Document:

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                                                                     Exhibit 4.1

                          REGISTRATION RIGHTS AGREEMENT

                                 March 25, 1996

To Duquesne Enterprises
Grant Building
Suite 2420
Pittsburgh, PA  15219

Gentlemen:

      This will confirm that in consideration of your agreement to purchase
certain shares (the "Preferred Shares") of Series A Convertible Preferred Stock,
$.001 par value per share ("Preferred Stock"), of H Power Corp., a Delaware
corporation (the "Company"), pursuant to the Securities Purchase Agreement dated
as of March ___, 1996 (the "Purchase Agreement") between the Company and you,
and as an inducement to you to consummate the transactions contemplated by the
Purchase Agreement, the Company covenants and agrees with you as follows:

      1. Certain Definitions. As used in this Registration Rights Agreement
("Agreement"), the following terms shall have the following respective meanings:

      "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

      "Common Stock" shall mean the Company's Common Stock, $.001 par value per
share, as constituted as of the date of this Agreement.

      "Conversion Shares" shall mean shares of Common Stock issued upon
conversion of the Preferred Shares.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

      "Holder" shall mean Duquesne Enterprises, its successors and assigns.

      "Restricted Stock" shall mean the Conversion Shares, excluding shares
which have been (a) registered under the securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them, or (b) publicly sold pursuant to Rule 144
under the Securities Act, or (c) which may be sold privately.
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      "Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

      2. Registration Rights. If the Company at any time (other than in the
initial public offering) proposes to register any of its equity securities under
the Securities Act for sale to the public, whether for its own account or for
the account of other security holders or both (except with respect to
registration statements on Forms S-4, S-8, or an offering solely to its
stockholders, or another form not available for registering the Restricted Stock
for sale to the public), each such time it will give written notice to the
Holder of its intention so to do, provided that at such time the Holder is the
holder of Registrable Securities. Upon the Holder's written request, received by
the Company within 15 business days after the giving of any such notice by the
Company, to register any of the Holder's Restricted Stock, the Company will use
its best efforts to cause the Restricted Stock as to which registration shall
have been so requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Company, all to the extent
requisite to permit the sale or other disposition by the Holder of such
Restricted Stock so registered. In the event that any registration pursuant to
this Section 2 shall be, in whole or in part, an underwritten public offering of
Common Stock, the number of shares of Restricted Stock to be included in such an
underwriting may be reduced (pro rata among the Holder and all other requesting
security holders having rights similar to the rights granted herein based upon
the number of shares of Restricted Stock owned by such holders) if and to the
extent that the managing underwriter shall be of the opinion that such inclusion
would adversely affect the marketing of the securities to be sold by the Company
therein.

      3. Registration Procedures.

            (a) If and whenever the company is required by the provisions of
Section 2 to use its best efforts to effect the registration of any shares of
Restricted Stock under the Securities Act, the Company will, as expeditiously as
possible:

                  (i) prepare and file with the Commission a registration
            statement (which, in the case of an underwritten public offering,
            shall be on Form S-1 or other form of general applicability
            satisfactory to the managing underwriter) with respect to such
            securities and use its best efforts to cause such registration
            statement to become and remain effective for the period of the
            distribution contemplated thereby (determined as hereinafter
            provided);

                  (ii) prepare and file with the Commission such amendments and
            supplements to such registration statement and the prospectus used
            in connection therewith as may be necessary to keep registration
            statement effective for the period specified in Section 3(i) above
            and comply with the provisions of the Securities Act with respect to
            the disposition of all Restricted Stock covered by such registration
            statement

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            in accordance with the Holder's intended method of disposition set
            forth in such registration statement for such period;

                  (iii) furnish to the Holder and other sellers and to each
            underwriter such number of copies of the registration statement and
            the prospectus included therein (including each preliminary
            prospectus) as such persons reasonably may request in order to
            facilitate the public sale or other disposition of the Restricted
            Stock covered by such registration statement;

                  (iv) use its best efforts to register or qualify the
            Restricted Stock covered by such registration statement under the
            securities or "blue sky" laws of such jurisdictions as the Holder,
            or, in the case of an underwritten public offering, the managing
            underwriter reasonably shall request; provided, however, that the
            Company shall not for any such purpose be required to qualify
            generally to transact business as a foreign corporation in any
            jurisdiction where it is not so qualified or to consent to general
            service of process in any such jurisdiction;

                  (v) use its best efforts to list or have admitted for trading
            the Restricted Stock covered by such registration statement with any
            securities exchange or listing agency (including Nasdaq) on which
            the Common Stock of the Company is then listed;

                  (vi) immediately notify the Holder and each underwriter under
            such registration statement, at any time when a prospectus relating
            thereto is required to be delivered under the Securities Act, of the
            happening of any event of which the Company has knowledge as a
            result of which the prospectus contained in such registration
            statement, as then in effect, includes an untrue statement of a
            material fact or omits to state a material fact required to be
            stated therein or necessary to make the statements therein not
            misleading in light of the circumstances then existing;

                  (vii) if the offering is underwritten and at the request of
            the Holder, use its best efforts to furnish on the date that
            Restricted Stock is delivered to the underwriters for sale pursuant
            to such registration: (A) an opinion dated such date of counsel
            representing the Company for the purposes of such registration,
            addressed to the underwriters and to the Holder, stating that such
            registration statement has become effective under the Securities
            Act, and that (1) to the best knowledge of such counsel, no stop
            order suspending the effectiveness thereof has been issued and no
            proceedings for that purpose have been instituted or are pending
            under the Securities Act, (2) the registration statement, the
            related prospectus and each amendment or supplement thereto comply
            as to form in all material respects with the requirements of the
            Securities Act (except that such counsel need not express any
            opinion as to financial statements contained therein), and (3) to
            such other effects as reasonably may be requested by

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            counsel for the underwriters or by the Holder or its counsel, and
            (B) a letter dated such date from the independent public accountants
            retained by the Company, addressed to the underwriters and to the
            Holder, stating that they are independent public accountants within
            the meaning of the Securities Act and that, in the opinion of such
            accountants, the financial statements of the Company included in the
            registration statement or the prospectus, or any amendment or
            supplement thereto, comply as to form in all material respects with
            the applicable accounting requirements of the Securities Act, and
            such letter shall additionally cover such other financial matters
            (including information as to the period ending no more than five
            business days prior to the date of such letter) with respect to such
            registration as such underwriters reasonably may request; and

                  (viii) make available for inspection by the Holder and any
            underwriter participating in any distribution pursuant to such
            registration statement and any attorney, accountant or other agent
            retained by the Holder or underwriter, all financial and other
            records, pertinent corporate documents and properties of the
            Company, and cause the Company's officers, directors and employees
            to supply all information reasonably requested by the Holder,
            underwriter, attorney, accountant or agent in connection with such
            registration statement.

            (b) For purposes of Section 3(i) and 3(ii) hereof, the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby and 120 days
after the effective date thereof.

            (c) In connection with each registration hereunder, the Holder will
furnish to the Company in writing such information with respect to itself and
the proposed distribution by it as reasonably shall be necessary in order to
assure compliance with federal and applicable state securities laws.

            (d) In connection with each registration pursuant to Section 2
hereof covering an underwritten public offering, the Company and the Holder
agree to enter into a written agreement with the managing underwriter in such
form and containing such provisions as are customary in the securities business
for such an arrangement between such underwriter and companies of the Company's
size and investment stature.

      4. Indemnification.

            (a) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Section 2, the Company will indemnify and
hold harmless the Holder, each underwriter of such Restricted Stock and each
other person, if any, who controls the Holder or underwriter within

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the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Holder, underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to Section 2,
any preliminary prospectus or final prospectus contained therein or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Holder, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by the Holder, underwriter or
controlling person in writing specifically for use in such registration
statement or prospectus.

            (b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Section 2, the Holder will indemnify and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Section 2, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company and each
such officer, director, underwriter and controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Holder will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
the Holder, as such, furnished in writing to the Company by the Holder
specifically for use in such registration statement or prospectus; and further,
provided, that the liability of the Holder hereunder shall be limited to an
amount equal to the proceeds to the Holder of Restricted Stock sold as
contemplated herein.

            (c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made

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against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to such indemnified party other
than under this Section 4 and shall only relieve it from any liability which it
may have to such indemnified party under this Section 4 if and to the extent the
indemnifying party is prejudiced by such omission. In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its election so
to assume and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 4 for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected; provided, however, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.

      5. Changes in Common Stock or Preferred Stock. If, and as often as, there
is any change in the Common Stock or the Preferred Stock by way of a stock
split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the rights
and privileges granted hereby shall continue with respect to the Common Stock or
the Preferred Stock as so changed.

      6. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, at all times
after 90 days after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
the Company agrees to:

            (a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;

            (b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

            (c) furnish to the Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
and of the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed
by the Company as such holder may reasonably request in availing itself

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of any rule or regulation of the commission allowing the Holder to sell any
Restricted Stock without registration.

      7. Representations and Warranties of the Company. The Company represents
and warrants to the Holder as follows:

            (a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Charter or Bylaws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or its properties or
assets is bound, conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under, any such indenture, agreement
or other instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
the Company.

            (b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
moratorium and other laws generally affecting the rights and remedies of
creditors.

            (c) The Company represents and warrants that it shall not enter into
any other agreement with any holder or prospective holder of any securities of
the Company which would be inconsistent with the terms and provisions contained
in this Agreement.

      8. Miscellaneous.

            (a) All covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto (including, without
limitation, transferees of any Preferred Shares or Restricted Stock), whether so
expressed or not.

            (b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by certified or registered
mail, return receipt requested, postage prepaid, or telexed, in the case of
non-U.S. residents, addressed as follows:

                  (i) If to the Company or to the Holder, at the address of such
            party set forth in the Purchase Agreement, with appropriate copies
            as noted therein;

                  (ii) If to any subsequent holder of Preferred Shares or
            Restricted Stock, to it at such address as may have been furnished
            to the Company in writing by such holder;

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or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of the Holder) or to the Holder (in the
case of the Company) in accordance with the provisions of this paragraph.

            (c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

            (d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the Holder.

            (e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

            (f) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, the Holder shall
agree not to sell publicly any shares of Restricted Stock or any other shares of
Common Stock (other than shares of Restricted Stock or other shares of Common
Stock being registered in such offering), without the consent of such
underwriters, for a period of not more than 180 days following the effective
date of the registration statement relating to such offering; provided, however,
that all persons entitled to registration rights with respect to shares of
Common Stock who are not parties to this Agreement, all other persons selling
shares of Common Stock in such offering and all executive officers and directors
of the Company, shall also have agreed not to sell publicly their Common Stock
under the circumstances and pursuant to the terms set forth in this Section
8(f).

            (g) Notwithstanding the provisions of Section 3(a) hereof, the
Company's obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for a
period not to exceed 90 days in any 12-month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of the Board of Directors of the Company, should not be disclosed.

            (h) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.

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            Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this Agreement, whereupon this
Registration Rights Agreement shall be a binding agreement between the Company
and you.

                                    Very truly yours,

                                    H POWER CORP.

                                    By: /s/ R. C. Cope
                                       ---------------------------------------

                                    Title: President
                                       ---------------------------------------

Accepted and agreed to,
with the intent to be legally bound,
this 25th day of March, 1996.

DUQUESNE ENTERPRISES

By:    /s/ Anthony Villioti
       ---------------------------------------
Title: Vice President
       ---------------------------------------

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                                                                     Exhibit 4.2

                                  H POWER CORP.

                            INVESTOR RIGHTS AGREEMENT

      This Investor Rights Agreement (the "Agreement") is entered into as of the
22nd day of May, 1996 by and between H Power Corp., a Delaware corporation (the
"Company"), and Singapore Technologies Automotive Ltd., a Singapore corporation
(the "Investor").

                                    RECITALS

      WHEREAS, the Company proposes to sell and issue shares of its Preferred
Stock pursuant to that certain Series B Preferred Stock Purchase Agreement
between the Company and the Investor dated as of the date hereof (the "Purchase
Agreement"); and

      WHEREAS, as a condition of entering into the Purchase Agreement, the
Investor has requested that the Company extend to it registration rights and
other rights as set forth below; and

      WHEREAS, the Company desires to grant such rights to the Investor.

      NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Purchase Agreement, the parties mutually agree as follows:

                                   I. GENERAL

      1.1. Definitions. As used in this Agreement the following terms shall have
the following respective meanings:

      "Common Stock" means the Common Stock of the Company.

      "Conversion Shares" means shares of any Common Stock issued or issuable
upon the conversion of the Series B Preferred Stock.

      "Holder" means the Investor and any other person or entity owning of
record Registrable Securities (including without limitation Series B Preferred
Stock) other than Registrable Securities that have been sold to the public.

      "IPO" means the first firmly underwritten public offering pursuant to an
effective Registration Statement under the Securities Act covering the offer and
sale of Common Stock for the account of the
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Company in which the gross cash proceeds to the Company (after underwriting
discounts, commissions and fees) are at least $7,000,000.

      "1934 Act" means the Securities Exchange Act of 1934, as amended.

      "Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.

      "Registrable Securities" means (i) any Common Stock of the Company issued
or issuable on conversion of Series B Preferred Stock, and (ii) any Common Stock
owned (or issuable upon the conversion or exercise of securities owned) by the
Investor.

      "Registrable Securities then outstanding" shall be the number of shares
determined by calculating the total number of shares of Common Stock that are
Registrable Securities and either (i) are then issued and outstanding or (ii)
are issuable pursuant to then exercisable or convertible securities.

      "Registration Expenses" means all expenses incurred by the Company in
complying with Sections 2.1 and 2.2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of a single special
counsel for the Holders not to exceed $20,000, blue sky fees and expenses and
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).

      "Securities Act" means the Securities Act of 1933, as amended.

      "Selling Expenses" means all underwriting discounts, selling commissions
and stock transfer taxes, if any, applicable to the sale.

      "Series B Holder" means the Investor and any person or entity owning of
record any Shares, or any shares of Common Stock issued upon the conversion of
Shares, that have not been sold to the public.

      "Shares" means shares of the Company's Series B Preferred Stock.

      "SEC" means the Securities and Exchange Commission.

                             II. REGISTRATION RIGHTS

      2.1. Demand Registration.

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            2.1.1. Subject to the conditions of this Section 2.1, if the Company
shall receive at any time subsequent to an IPO, a written request from the
Holders of Registrable Securities representing at least $5,000,000 of the equity
securities of the Company then outstanding, that the Company file a registration
statement under the Securities Act covering the registration of at least two
percent (2%) of the Registrable Securities then outstanding (or any lesser
number if the aggregate offering price is not less than $5,000,000) (the Holders
requesting such registration are hereinafter referred to as the "Initiating
Holders"), then the Company shall, within thirty (30) days of the receipt
thereof, give written notice of such request to all Holders and, subject to the
limitations of this Section 2.1, shall use its commercially reasonable efforts
to effect, as soon as practicable, the registration under the Securities Act of
all Registrable Securities that the Holders request to be registered.

            2.1.2. The right of any Holder to include his Registrable Securities
in such registration shall be conditioned upon such Holder's participation in an
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by such Holder and the Company)
to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected by the Company
(which underwriter or underwriters shall be reasonably acceptable to a majority
in interest of the Initiating Holders) and shall enter into customary custody
agreements for selling stockholders. Notwithstanding any other provision of this
Section 2.1, if the underwriter advises the Company in writing that marketing
factors require a limitation of the number of securities to be underwritten
(including Registrable Securities), then the Company shall so advise all Holders
of Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares that may be included in the underwriting shall be
allocated to the Holders of such Registrable Securities on a pro rata basis
based on the number of Registrable Securities held by all such Holders
(including the Initiating Holders). Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from the registration.

            2.1.3. The Company shall not be required to effect a registration
pursuant to this Section 2.1:

                  (i) after the Company has effected two (2) registrations
      pursuant to this Section 2.1, and such registrations have been declared or
      ordered effective;

                  (ii) during the period starting with the date of filing of,
      and ending on the date one hundred eighty (180) days following the
      effective date of, the registration statement pertaining to the Company's
      initial public offering, provided, that the Company is making reasonable
      and good faith efforts to cause such registration statement to become
      effective;

                  (iii) if the Company shall furnish to Holders requesting a
      registration statement pursuant to this Section 2.1, a certificate stating
      that in the good faith judgment of the Board of Directors of the Company,
      it would materially and adversely affect the Company for such

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      registration statement to be filed and it is therefore essential to defer
      the filing of such registration statement, in which event the Company
      shall have the right to defer such filing for a period of not more than
      one hundred eighty (180) days after receipt of the request of the
      Initiating Holders; provided, that such right to delay a request shall be
      exercised by the Company no more than once in any one year period.

      2.2. Piggyback Registrations. The Company shall notify all Holders of
Conversion Shares in writing at least fifteen (15) days prior to the filing of
any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans and corporate reorganizations or rights offerings to stockholders) and
will afford each such Holder an opportunity to include in such registration
statement all or part of such Registrable Securities held by such Holder. Each
such Holder desiring to include in any such registration statement all or any
part of the Registrable Securities held by it shall, within ten (10) days after
the above-described notice from the Company, so notify the Company in writing.
If a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.

            2.2.1. Underwriting. If the registration statement under which the
Company gives notice under this Section 2.2 is for an underwritten offering, the
Company shall so advise the Holders of Conversion Shares. In such event, the
right of any such Holder to be included in a registration pursuant to this
Section 2.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting and customary custody agreements for selling
stockholders. Notwithstanding any other provision of this Agreement, if the
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Holders of Conversion Shares, the holders of shares of Common Stock
issued upon conversion of the Series A Preferred Stock and the holders of other
securities participating through piggyback registration rights in such offering,
in each case on a pro rata basis based on the total number of Registrable
Securities held by such holders; and third, to any other shareholder of the
Company (on a pro rata basis). No such reduction shall reduce the securities
being offered by the Company for its own account to be included in the
registration and underwriting.

            2.2.2. Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.2 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.4 hereof.

                                       4
<PAGE>

      2.3. [Intentionally omitted]

      2.4. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 2.1 or any registration under Section 2.2 herein shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations
hereunder shall be borne by the holders of the securities so registered pro rata
on the basis of the number of shares so registered. The Company shall not,
however, be required to pay for expenses of any registration proceeding begun
pursuant to Section 2.1, the request of which has been subsequently withdrawn by
the Initiating Holders, unless (a) the withdrawal is based upon material adverse
information concerning the Company of which the Initiating Holders were not
aware at the time of such request or (b) for registration proceedings begun
pursuant to Section 2.1, the Holders of a majority of Registrable Securities
agree to forfeit their right to one requested registration pursuant to Section
2.1 (in which event such right shall be forfeited by all Holders). If the
Holders are required to pay the Registration Expenses, such expenses shall be
borne by the holders of securities (including Registrable Securities) requesting
such registration in proportion to the number of shares for which registration
was requested.

      2.5. Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities, the Company shall use its best
efforts, as expeditiously as reasonably possible, to:

            2.5.1. Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to one hundred
eighty (180) days or, if earlier, until the Holder or Holders have completed the
distribution related thereto.

            2.5.2. Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.

            2.5.3. Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.

            2.5.4. Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.

                                       5
<PAGE>

            2.5.5. In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement and customary custody agreements for selling
stockholders.

            2.5.6. Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

            2.5.7. Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) in the event of an underwritten public
offering, a copy of the opinion addressed to the underwriters, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as may be requested by the underwriters for
an underwritten public offering which opinion may be relied on by such Holders
and (ii) a letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as may be requested by the
underwriters for an underwritten public offering (or otherwise in form and
substance as would be customarily given to underwriters in an underwritten
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration), such letter to be addressed to the underwriters, if
any, and if permitted by applicable accounting standards, to the Holders
requesting registration of Registrable Securities.

      2.6. "Market Stand-Off" Agreements.

            2.6.1. If requested by the Company or a representative of the
underwriters of Common Stock (or other securities) of the Company, each Holder
shall not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the
registration) for a period specified by the representative of the underwriters,
not to exceed one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Securities Act (the
"Effective Date"); provided, that:

                  (i) such agreement shall apply only to the Company's initial
      public offering; and

                  (ii) all persons entitled to registration rights similar to
      those granted hereunder, all other persons participating in the Company's
      initial public offering, all officers and directors of the Company and all
      shares that are beneficially owned by any person for any entity that is
      the

                                       6
<PAGE>

      beneficial owner (as determined in accordance with Rule l3d-3 of the
      Securities Exchange Act of 1934) of at least seven percent (7%) of the
      Company's voting securities prior to the Company's initial public
      offering, shall have entered into similar agreements.

      The obligations described in this Section 2.6.1 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a SEC Rule 145 transaction on Form S-4 or similar forms that
may be promulgated in the future. The Company may impose stop-transfer
instructions with respect to the shares of Common Stock (or other securities)
subject to the foregoing restriction until the end of said one hundred eighty
(180) day period.

            2.6.2. To the extent reasonably requested by a representative of the
underwriters of Common Stock for the Company's IPO, each Series B Holder will
agree with such representative not to sell or otherwise transfer or dispose of,
any Common Stock of the Company acquired by such Series B Holder in the
Company's IPO pursuant to Article IV hereof, for a period so requested by the
representative of the underwriters, not to exceed one hundred eighty (180) days
following the Effective Date for the IPO.

      2.7. Delay of Registration: Furnishing Information.

            2.7.1. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Article II.

            2.7.2. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.1 or 2.2 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.

      2.8. Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 2.1 or 2.2:

            2.8.1. To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners, officers and directors of each
Holder, any underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning
of the Securities Act or the 1934 Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively a "Violation") by the Company: (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments

                                       7
<PAGE>

or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the 1934 Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the 1934 Act or any
state securities law in connection with the offering covered by such
registration statement; and the Company will reimburse each such Holder,
partner, officer, director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 2.8.1 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person.

            2.8.2. To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors and officers,
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, underwriter or other such Holder, or
partner, director, officer or controlling person of such other Holder, may
become subject under the Securities Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder, in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 2.8.2 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; and, provided further, that in no event
shall any indemnity under this Section 2.8 exceed the gross proceeds from the
offering received by such Holder.

            2.8.3. Promptly after receipt by an indemnified party under this
Section 2.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying

                                       8
<PAGE>

party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.8.

            2.8.4. If the indemnification provided for in this Section 2.8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

            2.8.5. The obligations of the Company and Holders under this Section
2.8 shall survive the completion of any offering of Registrable Securities in a
registration statement, and otherwise.

      2.9. Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Article II may be assigned by a
Holder to a transferee or assignee of Registrable Securities which (i) is a
subsidiary, parent, general partner, limited partner or retired partner of a
Holder, (ii) is a Holder's family member or trust for the benefit of an
individual Holder, or (iii) acquires at least ten thousand (10,000) shares of
Registrable Securities (as adjusted for stock splits and combinations);
provided, however, (a) the transferor shall, within thirty (30) days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned, and (b) such transferee shall agree in
writing to be subject to all restrictions set forth in this Agreement.

      2.10. Amendment of Registration Rights. Any provision of this Article II
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of not less than seventy-five
percent (75%) of the Conversion Shares. Any amendment or waiver effected in
accordance

                                       9
<PAGE>

with this Section 2.10 shall be binding upon each such Holder and the Company.
By acceptance of any benefits under this Article II, Holders of Conversion
Shares hereby agree to be bound by the provisions hereunder.

      2.11. Limitation on Subsequent Registration Rights. After the date of this
Agreement, the Company shall not, without the prior written consent of the
Holders of not less than fifty percent (50%) of the Conversion Shares, enter
into any agreement with any holder or prospective holder of any securities of
the Company which would allow such holder or prospective holder (a) to include
such securities in any registration filed under Section 2.1 hereof, unless,
under the terms of such agreement, such holder or prospective holder may include
such securities in any such registration only to the extent that the inclusion
of his securities will not reduce the amount of the Registrable Securities of
the Series A Holders which is included, or (b) to make a demand registration
which could result in such registration statement being declared effective prior
to the date set forth in Section 2.1.3(ii) or within one hundred twenty (120)
days of the effective date of any registration statement effected pursuant to
Section 2.1.

      2.12. Rule 144 Reporting. With a view to making available to the Series B
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:

                  (i) Make and keep public information available, as those terms
      are understood and defined in SEC Rule 144 or any similar or analogous
      rule promulgated under the Securities Act, at all times after the
      effective date of the first registration filed by the Company for an
      offering of its securities to the general public;

                  (ii) After such registration, file with the SEC, in a timely
      manner, all reports and other documents required of the Company under the
      Securities Act and the 1934 Act; and

                  (iii) After such registration and for so long as a Series B
      Holder owns any Registrable Securities, furnish to such Holder forthwith
      upon request: (A) a written statement by the Company as to its compliance
      with the reporting requirements of said Rule 144 of the Securities Act,
      and of the 1934 Act (at any time after it has become subject to such
      reporting requirements); (B) a copy of the most recent annual or quarterly
      report of the Company; and (C) such other reports and documents as a
      Holder may reasonably request in availing itself of any rule or regulation
      of the SEC allowing it to sell any such securities without registration.

                          III. COVENANTS OF THE COMPANY

      3.1. Financial Information and Reporting.

            3.1.1. The Company will maintain true books and records of account
in which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established

                                       10
<PAGE>

and administered in accordance with generally accepted accounting principles
consistently applied, and will set aside on its books all such proper accruals
and reserves as shall be required under generally accepted accounting principles
consistently applied.

            3.1.2. As soon as practicable after the end of each fiscal year of
the Company, and in any event within one hundred twenty (120) days thereafter,
the Company will furnish each Series B Holder a consolidated balance sheet of
the Company, as of the end of such fiscal year, and a consolidated statement of
income and a consolidated statement of cash flows of the Company, for such year,
all prepared in accordance with generally accepted accounting principles and
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail. Such financial statements shall be
accompanied by a report and opinion thereon by one of the "big six" independent
public accounting firms selected by the Company's Board of Directors.

            3.1.3. The Company will furnish only upon request to each Series B
Holder owning more than ten percent (10%) of the Series B Preferred Stock, as
soon as practicable after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Company, and in any event within
forty-five (45) days thereafter, a consolidated balance sheet of the Company as
of the end of each such quarterly period, and a consolidated statement of income
and a consolidated statement of cash flows of the Company for such period and
for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles, with the exception that no notes need be
attached to such statements and year-end audit adjustments may not have been
made.

            3.1.4. The Company will furnish only upon request to each Series B
Holder owning more than ten percent (10%) of the Series B Preferred Stock:

                  (i) at least thirty (30) days prior to the beginning of each
      fiscal year, an annual budget and operating plans for such fiscal year
      (and as soon as available, any subsequent revisions thereto); and

                  (ii) as soon as practicable after the end of each month, and
      in any event within twenty (20) days thereafter, a consolidated balance
      sheet of the Company as of the end of each such month, and, a consolidated
      statement of income and a consolidated statement of cash flows of the
      Company for such month and for the current fiscal year to date, including
      a comparison to plan figures for such period, prepared in accordance with
      generally accepted accounting principles, with the exception that no notes
      need be attached to such statements and year-end audit adjustments may not
      have been made.

      3.2. Confidentiality of Records.

            3.2.1. Each Series B Holder agrees not to use Confidential
Information (as hereinafter defined) of the Company for its own use or for any
purpose except to monitor its equity investment in the

                                       11
<PAGE>

Company and the performance of the Company as well as to enforce its rights with
respect to the Company from time to time. Except as permitted under Section
3.2.2 below, such Holders agree to use their respective best efforts not to
disclose such Confidential Information to any third parties. Each such Holder
shall undertake to treat such Confidential Information in a manner consistent
with the treatment of its own information of such proprietary nature and agrees
that it shall protect the confidentiality of and use reasonable efforts to
prevent disclosure of the Confidential Information to prevent it from falling
into the public domain or the possession of unauthorized persons. Each
transferee of such Holders who receives Confidential Information shall agree to
be bound by such provisions. For purposes of this Section, "Confidential
Information" means any information, technical data or know-how, including, but
not limited to, the Company's research, products, software, services,
development, inventions, processes, designs, drawings, engineering, marketing,
or finances, disclosed by the Company either directly or indirectly in writing,
orally or by drawings or inspection of parts or equipment.

            3.2.2. Confidential Information does not include information,
technical data or know-how which (i) is in a Holder's possession at the time of
disclosure; (ii) before or after it has been disclosed to the Holder, it is part
of the public knowledge or literature, not as a result of any action or inaction
of the Holder; (iii) is approved for release by written authorization of
Company; or (iv) is developed independently by a Holder. The provisions of this
Section shall not apply (a) to the extent that a Holder is required to disclose
Confidential Information pursuant to any law, statute, rule or regulation or any
order of any court or jurisdiction process or pursuant to any direction, request
or requirement (whether or not having the force of law but if not having the
force of law being of a type with which institutional investors in the relevant
jurisdiction are accustomed to comply) of any self-regulating organization or
any governmental, fiscal, monetary or other authority; (b) to the disclosure of
Confidential Information to the Holder's employees, counsel, accountants or
other professional advisors; (c) to the extent that the Holder needs to disclose
Confidential Information for the protection of any of the Holder's rights or
interest against the Company, whether under this Agreement or otherwise; or (d)
to the disclosure of Confidential Information to a prospective transferee of
securities which agrees to be bound by the provisions of this Section in
connection with the receipt of such Confidential Information.

      3.3. Proprietary Information. The Company shall require all employees of
and consultants to the Company who have access to proprietary information of the
Company to enter into agreements in the Company's standard form providing for
the protection of proprietary information and inventions.

      3.4. Board of Directors Approval.

                  (i) The Company shall not without the approval of a majority
      of the Board of Directors take any of the following actions:

                  (a) adopt any stock option or purchase plan;

                                       12
<PAGE>

                  (b) issue or grant any equity securities of the Company or any
            options or securities convertible into equity securities of the
            Company other than option grants in the ordinary course of business
            for two hundred (200) or fewer shares;

                  (c) adopt an annual budget, business or financial plan;

                  (d) enter into any real estate lease or real property purchase
            agreement; or

                  (e) enter into any material transaction outside the ordinary
            course of the Company's business.

                  (ii) The Company's Board of Directors shall set a policy as to
      whether the approval of a majority of the Board of Directors is required
      to take any of the following actions:

                  (a) hire or extend an offer of employment to any officer of
            the Company;

                  (b) enter into any consulting or employment arrangement or
            agreement involving annual compensation in excess of $75,000; or

                  (c) adopt any compensation programs including but not limited
            to establishing the base salary or bonus for any officer or employee
            of the Company who earns greater than $75,000 per year for his or
            her services to the Company.

      3.5. Board Meetings. Until such time as the Company is profitable or the
Board of Directors otherwise determines, the Company's Board of Directors will
meet either in person or telephonically approximately every two months or at
least six times per year. After such time as the Company is profitable, the
Company's Board of Directors shall generally attempt to meet at least four (4)
times per year.

      3.6. Reservation of Common Stock. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to timi upon such
conversion.

      3.7. Real Property Holding Corporation. The Company covenants that it will
operate in a manner such that it will not become a "United States real property
holding corporation" ("USRPHC") as that term is defined in Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder ("FIRPTA"). The Company agrees to make determinations as to its
status as a USRPHC, and will file statements concerning those determinations
with the Internal Revenue Service, in the manner and at the times required under
Reg. Sec. 1.897-2(h), or any supplementary or successor provision thereto.
Within 30 days of a request from an Investor or any of its partners, the Company
will inform the requesting party, in the manner set forth in Reg. Sec.
1.897-2(h)(1)(iv) or any supplementary

                                       13
<PAGE>

or successor provision thereto, whether that party's interest in the Company
constitutes a United States real property interest (within the meaning of Code
Section 897(c)(1) and the regulations thereunder) and whether the Company has
provided to the Internal Revenue Service all required notices as to its USRPHC
status.

      3.8. Termination of Covenants. All covenants of the Company contained in
Article III of this Agreement shall expire and terminate as to the Investor on
the Effective Date of the IPO.

      3.9. Directors. The Company will reimburse each director of the Company
for all reasonable transportation and out-of-pocket expenses incurred by such
director in the attending of no more than four meetings of the Board of
Directors of the Company or any committees thereof or in carrying out any
business of the Company as authorized by the Board of Directors or any executive
officer of the Company. The Company acknowledges that, for the director who is
the nominee of the Investor, transportation expenses (only Business Class
travel) to and from Asia shall be deemed reasonable. The Board of Directors may
conduct certain meetings telephonically but shall meet at least two times per
year in person.

                          IV. PRO RATA PURCHASE RIGHTS

      4.1. Grant. The Company hereby grants to each Series B Holder, unless
waived by the Holders of not less than fifty percent (50%) of the Conversion
Shares then outstanding, the right to purchase a pro rata share of New
Securities (as defined below) that the Company may, from time to time, propose
to sell and issue up to and including the IPO. Each Series B Holder's pro rata
share, for purposes of this right, is the ratio of (X) the number of shares of
Registrable Securities then owned by such Holder to (Y) the total number of
shares of Registrable Securities of the Company outstanding immediately prior to
the issuance of the New Securities. The purchase rights granted in this Article
IV shall be subject to the following provisions of this Article IV.

      4.2. New Securities. "New Securities" shall mean any offering by the
Company of any Common Stock or Preferred Stock of the Company, whether now
authorized or not, and rights, options or warrants to purchase said Common Stock
or Preferred Stock, and securities of any type whatsoever that are, or may
become, convertible into said Common Stock or Preferred Stock; provided,
however, that "New Securities" does not include:

                  (i) securities issuable upon conversion of the Shares;

                  (ii) securities issued upon conversion or exchange of
      securities outstanding on the date hereof;

                  (iii) any securities issued after the Company's initial public
      offering (but does not exclude shares issued in the initial public
      offering);

                                       14
<PAGE>

                  (iv) securities issued pursuant to the acquisition of another
      entity, business, product or technology by the Company by merger, purchase
      of substantially all of the assets, or other reorganization whereby the
      Company owns more than 50% of the voting power of such entity, business,
      product or technology;

                  (v) shares of Common Stock (or related options) issued or
      issuable at any time to employees, directors or consultants of the
      Company, or any subsidiary, pursuant to any employee stock offering, plan,
      or arrangement approved by the Board of Directors; and

                  (vi) shares of Common Stock or Preferred Stock issued in
      connection with any stock split, stock dividend, or recapitalization by
      the Company.

      4.3. Notice and Exercise.

            4.3.1. In the event that the Company proposes to undertake an
issuance of New Securities, it shall give each Series B Holder written notice of
its intention, describing the type of New Securities, the price and the general
terms upon which the Company proposes to issue the same. Each such Holder shall
have twenty (20) business days from the date of mailing of any such notice to
agree to purchase its pro rata share of such New Securities for the price and
upon the general terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased.

            4.3.2. The Company shall promptly, in writing, inform each Series B
Holder which purchases all the New Securities available to it ("Fully-Exercising
Holder") of any other Series B Holder's failure to do likewise. During the ten
(10) business day period commencing after such information is delivered to each
Fully-Exercising Holder, each Fully-Exercising Holder shall be entitled to
obtain that portion of the New Securities for which Series B Holders were
entitled to subscribe, but which were not subscribed for by such Holders, which
is equal to the proportion that the number of Registrable Securities then held
by such Fully-Exercising Holder bears to the total number of shares of
Registrable Securities then held by all Fully-Exercising Holders who wish to
purchase some of the unsubscribed shares.

            4.3.3. Notwithstanding the foregoing, the Company shall not be
required to offer or sell New Securities to any Series B Holder who would cause
the Company to be in violation of applicable federal or state securities laws by
virtue of such offer or sale.

      4.4. Partial Exercise. In the event that the Series B Holders fail to
exercise in full the pro rata purchase right provided in this Article IV, the
Company shall have one hundred and twenty (120) days thereafter to sell (or
enter into an agreement pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within thirty (30) days from the date of
said agreement) the New Securities respecting which such Holders' rights were
not exercised at a price and upon general terms materially no more favorable to
the purchasers thereof than specified in the Company's notice. In the event the

                                       15
<PAGE>

Company has not sold the New Securities within said one hundred and twenty (120)
day period (or sold and issued New Securities in accordance with the foregoing
within one hundred and twenty (120) days from the date of said agreement), the
Company shall not thereafter issue or sell any New Securities without first
offering such securities to the Holders in the manner provided above.

                               V. MISCELLANEOUS

      5.1. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York as applied to agreements among New York
residents entered into and to be performed entirely within New York.

      5.2. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Conversion Shares from time to time; provided,
however, that prior to the receipt by the Company of adequate written notice of
the transfer of any Registrable Securities specifying the full name and address
of the transferee, the Company may deem and treat the person listed as the
holder of such shares in its records as the absolute owner and holder of such
shares for all purposes, including the payment of dividends or any redemption
price.

      5.3. Separability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

      5.4. Amendment and Waiver.

            5.4.1. Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of not less than fifty percent (50%) of the Conversion Shares.

            5.4.2. Except as otherwise expressly provided, the obligations of
the Company and the rights of the Holders under this Agreement may be waived
only with the written consent of the holders of not less than fifty percent
(50%) of the Conversion Shares.

      5.5. Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under this Agreement
or any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing

                                       16
<PAGE>

and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, shall be cumulative and not alternative.

      5.6. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient or, if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Company and the Investor at their respective addresses set forth on
the signature page hereof or at such other address as any party may designate by
ten (10) days advance written notice to the other parties hereto.

      5.7. Attorney's Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

      5.8. Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

      5.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

      5.10. Remedies. The Investor, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy of law
would be adequate.

      5.11. No Third Party Beneficiaries. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
permitted transferees of any Shares or any Common Stock issued upon conversion
or exercise thereof). Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

                                       17
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement as of the date set forth in the first paragraph hereof.

                                   H POWER CORP. ("Company")

                                   By /s/ R. C. Cope
                                     -----------------------------------------
                                   Name: R. C. Cope
                                        --------------------------------------
                                   Title: President
                                         -------------------------------------

                                   Address:

                                   60 Montgomery Street
                                   Belleville, New Jersey 07109
                                   Attention: Richard Cope

                                   SINGAPORE TECHNOLOGIES AUTOMOTIVE
                                   LTD. ("Investor")

                                   By /s/ Wu Tzu Chien
                                     -----------------------------------------
                                   Name: Wu Tzu Chien
                                        --------------------------------------
                                   Title:
                                         -------------------------------------

                                   Address:

                                   5 Portsdown Road
                                   Singapore 139296
                                   Attention: Fong Saik Hay

                                       18

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