RESEARCH AND DEVELOPMENT AGREEMENT

This Research And Development Agreement ("Agreement") is entered into effective
as of January 1, 2003, by and between Clean Energy USA, Inc., a Delaware
corporation ("Clean Energy"); and McSheahan Enterprises Ltd., a British Columbia
corporation ("McSheahan"), with reference to the following facts:

RECITALS:

WHEREAS,

Clean Energy and/or its parent corporation, Clean Energy Combustion Systems,
Inc., a Delaware corporation ("CECSI") is the owner or licensee of a suite of
proprietary mid- and high-frequency oscillating valveless combustion
technologies including, without limitation, its pulse blade combustion and
vortex technologies (collectively referred to in this agreement as the
"High-Frequency Combustion Technologies"), which Clean Energy believes to be
more energy-efficient, and to emit significantly lower levels of pollutants,
than conventional steady-state combustion;

WHEREAS,

Clean Energy desires McSheahan to perform on an exclusive basis, and McSheahan
desires to provide on an exclusive basis, continued research on the
High-Frequency Combustion Technologies and product development services with
respect to selected commercial applications of the High-Frequency Combustion
Technologies, on a cost-plus basis;

WHEREAS,

in performing research and development services for Clean Energy, McSheahan will
become privy to certain confidential and proprietary information concerning the
High-Frequency Combustion Technologies, as well as other matters pertaining to
the business of Clean Energy; and

WHEREAS,

McSheahan desires to set forth in this Agreement certain covenants for the
benefit of the Clean Energy and its affiliates including, without limitation,
covenants by McSheahan and its affiliates that they will not divulge
Confidential Information (as that term is defined below) of Clean Energy and its
affiliates and/or retain or transfer Proprietary Work Product (as that term is
defined below) of the Clean Energy and its affiliates.

NOW, THEREFORE,

in consideration of the mutual covenants and promises contained herein, and for
valuable consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, the parties to this Agreement (collectively "parties" and
individually a "party") agree as follows:

AGREEMENT:

DEFINITIONS

Unless defined in other sections of this Agreement, capitalized terms shall have
the definitions set forth below in this section 1:

"Affiliate"

means any person controlling, controlled by, or under common control with a
party.

"Authorized Person"

means: (1) the principal investigators of McSheahan in connection with its
evaluation of the commercial application of the High-Frequency Combustion
Technologies, including the conduct of tests or studies; (2) the principal
negotiators of McSheahan in connection with negotiations leading to any business
transaction relating to the use of the High-Frequency Combustion Technologies by
McSheahan, including any investment in Clean Energy, and (3) the attorneys,
advisors, accountants and other professional agents of McSheahan utilized in
connection with the foregoing.

"Confidential Information"

means any information, matter or thing of a secret, confidential or private
nature, whether or not so denominated, and whether disclosed orally or in
written or electronic medium or by access leading to observation or otherwise,
which: (1) relates to the High-Frequency Combustion Technologies in general or
the Proprietary Work Product or High-Frequency Combustion Research And Product
Engineering Projects in particular, including information connected with the
business or methods of operation of Clean Energy or its affiliates, including
CECSI. "Confidential Information" shall be broadly defined and includes, by way
of example and not limitation, technical, scientific, financial, business,
personal and other information, including: (i) general business information
relating to management, finances and accounting, products, research,
development, manufacturing, marketing, sales, distribution, and business plans
and strategies; and (ii) scientific and technical information including computer
programs and systems, methods, techniques, formats, operations, know-how,
experience, skill, trade secrets, formulations, processes, methods, practices,
ideas, devices, discoveries, inventions, scientific and test data and results,
compilations of information or data, copyrights, publications, reports, plans,
designs, patterns, schematics, specifications and drawings. For purposes of the
preceding sentence, the term "trade secrets" shall mean the broadest and most
inclusive interpretation of "trade secrets" as defined by applicable law.

"Controlled Persons"

means: (1) the officers, directors, employees, shareholders, partners, joint
ventures, affiliates, subsidiaries, divisions, successors, assigns, heirs,
consultants, attorneys, accountants, lenders, insurers and other agents and
representatives of McSheahan; and (2) any other person to whom McSheahan
discloses any Confidential Information.

"High-Frequency Combustion Research And Product Engineering Projects"

is defined in section 2.

"Proprietary Work Product"

means any written or tangible property relating to the High-Frequency Combustion
Research And Product Engineering Projects used, developed or acquired by
McSheahan under this Agreement, whether or not such property also qualifies as
Confidential Information. Proprietary Work Product shall be broadly defined and
shall include, by way of example and not limitation, all test-bench, prototype
and production burner units and parts and components thereof relating to the
High-Frequency Combustion Research And Product Engineering Projects worked on or
developed by McSheahan Enterprises under this Agreement, all engineering and
other designs, drawings, schematics, and patterns relating to High-Frequency
Combustion Research And Product Engineering Projects, all information, data and
results of experiments, investigations, tests and trials relating to
High-Frequency Combustion Research And Product Engineering Projects, and all
compilations, reports, records, memoranda, notes, notebooks, files, lists,
literature, correspondence, spread sheets, computer programs and software,
computer print outs, other written and graphic records, and the like, whether
originals, copies, duplicates or summaries thereof, affecting or relating to the
High-Frequency Combustion Research And Product Engineering Projects.

EXCLUSIVE PROVISION OF RESEARCH AND DEVELOPMENT SERVICES

During the term of this Agreement Clean Energy shall tender to McSheahan on an
exclusive basis, and McSheahan shall perform for Clean Energy on an exclusive
basis, all research projects relating to the High-Frequency Combustion
Technologies, and all product development services with respect to selected
commercial applications of the High-Frequency Combustion Technologies
(collectively, the "High-Frequency Combustion Research And Product Engineering
Projects") as may be required by Clean Energy or its affiliates, including
CECSI. All research and development services performed by McSheahan under this
Agreement shall be rendered on a cost-plus basis as more particularly described
below in section 4. Unless otherwise consented to by Clean Energy, McSheahan
shall prepare project budgets and project timetables for each research project,
and Clean Energy shall approve the foregoing. Notwithstanding the foregoing,
research and development activities conducted by Clean Energy's joint venture
partners or licensees shall not be subject to the foregoing exclusivity
requirement.

NON-DELEGATION

The duties and obligations of McSheahan under this Agreement are personal to it,
and cannot be assigned or delegated to any other party without the prior written
consent of Clean Energy. Notwithstanding the foregoing, McSheahan may assign its
rights and delegate its obligations under this Agreement to a company either
wholly-controlled by McSheahan or by Barry A. Sheahan.

BILLINGS AND PAYMENTS

McSheahan shall invoice Clean Energy from time-to-time for services provided
calculated on a calendar month basis as follows:

(1) "Base Research and Development Expenditures", defined as McSheahan's actual
direct costs to perform research and development activities for Clean Energy
under this Agreement, principally wages (other than any amounts payable to Barry
A. Sheahan), casual labor or contract fees, materials and supplies, fabrication
and other approved outside services, including research and development
consultants;

(2) "Research and Development Overhead", defined as the agreed portion of
McSheahan's indirect costs, including prorata share of premises, office,
administrative and support expenditures, to be charged to Clean Energy, which
the parties agree shall be an amount equal 20% of Base Research and Development
Expenditures for the period; and

(3) "Contract Mark-up", defined as the consideration for McSheahan to provide
the research and development services, which shall be an amount equal to as 10%
of the sum of Base Research and Development Expenditures.

All invoices shall be paid by Clean Energy within thirty days of presentation.

USE OF OFFICE SPACE

During the term of this Agreement, Clean Energy shall be permitted to share the
office portion of McSheahan's premises and all furniture and equipment located
therein. McSheahan shall invoice Clean Energy for its pro-rata share of common
expenses for these premises, including rent, utilities and maintenance, with
such charges being added to the Research and Development Overhead charged to
Clean Energy pursuant to section 4.

GRANTS AND TAX CREDITS

McSheahan shall have the right and the obligation to apply for and make use of
any grants or tax credits available to support any research and development
activities under this Agreement, including British Columbia research tax
credits. Notwithstanding the preceding sentence but subject to the following
sentence, McSheahan agrees that it shall apply the proceeds of any grants or tax
credits received in connection with High-Frequency Combustion Research And
Product Engineering Projects to pay down the net balance of any loans or
advances made by Clean Energy or its affiliates to McSheahan including, without
limitation, the loan originally owed to Clean Energy by Clean Energy
Technologies (Canada), Inc. which loan McSheahan assumed on even date herewith.
Notwithstanding the preceding sentence, should there be amounts payable by Clean
Energy to McSheahan at the time of receipt of the grant or tax credit, or
prospective amounts payable in connection with pending High-Frequency Combustion
Research And Product Engineering Projects, then the grant or tax credit shall be
first applied against payment of that amount, as an intervening credit against,
the loans or advances due Clean Energy.

By way of illustration, assume that McSheahan receives $250 in grant or tax
credit proceeds, and at that time McSheahan owes Clean Energy $500 in loans and
advances, Clean Energy owes McSheahan $100 in unpaid invoices, and $50 will
become due from Clean Energy to McSheahan with respect to pending High-Frequency
Combustion Research And Product Engineering Projects. In such event, (i) the
first $100 of the grant or tax credit proceeds shall be deemed to have been paid
to Clean Energy as a credit against payment of the outstanding balance of the
loans and advances and then, in turn, forwarded by Clean Energy to McSheahan as
a cash payment against the $100 in unpaid invoices, (ii) the next $50 of the
grant or tax credit proceeds shall also be deemed to have been paid to Clean
Energy as a credit against payment of the outstanding balance of the loans and
advances and then, in turn, forwarded by Clean Energy to McSheahan as a cash
payment (advance) against the prospective cost of completing the pending
High-Frequency Combustion Research And Product Engineering Projects; and (iii)
the $100 balance of the grants or tax credits shall then be paid in cash to
Clean Energy as a payment against the outstanding balance of loans and advances.

TERM

This Agreement shall have a term of three years, and thereafter will renew
automatically for one or more additional one year terms unless either party
gives at least six (6) months prior written notice during a pending term or
renewal period of their intent not to renew this Agreement. Notwithstanding the
immediately preceding sentence, upon McSheahan's payment in full of all loans
and advances due to Clean Energy, either party shall have the right to terminate
this Agreement upon four (4) months prior written notice during a pending term
or renewal period. Also notwithstanding the foregoing, either party shall have
the right to terminate this Agreement for cause, including failure of any party
to perform its obligations hereunder.

USE OF CONFIDENTIAL INFORMATION AND PROPRIETARY WORK PRODUCT

McSheahan covenants that it shall use the Confidential Information and the
Proprietary Work Product solely for the purposes described in section 2 for the
benefit of Clean Energy and its affiliates. Nothing contained in this Agreement
shall be construed as an express or implied license or permission for McSheahan
to use the Confidential Information or Proprietary Work Product for any purpose
other than that stated in this section, or as a grant or transfer by Clean
Energy to McSheahan of any proprietary right or interest in the Confidential
Information or Proprietary Work Product. McSheahan covenants that it will not
contact any joint venture partners, consultants, advisors, vendors, suppliers
and customers of Clean Energy or its affiliates without the prior written
notification to and approval by Clean Energy.

OWNERSHIP OF PROPRIETARY WORK PRODUCT

McSheahan agrees that the Proprietary Work Product shall be the proprietary to
Clean Energy, and that Clean Energy shall have full right, title and interest
with respect to all of that property.

NON-DISCLOSURE

McSheahan acknowledges that the Confidential Information is not generally known
to the public or to other persons who are able to obtain economic value from its
use, transmission or other disclosure, and the Confidential Information derives
independent economic value thereby. Except as authorized by this Agreement,
McSheahan agrees for itself and, to the full extent that execution of this
Agreement renders it legally possible, each and every of its Controlled Persons,
that they: (1) shall take all efforts reasonably necessary to maintain the
secrecy and confidentiality of the Confidential Information and to otherwise
comply with the terms of this Agreement; (2) shall not disclose the Confidential
Information to any person or entity other than an Authorized Person without
Clean Energy's prior written consent; (3) shall restrict access to the
Confidential Information on a "need-to-know" basis to those of its Authorized
Persons who clearly need such access in order to perform McSheahan's obligations
under this Agreement, and shall instruct each of those Authorized Persons of
their obligations under this Agreement; and (4) shall not, without the prior
written consent of Clean Energy, use for its own benefit (except for the sole
purpose of performing McSheahan's obligations under this Agreement), publish,
duplicate, replicate or otherwise disclose to or discuss with others, or permit
the use by others for their benefit or to the detriment of the providing party,
any of the Confidential Information. McSheahan covenants that each of its
Authorized Persons will execute for the benefit of Clean Energy a
confidentiality agreement containing effectively the same provisions and
protections contained in this Agreement.

EXCEPTIONS

The obligation of confidentiality set forth above in section 10 shall not apply
to the extent that McSheahan:

a. is required to disclose information under applicable law, regulation or order
   of a governmental agency; provided, however, that McSheahan has (i) first
   given prompt written notice to Clean Energy of its obligation to make such
   disclosure and the particulars of the disclosure, (ii) afforded Clean Energy
   a reasonable and effective opportunity to appear and make such application to
   the applicable governmental agency as it may deem necessary and appropriate
   to prevent or limit that disclosure, and (iii) cooperated diligently with
   Clean Energy and in good faith if Clean Energy elects to contest the
   disclosure sought;
   
   is required to disclose information by a court of competent jurisdiction by
   way of subpoena or other process or order; provided, however, that McSheahan
   has: (i) first given prompt written notice to Clean Energy of the proceeding
   in which such disclosure is sought and the particulars of the disclosure,
   (ii) afforded Clean Energy a reasonable and effective opportunity to appear
   and make such application to the court as it may deem necessary and
   appropriate to prevent or limit that disclosure, such as an order quashing
   such disclosure or a protective order, and (iii) cooperated diligently with
   Clean Energy and in good faith if E& elects to contest the disclosure sought;
   
   can demonstrate by clear and convincing evidence that the disclosed
   information was at the time of disclosure already in the public domain or has
   since come into the public domain other than as a result of actions or
   failure to act by McSheahan or any of its Controlled Persons;
   
   can demonstrate by clear and convincing evidence that the disclosed
   information was rightfully known to McSheahan or was otherwise in its
   possession (as shown by its written records) prior to the date of disclosure
   under this Agreement;
   
   can demonstrate by clear and convincing evidence that McSheahan independently
   developed the disclosed information (as shown by its written records) without
   access to Clean Energy or reliance upon the Confidential Information or
   Proprietary Work Product; or
   
   can demonstrate by clear and convincing evidence that McSheahan received the
   disclosed information on an unrestricted basis from a source other than Clean
   Energy which source is not under a duty of confidentiality to Clean Energy.

For purposes of this Agreement, specific disclosures made to McSheahan (such as,
by was of illustration and not limitation, "600 to 800 cycles per second" or
"$50,000"), shall not be deemed to be within the exceptions listed above merely
because such specific disclosure is embraced by a general disclosure (such as,
by was of illustration and not limitation, "400 to 800 cycles per second" or
"$40,000 to $80,000") that is in the public domain or in the possession of
McSheahan. In addition, any combination of features disclosed by Clean Energy
shall not be deemed to be within the exceptions listed above merely because
individual features are separately in the public domain or in the possession of
McSheahan, but shall be within the exceptions only if the combination itself and
its principle of operation are in the public domain or in the possession of
McSheahan as provided in the exceptions listed above.

RETURN

McSheahan covenants for itself and, to the full extent that execution of this
Agreement renders it legally possible, each and every of its Controlled Persons,
that they shall return to Clean Energy promptly upon its request, without cost,
charge or reimbursement: (1) any and all Confidential Information (including
Proprietary Work Product) used, acquired or developed by McSheahan and its
Controlled Persons, including copies and duplicates thereof, and (2) any and all
notes, summaries, compilations, analyses, results and derivations made from or
with respect to Confidential Information (including Proprietary Work Product),
whether in hard or electronic form. Notwithstanding the foregoing, McSheahan may
rely upon the reasonable advice of their legal counsel as to what notes and
summaries Confidential Information (including Proprietary Work Product) for
purposes of this section 12.

INDEMNIFICATION

McSheahan covenants to indemnify Clean Energy for any and all "losses" (as that
term is defined below) directly or indirectly incurred by Clean Energy, whether
foreseeable or unforeseeable, and whether meritorious or not meritorious, based
upon or related to or arising from, whether directly or indirectly, the breach
or threatened breach by McSheahan of any of its representations, warranties,
obligations, covenants or agreements under this Agreement. The term "losses"
means any losses, liabilities, damages, judgments, deficiencies, assessments,
penalties, settlements, and legal and other costs and/or expenses of any kind or
nature whatsoever including, without limitation, "fees and costs" associated
with any "action or proceeding." The term "action or proceeding" shall have the
same definition as set forth in section 14(d)(ii) below, and the term "fees and
costs" shall refer to those items described in section 14(d)(iv) below.

MISCELLANEOUS

Preparation of Agreement; Costs and Expenses. Each party acknowledges that: (1)
he, she or it had the advice of, or sufficient opportunity to obtain the advice
of, legal counsel separate and independent of legal counsel for any other party
hereto; (2) the terms of the transactions contemplated by this Agreement are
fair and reasonable to such party; and (3) such party has voluntarily entered
into the transactions contemplated by this Agreement without duress or coercion.
Each party further acknowledges that such party was not represented by the legal
counsel of any other party hereto in connection with the transactions
contemplated by this Agreement, nor was he, she or it under any belief or
understanding that such legal counsel was representing his, her or its
interests. Except as expressly set forth in this Agreement, each party shall pay
all legal and other costs and expenses incurred or to be incurred by such party
in negotiating and preparing this Agreement; in performing due diligence or
retaining professional advisors; in performing any transactions contemplated by
this Agreement; or in complying with such party's covenants, agreements and
conditions contained herein. Each party agrees that no conflict, omission or
ambiguity in this Agreement, or the interpretation thereof, shall be presumed,
implied or otherwise construed against any other party to this Agreement on the
basis that such party was responsible for drafting this Agreement.

Cooperation

. Each party agrees, without further consideration, to cooperate and diligently
perform any further acts, deeds and things, and to execute and deliver any
documents that may be reasonably necessary or otherwise reasonably required to
consummate, evidence, confirm and/or carry out the intent and provisions of this
Agreement, all without undue delay or expense.

Interpretation.

Survival

. All representations and warranties made by any party in connection with any
transaction contemplated by this Agreement shall, irrespective of any
investigation made by or on behalf of any other party hereto, survive the
execution and delivery of this Agreement, and the performance or consummation of
any transaction described in this Agreement.

Entire Agreement/No Collateral Representations

. Each party expressly acknowledges and agrees that this Agreement, and the
agreements and documents referenced herein: (1) are the final, complete and
exclusive statement of the agreement of the parties with respect to the subject
matter hereof; (2) supersede any prior or contemporaneous agreements,
memorandums, proposals, commitments, guaranties, assurances, communications,
discussions, promises, representations, understandings, conduct, acts, courses
of dealing, warranties, interpretations or terms of any kind, whether oral or
written (collectively and severally, the "
prior agreements
"), and that any such prior agreements are of no force or effect except as
expressly set forth herein; and (3) may not be varied, supplemented or
contradicted by evidence of prior agreements, or by evidence of subsequent oral
agreements. No prior drafts of this Agreement, and no words or phrases from any
prior drafts, shall be admissible into evidence in any action or suit involving
this Agreement.

Amendment; Waiver; Forbearance

. Except as expressly provided herein, neither this Agreement nor any of the
terms, provisions, obligations or rights may be amended, modified, supplemented,
augmented, rescinded, discharged or terminated (other than by performance),
except by a written instrument or instruments signed by all of the parties to
this Agreement. No waiver of any breach of any term, provision or agreement, or
of the performance of any act or obligation under this Agreement, or of any
extension of time for performance of any such act or obligation, or of any right
granted under this Agreement, shall be effective and binding unless such waiver
shall be in a written instrument or instruments signed by each party claimed to
have given or consented to such waiver. Except to the extent that the party or
parties claimed to have given or consented to a waiver may have otherwise agreed
in writing, no such waiver shall be deemed a waiver or relinquishment of any
other term, provision, agreement, act, obligation or right granted under this
Agreement, or of any preceding or subsequent breach thereof. No forbearance by a
party in seeking a remedy for any noncompliance or breach by another party
hereto shall be deemed to be a waiver by such forbearing party of its rights and
remedies with respect to such noncompliance or breach, unless such waiver shall
be in a written instrument or instruments signed by the forbearing party.

Remedies Cumulative

. The remedies of each party under this Agreement are cumulative and shall not
exclude any other remedies to which such party may be lawfully entitled.

Severability

. If any term or provision of this Agreement or the application thereof to any
person or circumstance shall, to any extent, be determined to be invalid,
illegal or unenforceable under present or future laws, then, and in that event:
(1) the performance of the offending term or provision (but only to the extent
its application is invalid, illegal or unenforceable) shall be excused as if it
had never been incorporated into this Agreement, and, in lieu of such excused
provision, there shall be added a provision as similar in terms and amount to
such excused provision as may be possible and be legal, valid and enforceable;
and (2) the remaining part of this Agreement (including the application of the
offending term or provision to persons or circumstances other than those as to
which it is held invalid, illegal or unenforceable) shall not be affected
thereby, and shall continue in full force and effect to the fullest legal
extent.

No Reliance Upon Prior Representation

. Each party acknowledges that: (1) no other party has made any oral
representation or promise which would induce them prior to executing this
Agreement to change their position to their detriment, to partially perform, or
to part with value in reliance upon such representation or promise; and (2) such
party has not so changed its position, performed or parted with value prior to
the time of the execution of this Agreement, or such party has taken such action
at its own risk.

Headings; References; Incorporation; Gender; Statutory References

. The headings used in this Agreement are for convenience and reference purposes
only, and shall not be used in construing or interpreting the scope or intent of
this Agreement or any provision hereof. References to this Agreement shall
include all amendments or renewals thereof. All cross-references in this
Agreement, unless specifically directed to another agreement or document, shall
be construed only to refer to provisions within this Agreement, and shall not be
construed to be referenced to the overall transaction or to any other agreement
or document. Any Exhibit referenced in this Agreement shall be construed to be
incorporated in this Agreement by such reference. As used in this Agreement,
each gender shall be deemed to include the other gender, including neutral
genders appropriate for entities, if applicable, and the singular shall be
deemed to include the plural, and vice versa, as the context requires. Any
reference to statutes or laws will include all amendments, modifications, or
replacements of the specific sections and provisions concerned
.

Time is of the Essence

. It is expressly understood and agreed that time of performance is strictly of
the essence with respect to each and every term, condition, obligation and
provision hereof and that the failure to timely perform any of the terms,
conditions, obligations or provisions hereof by any party shall constitute a
material breach and a noncurable (but waivable) default under this Agreement by
the party so failing to perform.

Enforcement

.

   Applicable Law

   . This Agreement and the rights and remedies of each party arising out of or
   relating to this Agreement (including, without limitation, equitable
   remedies) shall (with the exception of any applicable securities laws) be
   solely governed by, interpreted under, and construed and enforced in
   accordance with the laws (without regard to the conflicts of law principles)
   of the Province of British Columbia, Canada, as if this Agreement were made,
   and as if its obligations are to be performed, wholly within the Province of
   British Columbia.

i. Consent to Jurisdiction; Service of Process. Any "action or proceeding" (as
   such term is defined below) arising out of or relating to this Agreement
   shall be filed in and heard and litigated solely before the British Columbia
   Supreme Court, with venue at the Vancouver Registry of the British Columbia
   Supreme Court; provided, however, the foregoing shall not: (1) limit the
   rights of any party to enforce any judgment issued by the British Columbia
   Supreme Court in any other jurisdiction; or (2) limit the rights of any party
   who has otherwise accepted jurisdiction in the Province of British Columbia
   as provided above to enforce this Agreement in any other jurisdiction against
   any other party who has failed or refused to answer or to appear in any
   action or proceeding brought before the British Columbia Supreme Court
   (notwithstanding the terms of this section). Each party generally and
   unconditionally accepts the exclusive jurisdiction of such courts and venue
   therein; consents to the service of process in any such action or proceeding
   by certified or registered mailing of the summons and complaint in accordance
   with the notice provisions of this Agreement; and waives any defense or right
   to object to venue in said courts based upon the doctrine of "forum non
   conveniens." The term "action or proceeding" is defined as any and all
   claims, suits, actions, hearings, arbitrations or other similar proceedings,
   including appeals and petitions therefrom, whether formal or informal,
   governmental or non-governmental, or civil or criminal.
   
   Consent to Specific Performance and Injunctive Relief and Waiver of Bond or
   Security. McSheahan acknowledges that Clean Energy may, as a result of the
   breach by McSheahan of its covenants and obligations under this Agreement,
   sustain immediate and long-term substantial and irreparable injury and damage
   which cannot be reasonably or adequately compensated by damages at law.
   Consequently, McSheahan agrees that in the event of the breach or threatened
   breach of its covenants and obligations hereunder, Clean Energy shall be
   entitled to obtain from a court of competent equitable relief including,
   without limitation, enforcement of all of the provisions of this Agreement by
   specific performance and/or temporary, preliminary and/or permanent
   injunctions enforcing any of the rights of Clean Energy, requiring
   performance by McSheahan, or enjoining any breach by McSheahan, all without
   proof of any actual damages that have been or may be caused Clean Energy by
   such breach or threatened breach and without the posting of bond or other
   security in connection therewith. McSheahan waives the claim or defense
   therein that the party bringing the action or proceeding has an adequate
   remedy at law and such party shall not allege or otherwise assert the legal
   position that any such remedy at law exists. McSheahan acknowledges that: (1)
   the terms of this subsection (iii) are fair, reasonable and necessary to
   protect the legitimate interests of Clean Energy; (2) this waiver is a
   material inducement to Clean Energy to enter into the transaction
   contemplated hereby; (3) Clean Energy has already relied upon this waiver in
   entering into this Agreement; and (4) Clean Energy will continue to rely on
   this waiver in their future dealings with McSheahan. McSheahan warrants and
   represents that it has reviewed this provision with its legal counsel, and
   that it has knowingly and voluntarily waived its rights following
   consultation with legal counsel.
   
   Recovery of Fees and Costs. If any party institutes or should the parties
   otherwise become a party to any action or proceeding based upon or arising
   out of this Agreement including, without limitation, to enforce or interpret
   this Agreement or any provision hereof, or for damages by reason of any
   alleged breach of this Agreement or any provision hereof, or for a
   declaration of rights in connection herewith, or for any other relief,
   including equitable relief, in connection herewith, the "prevailing party"
   (as such term is defined below) in any such action or proceeding, whether or
   not such action or proceeding proceeds to final judgment or determination,
   shall be entitled to receive from the non-prevailing party as a cost of suit,
   and not as damages, all fees, costs and expenses of enforcing any right of
   the prevailing party (collectively, "fees and costs"), including without
   limitation, (1) reasonable attorneys' fees and costs and expenses, (2)
   witness fees (including experts engaged by the parties, but excluding
   shareholders, officers, employees or partners of the parties), (3)
   accountants' fees, (4) fees of other professionals, and (5) any and all other
   similar fees incurred in the prosecution or defense of the action or
   proceeding; including, without limitation, fees incurred in the following:
   (A) postjudgment motions; (B) contempt proceedings; (C) garnishment, levy,
   and debtor and third party examinations; (D) discovery; and (E) bankruptcy
   litigation. All of the aforesaid fees and costs shall be deemed to have
   accrued upon the commencement of such action and shall be paid whether or not
   such action is prosecuted to judgment. Any judgment or order entered in such
   action shall contain a specific provision providing for the recovery of the
   aforesaid fees, costs and expenses incurred in enforcing such judgment and an
   award of prejudgment interest from the date of the breach at the maximum rate
   of interest allowed by law. The term "prevailing party" is defined as the
   party who is determined to prevail by the court after its consideration of
   all damages and equities in the action or proceeding, whether or not the
   action or proceeding proceeds to final judgment (the court shall retain the
   discretion to determine that no party is the prevailing party in which case
   no party shall be entitled to recover its costs and expenses under this
   subsection (iv).

Successors and Assigns

. Each and every representation, warranty, covenant, condition and provision of
this Agreement as it relates to each party hereto shall be binding upon and
shall inure to the benefit of such party and his, her or its respective
successors and permitted assigns, spouses, heirs, executors, administrators and
personal and legal representatives, including without limitation any successor
(whether direct or indirect, or by merger, consolidation, conversion, purchase
of assets, purchase of securities or otherwise).

Counterparts; Electronically Transmitted Documents. This Agreement may be
executed in counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument, binding on all
parties hereto. Any signature page of this Agreement may be detached from any
counterpart of this Agreement and reattached to any other counterpart of this
Agreement identical in form hereto by having attached to it one or more
additional signature pages. If a copy or counterpart of this Agreement is
originally executed and such copy or counterpart is thereafter transmitted
electronically by facsimile or similar device, such facsimile document shall for
all purposes be treated as if manually signed by the party whose facsimile
signature appears.

Notices. Unless otherwise specifically provided in this Agreement, all notices,
demands, requests, consents, approvals or other communications (collectively and
severally called "notices") required or permitted to be given hereunder, or
which are given with respect to this Agreement, shall be in writing, and shall
be given by: (1) personal delivery (which form of notice shall be deemed to have
been given upon delivery), (2) by telegraph or by private airborne/overnight
delivery service (which forms of notice shall be deemed to have been given upon
confirmed delivery by the delivery agency), (3) by electronic or facsimile or
telephonic transmission, provided the receiving party has a compatible device or
confirms receipt thereof (which forms of notice shall be deemed delivered upon
confirmed transmission or confirmation of receipt), or (4) by mailing in the
official government mails of their applicable local jurisdiction by registered
or certified mail or the equivalent, return receipt requested and postage
prepaid (which forms of notice shall be deemed to have been given upon the of
receipt). Notices shall be addressed at the addresses first set forth above, or
to such other address as the party shall have specified in a writing delivered
to the other parties in accordance with this paragraph. Any notice given to the
estate of a party shall be sufficient if addressed to the party as provided in
this subsection (g).

WHEREFORE

, the parties hereto have for purposes of this Agreement executed this Agreement
in the City Burnaby, Province of British Columbia, Canada, effective as of the
date first set forth above.

CLEAN ENERGY:

Clean Energy USA, Inc.

By: /s/ R. Dirk Stinson

R. Dirk Stinson, President and Chief Executive Officer

McSHEAHAN:

McSheahan Enterprises Ltd..

By:  /s/ Barry A. Sheahan

Barry A. Sheahan, President