Exhibit 10.89

 

[Logo of Environmental Power Corporation]

 

Environmental Power Corporation

One Cate Street, 4th Floor

Portsmouth, New Hampshire 03801

Tel. (603) 431-1780

Fax (603) 431-2650

December 30, 2005

Mr. Joseph E. Cresci

c/o Environmental Power Corporation

One Cate Street, 4th Floor

Portsmouth, NH 03801

Dear Joe:

The purpose of this letter is to set forth our understanding regarding certain
matters related to your continued employment with, and transition and retirement
from your employment with, Environmental Power Corporation (the “Corporation”),
as set forth in that certain letter dated July 13, 2005 (the “Prior Letter”).
Capitalized terms used in this letter but not otherwise defined herein shall
have the respective meanings ascribed to them in the Prior Letter.

1. The Retirement Date, and, therefore, the Transition Period, has been extended
to June 30, 2006. During the remainder of the Transition Period, you will
provide such support for the business of Microgy and the Corporation as the
Corporation’s Board of Directors or management may reasonably request,
consistent with the relocation of your principal residence to Florida and a
part-time schedule.

2. Your salary during the period beginning on January 1, 2006 and continuing
through the Retirement Date will be 50% of your current salary, and your
benefits will remain the same as those you currently enjoy.

3. The other terms of the Prior Letter remain unaffected hereby, except that the
payment of your full current salary and benefits for the one-year period
following the Retirement Date in accordance with paragraph 2 of the Prior
Letter, or any severance which becomes payable in accordance with Section 7 of
the Prior Letter, shall be paid at such times and in such manner as you and the
Company determine comply with, and will not result in any tax penalty to you
under, Section 409A of the Internal Revenue Code. In the event that you desire a
particular payment schedule that would, in the opinion of the Company, trigger
such a tax penalty, you agree that (i) any such penalty will be your sole
responsibility, and that the Company will have no liability to you therefor and
(ii) in no event will the Company be required to make such payments any more
quickly than it would otherwise be required to pursuant to the applicable
provisions of the Prior Letter.

4. It is understood that nothing in this letter is intended to affect your
status as a member of the Board of Directors of the Corporation.

--------------------------------------------------------------------------------

Mr. Joseph E. Cresci

December 30, 2005

Page 2

If the foregoing accurately sets forth your understanding of the agreement
between you and the Corporation with regard to the subject matter of this
letter, please so indicate by executing a copy of this letter where indicated
below and returning it to me.

Very truly yours,

 

/s/ Kamlesh R. Tejwani

Kamlesh R. Tejwani President and Chief Executive Officer Environmental Power
Corporation

ACCEPTED:

 

/s/ Joseph E. Cresci

Joseph E. Cresci

Dated: December 30, 2005