAGE>

Attest:                               H POWER CORP.

By:/s/ Thomas Michael                     By: /s/ William L. Zang
   -------------------------------            ----------------------------------


                                          Title: Chief Financial Officer
                                                 -------------------------------



Attest:                               H POWER ENTERPRISES OF CANADA, INC.

By:/s/ Thomas Michael                     By: /s/ H. Frank Gibbard
   ----------------------------------         ----------------------------------



                                     Page 24
<PAGE>

                                   SCHEDULE C

                    FUEL CELL PRODUCTS PERFORMANCE STANDARDS

                FOR BETA AND RESIDENTIAL COGENERATION UNIT (RCU)
          (COMMERCIAL UNITS ALSO SHALL MEET OR EXCEED THESE STANDARDS)


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                    JAN-02      NOV-02      FEB-03       JAN-04         JUL-05          DEC-07
====================================================================================================================

====================================================================================================================
                                                                          EARLY
           DESIGNATION             VERSION 2  VERSION 3   VERSION 4    COMMERCIAL     COMMERCIAL    COMMERCIAL V2
--------------------------------------------------------------------------------------------------------------------
<S>                                   <C>        <C>         <C>           <C>           <C>             <C>
Net Output, LPG                       4.5        4.5         4.5           4.5           4.5             4.5
--------------------------------------------------------------------------------------------------------------------
Net Output, NG                        4.0        4.0         4.0           4.5           4.5             4.5
--------------------------------------------------------------------------------------------------------------------
Grid Connect                          No         Yes         Yes           Yes           Yes             Yes
--------------------------------------------------------------------------------------------------------------------
LPG System efficiency (4kW)           [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
NG System efficiency (4 kW)           [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
Cogen efficiency                      [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
Peak Total efficiency, LPG            [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
Peak Total efficiency, NG             [*]        [*]         [*]           [*]           [*]             [*]]
--------------------------------------------------------------------------------------------------------------------
Min ambient temperature (F)           -22        -22         -22           -40           -40             -40
--------------------------------------------------------------------------------------------------------------------
Max ambient temperature (F)           104        104         104           110           115             115
--------------------------------------------------------------------------------------------------------------------
MTBF (hrs)                            [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
Minor service (hrs)                   [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
Major service (hrs)                   [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
Lifetime (yrs)                        [*]        [*]         [*]           [*]           [*]             [*]
--------------------------------------------------------------------------------------------------------------------
Installation Time (days)               2          2           2             1             1               1
--------------------------------------------------------------------------------------------------------------------
</TABLE>

1.        OTHER SPECIFICATIONS

<TABLE>
<CAPTION>
<S>                        <C>
UNIT RATING:               10 kWe for 15 minutes
                           Able to start equipment with motor peaks up to 20 kWe

SYSTEM PERFORMANCE:        LPG (at 4.5 kWe)
                           [*] fuel to electricity efficiency with minimum load of 1 kW
                           [*] in cogeneration mode

                           NG (at 4.0 kWe)
                           [*] fuel to electricity efficiency with minimum load of 1 kW
                           [*] in cogeneration mode

COGENERATION:              Water connections provided for heat recovery
</TABLE>



                                     Page 1
<PAGE>

<TABLE>
<CAPTION>
<S>                        <C>
OUTPUT VOLTAGE:            120/240 VAC, 60 Hz

NOISE:                     65 dBa or less @ 1 meter

PHYSICAL CHARACTERISTICS:  W: 4ft X H: 4 ft X D: 4 ft.

LOCATION:                  Suitable for outdoor installation

POWER QUALITY:             IEEE 519

START UP:                  Autonomous

FUEL TYPE:                 Propane or Natural Gas

WATER CONSUMPTION:         Maximum of 0.75 Gallons/hour, tap water

INSTALLATION:              On prefabricated slab

AUTONOMY:                  Fully autonomous, always grid independent

OPERATION MODES:           Stand-alone: system provides all the power.
Grid connected: system provides all the power with the possibility of switching
to the grid all the load through an automatic or manual transfer switch.

PROTECTIONS:          Overload protection with relay output for load shedding capability
</TABLE>

2.       CODES AND STANDARDS

         UNITS SHALL COMPLY WITH THE FOLLOWING CODES AND STANDARDS

o        A.G.A./CGA, UL Listing
o        IEEE 929
o        IEEE P1547
o        UL 1741
o        NFPA 853
o        ASME PTC-50
o        IEEE 519
o        ANSI Z21.83

3.       GRID COMPATIBILITY
         The commercial RCU shall be able to operate either independently of, or
         concurrently with, the electric grid. The power conditioning system and
         interconnection equipment shall conform with all applicable codes and
         standards.




                                     Page 2
<PAGE>
4.       INSTALLATION, START-UP AND TRAINING

Units are factory tested before shipping and ready for connections.

o        INSTALLATION  &  START UP:
         -        Included on site initial setting, start-up and commissioning
                  as necessary, byH Power, anywhere in the US during the test
                  program
         -        Outside installation only

o        TECHNICAL ASSISTANCE:
         -        continuous phone assistance (regular hours, working days).
         -        Regularly scheduled visits during test program (frequency to
                  be determined based on initial product performance in the
                  field).

Units are installed parallel to the grid. In the case of failure during the
testing period, the customer will not suffer from a loss of power because power
is then drawn from the grid. A local technician under H Power guidance or a H
Power technician can then start with troubleshooting.

o        TRAINING:
         -        On site,one to two days during commissioning period
         -        One or two days seminar at a central location up to 3
                  times/year

o        MANUALS: Installation, Operation and Maintenance manuals included,
                  RS-232 interfacing and fault diagnostics provided.

o        REMOTE MONITORING: Included in Alpha units.

5.       SAFETY FEATURES:

[ ]      Hydrogen leak detectors that shut-off RCU and close gas valves.

[ ]      Natural Gas or propane leak detector with interlocks.

[ ]      Shut-off valve device on fuel line

[ ]      Automatic shut-off system on fresh water inlet of the steam boiler.

[ ]      Automatic shut-off system in case of failure of hydrogen utilization
         into the stack.

[ ]      Water heater (boiler) is CGA/A.G.A. approved. It is a commercial
         product from Lennox Industries or equivalent. Therefore it already
         includes standard safety features as required locally and nationally
         (relief valves, high temperature limits, Codes and Standards (relief
         valves, high temperature limits, flame detection, etc.).



                                     Page 3
<PAGE>

Compliance with all Schedule C Standards shall be verified by an independent
third party, if requested by ECO Fuel Cells, LLC. Other Fuel Cell Products shall
be added to this Schedule as their specifications become available.

                                   SCHEDULE C
             RESIDENTIAL COGENERATION UNIT SPECIFICATION DEFINITIONS

NET OUTPUT -            the maximum continuous output of the RCU within the
                        parameters of the system specification (temperature,
                        elevation, etc).

GRID CONNECT -          the ability of the RCU to interact directly with the
                        electric grid.

SYSTEM EFFICIENCY -     the conversion efficiency of fuel energy to electricity
                        at a load point of 4 kW.

COGEN EFFICIENCY -      the percentage of input fuel energy that may be
                        reclaimed as useful heat.

PEAK TOTAL EFFICIENCY - the highest theoretical total efficiency (electric +
                        cogen) that can be obtained by the RCU.

AMBIENT TEMPERATURE -   the temperature of the air surrounding the RCU.

MTBF -                  the average time, over a large sample population, that a
                        unit will operate between unplanned shutdowns. Achieving
                        a particular MTBF is dependent upon adherence to a
                        strict maintenance schedule.

MINOR SERVICE -         the replacement of deionizing cartridges and a
                        preventative maintenance check. By 2006, the homeowner
                        shall replace the deionizer cartridges every 6 months,
                        an operation that will take less than 10 minutes. Each
                        12 months a qualified technician will inspect the unit
                        to perform any necessary preventative maintenance.

MAJOR SERVICE -         the expected replacement interval for components such as
                        a stack, blowers, compressors, etc.

LIFETIME -              the theoretical limit on the life of the unit, generally
                        based on the lifetime of the reformer vessel. This does
                        not correspond to the length of time before the unit
                        becomes obsolete.

INSTALLATION TIME -     the length of time it takes to completely commission a
                        unit, from groundbreaking to system operation.




                                     Page 4

<PAGE>

--------------------------------------------------------------------------------
This Schedule A details the schedule and volumes of H Power's Fuel Cell Products
(including Alpha, Beta, Commercial Units and Other Fuel Cells as defined in the
Operating Agreement) to be purchased by ECO Fuel Cells. The number of Units may
change, but EFC shall be given credit toward its Fuel Cell Product purchase
obligations under the Operating Agreement, for the dollar amount of all
purchases of any Fuel Cell Products.
--------------------------------------------------------------------------------

                     SCHEDULE A, FUEL CELL PRODUCT PURCHASES

ALPHA & BETA UNITS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
         SHIPMENT DATE                                                                    ALPHA UNITS   ALPHA UNITS    BETA UNITS
         X-FACTORY MTL.                               PRODUCT TYPE                          PROPANE     NATURAL GAS     PROPANE
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                                                      <C>           <C>            <C>
Shipped as of 2/28/01            Residential Co-Generation Unit [*]                           [*]           [*]           [*]
Shipped as of 2/28/01            Residential Co-Generation Unit [*]                           [*]           [*]           [*]
Shipped May 2001                 Residential Co-Generation Unit [*]                           [*]           [*]           [*]
Shipped June 2001                Residential Co-Generation Unit [*]                           [*]           [*]           [*]
[*]                              Residential Co-Generation Unit [*]                           [*]           [*]           [*]
[*]                              Residential Co-Generation Unit [*]                           [*]           [*]           [*]
[*]                              Residential Co-Generation Unit [*]                           [*]           [*]           [*]
[*]                              Residential Co-Generation Unit [*]                           [*]           [*]           [*]

====================================================================================================================================
                                                                               SUB-TOTAL      [*]           [*]           [*]
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
         SHIPMENT DATE             BETA UNITS    TOTAL   PRICE      TOTAL
         X-FACTORY MTL.           NATURAL GAS    UNITS    USD      DOLLARS
-------------------------------------------------------------------------------
<S>                               <C>           <C>      <C>       <C>
Shipped as of 2/28/01                 [*]         [*]     [*]        [*]
Shipped as of 2/28/01                 [*]         [*]     [*]        [*]
Shipped May 2001                      [*]         [*]     [*]        [*]
Shipped June 2001                     [*]         [*]     [*]        [*]
[*]                                   [*]         [*]     [*]        [*]
[*]                                   [*]         [*]     [*]        [*]
[*]                                   [*]         [*]     [*]        [*]
[*]                                   [*]         [*]     [*]        [*]

===============================================================================
                                      [*]         [*]     [*]        [*]
-------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
COMMERCIAL UNITS
--------------------------------------------------------------------------------------------------------------------------------
         SHIPMENT DATE
         X-FACTORY MTL                                                                            TOTAL   PRICE      $ ECO
        CALENDAR QUARTER                              PRODUCT TYPE                                UNITS    USD      PURCHASE
================================================================================================================================
<S>                              <C>                                                              <C>      <C>     <C>
            [*]                  Residential Co-Generation Unit [*]                                 [*]     [*]        [*]
            [*]                  Residential Co-Generation Unit [*]                                 [*]     [*]        [*]
            [*]                  Residential Co-Generation Unit [*]                                 [*]     [*]        [*]
            [*]                  Residential Co-Generation Unit [*]                                 [*]     [*]        [*]
            [*]                  Residential Co-Generation Unit [*]                                 [*]     [*]        [*]
            [*]                  Residential Co-Generation Unit [*]                                 [*]     [*]        [*]
================================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
================================================================================================================================
         CALENDAR YEAR
--------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                                                              <C>      <C>     <C>
              [*]                Residential Co-Generation Unit [*]                                [*]     [*]        [*]
              [*]                Residential Co-Generation Unit [*]                                [*]     [*]        [*]
              [*]                Residential Co-Generation Unit [*]                                [*]     [*]        [*]
              [*]                Residential Co-Generation Unit [*]                                [*]     [*]        [*]
              [*]                Residential Co-Generation Unit [*]                                [*]     [*]        [*]
================================================================================================================================
                                                                                                       SUB-TOTAL      [*]
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
         CALENDAR YEAR
--------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                              <C>                 <C>           <C>
              [*]                               Portable and Mobile Units        see note                             [*]
              [*]                               Portable and Mobile Units                                             [*]
              [*]                               Portable and Mobile Units                                             [*]
              [*]                               Portable and Mobile Units                                             [*]
              [*]                               Portable and Mobile Units                                             [*]
================================================================================================================================
                                                                                                       SUB-TOTAL   $  [*]
================================================================================================================================
                                                                                                           TOTAL   $  [*]
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                     ROUNDED TO:   $ 81,186,000
--------------------------------------------------------------------------------------------------------------------------------
Note                                            June 2002 - EPACv2 (500W)             [*]
</TABLE>

-------------
* Confidential