10. Capital Lease

On October 1, 2012, the Company entered into an agreement under which it is providing a customer with 255 GenDrive units, service and maintenance of the units and daily delivery of hydrogen in exchange for a monthly utility payment tied to the amount of energy (kilograms of hydrogen) consumed each month. The agreement has an initial term of three years with an automatic three year renewal unless the customer terminates at the end of the initial 3 year term.

On December 28, 2012, Plug Power sold the 255 GenDrive units in use under the agreement to a third party and leased back the equipment to fulfill its obligations under the agreement or at other customer sites as agreed to by the owner/lessor. The transaction has been recorded by the Company as leased property under capital lease with a corresponding liability of obligations under capital lease on the consolidated balance sheets.

Leased property under capital lease at September 30, 2014 and December 31, 2013 consist of the following:

	September 30,			December 31,
	2014			2013
Leased property under capital lease	$	3,098,921		$	3,098,921
Less accumulated depreciation	(1,032,974		)	(645,609		)
Leased property under capital lease, net	$	2,065,947		$	2,453,312