Document:

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                                                                    Exhibit 10.6

                                                    W. Zang Employment Agreement

                         OFFICER'S EMPLOYMENT AGREEMENT

      EMPLOYMENT AGREEMENT, dated as of November 23, 1999, between H Power
Corp., a Delaware corporation, having its principal place of business at 60
Montgomery Street, Belleville, New Jersey 07109 (hereinafter referred to as the
"Company"), and William L. Zang, residing at 1406 Langara Circle, Bellingam, WA
98226 (hereinafter referred to as "Executive"). (The Company and Executive are
collectively referred to as the "Parties.")

1. Term of Employment

      Subject to the provisions of this employment agreement, the Company hereby
agrees to employ Executive, and Executive hereby agrees to be employed by the
Company, for a term commencing December 6, 1999 and ending December 5, 2002 (the
"Term"). This contract will renew automatically in one year increments unless
written notice is given by either party of an intent to terminate the contract
within six months of the expiration date then in effect for the contract.

2. Titles and Duties

      Subject at all times to the supervision and direction of the Chief
Executive Officer of the Company (the "CEO"), Executive shall be employed as
Chief Financial Officer, and shall have such duties, authority, rights and
obligations as are usually inherent in such position and as the CEO may
reasonably require. In general, Executive shall use his very best efforts to
promote the business of the Company. In the event that Executive is elected or
appointed as a Director or an Officer of the Company's affiliated or subsidiary
companies, whether now existing or hereafter acquired, Executive consents to
serve in such capacity or capacities as the CEO may determine, without
additional compensation.

      Executive shall render his services at the Company's principal place of
business or at such other place or places as the Board shall designate.

3. Exclusive Employment

      Executive shall devote substantially all his business time, ability and
attention to the business of H Power. Executive shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether for compensation or otherwise, that is in
competition directly or indirectly with the business of H Power.

4. Compensation & Benefits

      For the full and faithful performance of his services as set forth
hereunder, Executive shall be entitled to the following:

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                                                    W. Zang Employment Agreement

      a.    Base Salary. During the Term, Executive shall be paid an annual
            salary of $120,000.00, payable in bi-weekly installments, subject to
            all applicable withholding, social security and other payroll taxes.

      b.    Salary Adjustments. The rate of salary shall be reviewed by the
            Board not less often than annually and may be increased (but not
            decreased) from time to time in such amounts as the Board in its
            discretion may provide; it being understood, however, that the Board
            shall have no obligation to increase said salary.

      c.    Benefit Programs. Executive shall be entitled to participate in all
            employee benefit programs of the Company available to senior
            executives of the Company, as such programs may be in effect from
            time to time, including, without limitation: pension or other
            retirement plans; profit sharing plans; group life insurance;
            accidental death and dismemberment insurance; hospitalization,
            surgical and major medical coverage; sick leave, vacation and
            holiday benefits; and other employee benefit programs sponsored by
            the Company; provided, however, that there is no obligation on the
            part of the Company to provide these benefits to senior executives.
            Such programs may be amended or terminated if done so for all or a
            material portion of the Company's executives.

      d.    Business Expense Reimbursement. Executive shall be entitled to
            receive reimbursement from the Company for all reasonable and actual
            out-of-pocket expenses incurred by him (in accordance with the
            policies and procedures established by the Company) in performing
            services during his employment, provided that Executive timely
            submits reasonable documentation with respect to such expenses.

      e.    Automobile. Executive shall be entitled to an automobile allowance
            of eight thousand dollars ($8,000) per annum.

      f.    Bonuses. In addition to all other compensation, Executive shall be
            entitled to receive such bonuses as the Board shall determine, in
            its sole discretion, from time to time; it being understood that the
            Board shall have no obligation to award such bonuses.

      g.    Stock Options. Executive shall be granted five-year stock options to
            purchase 50,000 shares of the Company's Common Stock, par value
            $.001 per share, at a price of $15.00 per share. The options may be
            exercised as follows: one-third as of December 5, 2000, one-third as
            of December 5, 2001, and the final third as of December 5, 2002.

      h.    Vacation. Executive will be entitled to three weeks vacation during
            the first five years of

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                                                  W. Zang Employment Agreement

            service, four weeks during the second five years of service and five
            weeks vacation for service in excess of 10 years.

5. Termination of Employment

      a.    For Cause. The Company shall have the right to terminate this
            employment agreement immediately after written notification to
            Executive specifying the basis for the termination, upon the
            occurrence of any one of the following events which shall constitute
            "cause": (i) the willful failure by Executive to abide by the terms
            of this employment agreement; or (ii) fraud, misappropriation,
            embezzlement, theft, dishonesty or similar actions by Executive; or
            (iii) the habitual or willful neglect by Executive of his employment
            duties; or (iv) an act of moral turpitude by Executive which tends
            to reflect unfavorably on the Company.

                  In the event that the Company terminates Executive's
            employment for cause, Executive shall be entitled only to the unpaid
            bi-weekly installments of his Base Salary up to and including the
            date of termination and to his approved Business Expense
            Reimbursement not paid prior to termination.

      b.    In the Event of Death. This employment agreement shall terminate in
            the event of Executive's death, in which case Executive's estate
            shall be entitled to the bi-weekly installments of Executive's Base
            Salary for a period of six months following the date of death and
            Executive's Business Expense Reimbursement not paid prior to his
            death.

      c.    In the Event of Disability. The Company shall have the right to
            terminate this employment agreement in the event of Executive's
            inability to substantially perform his duties hereunder for a period
            of three months out of any six-month period during his employment,
            whether such inability results from illness, accident or otherwise.

                  In the event that the Company terminates Executive's
            employment during the term of this employment agreement as a result
            of Executive's Disability, Executive shall be entitled to the
            bi-weekly installments of his Base Salary for a period of six months
            following the date of termination; Executive's Business Expense
            Reimbursement not paid prior to termination; and the continuation of
            Executive's health and welfare benefits through the end of the term
            of this employment agreement.

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                                                    W. Zang Employment Agreement

      d.    Change in Control. (i) In the event that Executive's employment is
            terminated by the Company within one year following a Change in
            Control (as defined below) for any reason other than cause, death or
            disability, then the Company shall pay Executive one-half his annual
            Base Salary at his then current rate and one-half of the latest
            annual incentive compensation payment calculated by taking the
            highest of the latest two incentive payments earned and paid divided
            by two, such payment to be made in one lump sum payment at the time
            of termination. Such payments shall be in lieu of any and all other
            payments due and owing to Executive under the terms of this
            Agreement. The Company shall also provide to the Executive health
            insurance for a period of one year following termination of
            Executive's employment. Executive shall not be required to seek
            other employment or to otherwise mitigate the effects of such
            termination, and such payments shall not be reduced by any income
            received from other sources (all compensation and other benefits
            described above and the terms thereof shall hereinafter be referred
            to collectively as the "Severance Package").

                  (ii) Executive may terminate his employment hereunder within
            one year following a Change of Control for Good Reason; provided
            that, (x) the Company has been given notice setting forth in
            reasonable detail the nature of the Good Reason and (y) a period of
            at least thirty (30) days in which the Company may remedy the
            circumstances giving rise to such Good Reason has expired, and the
            Company fails to so remedy such circumstances. For purposes of this
            Agreement, "Good Reason" shall mean:

                        (A) the assignment to Executive of any duties materially
                  inconsistent with Executive's position, duties and
                  responsibilities as set forth in Section 2 of this Agreement
                  or any action by the Company which results in a material
                  diminution in Executive's position, authority, duties or
                  responsibilities, excluding for this purpose any isolated or
                  inadvertent action by the Company which is remedied by the
                  Company promptly after receipt of notice thereof from the
                  Executive; or

                        (B) any failure by the Company to comply in all material
                  respects with the provisions of Section 4 of this Agreement
                  regarding Executive's compensation, benefits, vacation, and
                  expenses other than an isolated or inadvertent action by the
                  Company which is remedied by the Company promptly after
                  receipt of notice thereof from the Executive.

            In the event that Executive terminates his employment for Good
            Reason following a Change in Control, then the Company shall pay
            Executive the Severance Package.

                  For purposes of this provision, a "Change in Control" shall be
            deemed to have occurred: (i) if any "person" (as such term is used
            in Sections 13(d)(3) and 14(d)2) of the

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                                                    W. Zang Employment Agreement

            Securities Exchange Act of 1934, as amended (the "Exchange Act")),
            other than Executive, who is not a shareholder of the Company as of
            the date hereof, shall have become the beneficial owner, directly or
            indirectly, of Common Stock representing thirty-three and one-third
            percent (33 1/3%) or more of the combined voting power of the
            Company's then outstanding securities, unless three-quarters of the
            Board of Directors, as constituted immediately prior to the date of
            the Change in Control, decide in their reasonable discretion that no
            Change in Control has occurred, the Executive not being allowed to
            vote on such matter if he is then a Director; provided, however,
            that if any such person other than Executive (whether or not a
            stockholder of the Company as of the date hereof) shall become the
            beneficial owner, directly or indirectly, of Common Stock
            representing fifty percent (50%) or more of the Company's then
            outstanding securities, a Change in Control shall ipso facto have
            occurred; or (ii) if there is a Change in Control of a nature that,
            in the opinion of counsel for the Company, would be required to be
            reported in response to Item 6(e) of schedule 14A under the Exchange
            Act, unless three-quarters of the Board of Directors, as constituted
            immediately prior to the date of the Change in Control, decide in
            their reasonable discretion that no Change in Control has occurred,
            Executive not being allowed to vote on such matter if he is then a
            Director.

6. Unauthorized Disclosure

      During the period of his employment and for a period of three (3) years
thereafter, Executive shall not, without the prior written consent of the Board,
disclose to any person other than as required by law or court order (10 days'
prior written notice having been given to the Company in order to formulate a
response), or other than to an employee of the Company, or to a person to whom
disclosure is necessary or appropriate in connection with the performance by
Executive of his duties as an executive of the Company, any confidential
information obtained by him while in the employ of the Company with respect to
any of the Company's products, services, customers, suppliers, marketing
techniques, patents, proprietary technologies, trade secrets, methods, or future
plans, the disclosure of which will be damaging to the Company; provided,
however, that confidential information shall not include any information known
generally to the public (other than as a result of unauthorized disclosure by
Executive).

7. Restrictive Covenant

      During the period of his employment and for a period of two (2) years
thereafter, Executive shall not enter into competition with the Company or any
affiliate of the Company without the prior consent of the Board. For the purpose
of this paragraph 7, competition shall mean the association of Executive with a
company, corporation, firm or partnership, whether as an employee, consultant,
partner, principal, agent, representative or shareholder, directly or indirectly
(except as a holder, directly or indirectly,

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                                                    W. Zang Employment Agreement

of less than Five (5%) Percent of the outstanding securities of any corporation
whose stock is listed for trading on any securities exchange or are traded in
the over-the-counter market), which competes, directly or indirectly, with the
Company in any business in which the Company is presently engaged, including but
not limited to the development, marketing, manufacturing, or distribution of
fuel cell system, or will be engaged upon termination of Executive's employment,
unless such association shall be for purposes and shall impose duties upon
Executive that do not directly relate to the Company's business activities. If a
court of competent jurisdiction should determine that the period, scope, or
geographical area of the restrictions set forth in this paragraph 7 are
unreasonable under the circumstances then existing, the Parties agree that the
period, scope, or geographical area that is reasonable under such circumstances
shall be substituted for the stated period, scope, or geographical area.

      During the Term and for a period of two (2) years thereafter, Executive
shall neither solicit, induce and/or suggest to any of the employees,
consultants to, or other persons having a substantial contractual relation with,
the Company to leave such employ, cease consulting or terminate such contractual
relationship with the Company nor to join Executive as a partner, co-venturer,
employee, investor, or otherwise, in any substantial business activity
whatsoever.

      Executive shall at no time take any action or make any statement that
could discredit the reputation of the Company or its personnel, products or
services.

8. Inventions or Discoveries

      Executive shall fully and promptly disclose to the Company any and all
improvements, discoveries, and inventions made or conceived by him, whether or
not patentable, whether or not during the working hours of his employment or
with the use of the Company's facilities, materials or personnel, and whether
solely or jointly with others, during his employment by the Company, which
result from or relate to the business of the Company in any way.

      Any and all such improvements, discoveries, and inventions are and shall
remain the sole and exclusive property of the Company without royalty or payment
of any further consideration to Executive, on his own behalf and on the behalf
of his heirs, assigns, executors, administrators, and any other legal
representative. Executive hereby assigns and transfers all of his right, title
and interest in and to all such improvements, discoveries, and inventions to the
Company, including, but not limited to, any applications for United States
and/or foreign letter patents and any United States and/or foreign patents that
shall be granted. Executive shall apply, at the Company's request and expense,
for United States and foreign letters patent, whether in his name or otherwise
as the Company shall desire, and shall execute and deliver to the Company
without charge to the Company, but at its expense, such written instruments and
shall do such other acts as may be necessary or appropriate in the opinion of
the Company to obtain and maintain United States and/or foreign letters patent
or other proprietary rights and shall vest the entire right entitled thereto in
the Company.

9. Equitable Relief

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                                                    W. Zang Employment Agreement

      Executive hereby represents that the services to be performed by him are
of a special, unique, unusual, extraordinary and intellectual character which
gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law and that any violation of
this employment agreement will cause the Company immediate and irreparable harm.
Executive therefore expressly agrees that, in addition to any other rights or
remedies which the Company may possess, the Company shall be entitled to
injunctive and other equitable relief to prevent a breach of this contract by
the Company.

10. Indemnification

      Executive shall indemnify and save harmless the Company from all liability
from loss, damage or injury to persons or property resulting from the gross
negligence or willful misconduct of Executive.

11. Assignability

      No rights or obligations under this employment agreement may be assigned
or transferred by Executive except:

      a.    Executive's rights to compensation and benefits hereunder shall, in
            the event of death, pass to his estate, or to his designated
            beneficiary and may be transferred by will or operation of law, and

      b.    Executive's rights under the Company's plans, programs and policies
            may be assigned or transferred in accordance with the terms of such
            plans, programs and policies.

      The rights and obligations of the Company under this employment agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company. The Company shall have the right to assign this
agreement to a successor in the event of a merger, consolidation, sale of a
substantial portion of its assets or a similar transaction.

12. Governing Law

      This employment agreement shall be governed by the laws of the State of
New Jersey without reference to the principles of conflict of laws.

13. Entire Agreement

      Except as otherwise specifically provided herein, this employment
agreement contains all the legally binding understandings and representations
between the Company and Executive pertaining to the subject matter hereof and
supersedes all undertakings and agreements, if any, whether oral or in writing,
previously entered into by the Company and Executive with respect to such
subject matter.

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                                                    W. Zang Employment Agreement

14. Amendment or Modification; Waiver

      No provision of this employment agreement may be amended or waived unless
such amendment or waiver is approved by the Board and is signed by Executive and
by a duly authorized officer of the Company. Except as otherwise specifically
provided in this employment agreement, no waiver by the Company or Executive of
any breach by the other of any condition or provision of this employment
agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or any prior or
subsequent time.

15. Notices

      Any notice required or permitted to be given under this employment
agreement shall be in writing and shall be deemed to have been given when
delivered personally or sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently give
notice of:

                  If to H Power:    H Power Corp.
                                    60 Montgomery Street
                                    Belleville, New Jersey 07109
                                    Attn.: Secretary

                  If to Executive:  William L. Zang
                                    1406 Langara Circle
                                    Bellingam, WA 98226

16. Severability

      In the event that any provision or portion of this employment agreement
shall be determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this employment agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.

17. Survivorship

      To the extent contemplated by this employment agreement, the respective
rights and obligations of the Parties hereunder shall survive any termination of
this employment agreement to the extent necessary to the intended preservation
of such rights and obligations.

18. Representations

      a.    By the Executive. Executive represents and warrants that the
            performance of his duties under this employment agreement will not
            violate any agreement between him and any other person, firm or
            organization.

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                                                    W. Zang Employment Agreement

      b.    By the Company. The Company represents and warrants that it is fully
            authorized and empowered to enter into this employment agreement.

19. References

      In the event of Executive's death or a judicial determination of his
incompetence, reference in this employment agreement to Executive will be
deemed, where appropriate, to refer to his legal representative or, where
appropriate, to his beneficiary or beneficiaries.

      Headings to the sections in this agreement are intended solely for
convenience and no provision of this employment agreement shall be construed by
reference to any heading.

20. Mutual Intent

      The language used in this employment agreement is the language chosen by
the Parties to express their mutual intent. The Parties agree that in the event
that any language, section, clause, phrase or word used in this employment
agreement is determined to be ambiguous, no presumption shall arise against or
in favor of either party and that no rule of strict construction shall be
applied against either party.

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                                                    W. Zang Employment Agreement

      IN WITNESS WHEREOF, Executive and the Company have caused this employment
agreement to be executed as of the day and year first above written.

EXECUTIVE                                 H POWER CORP.

/s/ William L. Zang                       By: /s/ H. Frank Gibbard
------------------------                      --------------------
William L. Zang                               H. Frank Gibbard
                                              Chief Executive Officer

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                                                                    Exhibit 10.7

                              CONSULTING AGREEMENT

      This Consulting Agreement, made and entered into as of July 28, 1999
between H Power Corp., a Delaware corporation having its principal place of
business at 60 Montgomery Street, Belleville, New Jersey 07109 (the "Company"),
and Frederick Entman, an individual residing at 260 Tillou Road, South Orange,
New Jersey 07079 (the "Consultant").

                                R E C I T A L S:

      WHEREAS, the Company considers it in its best interest and in the best
interest of its stockholders to foster the retention and engagement of key
senior personnel; and

      WHEREAS, for the foregoing reasons the Company desires to retain the
services of the Consultant on the terms and subject to the conditions provided
in this Agreement; and

      WHEREAS, the Consultant desires to accept such engagement by the Company
and to render services to the Company on the terms and subject to the conditions
provided in this Agreement;

      NOW THEREFORE, The parties hereto agree as follows:

1. Engagement

      The Company hereby agrees to retain the services of the Consultant, and
      the Consultant agrees to be retained by the Company, to render services to
      the Company for the period, at the rate of compensation and upon the other
      terms and conditions, set forth in this Agreement.

2. Term

      The term of the Consultant's engagement under this Agreement (the "Term")
      shall commence on June 1, 1999 and shall continue through and including
      May 31, 2004, unless earlier terminated in accordance with Section 7, in
      which event the Termination Date as set forth therein shall be deemed the
      end of the Term. If not earlier terminated, the Term shall be
      automatically extended for successive 12-month periods unless either Party
      shall object to any extension, in writing, no later than 90 days prior to
      the first day of such extension.

3. Position and Duties

      (a)   Position as Consultant

            The Consultant shall serve as a senior consultant to the Company.
            During his engagement hereunder, the Consultant shall report
            directly to the Board of Directors of the Company (the "Board"). The
            Consultant shall be obligated to devote a reasonable amount of his
            business time to the Company in satisfaction of his duties hereunder
            during any Engagement Year (as defined in Section 4(a) below); it
            being understood that the parties contemplate
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            that the Consultant shall have other businesses and endeavors and
            shall not devote all or even a substantial amount of his business
            time to the fulfillment of such duties.

      (b)   Duties as Consultant

            During the Term, the Consultant shall, subject to supervision by the
            Board, perform duties consistent with his experience and abilities,
            as may be reasonably and properly assigned to the Consultant by the
            Board. It is contemplated that the Consultant shall render services
            to the Company from his residence and/or from such other location(s)
            as may from time to time be convenient to the Consultant. Upon the
            Consultant's request, the Company shall provide him with an office,
            furnished and equipped in a manner consistent with the position as a
            senior consultant and paid for by the Company, at a location
            reasonably selected by the Consultant.

4. Compensation and Reimbursement of Expenses

      (a)   Compensation

            For purposes of this Agreement, each consecutive 12 month period
            during the Term ending on each May 31st (commencing with May 31,
            2000) during the Term shall be referred to as an "Engagement Year."
            For services rendered by the Consultant under this Agreement, the
            Company shall pay to the Consultant during each Engagement Year
            during the Term the following, which shall be considered his "Base
            Compensation": a base salary of $113,100 per year payable in equal
            biweekly installments, commencing with the end of the pay period
            which next follows the commencement of the Term; provided, that such
            base salary shall be adjusted at the beginning of each Engagement
            Year by a factor equal to the current rate of inflation during the
            period from the last such adjustment, or in the case of the first
            adjustment, from the date hereof, as shown by the U.S. Bureau of
            Labor Statistics Consumer Price Index for Urban Wage Earners and
            Clerical Workers ("Index"). Should the U.S. Department of Labor
            discontinue the publication of the Index, or publish same less
            frequently, or alter same in any other manner, then Company may
            adopt a substitute index or substitute procedure which reasonably
            reflects and monitors consumer prices within the United States.

            The Base Compensation shall be subject to customary payroll
            deductions (i.e., for social security, federal, state and local
            taxes and other amount customarily withheld from the compensation of
            members of the Board and/or employees of the Company).

      (b)   Financial Advisory Bonus

            Except for the Company's initial public offering, arranged for with
            Josephthal & Co., Inc., the Company shall pay to the Consultant and
            the Consultant shall be entitled to receive from the Company, an
            amount or amounts which shall be customary at such time for brokers,
            business opportunity finders, financial intermediaries or persons or
            entities performing similar functions, in connection with any and
            all public and private financings

                                  Page 2 of 14
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            consummated by the Company or any of its subsidiaries or affiliates
            during the Term hereunder and in connection with which the
            Consultant provides assistance, makes any introduction or otherwise
            facilitates such transaction, in each case, payable to the
            Consultant upon the receipt of said gross proceeds by the Company.
            In the event that the Consultant and the Company are unable to agree
            upon the amount of such compensation, they shall reasonably agree
            upon an independent investment banking firm to make such
            determination, which shall be binding upon them.

      (c)   Options

            Nothing herein shall limit or restrict the Consultant's ability to
            participate in the Company's 1996 Stock Option Plan (the "Plan"). On
            the date hereof, the Company hereby grants to the Consultant
            pursuant to the Plan the option (the "Consulting Options") to
            acquire 100,000 shares of the Company's common stock at a price of
            $15.00 per share (each of such amounts being subject to customary
            anti-dilution adjustments, including in connection with any stock
            split, recombination, reclassification or similar transaction). The
            Initial Option shall have a term of five years from the date hereof,
            irrespective of any termination of this Agreement, and shall be
            fully exercisable and vested from and after the date hereof. The
            Consulting Options may be exercised by cash tender or by tender of
            other options or securities of the Company, upon customary
            conditions relating to a cashless exercise of options.

      (d)   Reimbursement of Expenses; Office Equipment

            Consistent with established policies of the Company as in effect
            from time to time for senior executives, consultants and members of
            the Board, the Company shall pay to or reimburse the Consultant for
            all reasonable and actual out-of-pocket expenses, including without
            limitation, travel, hotel, automobile, telephone and cellular
            telephone expenses, computer and data processing expenses and
            similar expenses, incurred by the Consultant in performing his
            obligations under this Agreement. During the term of this Agreement,
            as may be extended, the Company shall furnish the Consultant with,
            or shall reimburse the Consultant for, a vehicle (of comparable
            stature to the make and model of the automobile to which the
            Consultant has been accustomed), as well as insurance costs
            therefor. In addition, the Company shall provide the Consultant with
            reasonable and necessary office furniture, equipment and supplies
            including without limitation, a desk top computer with a full
            keyboard and 17 inch screen, a laser jet printer, a modem, a
            scanner, tape back-up and uninterrupted power supply equipment, and
            programs required for the Consultant's duties hereunder for his use
            at his residence or at such other location the Consultant may
            select.

                                  Page 3 of 14
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5. Benefits

      (a)   Benefit Plans

            The payments provided in Section 4 above are in addition to any
            benefits to which the Consultant may be, or may become, entitled
            under any of the Company's benefit plans or programs for which
            members of the Board or senior executive officers of or consultants
            to the Company are or shall become eligible. During the term the
            Consultant shall be eligible to receive benefits and emoluments
            which are consistent with the benefits and emoluments provided to
            senior executive officers of the Company, and subsequent to the term
            shall be entitled to all health benefits for the life of the
            consultant.

      (b)   Vacation

            The Consultant shall be entitled to reasonable periods of vacation
            and sick time consistent with his role as a senior consultant to the
            Company, during which periods the Company shall not expect the
            Consultant to perform services hereunder.

      (c)   No Reduction

            There shall be no material reduction or diminution of the benefits
            provided in this Section 5 during the Term unless (i) the Consultant
            shall have provided his consent to such reduction or diminution or
            (ii) an equitable arrangement (embodied in an ongoing substitute or
            alternative benefit or plan) has been made with respect to such
            benefit or plan or (iii) such reduction is part of an
            across-the-board reduction affecting all senior executives of the
            Company.

6. Benefits Payable Upon Disability

      (a)   Disability Benefits

            During any period of Disability (as defined below) occurring during
            the Term, the Company shall continue to pay to the Consultant the
            Base Compensation as provided herein and continue to extend to him
            the benefits described in Sections 4 and 5 hereof; it being
            understood that if disability benefits are provided under any
            disability insurance or similar policy maintained by the Company (or
            maintained by the Consultant, the cost of which is reimbursed or
            paid by the Company), payments under such policy shall be considered
            as payments by the Company and, to the extent received, shall offset
            any Base Compensation payable to the Consultant under this
            Agreement. As used in this Agreement, "Disability" shall mean the
            inability (as determined by a majority of the remaining members of
            the Board, other than the Consultant, voting for such determination)
            of the Consultant to render services to the Company, as provided
            herein, as a result of physical or mental infirmity or disability.

      (b)   Services During Disability

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<PAGE>
            During the Term, notwithstanding any Disability, the Consultant
            shall, to the extent that he is physically and mentally able to do
            so, furnish information, assistance and services to the Company.

7. Termination

      This Agreement shall be terminated in accordance with the provisions of
      this Section 7, in which case the provision of Section 8 below shall be
      applicable.

      (a)   Upon Expiration of the Term

            This Agreement shall terminate in accordance with Section 2 above.

      (b)   By the Company

            In addition to the provisions of Section 7(a) above, this Agreement
            is subject to earlier termination by the Company, as follows:

            (i)   Death of Consultant
                  If the Consultant dies, this Agreement shall terminate, the
                  Termination Date being the date of the Consultant's death.

            (ii)  Disability

                  If the Consultant is unable to perform his services as
                  required in this Agreement, as a result of his Disability
                  during an Engagement Year, the Company shall have the right to
                  terminate this Agreement as determined by a majority of the
                  remaining members of the Board, other than the Consultant,
                  voting for such determination), the Termination Date being 15
                  days after notice thereof is provided to the Consultant.

            (iii) Termination by the Company for Cause

                  The Company shall have the right to terminate the Consultant's
                  engagement under this Agreement for Cause (as defined below),
                  the Termination Date to be immediately upon notice thereof
                  from the Company to the Consultant. For purposes of this
                  Agreement, "Cause" shall mean the Consultant's (A) conviction
                  of any misdemeanor involving moral turpitude or any felony,
                  (B) misappropriation or embezzlement from the Company, (C)
                  breach during the Term of Sections 10 or 11 below or (D)
                  persistent refusal (after 30 days' prior written notice during
                  which such refusal may be cured by the Consultant) to perform
                  his duties hereunder.

            (iv)  No Termination by the Company Without Cause

                                  Page 5 of 14
<PAGE>
                  The Company shall not have the right to terminate the
                  Consultant's engagement hereunder for any reason not
                  specifically set forth in clauses (i), (ii) or (iii) of this
                  Section 7(b).

      (c)   By The Consultant

            In addition to the provisions of Section 7(a) above, this Agreement
            is subject to earlier termination by the Consultant, as follows:

            (i)   Termination by the Consultant for Just Cause

                  The Consultant shall have the right to terminate his
                  employment under this Agreement upon the occurrence of a
                  material breach of this Agreement by the Company. The
                  Termination Date shall be 15 days after the date of the
                  applicable notice giving rise to a termination, by the
                  Consultant to the Company.

            (ii)  Termination by the Consultant Without Just Cause

                  The Consultant shall have the right to terminate the
                  Consultant's employment under this Agreement for any other
                  reason not set forth in clause (i) of this Section 7(c), the
                  Termination Date being 15 days after notice thereof from the
                  Consultant to the Company.

8. Effect of Termination
      The following provisions shall be applicable in the event of the
      termination of this Agreement as provided in Section 7 above.

      (a)   Expiration of Term

            Upon termination of this Agreement as provided in Section 7(a)
            above, this Agreement shall terminate and be of no further force and
            effect, except as provided in Sections 11, 12 and 13(b) below which
            shall survive such termination.

      (b)   Death

            Upon the termination of this Agreement as provided in Section
            7(b)(i) above, the Company shall pay to the Consultant's estate (i)
            the Base Compensation otherwise payable to the Consultant hereunder
            for the six-month period following the Termination Date, payable
            within 180 days after the Termination Date (but not earlier than any
            recovery of insurance proceeds in respect thereof, as provided
            below), and (ii) any bonus for the Engagement Year in which the
            Termination Date occurs that the Board determines would otherwise
            have been payable had the Consultant not died, which Annual Bonus
            shall be reduced by pro prorating it through the Termination Date,
            payable, in the case of this clause (ii), at the time such payment
            would otherwise be due and payable hereunder, and (iii) expense
            reimbursement amounts accrued through the Termination Date, at the
            time such payment would otherwise be due and payable thereunder.
            Neither party shall have

                                  Page 6 of 14
<PAGE>

            any further liability or obligation to the other except as provided
            in Sections 11, 12 and 13(b) hereunder which shall survive the
            Termination Date. Notwithstanding the provisions of clause (i) and
            (ii) above, the Company shall have the right to provide for either
            or both of the payments described therein by purchasing life
            insurance on the Consultant's life or reimbursing to the Consultant
            the cost of the premiums in respect of such life insurance which may
            be purchased directly by the Consultant if he so elects.

            In the event that the Consultant shall own any employee, director
            and/or consultant stock options as of the Termination Date, all of
            such options which are unvested as of the Termination Date shall
            vest and become exercisable by virtue of any termination under
            Section 7(b)(i) and, notwithstanding the provisions of the Plan
            pursuant to which such options may have been granted, the
            Consultant's estate shall have a period of two years from the
            Termination Date to exercise such options, except that the
            Consulting Options shall have the term provided in Section 4(c)
            above.

      (c)   Disability

            Upon the termination of this Agreement as provided in Section
            7(b)(ii) above, the Company shall pay to the Consultant (i) an
            amount equal to the compensation otherwise payable to the Consultant
            hereunder for the six-month period following the Termination Date
            and (ii) any bonus for the Employment Year in which the Termination
            Date occurs that the Board determines would otherwise have been
            payable had the Consultant not become Disabled, which Annual Bonus
            shall be reduced by prorating it through the Termination Date, in
            each case, payable at the times such payments would otherwise be due
            and payable hereunder and (iii) expense reimbursement amounts
            accrued through the Termination Date, at the time such payment would
            otherwise be due and payable thereunder. Neither party shall have
            any further liability or obligation to the other except as provided
            in Sections 11, 12 and 13(b) hereunder which shall survive the
            Termination Date. Notwithstanding the provisions of clauses (i) and
            (ii) above, the Company shall have the right to provide for either
            or both of such payments described therein by purchasing disability
            insurance in respect of the Consultant or reimbursing to the
            Consultant the cost of the premiums in respect of such disability
            insurance which may be purchased directly by the Consultant if he so
            elects. In the event that the Consultant shall own any employee,
            director and/or consultant stock options as of the Termination Date,
            all of such options which are unvested as of the Termination Date
            shall vest and become exercisable by virtue of any termination under
            Section 7(b)(ii) and, notwithstanding the provisions of the
            Company's Stock Option Plan pursuant to which such options may have
            been granted, the Consultant shall have a period of two years from
            the Termination Date to exercise such options, except that the
            Consulting Options shall have the term provided in Section 4(c)
            above.

      (d)   Termination by the Company For Cause

                                  Page 7 of 14
<PAGE>

            Upon the termination of this Agreement as provided in Section
            7(b)(iii) above, the Company shall pay to the Consultant (i) the
            accrued and unpaid Base Compensation, if any, through the
            Termination Date and (ii) expense reimbursement amounts accrued
            through the Termination Date, at the time such payments are
            otherwise due and payable thereunder. Neither party shall have any
            further liability or obligation to the other except as provided in
            Sections 11, 12 and 13(b) hereunder which shall survive the
            Termination Date. No unvested employee, director and/or consultant
            stock options shall vest or become exercisable by virtue of any
            termination under Section 7(b)(iii) and any and all rights thereto
            then possessed by the Consultant shall be terminated and of no
            further force and effect; it being understood that the foregoing
            shall not affect the Consulting Options.

      (e)   Termination by the Consultant for Just Cause

            Upon termination of this Agreement as provided in Section 7(c)(i)
            above, the Company shall pay to the Consultant (i) the Base
            Compensation which would otherwise have been payable hereunder for
            the remainder of the Term had the Agreement not been terminated and,
            (ii) expense reimbursement amounts accrued through the Termination
            Date, in each case, in the case of clause (i) and (ii) above, at the
            time such payments are otherwise due and payable thereunder. Neither
            party shall have any further liability or obligation to the other
            except as provided in Sections 11, 12 and 13(b) hereunder which
            shall survive the Termination Date. All unvested employee, director
            and/or consultant stock options, if any, shall vest and become
            exercisable for their remaining term absent such termination by
            virtue of any termination under Section 7(c)(i).

      (f)   Termination by the Consultant Without Just Cause

            Upon the termination of this Agreement as provided in Section
            7(c)(ii) above, the Company shall pay to the Consultant (i) the
            accrued and unpaid Base Compensation, if any, through the
            Termination Date, and (ii) expense reimbursement amounts accrued
            through the Termination Date. Neither party shall have any further
            liability or obligation to the other except as provided in Sections
            11, 12 and 13(b) hereunder which shall survive the Termination Date.
            No unvested employee or directors options shall vest or become
            exercisable by virtue of any termination under Section 7(c)(ii)
            above and any and all rights thereto to such unvested options then
            possessed by the Consultant shall be terminated and of no further
            force and effect; it being understood that the foregoing shall not
            affect the Consulting Options.

9. Federal Income Tax and Other Withholdings

      The Company shall withhold from any benefits payable pursuant to this
      Agreement such federal, state, city or other taxes and other amounts as
      may be required to be withheld pursuant to any applicable law or
      governmental regulations or ruling and shall timely pay over to the
      appropriate governmental or other authorities the amount withheld,
      together with any additional amounts required to be paid by the Company in
      respect thereof.

                                  Page 8 of 14
<PAGE>

10. Non-Competition and Confidential Information During the Term

      (a)   Non-Competition

            The Consultant covenants and agrees that he will not at any time
            during the Term engage in a business which is on the date hereof or
            during the Term in competition with the business of the Company, or
            solicit the services of any employee of the Company in connection
            therewith.

      (b)   Confidential Information

            The Consultant shall, during the Term hold in a fiduciary capacity
            for the benefit of the Company and its stockholders all secret,
            confidential or proprietary information, knowledge or data relating
            to the Company (and any of its subsidiaries or affiliates), which
            shall have been obtained by the Consultant during or by reason of
            his engagement by the Company. During the Term, the Consultant shall
            not, without the prior written consent of the Company, communicate
            or divulge any such information, knowledge or data to any person or
            entity other than the Company (or such applicable subsidiaries or
            affiliates) and those designated by them which would result in any
            misappropriation or improper use hereof, except that, during his
            engagement hereunder, in furtherance of the business and for the
            benefit of the Company, the Consultant may provide confidential
            information as appropriate to attorneys, accountants, financial
            institutions or other persons or entities engaged in business with
            the Company from time to time.

11. Indemnification and Liability Insurance

      (a)   Indemnification

            The Company shall indemnify and hold the Consultant harmless, to the
            fullest extent permitted by applicable laws and regulations, against
            any and all expenses, liabilities and losses (including without
            limitation, reasonable attorneys' fees and disbursements of counsel
            reasonably satisfactory to the Company), incurred or suffered by him
            in connection with his service hereunder, except to the extent of
            the Consultant's gross negligence or willful misconduct.

      (b)   Insurance

            To the extent available at commercially reasonable rates, the
            Company shall maintain for the benefit of the Consultant, a
            directors' and officers' liability insurance policy insuring the
            Consultant's service hereunder and, if the Consultant is a member of
            the Board, as a member thereof, during the Term in accordance with
            its customary practices as in effect from time to time during the
            Term; provided, that all other directors of the Company are also
            covered by such insurance. The parties acknowledge and agree that
            such policy may cover other directors and officers of the Company in
            addition to the Consultant.

12.   Registration Rights

                                  Page 9 of 14
<PAGE>

      The Company acknowledges that the Consultant and certain of his family
      members, namely his children Scott and Brian, and his wife Elise or trusts
      for the benefit of such persons or entities owned or controlled by such
      persons (together with the Consultant, the "Holders") are the holders in a
      substantial number of shares of Common Stock of the Company (the
      "Registrable Securities"). In connection with this Agreement and the
      transactions contemplated hereby, the Company desires to grant to the
      Holders certain registration rights relating to the Registrable
      Securities.

      (a)   Demand Registration

            The Holders and the holders under a Consulting Agreement dated the
            date hereof between the Company and Mr. Norman Rothstein
            collectively shall have the one-time right at any time from time to
            time to request registration under the Securities Act of 1933 of all
            or part of their Registrable Securities on Form S-1, S-2 or S-3 (if
            available) or any similar registration (each, a "Demand
            Registration"); provided, that the Company need not effect the
            Demand Registration unless such Demand Registration of all the
            Holders shall include at least 100,000 shares of Common Stock. In
            the event of a Demand Registration, the Company shall use its best
            efforts to file and cause to become effect such registration
            statement and take other appropriate methods to effect such
            distributions of securities, as shall be necessary or appropriate,
            upon customary terms and conditions.

      (b)   Piggyback Registration

            Whenever the Company proposes to register any of its securities
            under the Securities Act (other than in a registration relating to
            sales of securities to participants in a Company dividend
            reinvestment plan, S-4, or S-8 or any successor form or in
            connection with an exchange offer or an offering of securities
            solely to the existing stockholders or employees of the Company),
            the Company will give prompt written notice to all Holders of
            Registrable Securities of its intention to effect such a
            registration and will include in such registration (subject to
            customary underwriters' limitations, cut-backs and restrictions, if
            any, upon written notice from the Company's underwriters) all
            Registrable Securities with respect to which the Company has
            received written requests for inclusion therein.

      (c)   Expenses of Registration

            Except as otherwise provided herein, all registration expenses
            incurred in connection with all registrations pursuant to this
            Section 12 shall be borne by the Company; provided, that
            underwriters' or brokers' discounts, fees or selling commissions
            shall be borne by the Holders and not by the Company.

      (d)   Indemnification

            The Company agrees to indemnify, to the fullest extent permitted by
            applicable law, each Holder of Registrable Securities, against all
            losses, claims, damages, liabilities, expenses or any amounts paid
            in settlement of any litigation, investigation or proceeding
            commenced or threatened (collectively, "Claims") to which each such
            indemnified party may become

                                  Page 10 of 14
<PAGE>

            subject under the Securities Act (except to the extent based solely
            on information furnished to the Company in writing by such Holder
            for inclusion in any registration statement); the Consultant shall
            indemnify the Company against any claims under the Securities Act
            resulting solely from information furnished in writing to the
            Company by the Consultant for inclusion in a registration statement
            under which the Holders are selling security holders.

13. General Provisions

      (a)   Assignment

            Neither this Agreement nor any right or interest hereunder shall be
            assignable by the Consultant or the Company without the prior
            written consent of the other; provided, that (i) in the event of the
            Consultant's Death during the Term, the Consultant's estate and his
            heir, executors, administrators, legatees and distributees shall
            have the rights and obligations set forth herein, as provided
            herein, and (ii) nothing contained in this Agreement shall limit or
            restrict the Company's ability to merge or consolidate or effect any
            similar transaction with any other entity, irrespective of whether
            the Company is the surviving entity; provided, that such surviving
            entity shall continue to be bound by the provisions hereof binding
            upon the Company.

      (b)   Binding Agreement

            This Agreement shall be binding upon, and inure to the benefit of
            the Consultant and the Company and their respective heirs,
            executors, administrators legatees and distributees, successors and
            permitted assigns.

      (c)   Amendment of Agreement

            This Agreement may not be modified or amended except by an
            instrument in writing signed by the parties hereto.

      (d)   Severability

            If, for any reason, any provision of this Agreement is determined to
            be invalid or unenforceable, such invalidity or lack of
            enforceability shall not affect any other provision of this
            Agreement not so determined to be invalid or unenforceable, and each
            such other provision shall, to the full extent consistent with
            applicable law, continue in full force and effect, irrespective of
            such invalid or unenforceable provision.

      (e)   Effect of Prior Agreements

            This Agreement contains the entire understanding between the parties
            hereto respecting the Consultant's engagement by the Company, and
            supersedes any prior agreement between the Company and the
            Consultant relating to the retention of the Consultant as a
            consultant to the Company.

      (f)   Notices

                                  Page 11 of 14
<PAGE>

            For the purpose of this Agreement, notices and all other
            communications provided for in this Agreement shall be in writing
            and shall be deemed to have been duly given (i) when delivered, if
            sent by telecopy or by hand, (ii) one business day after sending, if
            sent by reputable overnight courier service, such as Federal
            Express, or (iii) three business days after being mailed, if sent by
            United States certified or registered mail, return receipt
            requested, postage prepaid. Notices shall be sent by one of the
            method described above; provided, that any notice sent by telecopy
            shall also be sent by any other method permitted above. Notices
            shall be sent, if to the Consultant, to Frederick Entman, 260 Tillou
            Road, South Orange, New Jersey 07079; and if to the Company to H
            Power Corporation, 60 Montgomery Street, Belleville, New Jersey
            07109; telecopy no. (201) 450-9850, directed to the attention of the
            Board with copies to the Chairman and the Secretary of the Company;
            or to such other address as either party may have furnished to the
            other in writing in accordance herewith, except that notice of
            change of address shall be effective only upon receipt.

      (g)   Counterparts

            This Agreement may be executed in several counterparts, each of
            which shall be deemed to be an original but all of which together
            shall constitute one and the same instrument. This Agreement may be
            executed by facsimile transmission.

      (h)   Arbitration

            In the event of a dispute or controversy arising under or in
            connection with this Agreement, the Consultant shall give the
            Company or the Company shall give the Consultant, as applicable, a
            written demand for relief. If the dispute or controversy is not
            resolved, it shall be settled exclusively by arbitration, conducted
            in Essex County, Newark, the State of New Jersey, in accordance with
            the rules of the American Arbitration Association. Judgment shall be
            entered on the arbitrator's award in any court having jurisdiction
            over the parties hereto.

      (i)   Indulgences, Etc.

            Neither the failure nor any delay on the part of either party to
            exercise any right, power or privilege under this Agreement shall
            operate as a waiver thereof, nor shall any single or partial
            exercise of any right, remedy, power or privilege preclude any other
            or further exercise of the same or of any other right, remedy, power
            or privilege, nor shall any waiver of any right, remedy, power or
            privilege with respect to any occurrence be construed as a waiver of
            such right, remedy, power or privilege with respect to any other
            occurrence.

      (j)   Headings

            The headings of sections and paragraphs herein are included solely
            for convenience of reference and shall not control the meaning or
            interpretation any of the provisions of this Agreement.

                                  Page 12 of 14
<PAGE>

      (k)   Governing Law

            This Assignment shall be governed by and construed in accordance
            with the internal laws of the State of New Jersey, without regard to
            principles of conflicts of laws.

                                  Page 13 of 14
<PAGE>

IN WITNESS WHEREOF, the Company has caused this Agreement, comprised of 14 pages
including this page, to be executed by its duly authorized officer, and the
Consultant has signed this Agreement, all as of the date first set forth above.

Consultant:                               H Power Corp.:

/s/ Frederick Entman              By: /s/ H. Frank Gibbard
-----------------------               --------------------
Frederick Entman                                       CEO

                                  Page 14 of 14

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