Document:

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                                                                  EXHIBIT 10.57

                                 LEASE AGREEMENT

      THIS LEASE AGREEMENT (the "Lease") is made and entered into as of the 10th
day of January 2001, by and between W.F. HARRIS DEVELOPMENT, LLC, a North
Carolina limited liability company ("Landlord"), and H Power Corporation, a
Delaware corporation ("Tenant").

                                    AGREEMENT

      In consideration of the mutual covenants and agreements contained in this
Lease, the parties agree for themselves, their successors and assigns, as
follows:

      1.    DESCRIPTION OF PREMISES.

      Landlord leases to Tenant, and Tenant accepts and rents from Landlord, the
premises ("Premises") consisting of an approximately 80,000 square foot building
(the "Building") located at 1412 Airport Road in Monroe, North Carolina, and
located on real property ("Land"), in Union County, North Carolina all as shown
on EXHIBIT A attached hereto.

      2.    TERM; RENEWAL.

      The term of this Lease shall commence upon the earlier to occur of the
following: (1) thirty (30) days after the substantial completion of the
Additional Improvements, as defined below, and receipt of a certificate of
occupancy therefore, and (2) the date on which Tenant occupies the Premises for
the purpose of conducting business (the "Commencement Date"). The term of this
Lease shall end at midnight on the day that is the last day of the month in
which the day preceding the tenth (10th) anniversary of the Commencement Date
occurs (the "Expiration Date"), unless sooner terminated or extended as provided
herein. Notwithstanding the foregoing, Tenant may occupy the office area of the
Premises prior to substantial completion of all Additional Improvements and may
use the remainder of the Premises for purposes of storing and installing
fixtures, machinery and equipment and for performing such other work that Tenant
may require in connection with Tenant's occupancy of the Premises including, but
not limited to, performing the following: floor coating, painting the roof,
installing telephone, data, electrical and HVAC risers, ducts, pipes and
pathways, and installing workbenches, conveyors and air compressors; provided
that such occupancy complies with all local laws, codes, rules and ordinances;
provided further, that upon such occupancy, all provisions of this Lease shall
apply, except for the provisions of Paragraph 3 and Paragraph 4.

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      3.    RENTAL AND OPERATING EXPENSES.

      (a)   Beginning on the Commencement Date and throughout the full term of
this Lease, Tenant shall pay to Landlord, without notice, demand, reduction,
setoff or any defense, a base rental (the "Base Rent"), in advance, on the first
day of each month as set forth on EXHIBIT B attached hereto.

      (b)   LATE PAYMENT.

      If any monthly installment of Rent or any other sum due and payable
pursuant to this Lease remains due and unpaid ten (10) days after notice is sent
to Tenant advising Tenant of such non-payment (provided, however, that Landlord
shall be obligated to give such notice and Tenant shall have such ten (10) day
cure period thereafter only twice in each twelve (12) month period during the
term of this Lease), Tenant shall pay as additional rent hereunder a late
payment charge equal to three percent (3%) of the unpaid rent or other payment.
All unpaid rent and other sums of whatever nature owed by Tenant to Landlord
under this Lease shall bear interest from the tenth (10th) day after notice is
sent to Tenant advising Tenant of such payment (provided, however, that Landlord
shall be obligated to give such notice and Tenant shall have such ten (10) day
cure period thereafter only twice in each twelve (12) month period during the
term of this Lease) until paid, at the lesser of twelve percent (12%) per annum
or the maximum interest rate per annum allowed by law. Acceptance by Landlord of
any payment from Tenant under this Lease in an amount less than that which is
currently due shall in no way affect Landlord's rights under this Lease and
shall in no way constitute an accord and satisfaction.

      (c)   DOCUMENTARY TAX.

      In the event that any documentary stamp tax, sales tax or any other tax or
similar charge (exclusive of any income tax payable by Landlord as a result)
levied on the rental, leasing or letting of the Premises, whether local, state
or federal, is required to be paid due to the execution of this Lease or
otherwise with respect to this Lease or the payments due under this Lease, the
cost shall be borne by Tenant and shall be paid promptly and prior to same
becoming past due. Tenant shall provide Landlord with copies of all paid
receipts respecting such tax or charge promptly after payment of same. To the
best of Tenant's knowledge, there are currently no such taxes or similar charges
due.

      (d)   OPERATING EXPENSES.

            (i) As used in this Paragraph 3 (d), the following terms shall have
the following meanings:

      (A)         OPERATING EXPENSE PAYMENT.

                        As used in this Lease, the Tenant's proportionate share
                  of the Operating Expenses shall be one hundred percent (100%).

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      (B)         OPERATING EXPENSES.

                        All costs and expenses incurred or paid by Landlord or
                  Landlord's agent in the management, operation, repair and
                  maintenance of the common areas of the Premises (collectively
                  referred to as the "Common Areas"), including, without
                  limitation, water and sewer charges, parking lot maintenance,
                  costs for outdoor lighting, costs for landscape maintenance
                  and general groundskeeping, management fees (including
                  management fees payable to Landlord), all assessments for
                  public betterments or improvements, ad valorem real estate
                  taxes and any other taxes on real estate, ad valorem taxes on
                  equipment or other property used primarily in connection with
                  the operation or maintenance of the Common Areas, and the
                  costs, including without limitation, legal and consulting
                  fees, of contesting or attempting to reduce any of the above
                  described taxes (which reduction shall be passed through to
                  Tenant in proportion to Tenant's proportional share of
                  Operating Expenses), the cost of labor, materials, insurance,
                  utilities and services and such other expenses with respect to
                  the operation, maintenance and management of the Building,
                  that part of the Land upon which the Building is constructed
                  and the areas of the Land used by the Building and the
                  occupants in common with other buildings on the Land and
                  occupants of such buildings, which shall be incurred or paid
                  by or on behalf of Landlord and which shall be properly
                  chargeable to the operation, maintenance and management in
                  accordance with generally accepted accounting principles.
                  Subject to Tenant's prior written approval, which approval
                  shall not be unreasonably withheld or delayed, Operating
                  Expenses shall also include the reasonable amortization of
                  capital improvements (over the longest period permitted by the
                  Internal Revenue Code), which will improve the efficiency of
                  maintaining or operating the Common Areas, reduce operating
                  expenses or the rate of increase thereof or are required by
                  local, state or federal regulations.

                        Operating Expenses shall not include: (i) depreciation
                  or amortization (except as otherwise provided above); (ii)
                  debt service or interest (paid or accrued); (iii) leasing
                  commissions or brokerage fees; (iv) renovating space for new
                  tenants or in renovating space vacated by any tenant; (vi)
                  Landlord's cost of utilities charged to tenants and Landlord's
                  payroll, material and contract cost of other services charged
                  to tenants; (vii) cost incurred by Landlord for Tenant's
                  alterations and upfitting; (viii) any cost of painting and
                  decorating the premises of other tenants; and (ix) the costs
                  of shifting soils and other costs where the Land was not
                  properly prepared or graded; (x) all capital expenses and all
                  expenses required to be capitalized in accordance with
                  generally accepted accounting principals; (xi) any costs
                  incurred in connection with entering in or the enforcement of
                  leases or other occupancy agreements, any costs to the extent
                  that Landlord is reimbursed or entitled to reimbursement or
                  payment by the

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                  proceeds of insurance, or otherwise; (xii) any costs with
                  respect to the installation, operation or maintenance of any
                  facility for which a charge (other than rent) is made by
                  Landlord for the use thereof; (xiii) the cost of any repair
                  necessitated by the taking by condemnation of any part of the
                  Building; (xiv) the amount paid to any entity which is
                  affiliated with Landlord for any charge to the extent that
                  such charge is in excess of an amount which would be paid in
                  the absence of such relationship; (xv) all costs arising out
                  of the presence or removal of Hazardous Materials; (xvi) costs
                  for the purchase of sculpture, paintings or other objects of
                  art; (xvii) costs incurred to the extent of the negligence or
                  willful misconduct of Landlord; (xviii) any interest, fines or
                  penalties incurred by Landlord; the cost of any work or
                  service performed for any other tenant at Landlord's expense
                  if such work or service is in excess of the work or service
                  that Landlord is to provide under this Lease to Tenant at
                  Landlord's cost and expense; (xix) costs incurred in curing
                  violations of any laws, orders, rules, regulations and
                  requirements; (xx) costs incurred with respect to a sale of
                  the Building, the Land or any interest therein; and (xxi) the
                  cost of compliance with all laws, orders, rules, regulations,
                  and requirements having as a primary purpose the benefit of
                  disabled persons, including, without limitation, the Americans
                  With Disabilities Act of 1990, as amended.

            (ii)  In addition to the payment of Base Rent, Tenant shall also pay
throughout the term of this Lease, including any extensions, the monthly
estimate of the Operating Expense Payment as determined by the Landlord, as
follows (said Operating Expense Payment and Base Rent are sometimes collectively
referred to herein as "Rent"):

            (A)   Prior to the commencement of the Lease, the Landlord shall
                  notify the Tenant of Landlord's estimate of the Operating
                  Expense Payments for the term of this Lease. Tenant shall pay
                  monthly, one twelfth of the estimate prepared by Landlord.
                  Landlord has advised Tenant that its estimate of Operating
                  Expenses for the first lease year is $0.60 per square foot.

            (B)   Within sixty (60) days after the end of each calendar year, or
                  as soon as possible thereafter, Landlord shall deliver to
                  Tenant the statement setting forth (1) the amount of the
                  Operating Expenses paid or incurred in the immediate preceding
                  calendar year, (2) the amount paid by Tenant as the monthly
                  estimate during the immediate preceding calendar year and (3)
                  the amount, if any, owing by Tenant for the difference in the
                  two. Tenant shall pay such amount, if applicable, in full
                  within thirty days after receipt of such statement. If the
                  statement indicates that the amount paid by Tenant during the
                  preceding calendar year is in excess of Tenant's share of such
                  Operating Expenses, the excess shall be applied as a credit to
                  the monthly estimate due from Tenant for the then current
                  calendar year.

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            (iii) Tenant may review Landlord's books pertaining to the
determination of the Operating Expense during regular business hours in
Landlord's office on or before 120 days after Landlord delivers its statement of
amounts due from Tenant; provided, however, that all reasonable expenses
incurred by Landlord in connection with such review shall be paid by Tenant and
such review by Tenant shall not postpone or alter the liability and obligation
of Tenant to pay the monthly estimate of the Operating Expense Payment.

            (iv) If the expiration date of the Lease shall be on a day other
than the final day of the calendar year, then the Tenant shall continue paying
the monthly estimate of Operating Expense Payment through the expiration date
and upon determination of the actual Operating Expenses for the calendar year in
which the expiration date occurs, Tenant shall pay to Landlord the difference,
if any, by which the actual Operating Expense Payment exceed the monthly
payments made, or Landlord shall promptly refund any excess amounts paid to
Tenant, as the case may be.

      4.    DELIVERY OF POSSESSION; ADDITIONAL IMPROVEMENTS.

      Landlord will deliver the Premises to Tenant on or before the Commencement
Date, with certain improvements (the "Additional Improvements") substantially
completed in accordance with plans and specifications ("Plans") identified on
attached EXHIBIT C (subject to revisions mutually agreed to in writing by
Landlord and Tenant). Landlord agrees to use its best efforts to substantially
complete the Additional Improvements by no later than May 1, 2001.

      It is understood and agreed that the total cost for the Additional
Improvements is estimated to be $1,060,000 and that, of this amount, Landlord
has incorporated $303,000 into the calculation of the Base Rent due under this
Lease, for certain base building improvements, as described on EXHIBIT B. At
Tenant's option, Landlord shall fund additional costs for the Additional
Improvements up to $757,000. In the event that the cost of the Additional
Improvements is greater than $1,060,000, Tenant shall be solely responsible for
all costs above $1,060,000, unless Landlord elects to amortize said additional
costs into the rental rate, in accordance with Paragraph 3 of this Lease.

      Tenant shall furnish Landlord with an irrevocable letter of credit,
reasonably satisfactory to Landlord, cash (which, in accordance with an escrow
agreement mutually acceptable to Landlord and Tenant and consistent with the
provisions of this Lease, shall be deposited in an interest bearing account with
the interest payable to Tenant), or other collateral, which shall be
satisfactory to Landlord in its sole discretion, equal to the amount one hundred
percent (100%) of the cost of the Additional Improvements in excess of $303,000
for a period of seven (7) years (the "Improvements Collateral"). The amount of
the Improvements Collateral may be reduced by one-tenth of the original amount
of the Improvements Collateral for each of said seven (7) years. In addition,
Tenant shall furnish Landlord with an irrevocable letter of credit, reasonably
satisfactory to Landlord, equal to $50,000 for the entire term of this Lease
(the "Restoration Collateral"). This amount represents potential costs for
restoration of the Building upon the termination of this Lease. The Improvements
Collateral and the Restoration Collateral may be used by Landlord to reimburse
Landlord for the costs of the Additional Improvements and for restoration of the
Building, upon the termination of this Lease prior to the expiration of the
ten-year initial term.

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      Tenant shall furnish Landlord with a portion of the Improvements
Collateral in an amount equal to the greater of (i) one-half of the costs of
construction of the Additional Improvements and (ii) $500,000 by no later than
March 15, 2001. Tenant shall furnish Landlord with the remainder of the
Improvements Collateral and the Restoration Collateral no later than twenty-one
(21) days prior to the Commencement Date. If the Improvements Collateral or the
Restoration Collateral is an irrevocable letter of credit that must be renewed
during the term of the Lease, Tenant shall provide Landlord evidence
satisfactory to Landlord that said letter of credit has been renewed at least
thirty (30) days prior to its expiration. If Tenant fails to comply with the
following provision it shall be deemed an Event of Default under this Lease and
Landlord shall be entitled to draw on such letter of credit in amounts
acceptable to Landlord, in its sole discretion.

      5.    ALTERATIONS AND IMPROVEMENTS BY TENANT.

      Tenant shall make no structural changes respecting the Premises and shall
make no changes of any kind respecting the Premises that are visible from the
exterior of the Premises. Any other nonstructural changes or other alterations,
additions, or improvements to the Premises shall be made by or on behalf of
Tenant only with the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed. All alterations, additions or improvements,
including without limitation all partitions, walls, railings, carpeting, floor
and wall covering and other fixtures (excluding, however, Tenant's trade
fixtures as described in the paragraph entitled "Trade Fixtures and Equipment"
below) made by, for, or at the direction of Tenant shall, when made, become the
property of Landlord, at Landlord's sole election, and shall, at Landlord's sole
election, remain upon the Premises at the expiration or earlier termination of
this Lease, unless agreement is reached to the contrary at the time Landlord
gives approval for same. If Tenant shall request Landlord's consent to a change,
alteration, addition or improvement to the Premises and Landlord fails to
respond, or withholds its consent but does not specify the reasons therefor in
reasonable detail, within thirty (30) days after Tenant's request, then, in any
such event, Landlord's consent shall be deemed given to such change, alteration,
addition and/or improvement; provided, however, that at the time of Tenant's
request, Tenant may notify Landlord that, in Tenant's reasonable discretion,
such request is an emergency and requires an expedited response by Landlord; in
such event, Landlord's consent shall be deemed given if Landlord fails to
respond within ten (10) days.

      6.    USE OF PREMISES.

      (a)   Tenant shall use the Premises only for manufacturing fuel cells and
similar products or derivatives, research and development, general office,
manufacturing, and warehouse purposes and for no other purposes. Tenant shall
comply with all laws, ordinances, orders, regulations or zoning classifications
of any lawful governmental authority, agency or other public or private
regulatory authority (including insurance underwriters or rating bureaus) having
jurisdiction over the Premises. Tenant shall not do any act or follow any
practice relating to the Premises which shall constitute a nuisance or detract
unreasonably in any way from the reputation of the Premises. Tenant's duties in
this regard shall include allowing no noxious or offensive odors, fumes, gases,
smoke, dust, steam or vapors, or any loud or disturbing noise or vibrations to
emit from the Premises.

      (b)   Without limiting the generality of (a) above and except as noted
below and in accordance and compliance with current environmental rules and
regulations, the Premises shall not be used for the treatment, storage,
transportation to or from, use or disposal of toxic or

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hazardous wastes, materials, or substances, or any other substance that is
prohibited, limited or regulated by any governmental or quasi-governmental
authority or that, even if not so regulated, could or does pose a hazard to the
health and safety of the occupants of the Premises or surrounding property
(collectively, "Hazardous Materials"). Landlord warrants that, to the best of
its knowledge, it has no knowledge of any existing environmental conditions at
Premises and the Premises meet all applicable environmental rules and
regulations in effect as of the Commencement Date. Landlord acknowledges that
Tenant may use hydrogen, propane, natural gas and/or other hydrogen producing
materials and catalysts in the operation of Tenant's business and may install a
hydrogen generator; provided, however, said acknowledgement shall not relieve
Tenant of its obligation to comply with this paragraph; provided, further, that
Tenant acknowledges that the Building is not being constructed to withstand any
explosions that may occur as a result of such materials.

      (c)   Tenant shall exercise due care in its use and occupancy of the
Premises and shall not commit or allow waste to be committed on any portion of
the Premises; and at the expiration or earlier termination of this Lease, Tenant
shall deliver the Premises to Landlord in as good condition as existed on the
date they were received by Tenant, excluding ordinary wear and tear, but
including all alterations, changes, installations and repairs approved by
Landlord.

      (d)   Tenant shall indemnify, defend and hold harmless Landlord from and
against all claims, judgments, damages (including punitive damages), losses,
penalties, fines, liabilities (including strict liability), encumbrances and
liens, and any other costs and expenses, including, but not limited to,
reasonable attorneys' fees, disbursements, consultant's fees and other costs,
arising out of or in connection with Hazardous Materials which exist or are
located on or about the Premises, the Building and/or the Land during Tenant's
occupancy of the Premises, unless caused by Landlord, its agents, contractors,
employees, invitees, licensees, servants, subcontractors. This indemnification
set forth shall survive the expiration or earlier termination of the term of
this Lease.

      (e)   Landlord shall indemnify, defend and hold harmless Tenant from and
against all claims, judgments, damages (including punitive damages), losses,
penalties, fines, liabilities (including strict liability), encumbrances and
liens, and any other costs and expenses, including, but not limited to,
reasonable attorneys' fees, disbursements, consultant's fees and other costs,
arising out of or in connection with Hazardous Materials which exist or are
located on or about the Premises, the Building and/or the Land prior to the
Commencement Date unless caused by Tenant, its agents, contractors, employees,
invitees, licensees, servants, subcontractors or subtenants. This
indemnification set forth shall survive the expiration or earlier termination of
the term of this Lease.

      7.    TAXES.

      (a)   Tenant shall pay any taxes imposed or assessed upon Tenant's trade
fixtures, equipment, machinery, inventory, merchandise or other personal
property located on the

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Premises and owned by or in the custody of Tenant as promptly as all such taxes
or assessments may become due and payable without any delinquency.

      (b)   During the term of this Lease, and any renewal term hereof, Tenant
shall pay all taxes, assessments and other impositions and duties levied on the
Premises and upon any buildings or improvements located or to be located
thereon. Any such taxes, assessments or duties for the first and final years of
the term of this Lease shall be prorated between Landlord and Tenant. In the
event the Premises are not separately assessed as of the calendar year in which
the term of this Lease commences, Landlord and Tenant shall agree upon the tax
liability of the Premises for such year; provided, however, if they are unable
to so agree, written notice from the appropriate taxing authority as to the
amount of real estate tax attributable to the Premises shall be binding upon
Landlord and Tenant. If Landlord receives a refund of any portion of such taxes
or assessments that were included in the amounts paid by Tenant, then Landlord
shall reimburse Tenant its pro rata share of such refund, less any expenses that
Landlord reasonably incurred to obtain the refund, but only to the extent that
taxes were refunded or reduced.

      (c)   Tenant may, at Tenant's cost and expense, in Tenant's name and on
Tenant's behalf, or in the name and on behalf of Landlord, in good faith,
contest any taxes and assessments and, in the event of any such contest, may
permit the taxes and assessments so contested to remain unpaid during the period
of such contest and any appeal therefrom; provided, however, if Landlord shall
notify Tenant that, in Landlord's reasonable opinion, the Premises or any part
thereof will be subject to loss or forfeiture by virtue of or by reason of such
nonpayment, such taxes and assessments shall be paid forthwith or Tenant shall
deposit with Landlord a sum of money reasonably required by Landlord as security
to protect the Premises from any loss or forfeiture. Landlord, at the cost and
expense of Tenant, shall cooperate fully with Tenant in any such contest.

      8.    FIRE AND EXTENDED COVERAGE INSURANCE.

      Landlord shall maintain and pay for fire insurance (subject to
reimbursement by Tenant in accordance with Section 3(d) of this Lease), with
extended coverage, covering the Building in an amount equal to one hundred
percent (100%) of the replacement cost. If, because of anything done, caused to
be done, permitted or omitted by Tenant or its agents, contractors, employees,
invitees, licensees, servants, subcontractors or subtenants, including but not
limited to vacating the Premises, the premium rate for any kind of insurance in
effect on the Building or any part of the Building shall be raised, after notice
and time to cure (so long as Landlord is provided such from the insurance
carrier), Tenant shall pay the amount of any such increase in premium. Tenant
shall maintain and pay for all fire and extended coverage insurance on its
contents in the Premises, including trade fixtures, equipment, machinery,
merchandise or other personal property belonging to or in the custody of Tenant.
Notwithstanding the foregoing, Tenant may, at its option and sole expense,
maintain the foregoing insurance in place of Landlord; provided, however, that
such insurance shall be on substantially the same terms and for the same amounts
as that provided by Landlord at the time of Tenant's election. If Tenant shall
so elect to maintain this insurance, Tenant shall cause Landlord to be named as
loss payee thereunder and shall provide Landlord with a certificate of insurance
evidencing the same within five (5) days of the purchasing of such insurance.

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      9.    LANDLORD'S COVENANT TO REPAIR AND REPLACE.

      (a)   During the term of this Lease, Landlord shall be responsible only
for repairs or replacements to the roof, exterior walls, and structural members
(including foundation and subflooring of the Premises). Landlord's repairs and
replacements shall be made within a reasonable time, not to exceed ninety (90)
days after receiving written notice from Tenant of the need for repairs. If
Landlord refuses or cannot, using due diligence, complete its repairs within
ninety (90) days after written notice from Tenant, then (unless the need for
such repairs or replacements is the result of the negligence, misconduct or
intentional acts or omissions of Tenant, its agents, contractors, employees,
invitees, licensees, servants, subcontractors, or subtenants, in which event
Tenant shall not be entitled to terminate this Lease) Tenant may terminate this
Lease effective upon thirty (30) days' prior written notice, without prejudice
to Landlord's rights to receive payment from Tenant for uninsured damages caused
directly or indirectly by Tenant as stated below. To the extent the need for
such repairs or replacements is the result of the negligence, misconduct or
intentional acts or omissions of Tenant, its agents, contractors, employees,
invitees, licensees, servants, subcontractors, or subtenants, and the expense of
such repairs or replacements are not fully covered and paid by Landlord's
insurance, then Tenant shall pay Landlord the full amount of expenses not
covered. Except for the right to terminate as described above, Landlord's duty
to repair or replace as prescribed in this paragraph shall be Tenant's sole
remedy and shall be in lieu of all other warranties or guaranties of Landlord,
express or implied.

      (b)   Landlord shall not be liable for any failure to make any repairs or
to perform any maintenance required of Landlord under this Lease unless such
failure shall persist for an unreasonable period of time after written notice
(the "Repair Notice") from Tenant setting forth the need for such repairs or
replacements in reasonable detail has been received by Landlord. If Landlord
shall fail to make any repairs or replacement within a reasonable period of
time, the (i) Rent shall be abated commencing as of the date the Landlord
receives the Repair Notice until the date such repair or replacement is complete
and (ii) Tenant may elect, by notice to Landlord, to effect such repair and/or
replacement and set-off against the Rent all reasonable amounts expended by
Tenant in connection therewith. Notwithstanding the foregoing, if the cause for
a repair or replacement required to be made by Landlord is materially
interfering with the operation of Tenant's business, in Tenant's reasonable
judgment, Tenant shall so notify Landlord; in such event, if Landlord shall fail
to immediately take steps to remedy such problem so that such problem does not
materially interfere with the operation of Tenant's business, then Tenant shall
have the rights provided in clauses (b)(i) and (ii) above. Except as set forth
Paragraph 13 of this Lease, so long as Landlord exercises reasonable care, there
shall be no liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any repairs, replacements,
alterations or improvements to any portion of the Premises, or to fixtures,
appurtenances and equipment.

      10.   TENANT'S COVENANT TO REPAIR.

      Tenant shall be responsible for the repair, replacement and maintenance in
good order and condition of all parts and components of the Building servicing
the Premises, other than those specified for repair, replacement and maintenance
by Landlord above, including, without

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limitation, the plumbing, wiring, electrical systems, heating systems, air
conditioning systems, glass and plate glass, equipment and machinery
constituting fixtures, unless such repairs or replacements are required as a
result of the negligence, misconduct or intentional acts or omissions of
Landlord, its agents, contractors, employees, invitees, or subcontractors, in
which event Landlord shall be responsible for such repairs. Landlord agrees to
assign to Tenant warranties for Building systems which are the responsibility of
Tenant. At the end of the term of this Lease, Tenant shall return the Premises
to Landlord in as good condition as they were when received, excepting only
normal wear and tear and repairs required to be made by Landlord under this
Lease. Tenant's duty to maintain the heating and air conditioning systems shall
specifically include the duty to perform the routine and periodic maintenance
and regular inspection of such heating and air conditioning systems, the
replacement of filters as recommended and the performance of other recommended
periodic servicing in accordance with applicable manufacturer's standards and
recommendations.

      11.   TRADE FIXTURES AND EQUIPMENT.

      So long as Tenant is not in default under this Lease, any trade fixtures
installed in the Premises at Tenant's expense shall remain Tenant's personal
property and Tenant shall have the right at any time during the term of this
Lease to remove such trade fixtures. Upon removal of any trade fixtures, Tenant
shall immediately restore the Premises to substantially the same condition as
they were when received by Tenant, ordinary wear and tear excepted. Any trade
fixtures not removed by Tenant at the expiration or an earlier termination of
the Lease shall become, at Landlord's sole election, either (i) the property of
Landlord, in which event Landlord shall be entitled to handle and dispose of
same in any manner Landlord deems fit without any liability or obligation to
Tenant or any other third party with respect thereto, or (ii) subject to
Landlord's removing such property from the Premises and storing same, all at
Tenant's expense and without any recourse against Landlord with respect thereto.
Without limiting the generality of the foregoing, the following property shall
in no event be deemed to be "trade fixtures" and Tenant shall not remove any
such property from the Premises under any circumstances, regardless of whether
installed by Landlord or Tenant: (a) any air conditioning, air ventilating or
heating fixtures or equipment; (b) any lighting fixtures or equipment; (c) any
carpeting or other permanent floor coverings; (d) any paneling or other wall
coverings; (e) plumbing fixtures and equipment; or (f) permanent shelving.

      12.   UTILITIES.

      Tenant shall arrange for and pay for all utilities or services related to
its use of the Premises including without limitation electricity, gas, heat,
water, sewer, telephone and janitorial services. All of such utilities shall be
separately metered.

      13.   DAMAGE OR DESTRUCTION OF PREMISES.

      If the Premises or any part thereof shall be damaged by fire, the
elements, unavoidable accident or other casualty, Landlord shall cause the
damages to be repaired with reasonable diligence provided, and to the extent
that, insurance proceeds payable with respect to such damage are paid to
Landlord, and if the Premises shall be rendered untenable only in part, the rent
shall

                                       10
<PAGE>

be abated proportionately as to the portion of the Premises rendered untenable
until the repairs are made. If, without the fault of Tenant, the Premises shall
be rendered wholly untenable and shall require substantial reconstruction,
Landlord shall have the option (a) to cancel this Lease by giving Tenant written
notice thereof within thirty (30) days after the date of any such damage or
destruction and the Lease shall wholly terminate on the date specified in the
notice, with the rent being payable only to the time of damage, or (b) to cause
the damages to be repaired with reasonable diligence, with the rent being abated
until such repairs have been completed. Notwithstanding the foregoing provisions
of this paragraph, in the event the Premises is damaged by fire or other
casualty due to the willful misconduct or gross negligence of Tenant, its
employees, agents or licensees, there shall not be any apportionment or
abatement of any rent and the Lease shall continue unless cancelled by Landlord
by giving Tenant written notice thereof within thirty (30) days after the date
of any such damage or destruction. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or injury to Tenant's business resulting in
any way from damage to the Premises or the repair thereof. Landlord retains the
sole right to adjust and settle all claims in regards to property insurance
coverage maintained on the Building or Premises. If the Premises or a
substantial portion thereof is damaged by fire, the elements, unavoidable
accident or other casualty and the repair thereof is not reasonably anticipated
to be completed within 120 days of the date of such damage, or the repair
thereof is not in fact completed with 120 days of the date of such damage, then
in any such event Tenant may terminate this Lease effective as of the date of
such damage by giving notice to Landlord.

      14.   GOVERNMENTAL ORDERS.

      Landlord represents and warrants that the Premises shall be delivered to
Tenant in compliance with all laws, rules, ordinances, orders, and regulations
and insurance requirements on the Commencement Date. Without limiting the
generality of anything in this Lease but subject to the preceding sentence and
this Article 14, and except as set forth below regarding compliance of the
physical structure of the common facilities of the Building ("Common Areas")
with the applicable requirements of the Americans with Disabilities Act and the
implementing regulations to such act ("ADA"), Tenant agrees, at its own expense,
to insure that the Premises is in lawful compliance with any requirements of any
legally constituted public authority that may be in effect from time to time
made necessary solely by reason of Tenant's use or occupancy of the Premises. If
it is determined that the physical structure of the Premises is in unlawful,
noncompliance with the ADA, Landlord, as its sole obligation, will take the
actions necessary to cause the physical structure of the Premises to no longer
be in such unlawful noncompliance, and Landlord acknowledges and agrees that
Tenant shall have no obligation or liability whatsoever to Landlord or to anyone
claiming by or through Landlord, regarding any failure of the Premises to comply
with the requirements of the ADA. With regard to the physical structure of the
Common Areas, Landlord shall insure that the physical structure of such Common
Areas is not in unlawful noncompliance with the applicable requirements of the
ADA. If it is determined that the physical structure of such Common Areas is in
unlawful noncompliance with the ADA and such noncompliance interferes with
Tenant's use or occupancy of the Premises, then Landlord, as its sole
obligation, will take the actions necessary to cause the physical structure of
such Commons Areas to no longer be in such unlawful noncompliance, and Tenant
acknowledges and agrees that Landlord has and shall have no other obligation or
liability to Tenant, or to anyone claiming by or through Tenant, regarding any
failure of the Common Areas to comply with the applicable

                                       11
<PAGE>

requirements of the ADA. Notwithstanding the foregoing, but subject to the first
sentence of this Section 14, if the need for any action to eliminate any such
unlawful noncompliance in the Common Areas or the Premises is a result of
Tenant's alterations to the Premises, or changes in use from the use currently
contemplated as of the date hereof, following the Commencement Date (whether
with or without Landlord's consent), Tenant shall be responsible for the cost of
such necessary actions.

      In performance of any acts required of or permitted Tenant under any
provisions of this Lease, Tenant shall obey and comply with all lawful
requirements, rules and regulations and ordinances of all legally constituted
authorities existing at any time during the continuance of such performance in
any way affecting the Premises or the use of the Premises by Tenant. Tenant
shall promptly pay and discharge any and all licenses, liens or other charges
arising out of or in connection with the performance of any act required or
permitted Tenant hereunder and shall keep the Premises free and clear of any and
all such liens or charges.

      Tenant shall comply with all laws, ordinances, rules, orders or
regulations applicable to Tenant's use of the Premises. Tenant shall be
responsible for any expense incident to abatement or compliance with
requirements of any federal, state or local statutory or regulatory requirements
caused, directly or indirectly, by the activities of the Tenant or Tenant's
agents, employees, invitees and contractors. Notwithstanding anything to the
contrary contained in this Article 14, Tenant shall not be required to make any
structural alterations, repairs or replacements.

      15.   MUTUAL WAIVER OF SUBROGATION.

      For the purpose of waiver of subrogation, the parties mutually release and
waive unto the other all rights to claim damages, costs or expenses for any
injury to persons (including death) or property caused by a casualty of any type
whatsoever in, on or about the Premises if the amount of such damage, cost or
expense has been paid to such damaged party under the terms of any policy of
insurance. All insurance policies carried with respect to this Lease, if
permitted under applicable law, shall contain a provision whereby the insurer
waives, prior to loss, all rights of subrogation against either Landlord or
Tenant.

      16.   SIGNS AND ADVERTISING.

      Tenant may, at Tenant's sole cost and expense, install identification
signs inside the Premises without Landlord's consent and outside the Premises,
subject to Landlord's approval as to size, location, illumination,
configuration, and materials of construction, such approval not to be
unreasonably withheld.

      17.   INDEMNIFICATION AND LIABILITY INSURANCE.

      (a)   Tenant shall indemnify and save Landlord harmless against any and
all claims, suits, demands, actions, fines, damages, and liabilities, and all
costs and expenses (including, without limitation, reasonable attorneys' fees)
arising out of injury to persons (including death) or property occurring in, on
or about, or arising out of the Premises to the extent caused or

                                       12
<PAGE>

occasioned by any negligent or intentional acts or omissions of Tenant, its
agents, contractors, employees, invitees, licensees, servants, subcontractors or
subtenants, except to the extent caused by any negligent or intentional acts or
omissions on the part of Landlord, its agents, contractors, employees, invitees,
licensees, servants and subcontractors. The non-prevailing party shall also pay
all costs, expenses and reasonable attorneys' fees that may be incurred by the
prevailing party in enforcing the agreements of this Lease, whether incurred as
a result of litigation or otherwise. Tenant shall give Landlord immediate notice
of any such happening causing injury to persons or property.

      (b)   Landlord shall indemnify and save Tenant harmless against any and
all claims, suits, demands, actions, fines, damages, and liabilities, and all
costs and expenses thereof (including without limitation reasonable attorneys'
fees) arising out of injury to persons (including death) or property occurring
in, on or about, or arising out of the Premises to the extent caused or
occasioned by any negligent or intentional acts or omissions of Landlord, its
agents or employees, except to the extent caused by any negligent or intentional
acts or omissions on the part of Tenant, its agents, contractors, employees,
invitees, licensees, servants, subcontractors or subtenants. Provided, however,
Landlord shall not be liable for any damage caused or occasioned by or from
water, snow or ice being upon or coming through the roof, trapdoor, walls,
windows, doors, or otherwise in, upon or about the Premises.

      (c)   At all times during the term of this Lease, Tenant shall at its own
expense keep in force adequate public liability insurance with a company
authorized to do business in North Carolina covering the Premises and Tenant's
use and occupancy of the Premises, containing a contractual liability
endorsement, and naming Landlord as an additional insured. The amounts of such
coverage, until changed at Landlord's reasonable request, shall be not less than
$2,000,000.00 combined single limit bodily injury and property damage. Tenant
shall first furnish to Landlord certificates of insurance evidencing the
required coverage prior to the Commencement Date and thereafter prior to each
policy renewal date. All policies required of Tenant under this Lease shall
contain a provision whereby the insurer is not allowed to cancel or change
materially the coverage without first giving thirty (30) days' written notice to
Landlord (ten (10) days for non-payment of premium). Within thirty (30) days of
the date of this Lease, Tenant shall furnish to Landlord certificates of
insurance for all insurance obligations of Tenant under this Lease

      18.   LANDLORD'S RIGHT OF ENTRY.

      Landlord, and those persons authorized by it, shall have the right to
enter the Premises at all reasonable times and upon reasonable notice for the
purposes of making repairs, making connections, installing utilities, providing
services to the Premises or for any other tenant, making inspections or showing
the same to prospective purchasers and/or lenders, as well as at any time in the
event of emergency involving possible injury to property or persons in or around
the Premises. Further, during the last six (6) months of the initial or of any
extended term, Landlord and those persons authorized by it shall have the right
at reasonable times and upon reasonable notice to show the Premises to
prospective tenants.

                                       13
<PAGE>

      19.   EMINENT DOMAIN.

      If the whole or any part of the Premises shall be taken under the power of
eminent domain, this Lease shall terminate as to the part so taken on the date
Tenant is required to yield possession to the condemning authority. Landlord (if
it receives adequate compensation from the condemning authority) shall make such
repairs and alterations as may be necessary in order to restore the part not
taken to useful conditions and the rent shall be reduced proportionately as to
the portion of the Premises so taken. If the part so taken substantially impairs
the usefulness of the Premises for an office or warehouse facility, either party
may terminate this Lease as of the date Tenant is required to yield possession.
All compensation awarded for the taking of the fee and the leasehold shall
belong to and be the property of Landlord; provided, however, nothing contained
herein shall prevent Tenant from claiming, proving and receiving awards from the
condemning authority for moving expense, removal of trade fixtures, or loss of
business goodwill.

      20.   EVENTS OF DEFAULT AND REMEDIES.

      (a)   Upon the occurrence of any one or more of the following events (the
"Events of Default," any one an "Event of Default"), the Landlord shall have the
right to exercise any rights or remedies available in this Lease, at law or in
equity. Events of Default shall be:

            (i) Tenant's failure to pay when due any rental or other sum of
      money payable under this Lease and such failure is not cured within ten
      (10) days after written notice of such failure; provided, however, that,
      for purposes of the payment of Rent, Landlord shall be obligated to give
      such notice and Tenant shall have such ten (10) day cure period thereafter
      only twice in each twelve (12) month period during the term of this Lease.

            (ii) Failure by either party to perform any other of the terms,
      covenants or conditions contained in this Lease if not remedied within
      thirty (30) days after receipt of written notice of such failure; or if
      such default cannot be remedied within such period, such party does not
      within thirty (30) days after written notice of such failure commence such
      act or acts as shall be necessary to remedy the default and shall not
      thereafter complete such act or acts within a reasonable time;

            (iii) Tenant shall become bankrupt or insolvent, or file any debtor
      proceedings, or file pursuant to any statute a petition in bankruptcy or
      insolvency or for reorganization, or file a petition for the appointment
      of a receiver or trustee for all or substantially all of Tenant's assets
      and such petition or appointment shall not have been set aside within
      sixty (60) days from the date of such petition or appointment, or if
      Tenant makes an assignment for the benefit of creditors, or petitions for
      or enters into an arrangement; or

            (iv) Tenant abandons or allows its leasehold estate to be taken
      under any writ of execution and such writ is not vacated or set aside
      within thirty (30) days.

                                       14
<PAGE>

            (v) If Tenant fails to maintain the Premises as otherwise provided
      in this Lease or fails to pay any increase in Landlord's insurance
      premiums as a result of the Premises being vacant as provided in Paragraph
      8 of this Lease.

      (b)   In addition to its other remedies, Landlord, upon an Event of
Default by Tenant, shall have the immediate right, after any applicable grace
period expressed in this Lease, to terminate and cancel this Lease and/or to
reenter and remove all persons and properties from the Premises and dispose of
such property as it deems fit, all without being guilty of trespass or being
liable for any damages caused. If Landlord reenters the Premises, it may either
terminate this Lease or, from time to time without terminating this Lease, make
such alterations and repairs as may be necessary or appropriate to relet the
Premises and relet the Premises upon such terms and conditions as Landlord deems
advisable without any responsibility on Landlord whatsoever to account to Tenant
for any surplus rents collected. No retaking of possession of the Premises by
Landlord shall be deemed as an election to terminate this Lease unless a written
notice of such intention is given by Landlord to Tenant at the time of reentry;
but, notwithstanding any such reentry or reletting without termination, Landlord
may at any time thereafter elect to terminate for such previous default. In the
event of an elected termination by Landlord, whether before or after reentry,
Landlord may recover from Tenant damages, including the costs of recovering the
Premises, and Tenant shall remain liable to Landlord for the total Rent (which
may at Landlord's election be accelerated to be due and payable in full as of
the Event of Default and recoverable as damages in a lump sum) as would have
been payable by Tenant under this Lease for the remainder of the term less the
rentals actually received from any reletting and less the reasonable rental
value of the Premises for the remainder of the term. If any rent owing under
this Lease is collected by or through an attorney, Tenant agrees to pay
Landlord's reasonable attorneys' fees to the extent allowed by applicable law.
In determining the annual rental which would be payable by Tenant subsequent to
default, the Tenant's estimate of monthly Operating Expenses shall be deemed
conclusive.

      (c)   In addition to its other remedies, Landlord, upon an Event of
Default by Tenant, shall have the immediate right, after any applicable grace
period expressed in this Lease, to obtain, receive and use the Improvements
Collateral and the Restoration Collateral for any purpose and in amounts
acceptable to Landlord, in its sole discretion.

      21.   SUBORDINATION.

      This Lease is subject and subordinate to any and all mortgages or deeds of
trust now or hereafter placed on the property of which the Premises are a part,
and this clause shall be self-operative without any further instrument necessary
to effect such subordination; however, if requested by Landlord, Tenant shall
promptly execute and deliver to Landlord any such certificate(s) as Landlord may
reasonably request evidencing subordination of this Lease to or the assignment
of this Lease as additional security for such mortgages or deeds of trust. As a
condition to any such subordination, in each case the holder of the mortgage or
deed of trust shall provide a non-disturbance agreement reasonably acceptable to
Tenant pursuant to which such holder agrees to assume the obligations of the
Landlord hereunder and that this Lease shall not be divested by foreclosure or
other default proceedings so long as Tenant shall not be in default under the
terms of this Lease beyond any applicable cure period set forth in this Lease.
Tenant

                                       15
<PAGE>

shall continue its obligations under this Lease in full force and effect
notwithstanding any such default proceedings under a mortgage or deed of trust
and shall attorn to the mortgagee, trustee or beneficiary of such mortgage or
deed of trust, and their successors or assigns, and to the transferee under any
foreclosure or default proceedings. Tenant will, upon request by Landlord,
execute and deliver to Landlord or to any other person designated by Landlord,
any reasonable and accurate instrument or instruments required to give effect to
the provisions of this paragraph.

      22.   ASSIGNING AND SUBLETTING.

      Tenant shall not assign, sublet, mortgage, pledge or encumber this Lease,
the Premises, or any interest in the whole or in any portion, directly or
indirectly, without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed. If Tenant makes any such assignment,
sublease, mortgage, pledge or encumbrance with Landlord's written consent,
Tenant will still remain primarily liable for the performance of all terms of
this Lease. Landlord's consent to one assignment or sublease will not waive the
requirement of its consent to any subsequent assignment or sublease as required
in this Lease. Notwithstanding the foregoing, without the prior consent of
Landlord, Tenant may sublet the Premises or assign this Lease (i) to any
affiliated entity of Tenant or (ii) to any entity that acquires Tenant or all or
substantially all of the equity or assets of Tenant or into which Tenant is
merged or consolidated; provided, however, that, with respect to an assignment
or sublease described in clause (ii) above, such assignee or sublessee shall
have substantially the same financial condition as Tenant, in the reasonable
discretion of Landlord, that the use of the Premises shall comply with all the
terms of this Lease, and that the use of the Premises shall be compatible with
the use of other portions of the Land by other tenants.

      23.   TRANSFER OF LANDLORD'S INTEREST.

      If Landlord shall sell, assign or transfer all or any part of its interest
in the Premises or in this Lease to a successor-in-interest which expressly
assumes the obligations of Landlord under this Lease, then Landlord shall be
released or discharged from all covenants and obligations under this Lease,
effective the day of the assignment or transfer, and Tenant shall look solely to
such successor-in-interest for performance of all of Landlord's obligations.
Tenant's obligations under this Lease shall in no manner be affected by
Landlord's sale, assignment, or transfer of all or any part of such interests of
Landlord, and Tenant shall thereafter attorn and look solely to such
successor-in-interest as the Landlord under this Lease.

      24.   COVENANT OF QUIET ENJOYMENT.

      Landlord represents that it has full right and authority to lease the
Premises, and Tenant shall peacefully and quietly hold and enjoy the Premises
for the full term of this Lease so long as Tenant does not default in the
performance of any of the terms of this Lease.

      25.   ESTOPPEL CERTIFICATES.

      Within fifteen (15) business days after a request by Landlord, Tenant
shall deliver a written estoppel certificate, in reasonable and accurate form
supplied by or acceptable to

                                       16
<PAGE>

Landlord that this Lease is in full force and effect, that no default exists on
the part of Landlord or Tenant, that Tenant is in possession, that Tenant has
commenced the payment of rent, and that Tenant claims no defenses or offsets
with respect to payment of rentals under this Lease. Likewise, within fifteen
(15) business days after a request by Tenant, Landlord shall deliver to Tenant a
similar estoppel certificate covering such matters as are reasonably required by
Tenant.

      26.   PROTECTION AGAINST LIENS.

      Tenant shall do all things reasonably necessary to prevent the filing of
any mechanics', materialmen's or other types of liens whatsoever, against all or
any part of the Premises by reason of any claims made by, against, through or
under Tenant. If any such lien is filed against the Premises, Tenant shall
either cause the same to be discharged of record within twenty (20) days after
filing or, if Tenant in its discretion and in good faith determines that such
lien should be contested, it shall furnish such security as may be necessary to
prevent any foreclosure proceedings against the Premises during the pendency of
such contest. If Tenant shall fail to discharge such lien within said time
period or fail to furnish such security, then Landlord may at its election, in
addition to any other right or remedy available to it, discharge the lien by
paying the amount claimed to be due or by procuring the discharge by giving
security or in such other manner as may be allowed by law. If Landlord acts to
discharge or secure the lien, then Tenant shall immediately reimburse Landlord
for all sums paid and all costs and expenses (including reasonable attorneys'
fees) incurred by Landlord involving such lien, together with interest on the
total expenses and costs at the maximum lawful rate.

      27.   MEMORANDUM OF LEASE.

      If requested by Tenant, Landlord shall execute a recordable Memorandum of
Lease, prepared at Tenant's expense, specifying the exact term of this Lease and
such other terms as the parties shall mutually determine.

      28.   FORCE MAJEURE.

      In the event Landlord or Tenant shall be delayed, hindered or prevented
from the performance of any act required under this Lease, by reason of
governmental restrictions, scarcity of labor or materials, strikes, fire, or any
other reasons beyond its reasonable control, the performance of such act shall
be excused for the period of delay, and the period for performance of any such
act shall be extended as necessary to complete performance after the delay
period. However, the provisions of this paragraph shall in no way be applicable
to Tenant's obligations to pay Rent or Tenant's or Landlord's obligations to pay
any other sums, monies, costs, charges or expenses required by this Lease.

      29.   REMEDIES CUMULATIVE -- NONWAIVER.

      Unless otherwise specified in this Lease, no remedy of Landlord or Tenant
shall be considered exclusive of any other remedy, but each shall be distinct,
separate and cumulative with other available remedies. Each remedy available
under this Lease or at law or in equity may be exercised by Landlord or Tenant
from time to time as often as the need may arise. No

                                       17
<PAGE>

course of dealing between Landlord and Tenant or any delay or omission of
Landlord or Tenant in exercising any right arising from the other party's
default shall impair such right or be construed to be a waiver of a default.

      30.   HOLDING OVER.

      If Tenant remains in possession of the Premises or any part thereof after
the expiration of the term of this Lease, whether with or without Landlord's
acquiescence, Tenant shall be deemed only a tenant at will and there shall be no
renewal of this Lease without a written agreement signed by both parties
specifying such renewal. The "monthly" rental payable by Tenant during any such
tenancy at will period shall be one hundred fifty percent (150%) of the monthly
installments of Rent payable during the final month immediately preceding such
expiration. In the event that Tenant remains in possession of the Premises or
any part thereof for more than sixty (60) days after the expiration of the term
of this Lease, Tenant shall also remain liable for any and all damages, direct
and consequential, suffered by Landlord as a result of any such holdover without
Landlord's unequivocal written acquiescence.

      31.   NOTICES.

      Any notice allowed or required by this Lease shall be deemed to have been
sufficiently served if the same shall be in writing and sent by a nationally
recognized overnight courier or placed in the United States mail, via certified
mail or registered mail, return receipt requested, with proper postage prepaid
and addressed as follows:

<TABLE>
<S>               <C>                             <C>               <C>
AS TO LANDLORD:   W.F. Harris Development LLC     AS TO TENANT:     H Power Corporation
                  4015 Airport Ext. Road                            1373 Broad Street
                  Monroe, NC 28110                                  Clifton, NJ 07013

                                                  With a copy to:   Fulbright & Jaworski L.L.P.
                                                                    666 Fifth Avenue
                                                                    New York, NY 10103
                                                                    Attn: Merrill M. Kraines
</TABLE>

      The addresses of Landlord and Tenant and the party, if any, to whose
attention a notice or copy of same shall be directed may be changed or added
from time to time by either party giving notice to the other in the prescribed
manner.

      32.   LEASING COMMISSION.

      Landlord and Tenant represent and warrant each to the other that they have
not dealt with any broker(s) or any other person claiming any entitlement to any
commission in connection with this transaction other than Commercial Carolina
Corporation. Landlord shall pay a leasing commission to Commercial Carolina
Corporation. Landlord and Tenant agree to indemnify and save each other harmless
from and against any and all claims, suits, liabilities, costs, judgments and
expenses, including reasonable attorneys, fees, for any leasing commissions or
other commissions, fees, charges or payments resulting from or arising out of
their respective actions in connection with this Lease.

                                       18
<PAGE>

      33.   EXPANSION OPTION.

      (a)   During the first two (2) years of the initial term of this Lease and
provided that (i) no Event of Default has occurred and is continuing at the time
of such request and (ii) Tenant has not failed to pay Rent, within ten (10) days
of notice from Landlord of such non-payment, more than twice prior to the
exercise of the expansion option described herein, Tenant may request in writing
that Landlord construct up to an additional 80,000 square feet (but not less
than 25,000 square feet) of warehouse space with construction characteristics
similar to the Building (the "Expansion Space") on the parcel of land contiguous
to the Building as shown on EXHIBIT D attached hereto (the "Expansion Land").
Tenant may only exercise this option by written request delivered to Landlord.
Within thirty (30) days of Landlord's receipt of Tenant's written request,
Landlord and Tenant shall enter into a lease agreement mutually acceptable to
Landlord and Tenant and governing the leasing and construction of the Expansion
Space, which shall be on the same terms and conditions as this Lease, except for
the following:

            1.  The minimum term of the lease shall be ten (10) years.
            2.  This Lease shall continue in full force and effect.
            3. The base rental rate for the first year of the lease shall be an
            amount equal to the sum of (a) the actual costs of construction of
            the Expansion Space, plus (b) an amount equal to the fair market
            value of the Expansion Land at the time of the signing of the lease
            for the Expansion Space , multiplied by the 30 Day LIBOR rate plus
            500 basis points.
            4. Escalations in the base rental rate for the Expansion Space shall
            occur at the beginning of the fourth and seventh years of said
            lease, with the escalation being a percentage increase based on an
            additive accumulation of the Consumer Price Index for the three
            years prior to such escalation; provided, however, that such
            escalation shall be not less than four percent (4%) and not greater
            than seven percent (7%).
            5. The formula for determining the rental rate shall be the same
            used in Paragraph 3 hereof, with a five percent (5%) building
            allowance included.
            6. The Tenant shall have the same options to renew the term as
            provided herein, provided that the rent for such renewals shall be
            mutually agreed upon by Landlord and Tenant.
            7. The lease for the Expansion Space shall be subject to such legal
            and financial conditions as Landlord may reasonably require,
            including, but not limited to security deposits, the furnishing of
            additional letters of credit and compliance with certain financial
            conditions and covenants.

      (b)   Tenant shall have a right of first refusal to lease any building
constructed by Landlord on the Expansion Land, on terms and conditions to be
mutually agreed upon by Tenant and Landlord. In the event that Landlord and
Tenant cannot agree upon the terms and conditions for said lease, Landlord shall
be free to lease the Expansion Land and any improvements thereon to any party at
its sole discretion.

                                       19
<PAGE>

      34.   RENEWAL OPTION. This Lease may be renewed by Tenant for two (2)
successive, five-year terms (the "Renewal Term(s)"), if Tenant shall give
written notice of renewal to Landlord at least 180 days prior to the end of the
then-current term. Each Renewal Term shall be subject to the same terms and
conditions as the initial Term, except that Base Rent shall be due as shown on
EXHIBIT B.

      35.   PARKING. Landlord shall provide up to 250 parking spaces on the Land
for use by Tenant, at locations to be mutually agreed upon by Landlord and
Tenant. Within 90 days after receipt of a written request from Tenant, Landlord
shall construct additional parking as requested by Tenant at locations mutually
agreed upon by Landlord and Tenant, provided that the number of spaces provided
to Tenant shall not exceed 250. Any additional parking constructed by Landlord
shall be a part of the Additional Improvements as described in Paragraph 4 of
this Lease.

      36.   LANDLORD'S WARRANTY. Landlord will furnish to Tenant a five-year
limited warranty covering the parking area and truck court for the Building for
repairs, reasonable wear and tear excepted, but excluding any damage caused by
Tenant, its agents, contractors, employees, invitees, licensees, servants,
subcontractors or subtenants.

      37.   RIGHT OF FIRST REFUSAL. In the event that Landlord desires to sell
the Premises, Landlord shall first offer to sell the Premises to Tenant at the
price and on such other terms as are acceptable to Landlord, in its sole
discretion, and as are set forth in a written notice to Tenant. Tenant shall
have thirty (30) days to elect to purchase the Premises on the terms set forth
in such notice. In the event that Tenant elects not to purchase the Premises or
fails to notify Landlord of its election within said thirty (30) day period,
Landlord may sell the Premises to any third party at a price not less than
ninety-five (95%) of the price and on substantially the same terms and
conditions as set forth in Landlord's notice to Tenant. In the event that
Landlord desires to sell the Premises at a price less than ninety-five (95%) of
the price or on substantially more favorable terms as set forth in Landlord's
notice to Tenant, Landlord shall notify Tenant in writing. Tenant shall then
have fifteen (15) days to elect to purchase the Premises at said price and on
such revised terms and conditions. In the event Tenant elects not to purchase
the Premises or fails to notify Landlord of its election within said fifteen
(15) day period, Landlord may proceed with the sale of the Premises to a third
party.

      38.   MISCELLANEOUS.

      (a)   LIMITATION OF LANDLORD'S LIABILITY.

      If Landlord shall fail to perform any covenant, term or condition of this
Lease upon Landlord's part to be performed, and, as a consequence of such
default, Tenant shall recover a money judgment against Landlord, such judgment
shall be satisfied solely out of the proceeds of sale received upon execution of
such judgment levied thereon against the right, title and interest of Landlord
in the Building as the same may then be encumbered; and neither Landlord nor, if
Landlord be a partnership, any of the partners comprising Landlord shall have
any personal liability for any deficiency. It is understood and agreed that in
no event shall Tenant or any

                                       20
<PAGE>

person claiming by or through Tenant have the right to levy execution against
any property of Landlord other than its interest in the Building as hereinbefore
expressly provided.

      (b)   NATURE AND EXTENT OF AGREEMENT.

      This Lease, together with all exhibits hereto, contains the complete
agreement of the parties concerning the subject matter, and there are no oral or
written understandings, representations, or agreements pertaining thereto which
have not been incorporated herein. This Lease creates only the relationship of
landlord and tenant between the parties, and nothing herein shall impose upon
either party any powers, obligations or restrictions not expressed herein. This
Lease shall be construed and governed by the laws of the state in which the
Premises are located. Whenever the singular or plural number, or the masculine,
feminine or neuter gender is used in this lease, it shall equally include the
other.

      (c)   BINDING EFFECT.

      This Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, successors and assigns. No amendment
or modification to this Lease shall be binding upon Landlord unless same is in
writing.

      (d)   CAPTIONS AND HEADINGS.

      The captions and headings in this Lease are for convenience and reference
only, and they shall be in no way be held to explain, modify, or construe the
meaning of the terms of this Lease.

      39.   SEVERABILITY.

      If any term or provision of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected, and each term and provision of this Lease
shall be valid and enforced to the fullest extent permitted by law
notwithstanding the invalidity of any other term or provision of this Lease.

      40.   INDUCEMENT.

      Notwithstanding anything to the contrary stated in this Lease, Tenant has
advised Landlord that Tenant has applied or will be applying for certain
economic incentives from the North Carolina's Governor's Industrial Recruitment
Competitive Fund, City of Monroe's Economic Development Incentive Grant and
Union County's Economic Development Incentive Grant (collectively, the "Economic
Incentives"). The Economic Incentives anticipated are material to Tenant's
decision to relocate a major portion of its operations to the Premises and enter
into this Lease with Landlord. If Tenant should not be awarded the maximum
Economic Incentives, Tenant may terminate this Lease by providing Landlord with
written notice of its intention to terminate; provided, however, that Tenant
must provide said notice of termination to Landlord by no later than March 15,
2001. If Tenant fails to provide said notice of termination

                                       21
<PAGE>

to Landlord on or before March 15, 2001, Tenant shall be deemed to have waived
its termination rights under this Section 40 and shall have no further right to
terminate this Lease pursuant to this Section 40.

      Tenant authorizes Landlord to proceed with the construction of the
Additional Improvements even though the Economic Incentives are not yet
obtained. If Tenant shall terminate this Lease as provided in this Section 40,
then Tenant shall reimburse Landlord within fifteen (15) days after demand for
the following: (1) all costs reasonably incurred in connection with the
construction of the Additional Improvements by Landlord through the date
Landlord receives Tenant's termination notice; and (2) all costs reasonably
incurred in preserving, securing, and completing such portion of the Additional
Improvements as are constructed as of the date Landlord receives Tenant's
termination notice, so that the Additional Improvements will be in a safe and
secure condition and will be in a reasonable condition for Landlord to
recommence construction at a later date, including, but not limited to, removal
of construction debris and equipment, capping of utilities, completion of any
partially completed unit, element or stage of construction of the Additional
Improvements, the cost of items ordered but not returnable, and any payments or
penalties payable by Landlord to its contractors or subcontractors as a result
of the termination of construction of the Additional Improvements.

      41.   COUNTERPARTS/FACSIMILE.

      This Lease may be executed in multiple counterparts and by facsimile
transmission of the signatures of each of the parties hereto, each of which
shall constitute an original.

                                       22
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
under seal pursuant to authority duly given as of the day and year first above
written.

                                   "LANDLORD"

                                   W. F. HARRIS DEVELOPMENT, LLC

                                   By: /s/ W.F. Harris (SEAL)
                                      -----------------------
                                       W. F. Harris, Manager

                                   "TENANT"

                                   H POWER CORPORATION

                                   By: /s/ H. Frank Gibbard
                                      -----------------------
                                   Name:  H. Frank Gibbard
                                   Title: CEO

                                   Attest:

                                   By: /s/ Merrill M. Kraines
                                      -----------------------
                                   Name:  Merrill M. Kraines
                                   Title: Secretary

                                          [CORPORATE SEAL]

<PAGE>

                                   EXHIBIT "A"

                             DESCRIPTION OF PREMISES

                            SEE EXHIBIT A-1 ATTACHED

<PAGE>

                                   EXHIBIT "B"

                                      RENT

BASE RENT-INITIAL TERM

      LEASE YEAR        BASIC RENTAL RATE PER SQUARE FOOT

        Year 1                $3.75

        Year 2                $3.85

        Year 3                $3.95

        Year 4                $4.11

        Year 5                $4.11

        Year 6                $4.11

        Year 7                $4.11, plus a percentage increase equal to the
cumulative percentage increase in the Consumer Price Index ("CPI") published for
Monroe, North Carolina from the beginning of Year 4 of the initial term of the
Lease to the end of Year 6 of the initial term of the Lease; provided, however,
in any event the percentage change shall not exceed 8% and shall not be less
than 4%.

        Years 8, 9 and 10     Same rate as Year 7

The Base Rent for the initial term of the lease shall be equal to the rental
rates described above plus the actual costs of the Additional Improvements,
amortized over 10 years at 11%. An example of such calculation is set forth
below for informational purposes only:

        Year 1 Base Rental Rate:           $3.75
        Additional Improvements Cost(1):   $1.56
                                           -----
        Base Rent (Year 1)                 $5.31 per square foot

----------
(1) This example Base Rent calculation is based on the following formula for the
cost of Additional Improvements: $1,060,000 (estimated cost of Additional
Improvements) - $303,000 (amount already budgeted by Landlord into the basic
rate per square foot) = $757,000 (the cost of Additional Improvements not
already budgeted into the basic rate per square foot). This amount is then
amortized at 11% over 10 years for a cost of $125,132 per year or $1.56 per
square foot. This represents the maximum amount that Landlord may be obligated
to amortize over the initial 10 year term of the Lease for the cost of the
Additional Improvements. The actual Base Rent will be determined based upon the
actual cost for the Additional Improvements, using the formula described above.

<PAGE>

                             EXHIBIT "B", CONTINUED

                                      RENT

BASE RENT-RENEWAL TERMS

      LEASE YEAR        BASE RENT RATE PER SQUARE FOOT

        Year 11                    Same rate as Year 10, plus a percentage
increase equal to the cumulative percentage increase in the Consumer Price Index
("CPI") published for Monroe, North Carolina from the beginning of Year 8 of the
initial term of the Lease to the end of Year 10 of the initial term of the
Lease; provided, however, in any event the percentage change shall not exceed 7%
and shall not be less than 4%.

        Years 12,13,14 and 15      Same rate as Year 11, no escalations.

        Year 16                    Same rate as Year 15, plus a percentage
increase equal to the cumulative percentage increase in the Consumer Price Index
("CPI") published for Monroe, North Carolina from the beginning of Year 13 of
the first renewal term of the Lease to the end of Year 15 of the first renewal
term of the Lease; provided, however, in any event the percentage change shall
not exceed 12% and shall not be less than 6.7%.

        Years 17,18,19 and 20      Same rate as Year 16, no escalations.

If the CPI is discontinued or replaced, or if the items incorporated in the CPI
are revised, an equitable adjustment will be made to result in developing a
formula to be used in order to permit a rental adjustment to reflect any decline
in the purchasing power of the basic rental payment called for in this Lease.

<PAGE>

                                   EXHIBIT "C"

                            PLANS AND SPECIFICATIONS

Attached hereto as EXHIBIT C-1 are preliminary specifications for the Additional
Improvements that Tenant has provided to Landlord. Tenant shall provide final
specifications to Landlord by no later than January 19, 2001 and, based thereon,
Landlord and Tenant shall mutually agree on the plans for the Additional
Improvements.

<PAGE>

                                   EXHIBIT "D"

                                 EXPANSION SPACE

                            SEE EXHIBIT D-1 ATTACHED<PAGE>

                                                                  EXHIBIT 10.58

Gestion Immobiliere Ges-Mar Inc.
2430 boul. Marcel-Laurin
St-Laurent, Qc
H4R 1J9

ATTENTION : MR. BERNARD COTE

SUBJECT : CHALLENGER INDUSTRIAL PARK
         BUILDING C1
         6050-6100 HENRI-BOURASSA WEST, ST-LAURENT

Dear Mr. Cote:

We understand that the property noted above is for rent by yourselves, Gestion
Immobiliere Ges-Mar Inc. acting on behalf of Bombardier Inc., Services
Immobiliers (the "LESSOR"). Les Entreprises H-Power du Canada Inc. (the
"LESSEE"), by this Offer to Lease (the "OFFER"), proposes to lease premises in
the above referenced property on the terms and conditions described below.

1.   LEASED PREMISES

1.1  The leased premises shall have a rentable area of approximately 27,691
     square feet, comprised of 10,741 sq.ft of ground floor warehouse, 5,000
     sq.ft. of ground floor laboratory 5,195 sq.ft. of ground floor office
     (underneath the mezzanine), and 6,755 sq.ft. of mezzanine offices (the
     "LEASED PREMISES");

1.2  The Leased Premises are outlined in red on the plan attached hereto as
     Schedule A, and they form part of a recently erected building known as
     building C1 of the Challenger Industrial Park bearing civic numbers
     6050-6100 Henri-Bourassa West, in the City of Saint-Laurent, Province of
     Quebec, H4R 3A6 (the "BUILDING").

1.3  The Leased Premises shall be measured before the Commencement Date by the
     Lessor at its cost in accordance with the standards of measurement attached
     hereto as Schedule A-1 and the Lessee will receive a certificate from an
     independent professional attesting to the exact rentable area of the Leased
     Premises and all rent dependent upon the rentable area of the Leased
     Premises will be adjusted accordingly. The Lessee may, at its own cost,
     have the rentable area of the Leased Premises measured by an independent
     architect agreed upon by the Lessor and the Lessee and any discrepancy
     shall be resolved by this architect, acting in a reasonable and
     professional manner.

2.   TERM

2.1  The term of the Lease (the "TERM") shall be for TEN (10) years, which shall
     commence, subject to the other provisions of this Offer, on June 1st 2001
     (the "COMMENCEMENT Date") and shall terminate on May 31st, 2011 (the
     "EXPIRY DATE").

<PAGE>

3.   OCCUPANCY DATE AND FIXTURING PERIOD

3.1  The Lessee shall have occupancy of the Leased Premises no later than April
     1st 2001 (the "OCCUPANCY DATE"), and shall enjoy a fixturing period (the
     "FIXTURING PERIOD") until the Commencement Date, during which the Lessee
     shall perform the Lessee's work on the Leased Premises;

3.2  During the Fixturing Period, the Lessee shall pay for its consumption of
     public utilities to the appropriate authority, and all terms of this Offer
     shall apply, subject to Section 5.2 hereinbelow.

4.   USE OF THE LEASED PREMISES

4.1  The Leased Premises shall be used as offices, laboratories, light
     manufacturing and warehousing space involving the design, assembly, and
     sale of fuel cell systems and any other purpose permitted by the applicable
     laws and regulations, and for no other purpose.

     The Lessor warrants that usage 4032-04, which is the usage registered for
     Lessee's premises at 1069 Begin Street in St-Laurent, is permitted in the
     Building.

5.   NET RENT

5.1  The Lessee covenants and agrees to pay to the Lessor in lawful money of
     Canada without deduction abatement or set off, save as otherwise provided
     for in this Offer, the Lease or at law, an annual net rent of (the "NET
     RENT"):

        5.1.1 For the first five (5) years of the Term (for the period between
        June 1st 2001 and May 31st, 2006), nine dollars and fifty cents ($9.50)
        per square foot of rentable area of the Leased Premises representing the
        annual sum of net rent of two hundred and sixty-three thousand and
        sixty-four dollars and fifty cents ($263,064.50) payable in equal and
        consecutive monthly installments on the first day of each month of the
        Term of twenty-one thousand nine hundred and twenty-two dollars and four
        cents ($21,922.04);

        5.1.2 For the last five (5) years of the Term (for the period between
        June 1st, 2006 and May 31st, 2011), eleven dollars ($11.00) per square
        foot of rentable area of the Leased Premises representing the annual sum
        of net rent of three hundred and four thousand and six hundred and one
        dollars ($304,601.00) payable in equal and consecutive monthly
        installments on the first day of each month of the term of twenty-five
        thousand and three hundred and eighty-three dollars and forty-two cents
        ($25,383.42).

5.2  The Lessee shall not be required to pay to the Lessor the net rent and its
     share of additional rental for the duration of the Fixturing Period, but
     shall remain liable for all other obligations under this Offer during said
     period.

6.   ADDITIONAL RENTAL

6.1  It is intended that the rent provided for in this Offer shall be a net
     return of the Lessor for the Term, free of any and all costs, expenses of
     any nature whatsoever, taxes and charges with respect to the Leased
     Premises, other than any income or profit taxes which may be levied against
     the Lessor and

<PAGE>

     any interest or amortization charges of Lessor in respect of mortgages or
     hypothecs, and other than those costs, expenses, taxes and charges that are
     otherwise excluded in this Offer or the Lease.

6.2  The Lessee shall pay as additional rental (the "ADDITIONAL RENTAL") to the
     Lessor, its Proportionate Share (proportion that the rentable area of the
     Leased Premises bears to the total rentable area of the Building) and/or
     its Fair Share (as hereinafter defined) of all expenses actually incurred
     by the Lessor, without duplication or profit, in connection with operation,
     administration, insurance, repair, replacement (excluding latent or
     structural defects) and maintenance of the Building (the "OPERATING
     Expenses") and all taxes, including municipal, school, real estate, water,
     special taxes, any value-added tax on rental income and all other taxes or
     charges that may be levied by any government or any applicable taxing
     authority (the "Taxes"), but expressly excluding any tax on capital or
     large corporation tax.

     For the purposes hereof, the defined term "FAIR SHARE" shall mean the
     proportion as determined by the Lessor, acting reasonably and in good faith
     and explained in detail in the annual financial statements confirming the
     Operating Expenses.

     For 2001, the Lessee's Proportionate Share and Fair Share of Taxes and
     Operating Expenses is estimated at three dollars ($3.00) per square foot of
     rentable area of the Leased Premises.

6.3  Notwithstanding anything to the contrary contained in this Offer, the Lease
     shall exclude as an expense any refinancing of the Building or real estate
     on which it is located, replacement or painting of the Buildings curtain
     wall, or any loss or damage to the Building due to any hazard or peril
     against which the Lessor is or ought to have been insured. Furthermore,
     there shall be excluded or deducted from Operating Expenses, as the case
     may be,:

     6.3.1  any costs relating to the original construction of the Building and
            the costs of remedying construction inadequacies;

     6.3.2  all amounts that otherwise would be included which are the
            responsibility of other tenants in the Building or which are
            recovered or are recoverable by the Lessor from other tenants in the
            Building or any other person whatsoever as a result of any act,
            omission, default or negligence of such tenants or other persons;

     6.3.3  the cost of advertising in respect of the Building;

     6.3.4  repairs to the footings, foundations, structural columns and beams,
            structural sub-floors, bearing walls, exterior walls and windows,
            roofs of the Building and other parts of the structure of the
            Building (provided such repair was not caused by or contributed to
            by the Lessee);

     6.3.5  leasing commissions incurred with respect to the leasing of space in
            the Building;

     6.3.6  any amounts paid by the Lessor as interest, fines or penalties as a
            result of a breach of law by the Lessor with respect to the Building
            (provided such breach was not caused by or contributed to by the
            Lessee);

     6.3.7  tenant inducement payments and rent-free periods;

<PAGE>

     6.3.8  the cost of any renovations, improvements or betterments to the
            Building and all related costs which are capital in nature or
            attributed to the capital account of the Lessor in accordance with
            generally accepted accounting principles and any depreciation on the
            Building or on any structures located on the lands upon which the
            Building is situated, or on any equipment or fixtures, which by
            their nature do not require periodic repair and/or replacement.
            Nonetheless, the amortization of such costs which are incurred in
            order to maintain the quality of the Building and reduce the
            Operating Expenses (and which are not of an aesthetic or decorative
            nature) and which are capital in nature, over the useful life of
            such item plus the interest at the prime rate of Lessor's bank plus
            two percent (2%) on the unamortized portion of such cost, are part
            of the Operating Expenses;

     6.3.9  costs incurred in leasing premises in the Building to other tenants
            and the Lessee and the cost incurred in enforcing the leases of
            other tenants and the Lessee;

     6.3.10 the initial capital cost to the Lessor of all systems, services,
            equipment, fixtures or facilities or any part thereof servicing the
            Building;

     6.3.11 salaries of Lessor's employees above the level of Building
            management;

     6.3.12 costs relating to compliance with environmental laws (unless same
            are caused by the fault of the Lessee)

7.   PUBLIC UTILITIES AND LESSEE'S TAXES

7.1  The Lessee shall pay for its electricity, water, heat, gas, telephone, and
     all public utilities and other services with respect to the Leased
     Premises, directly to the suppliers from the Occupancy Date of the Leased
     Premises and/or at the Commencement Date of the Term, whichever is earlier.
     The Lessor confirms that all such utilities and services (other than
     telephone, for which the Lessee is responsible) shall be separately metered
     as regards the Leased Premises, the cost of installing such meters to be
     the sole responsibility of the Lessor.

8.   MAINTENANCE AND CLEANING OF LEASED PREMISES

8.1  The Lessee shall maintain and keep the Leased Premises and all improvements
     therein in good class condition as a careful tenant would do and effect all
     repairs and replacements, both major and minor (but expressly excluding any
     repairs to the structure of the Building or the Building systems, which
     shall be the responsibility of the Lessor and the expense thereof shall be
     dealt with in accordance with the provisions of this Offer and the Lease)
     to the Leased Premises and to the Lessee's facilities contained therein.
     The Lessee will use the Leased Premises with prudence and diligence and
     will keep the Leased Premises and all of the Lessee's improvements thereon
     in first class condition, reasonable wear and tear and damage by fire or
     other casualty excepted.

9.   LEASEHOLD IMPROVEMENTS

9.1  The Leased Premises will be taken by the Lessee "as is", which means that
     all costs incurred to build or make modifications to the Leased Premises
     will be taken out of the Allowance described below save and except for the
     construction of the demising wallsthe structure of the internal staircase,
     the build over of stairwells not required, the walls of the vestibule, and
     the access control,

<PAGE>

     video surveillance, fire alarm and centralized control for the HVAC systems
     described in Schedule B which shall be the Lessor's responsibility at
     Lessor's cost. The Lessor will provide four hundred fifty thousand dollars
     ($450,000.00) (the "ALLOWANCE") to the Lessee for the construction of
     Lessee's leasehold improvements in accordance with the building standards
     described in Schedule B annexed hereto or to a standard agreed upon by both
     Lessor and Lessee (the "LEASEHOLD IMPROVEMENTS"). The Lessor warrants that,
     as part of the Leasehold Improvements, the Lessee will be able to install
     an electrical entrance of 400 amperes at 600 volts, 3-phase. The Allowance
     will also be used to cover all the costs to be incurred for the relocation
     of the entrance door currently located between axis 5 and 6 to between axis
     6 and 7, which costs are estimated at eight thousand five hundred dollars
     ($8,500.00). All costs incurred for Leasehold Improvements above the
     Allowance shall be paid by the Lessee to the Lessor immediately upon
     presentation of the bills. If the Lessee does not pay or give notice of
     objection within ten (10) days of their receipt the bills demonstrating the
     additional amount to be paid by the Lessee to the Lessor above the
     Allowance, the Lessor shall have the right to institute the appropriate
     legal proceedings to cancel the Offer or the Lease. In the case of the
     Lessee giving notice of objection, once satisfactory explanations have been
     provided by the Lessor, the Lessee must pay them within ten (10) days of
     their receipt the bills demonstrating the additional amount to be paid by
     the Lessee to the Lessor above the Allowance, the Lessor shall have the
     right to institute the appropriate legal proceedings to cancel the Offer or
     the Lease.

9.2  The Lessee shall supply plans and specifications signed by the appropriate
     professionals (architects and engineers) of its requirements, at its
     expense, within twenty-one (21) days following the acceptance of this
     Offer. Based on the plans the Lessor's general contractor, shall supply
     three (3) independent estimates for each sub-trade involved in the
     construction of the Leasehold Improvements, one of them being the estimate
     of a supplier designated by the Lessee. The Leasehold Improvements shall be
     effected by the Lessor, such work to be performed in consultation with the
     Lessee's designated overseer(s) (engineer and/or architect), prior to the
     Commencement Date. The cost of the Leasehold Improvements to go against the
     Allowance will be determined by calculating the total sum using the lowest
     quote for each sub-trade plus the general conditions, administration and
     profit of Lessor's general contractor, the whole not to exceed twelve
     percent (12%) of the applicable quote.

     At the expiry date of the Term, the Lessor shall have the option, acting in
     a reasonable and business-like manner, to ask the Lessee to either remove
     all or any portion of Lessee's Work, as defined below, (repairing any
     damage caused thereby) and return the Leased Premises in their original
     state, including the Leasehold Improvements, wear and tear excepted.

9.3  The Lessee undertakes to examine the Leased Premises at the time of
     delivery on the Occupancy Date and shall notify the Lessor in writing
     within thirty (30) days of said date of any apparent defect in the Leased
     Premises, and, in respect of any items that cannot be verified at the
     Occupancy Date as a result of the time of year the Leased Premises are
     delivered to the Lessee (e.g. air conditioning), within one hundred eighty
     (180) days from the Occupancy Date. The Lessor confirms that at the
     Occupancy Date, the Leased Premises shall comply with all applicable laws
     and regulations, and should same not be the case, then notwithstanding the
     occupancy of the Leased Premises by the Lessee, the Lessor shall remain
     responsible to effect all repairs required in order to ensure such
     conformity, the whole at its sole cost.

9.4  Notwithstanding the incompletion of the Lessor's work, the Leased Premises
     shall be deemed ready for delivery and the Occupancy Date shall become in
     effect so long as: (i) such incomplete work

<PAGE>

     does not, in the Lessee's opinion, significantly interfere with the use of
     the Leased Premises or the work that the Lessee must perform therein and
     (ii) the Lessor confirms to the Lessee that Lessor's work shall be
     completed within sixty (60) days thereafter.

<PAGE>

9.5  In the event that the Leasehold Improvements are not completed prior to the
     Occupancy Date for cause attributable solely to the Lessee, the Term shall
     in no case be affected. If the delay is attributable to the Lessor or force
     majeure, the Lessee shall not make any claim for damages, save for any of
     its property that may have been damaged as a result of the Lessor's fault.
     However, the Commencement Date of the Lease shall be deferred by the number
     of days equal to the number of days of delay.

9.6  The Lessee reserves the right, at a future date, based on its electrical
     requirements, to increase the Leased Premises' electrical capacity by
     bringing in additional amperage from the local hydro electric grid to the
     Leased Premises. This would be done in accordance with all local bylaws and
     regulations and conditions defined in Clause 10.

10.  LESSEE'S WORK

10.1 Following the completion of the Leasehold Improvements, Lessee shall not
     have the right to execute any changes, alterations, additions, erections,
     leasehold improvements, repairs and installations to the Leased Premises
     (the "Lessee's Work"), unless it has obtained Lessor's prior written
     consent, which consent shall not be unreasonably withheld or unduly
     delayed. In the event Lessor consents to such Lessee's Work, then Lessee
     undertakes to conform to the conditions stipulated hereunder.

     (i)    Lessee's Work shall be carried out with reasonable dispatch and in a
            good workmanlike manner and in compliance with all applicable
            permits, authorizations, building and zoning bylaws and with all
            regulations and requirements of all competent authorities having
            jurisdiction over the Leased Premises;

     (ii)   The Building shall at all times be free of all pledges, registered
            legal hypothecs and any other encumbrances relating to the Lessee's
            Work;

     (iii)  Lessee shall maintain Lessee's workmen's compensation insurance
            covering all persons employed in connection with the Lessee's Work
            and shall produce evidence of such insurance to Lessor and Lessee
            shall also maintain such general liability insurance for the
            protection of Lessor and Lessee upon the terms Lessor may reasonably
            require, as well as contractor's protective liability insurance.
            Lessee shall further comply with all of the rules of the CSST
            (Commission de la Sante et de la Securite au Travail du Quebec);

     (iv)   Lessor shall be entitled to bid on the performance of the Lessee's
            Work, and the Lessee shall give serious consideration to such bid,
            so long as the cost is competitive;

     (v)    Lessee shall promptly pay for all materials supplied and work done
            by or on its behalf in respect of the Leased Premises in order to
            ensure that no legal hypothec is registered against any portion of
            the Building. If a legal hypothec is registered or filed, the Lessee
            shall, within ten (10) days of receipt of written notice of its
            existence, discharge it at its expense, failing which the Lessor
            may, at its option, discharge the same by paying the amount claimed
            to be due into court and the amount so paid and all expenses of the
            Lessor including any judicial and extrajudicial costs and attorney's
            fees

<PAGE>

            incurred by the Lessor shall be paid by the Lessee to the Lessor
            within five (5) days after demand.

     It is agreed and understood that no Lessee's Work by or on behalf of Lessee
     shall be permitted which, in Lessor's sole reasonable judgement, may weaken
     or endanger the structure or adversely affect the condition or operation of
     the Leased Premises and/or the Building or diminish the value thereof or
     restrict or reduce Lessor's coverage for insurance purposes.

10.2 Lessor shall be entitled to inspect the Lessee's Work; the Lessee shall
     pay, in respect of any such inspection the fees of all architectural and
     engineering consultants and/or the cost of all construction drawings
     prepared to comply with the Lessee's requirements and/or for the cost of
     entering the information of such drawings on the original drawings of the
     Building plus an administration fee representing ten percent (10%) of such
     cost for Lessor's supervision, overhead and administration. Each time the
     Lessee does some Lessee's Work in the Leased Premises, even if Lessee's
     Work is less than twenty-five thousand dollars ($25,000.00) the Lessee
     shall pay for the cost of entering the information of such drawings on the
     original drawings of the Building, as the case maybe, plus an
     administration fee representing ten percent (10%) of such cost.

10.3 Any Lessee's Work made by the Lessee without the prior written consent of
     the Lessor, or which is not made in accordance with the design criteria and
     specifications approved by the Lessor, shall be removed by the Lessee
     immediately upon demand and the Leased Premises shall be restored to their
     previous condition by the Lessee, the whole at Lessee's cost, failing which
     the Lessor shall have the right to remove said Lessee's Work at Lessee's
     entire cost and Lessor shall not be responsible for damages to Lessee's
     property resulting from such removal.

10.4 Notwithstanding anything contained in this Article, in the event that the
     Lessee's Work affects the structure of the Building or its mechanical or
     electrical systems, same shall, should the Lessor so decide, be performed
     by the Lessor, provided always that the costs thereof shall be competitive.

     In the event that Lessor does not choose to execute said Lessee's Work and
     consents to having Lessee execute same, then Lessee shall furnish to Lessor
     plans and specifications showing in reasonably complete detail the Lessee's
     Work proposed to be carried out and the estimated cost thereof. Lessor
     shall approve or reject such plans and specifications within fifteen (15)
     days after receipt of the same. If such plans and specifications are
     approved, all Lessee's Work shall be carried out in compliance with same.
     Furthermore, in the case where Lessee is authorized to carry out said
     Lessee's Work, Lessee shall, at its cost, provide Lessor with an engineer's
     certificate upon completion of said Lessee's Work. Any costs reasonably
     incurred by Lessor in order to permit Lessor to approve or reject Lessee's
     plans and specifications plus an administration fee representing ten
     percent (10%) of such cost shall be reimbursed by Lessee immediately upon
     Lessor's request. In addition to the above, Lessee shall comply with all
     the conditions stipulated in 10.1 and 10.3 above.

<PAGE>

10.5 Notwithstanding anything contained in this Article, the Lessor confirms
     that should the Lessee's Work relate to decoration, painting or matters of
     a cosmetic or temporary nature not affecting the structure of the Building
     or its mechanical or electrical systems, the Lessee shall be entitled to
     perform same without the necessity of obtaining the prior written approval
     of the Lessor.

10.6 It is agreed and understood that when completed, all Lessee's Work shall be
     comprised in and form part of Leased Premises and be subject to all the
     provisions of the Lease. Furthermore, any authorization given by Lessor to
     Lessee to do any Lessee's Work in accordance with this Article, shall not
     relieve Lessee of its responsibility for the Lessee's Work in question.

11.  SIGN

11.1 All signs on the exterior walls of the Building shall be subject to the
     Lessor's approval, which shall not be unreasonably withheld or unduly
     delayed, which approval shall be obtained in writing. Upon approval, the
     costs of installation and dismantling will be at the sole expense of the
     Lessee. All such signs shall comply with the lawful requirements of
     municipal and governmental authorities and with Lessor's rules and
     regulations applicable to all lessees.

12.  SECURITY DEPOSIT

12.1 Upon waiver and/or acceptance, as the case may be, of the items outlined in
     Clause 14, the Lessee shall deliver to the Lessor a first cheque in the
     amount of two hundred and sixty-five thousand and four hundred and
     twenty-nine dollars and seventy-seven ($265,429.77), GST and QST included,
     as deposit, which shall be applied towards the payment of the net rent and
     the Lessee's Proportionate Share and Fair Share of the Taxes and Operating
     Expenses for the first two (2) months of the first four (4) lease years
     i.e. May and June 2001, May and June 2002, May and June 2003 and May and
     June 2004, with the balance, if any, to be applied towards the period
     commencing on July 1st, 2004 and terminating on July 30, 2004, or as it is
     to be otherwise dealt with in accordance with the terms of this Offer.

13.  OPTION TO RENEW

13.1 On the condition that the Lessee is not then in default of the Lease, and
     provided the Lessor receives written notice from the Lessee of its
     intention to renew no later than six (6) months prior to the expiration of
     this Lease, the Lessee shall have the right to renew the Lease for one (1)
     further period of five (5) years under the same terms and conditions,
     excluding the net rent, the allowance, the leasehold improvements, the
     security deposit, the option to renew and the right of first offer. The net
     rent will be the then current net rent for similar space in similar
     buildings in St-Laurent at the time of exercise of the option to renew. For
     the renewal, there will be no allowance, no leasehold improvements, no
     security deposit, no further option to renew.

[13.2 In the event that the Lessor and the Lessee shall be unable to agree upon
      the net rent to be paid during the renewal period referred to in 13.1
      hereof within thirty (30) days from the Lessor's receipt of the Lessee's
      written notice referred to in 13.1 hereof, same shall be determined by
      binding arbitration in accordance with the provisions of the Code of Civil
      Procedure of Quebec.]

<PAGE>

14.  CONDITIONAL PERIOD

14.1 The Lessor shall have one (1) week from the date of acceptance of this
     Offer by both parties to verify and be entirely satisfied with the Lessee's
     credit / financial covenant. Should the Lessor not be satisfied with the
     Lessee's covenant, it shall have the right to: (A) ask for such guarantees
     from the Lessee as it may require, the furnishing of which shall be at the
     discretion of the Lessee (the Lessor having the right, after its receipt of
     the Lessee's response in respect of such request for guarantees, to either
     accept same or terminate its obligations under the present Offer which
     shall then become null and void and no further effect: or (B) terminate its
     obligations under the present Offer which shall then become null and void
     and no further effect.

15.  LEASE DOCUMENT

15.1 The Lessee and Lessor shall use their reasonable best efforts to execute,
     within forty-five (45) days following the waiver and/or acceptance, as the
     case may be, of the items outlined in Section 14 hereabove, a lease (the
     "LEASE") reflecting the terms and conditions of this Offer and other
     provisions as may be mutually agreed upon between the parties. The Lessor's
     standard form of lease for the Building, amended to reflect the terms and
     conditions of this Offer, shall be used as a starting point for such
     negotiations. The Lease shall contain, INTER ALIA, waivers of subrogation,
     cross-liability and severability of interests clauses from each party to
     the other, and the undertaking of Lessor to obtain a non-disturbance
     agreement from any third party having a hypothec, underlying lease or any
     security interest in the Building. Until such time as the Lease is signed,
     this Offer shall constitute a valid and binding agreement of lease between
     the Lessor and the Lessee. In no event shall the non-execution of the Lease
     entitle either party to refuse to respect its obligations and covenants as
     set out in this Offer.

16.  INSURANCE

16.1 The Lessee shall, at its own expense, during the Term, take out and keep in
     force comprehensive public liability and property damage insurance of the
     mutual benefit of the Lessee and the Lessee against all claims for personal
     injury, death, or property damage in, upon or about the Leased Premises
     and/or Building. The terms and conditions of such insurance shall be
     negotiated under provisions of Section 15.

17   RIGHT OF FIRST OFFER

17.1 The Lessee shall, throughout the Term, have a right of first offer on
     adjacent spaces in the Building (the "ADJACENT SPACE"). Should the Adjacent
     Space become vacant, the Lessor shall advise immediately the Lessee in
     writing and the Lessee shall have a period of four (4) weeks to notify the
     Lessor of its intention to lease the Adjacent Space, failing which this
     Right of First Offer shall become null and void. The leasing of the
     Adjacent Space shall be done at the then current net rent for similar term
     for similar space in similar buildings in St-Laurent at the time of
     exercise of the Right of First Offer. The term of the lease for the
     Adjacent Space shall co-terminate with the Term. If the Lessor and the
     Lessee do not agree on the terms and conditions for the leasing of the
     Adjacent Space within thirty (30) days of receipt of Lessee's notice, then
     the Right of First Offer shall become null and void and the Lessor shall
     have the right to lease the Adjacent Space to any other tenant.

<PAGE>

18.  TAXES

18.1 Lessee shall pay upon demand, any goods and services, sales, business
     transfer, multi-stage sales, use, consumption, value-added or other similar
     taxes imposed by the government of Canada, or by any provincial or local
     government, upon Lessor or Lessee on or in respect of the Lease, the
     payments made by Lessee hereunder or the goods and services provided by
     Lessor, including but not limited to the rental of the Leased Premises.

19.  BROKERAGE COMMISSION

19.1 The Lessee represents that the only real estate broker it has engaged in
     this present transaction is La Capitale Alliance-Commercial Inc. The Lessor
     will pay the commission resulting from this transaction to La Capitale
     Alliance-Commercial Inc., as per their agreement. Any other brokerage
     commission with respect to this transaction shall be borne exclusively by
     the party who has engaged such broker, and said party will indemnify and
     hold the other party harmless from any and all claims and costs with
     respect thereto.

20.  OUTSIDE AREAS

20.1 The Lessee shall not use any part of the exterior parking and loading areas
     or any other areas outside the Leased Premises for any purpose other than
     parking, shipping or receiving in the areas designated by the Lessor for
     same. Notwithstanding the foregoing, the Lessee shall have the right to
     forty-nine (49) parking stalls and install, at its own expense and in
     accordance with all relevant municipal codes and by-laws, exterior propane
     / hydrogen tanks at the rear of the Leased Premises for its exclusive use.
     The Lessee also reserves the right, with Lessor's approval, to add
     additional parking spaces along the rear perimeter of the building occupied
     by the Lessee where there would be no counter indication to the movement of
     traffic, persons, or other logistical issues.

21.  LANGUAGE

21.1 The parties hereto have required that this agreement and all notices,
     deeds, documents and other instruments to be given or executed pursuant
     hereto be drawn up in the English language; les parties aux presentes ont
     exige que la presente entent ainsi que tous les avis et autres documents a
     etre donne ou execute en vertu des presentes soient rediges en langue
     anglais.

<PAGE>

THIS OFFER IF NOT EXECUTED BY BOTH PARTIES BY _______________________ ON JANUARY
___, 2001 SHALL BE NULL AND VOID.

Signed in  St-Laurent on this 8th day    Signed  in  St-Laurent  on this 8th day
of January 2001.                         of January 2001.

LES ENTREPRISES H-POWER OF CANADA INC.   GESTION IMMOBILIERE GES-MAR INC.

/s/ Jean-Guy Chouinard                   /s/ Bernard Cote
------------------------------------     ---------------------------------------
Jean-Guy Chouinard, General Manager      Bernard Cote, duly authorized as he
                                         declares

<PAGE>

                                   SCHEDULE A
                                 LEASED PREMISES

[GRAPHIC]

<PAGE>

                                  SCHEDULE A-1

                       MEASUREMENT OF THE LEASED PREMISES

The Leased Premises are measured (i) from the furthest exterior face of the
exterior walls, and the centre line of all interior walls separating the Leased
Premises from adjoining leasable premises as designated by Landlord, and/or
Common Areas, hereinafter defined, with no deduction for space occupied by
projections, structures, or columns, structural or nonstructural where
applicable (hereinafter, the "Usable Area"); and (ii) by adding to the square
footage obtain in (i) above, a number of square feet corresponding to a
proportion of the Common Areas attributed to Tenant, which proportion is
calculated as follows:

The proportion comprised by the total Common Area expressed as a percentage of
the total Usable Area of the Building (total rentable area of the Building minus
total Common Area) multiplied by the Usable Area of the Leased Premises as
calculated in (i) above.

For the purpose of these presents "Common Area" means:

            (a) those areas, facilities, utilities, and installations in the
Property and the Industrial Park which, from time to time, are not designated or
intended by the Landlord to be leased to tenants of the Property and the
Industrial Park, and

            (b) those areas, facilities, and installations which serve or are
for the benefit of the Property and the Industrial Park, whether or not located
within, adjacent to, or near the Property and the Industrial Park and which are
designated from time to. time by the Landlord as part of the Common Areas of the
Property and the Industrial Park. Common Areas include, without limitation, all
areas, facilities, utilities, and installations which are provided or designated
(and which may be changed from time to time) by the Landlord for the use or
benefit of the tenants, their employees, customers and other persons permitted
by the Landlord in common with others entitled to the use or benefit hereof in
the manner for the purposes permitted by the lease.

<PAGE>

                                   SCHEDULE B
                 CHARACTERISTICS OF BASE BUILDING AND FINISHINGS

FLOOR COVERINGS

CARPET                  Commercial carpeting, 28 ounce, including carpet
                        baseboard, one single colour. Choice of colours as per
                        Lessor's SAMPLES.
Or

VINYL TILES             1/8 calibre, 12 inch by 12 inch, Lessor's samples.
                        Choice of colours as per Lessor's samples

DRYWALLS                1/2 inch gyprock walls on metal frames with paper
                        joints, sanded to the ceiling system, ready for painting

DEMISING                WALLS 5/8 inch gyprock sheet, each side on metal frames,
                        including 2 feet of insulation, sanded with paper joints
                        from the floor to the concrete support, ready for
                        painting

CEILING:                Acoustic tiles, 2 feet by 4 feet, suspended, reverse T,
                        building standard

DOORS & FRAMES:         Birch doors, tinted and varnished, full core, 36 inch x
                        80 inch x 1.75 inch, with birch frame tinted and
                        varnished. Hallway doors.

MAIN ENTRANCE:          Main entrance door in aluminum, to Building standards.

                        The Lessor will install a card access security system at
                        the main entrance to the Leased Premises with 12
                        contacts or movement detectors installed in locations
                        chosen by the Lessee.

PAINT & DECORATION:     Choice of colours (maximum 2 colours and complete walls)
                        chosen from Lessor's samples.

SPRINKLERS:             Throughout the Leased Premises, with smoke detectors as
                        required by law connected to a fire alarm panel linked
                        to a 24 hour central surveillance system.

<PAGE>

TOILETS:                Men's washrooms and women's washrooms with ceramic
                        floors and ceramic walls to a height of 4 feet. Colours
                        (complete walls only) of Lessee's choice as per Lessor's
                        samples. Counter with armoire beneath, mirror, sink,
                        cold and hot water, and air evacuation.

BLINDS:                 Blinds with nickel chains made of Texscreen with 5%
                        opening

HEATING, VENTILATION, & AIR CONDITIONING (HVAC)
                        HVAC system with adjustable control box for each 600
                        square feet, with thermostat in each zone. Electric
                        baseboard heating on outside perimeter with thermostat
                        for each 25 linear feet of exterior perimeter. The HVAC
                        is centralized and can be programmed "occupied" or
                        "unoccupied" as per the schedule and temperatures
                        determined by the Lessee

                        The capacity of the HVAC system for the office portion
                        is based on the following elements : lighting 2.0 watts
                        per square foot (as per the Energy code of Quebec),
                        electric power for equipment, plugs, etc 1.0 watt per
                        square foot and one (1) person per 100 square feet.

                        For the warehouse portion, natural gas aerothermes will
                        be installed. These aerothermes will also be centrally
                        controlled and can be programmed "occupied" or
                        "unoccupied" as per the schedule and temperatures
                        determined by the Lessee.
ELECTRICITY: LIGHTING:
                        For the office portion, built in fluorescent tube
                        fixtures, 21 x 41, and parabolic lenses up to a maximum
                        of 60 candle feet at desk level. For the warehouse
                        portion, Metal Halide fixtures up to a maximum of 30
                        candle feet at 3 feet from the floor.

                        Electrical outlets

                        Office standard - 2 double outlets 110 volts, 15 amperes
                        on one circuit. Open areas - 2 double outlets 110 volts,
                        15 amperes on 1 circuit per 100 square feet of leased
                        open area.
                        Stationery - 2 double outlets 110 volts, 20 amperes on 2
                        cuircuits
                        Kitchenette - 4 double outlets, 110 volts, 15 amperes on
                        2 circuits, and 2 double outlets 110 volts, 20 amperes
                        on 2 circuits

<PAGE>

                                EXPLANATORY NOTES

ACCESS CONTROL SYSTEM   The system controlling access to the main entrances of
                        the Industrial park includes, but is not limited to,
                        card readers, electronic locks, other complementary door
                        hardware installed, controllers, movement detectors,
                        door contacts, computers and control software, all
                        conduits and necessary wiring for it's proper
                        functioning. All additional equipment added by the
                        Lessee above and beyond that furnished by the Lessor, (
                        card readers, electronic locks, movement detectors, door
                        contacts, etc) are not included in the definition of
                        Access Control system.

VIDEO SURVEILLANCE SYSTEM
                        The exterior video camera system surveys the front and
                        back of all of the buildings in the Industrial park and
                        is linked to a recording device. The system includes,
                        but is not limited to, the video cameras, the
                        multiplexers, the poles, the computer hardware and
                        software required for control, and all cabling and
                        wiring. ANY ADDITIONAL EQUIPMENT REQUIRED BY THE LESSEE
                        (ADDITIONAL CAMERAS OR MULTIPLEXERS) ARE NOT INCLUDED IN
                        THE ABOVE DEFINITION.

FIRE ALARM SYSTEM       The ionic, smoke, or other detectors controlling the
                        premises of the industrial park along with the sprinkler
                        system.

HVAC SYSTEM             The HVAC system includes:

                        a)    All HVAC equipment and installation
                        b)    All conduits, boxes, mixers, diffusers and
                              controls located in the leased premises and
                              elsewhere in the industrial park;
                        c)    The spaces in which are located all the common
                              installations for HVAC and all the equipment
                              improvements and services therein.
                        d)    All HVAC units located on the roof, in a window,
                              or on a wall
                        e)    The power units of fuel systems required for such
                              equipment
                        f)    All conduits, air treatment units, and common
                              ventilation, cooling equipment
                        g)    All control, supervision, and energy savings
                              systems including the computer software, hardware,
                              thermostats and other equipment required for the
                              system to function.
                        The HVAC system does not include the following:
                        a)    Autonomous individual HVAC units installed by the
                              Lessee in the Leased Premises ;
                        b)    Air distribution systems installed by the lessee
                              in the Leased Premises
                        c)    Conduits, air treatment units, and auxiliary units
                              installed by or for a Lessee or by or for a group
                              of Lessees to respond to its or their specific
                              requirments, or that have to be installed to
                              recycle their own air.

<PAGE>

SHIPPING/RECEIVING
DOORS                   All shipping receiving doors in the warehouse shall be
                        equipped with exterior cushions and dock levellers.

EXTERIOR LANDSCAPING    Parking has to be paved, landcaping and grass

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