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Exhibit 10.40    
    

 
 

DEPOSIT AGREEMENT NO. 2    
    

        This Deposit Agreement ("Agreement") is made as of December 13, 2007 (the "Effective Date") by and between WESTPORT FUEL
SYSTEMS INC., a Delaware corporation having an office at Suite 101 - 1750 West 75th Avenue, Vancouver, British
Columbia V6P 6G2 ("Westport"), and CLEAN ENERGY FINANCE, L.L.C., a California limited liability
company having an office at Suite 200 - 3020 Old Ranch Parkway, Seal Beach, California 90704 ("CEF"). 

        WHEREAS
Westport and CEF are parties to a certain Agreement Regarding Acquisition, Conversion and Sale of Vehicles dated July 21, 2006, as amended on July 15, 2007 (the
"Vehicle Agreement"); 

        AND
WHEREAS, pursuant to the Vehicle Agreement, Westport is to convert to liquefied natural gas, or LNG, operation the model year 2007 T800 diesel tractors listed on the Release
Authorization Form in Schedule "A", attached hereto and incorporated herein by this reference (the "Vehicles"), and Westport, CEF and Inland
Kenworth, Inc. ("Inland") are to use commercially reasonable efforts to sell the converted Vehicles to third party end user customers
("Customers"); 

        AND
WHEREAS Westport will separately invoice Customers for the LNG fuel systems (the "LNG Systems") installed in the Vehicles; 

        AND
WHEREAS the parties to the Vehicle Agreement desire that Westport establish and maintain an inventory of LNG Systems for subsequent installation in the Vehicles (the
"Inventory"); 

        AND
WHEREAS CEF wishes to provide Westport an advance deposit for the purpose of financing the establishment and maintenance of the Inventory and the subsequent upfit and sale of the
Vehicles (the "Stated Purpose") upon and subject to the terms and conditions of this Agreement; 

        NOW,
THEREFORE, in consideration of the covenants and agreements contained herein and good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows: 

	1.
	DEPOSIT

	1.1.
	Advance of Deposit. Subject to the terms and conditions of this Agreement, CEF will advance to Westport, in the form of a
non-interest bearing, limited recourse (in accordance with the provisions of Section 1.4) loan, the sum of two million United States Dollars (USD $2,000,000) (the
"Deposit").

	1.2.
	Payment. CEF will pay Westport the Deposit within three (3) business days of the Effective Date by means of a wire transfer of
immediately available funds as follows: 

Silicon
Valley Bank

3003 Tasman Drive HF195

Santa Clara, California 95054

ABA Routing #: 121140399

Beneficiary Account #: 3300266291

Beneficiary Name: Westport Fuel Systems Inc. 

	1.3.
	Limitation of Use of Deposit Amount by Westport. Westport will use the Deposit solely for the Stated Purpose. 

1

 

	1.4.
	Repayment.

	(a)
	Subject
to paragraphs (c) and (d) below, upon the sale to a Customer of each LNG System incorporated into a Vehicle, Westport will repay to CEF that portion of the
Deposit specified as the "LNG System Deposit Price" in Schedule "B", attached hereto and incorporated herein by this reference, for the relevant sold Vehicle (the
"Repayment Amount").

	(b)
	Westport
will, within three (3) business days of receipt by Westport of immediately available funds from Customer for the sale of the LNG System, pay CEF the Repayment Amount
by bank draft, certified cheque or wire transfer of immediately available funds.

	(c)
	In
the event CEF receives the Repayment Amount with respect to the sale of an LNG System directly from Inland or another third party agreed to by the parties, on behalf of Westport,
such receipt from Inland will constitute repayment of the Repayment Amount by Westport with respect to such LNG System, and Westport will have no further repayment obligation under
paragraph (a) above with respect to such LNG System.

	(d)
	In
the event that any of the LNG Systems incorporated into the Vehicles remain unsold to Customers after twenty-four (24) months from the Effective Date, or such
other time period as is agreed to in writing by both CEF and Westport, Westport will have no further obligation to pay CEF the Repayment Amount with respect to such LNG Systems.

 

	2.
	REPRESENTATIONS AND WARRANTIES; LIMITATIONS OF LIABILITY

	2.1.
	Representations and Warranties. Westport represents and warrants to CEF that it is the owner of the LNG Systems, with a good and
marketable title, free and clear of all liens, charges, encumbrances and any other rights of others, and has the right, power and lawful authority to sell or otherwise convey such LNG Systems to
Customers.

	2.2.
	Limitation of Liability. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE OR OBLIGATED TO THE OTHER
IN ANY MANNER WHATSOEVER FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF CAUSED BY GROSS NEGLIGENCE OR WILFUL MISCONDUCT AND EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

	3.
	DEFAULT

	3.1.
	Events of Default. The following events will be considered to be events of default (an "Event of
Default"):

	(a)
	Westport
fails to make any of the payments in the amounts and at the times specified in this Agreement;

	(b)
	any
representation or warranty made by Westport in this Agreement proves to be incorrect at any time in any material respect;

	(c)
	Westport
makes any assignment for the general benefit of creditors or is adjudged insolvent or bankrupt;

	(d)
	Westport
ceases or threatens to cease to carry on its business or makes or proposes to make any sale of the whole or substantial portion of its assets outside of the ordinary course
of its business; 

2

 

	(e)
	any
proposal is made or petition filed by Westport under any law having for its purpose the extension of time for payment, composition or compromise of the liabilities of Westport;

	(f)
	any
order is made by any court of competent jurisdiction for the dissolution, winding-up or liquidation of Westport; or

	(g)
	any
receiver, administrator, or manager of the property, assets or undertaking of Westport is appointed under any law or other debt instrument issued by Westport.

	3.2.
	Remedy on Default. On the happening of an Event of Default, CEF will have the right, without any further demand or notice whatsoever,
to payment of all amounts whatsoever then outstanding and owing or to become owing by Westport to CEF under this Agreement or to pursue any remedy available at law or in equity.

 

	4.
	TERM AND TERMINATION

	4.1.
	Term and Termination. This Agreement will come into force on the Effective Date and will terminate upon the earlier of full repayment
by Westport of the Deposit and the expiry of the period set out in Section 1.4(d).

 

	5.
	GENERAL PROVISIONS

	5.1.
	Interpretation. Wherever in this Agreement the context so requires, the singular number will include the plural number and vice versa
and any gender herein used will be deemed to include the feminine, masculine or neuter gender. The division of this Agreement into articles, sections and subsections, and the insertion of the recitals
and headings, are for convenience of reference only and will not affect the construction or interpretation of this Agreement. The terms "hereof", "hereto", "herein", "hereunder" and similar
expressions refer to this Agreement and not to any particular Article or other portion hereof and include any agreement supplemental hereto.

	5.2.
	Notices. All notices, consents or other communications, other than day to day communications, provided for under this Agreement will
be in writing and will be deemed to be sufficiently given if delivered by courier or by hand to a representative of such party, and the notice will be deemed to have been received on the date of
actual delivery thereof. Until notice of change of address has been given in the manner provided in this section, notices will be addressed to the addresses set forth above.

	5.3.
	Governing Law and Jurisdiction. This Agreement will be governed by the laws of the State of California, excluding its conflict of law
provisions. Each party irrevocably submits to the non-exclusive jurisdiction of the Courts of the State of California.

	5.4.
	Severability. It is the intention and agreement of the parties that if any provision of this Agreement is held to be illegal, invalid
or unenforceable, in whole or in part, under present or future laws, the parties will substitute for such provision another provision that is legal, valid and enforceable and that achieves the same or
similar objectives. If this is not possible, the parties agree that should any provision of this Agreement be held to be illegal, invalid or unenforceable, such provision will be ineffective to the
extent of such illegality, invalidity or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

	5.5.
	Entire Agreement; Amendments. This Agreement, together with the Vehicle Agreement, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, whether oral or written, with respect to the subject matter hereof. No provision of this
Agreement may be changed, 

3

 

modified
or amended without the express written agreement of the parties executed by their authorized representatives. 

	5.6.
	Waivers. No indulgence or forbearance by any party hereunder will be deemed to constitute a waiver of its rights to insist on
performance in full and in a timely manner of all covenants of the other party hereunder and any such waiver, in order to be binding upon a party, must be express and in writing and signed by such
party and then such waiver will be effective only in the specific instance and for the purpose for which it is given. No waiver of any term, condition or covenant by any party will be deemed to be a
waiver by such party of its rights to require full and timely compliance with the same term, condition or covenant thereafter, or with any other term, covenant or condition of this Agreement at any
time.

	5.7.
	Binding Agreement; Assignment. This Agreement is binding on the parties and their respective successors and permitted assigns. CEF may
assign this Agreement or its interest herein or any part thereof to any person or entity. CEF must notify Westport within fifteen (15) days of the assignment.

	5.8.
	Survival. The terms of this Agreement which, by their nature, extend beyond the term of this Agreement will survive any termination or
expiration of this Agreement, including, without limitation, Article 2.

	5.9.
	Execution. This Agreement may be executed in two or more original, facsimile or.pdf counterparts, each of which, when so executed,
will be deemed to be an original copy hereof, and all such counterparts together will constitute but one single agreement. 

        AGREED
to by the parties as of the Effective Date. 

	WESTPORT FUEL SYSTEMS INC.	 	CLEAN ENERGY FINANCE, L.L.C.
	

/s/  J. MICHAEL GALLAGHER      
 Signature	
 	

/s/  PETER J. GRACE      
 Signature
	

J. Michael Gallagher
 Name	
 	

Peter J. Grace
 Name
	

President and COO
 Title	
 	

Vice President
 Title
	

Dec 12, 2007
 Date	
 	

Dec. 15, 2007
 Date
	
WESTPORT FUEL SYSTEMS INC.	
 	

 
	

/s/  ELAINE A. WONG      
 Signature	
 	

 
	

Elaine A. Wong
 Name	
 	

 
	

CFO
 Title	
 	

 
	

Dec 12, 2007
 Date	
 	

 

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SCHEDULE "A"
  
    RELEASE AUTHORIZATION FORM    
    

5

 
 
 

SCHEDULE "B"
  
    LNG SYSTEM DEPOSIT PRICE    
    

	#
	 	Vehicle Number
	 	LNG System

Deposit Price

	1	 	1XKDD49X87R197085	 	 	80,000.00
	2	 	1XKDD49XX7R197086	 	 	80,000.00
	3	 	1XKDD49X17R197087	 	 	80,000.00
	4	 	1XKDD49X37R197088	 	 	80,000.00
	5	 	1XKDD49X57R197089	 	 	80,000.00
	6	 	1XKDD49X17R197090	 	 	80,000.00
	7	 	1XKDD49X37R197091	 	 	80,000.00
	8	 	1XKDD49X57R197092	 	 	80,000.00
	9	 	1XKDD49X77R197093	 	 	80,000.00
	10	 	1XKDD49X97R197094	 	 	80,000.00
	11	 	1XKDD49X07R197095	 	 	80,000.00
	12	 	1XKDD49X27R197096	 	 	80,000.00
	13	 	1XKDD49X47R197097	 	 	80,000.00
	14	 	1XKDD49X67R197098	 	 	80,000.00
	15	 	1XKDD49X87R197099	 	 	80,000.00
	16	 	1XKDD49X07R197100	 	 	80,000.00
	17	 	1XKDD49X27R197101	 	 	80,000.00
	18	 	1XKDD49X47R197102	 	 	80,000.00
	19	 	1XKDD49X67R197103	 	 	80,000.00
	20	 	1XKDD49X87R197104	 	 	80,000.00
	21	 	1XKDD49XX7R197105	 	 	80,000.00
	22	 	1XKDD49X17R197106	 	 	80,000.00
	23	 	1XKDD49X37R197107	 	 	80,000.00
	24	 	1XKDD49X57R197108	 	 	80,000.00
	25	 	1XKDD49X77R197109	 	 	80,000.00
	 	 	 	 	

	 	 	 	 	$	2,000,000.00
	 	 	 	 	

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QuickLinks

Exhibit 10.40

DEPOSIT AGREEMENT NO. 2

SCHEDULE "A" RELEASE AUTHORIZATION FORM

SCHEDULE "B" LNG SYSTEM DEPOSIT PRICEFiled by Automated Filing Services Inc. (604) 609-0244 - PANTERA PETROLEUM INC. - Exhibit 10.1

AMENDING AGREEMENT

THIS AGREEMENT made March 17, 2008 effective as of February 28,
2008

AMONG:

  
    
      PANTERA PETROLEUM INC., a Nevada corporation,
        of 3316 West 1st Avenue, Vancouver, British Columbia, V6R 1G4

      (“Pubco”)

    

  

AND:

  
    
      ARTEMIS ENERGY PLC (formerly PANTERA OIL AND GAS
        PLC), a company registered in England, of 15 Poland Street, London, England,
        W1F 8QE

      (“Pantera”)

    

  

AND:

  
    
      AURORA PETROLEOS SA, a company registered in Paraguay,
        of 1430 Charles de Gaulle, Villa Mora 1885 Asuncion, Paraguay

      (“Aurora”)

    

  

AND:

  
    
      BOREAL PETROLEOS SA, a company registered in Paraguay,
        of 390 R1 4 Curupayty, Mariscal Estigaribia 1864 Asuncion, Paraguay

      (“Boreal”)

    

  

WHEREAS:

A. On November 21, 2007, Pubco, Pantera, Aurora and Boreal
entered into a Share Purchase Agreement (the “Purchase Agreement”) whereby Pubco
agreed to issue 4,000,000 common shares in the capital of Pubco to Pantera and
to pay $25,000 to each of Aurora and Boreal, for an aggregate payment of
$50,000, as consideration for the right to purchase up to 85% of the shares of
each of Aurora and Boreal;

B. The Purchase Agreement provides for, among other things, the
payment of certain amounts on or before specified dates (each, a “Payment Date”)
by Pubco to each of Aurora and Boreal in order for Pubco to acquire up to 85% of
the shares of Aurora and Borea;

C. Pubco, Pantera, Aurora and Boreal have agreed to amend the terms of the Purchase Agreement, on the terms and conditions of this Agreement, to extend certain of the Payment Dates.

THEREFORE, in consideration of the covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

 1.     Capitalized terms used in this
  Agreement and not otherwise defined herein shall have the meaning assigned to
  them in the Purchase Agreement.

 2.     Section 3.1 of the Purchase Agreement
  is deleted in its entirety and replaced with the following:

3.1 Right to Purchase

Upon issuance of the Pubco Shares to Pantera and the payment of $25,000 to each of Aurora and Boreal, Pubco shall have the right to acquire up to 85% of the shares of each of Aurora and Boreal as follows:

	
(a) 		
on or before November 30, 2007, Pubco shall have the right, but not the obligation, to acquire 15% of the issued and outstanding shares of each of Aurora and Boreal for an aggregate payment of $150,000 by Pubco to Aurora and
Boreal (as to $75,000 to each of Aurora and Boreal) (“Investment One”);

	
	 	 
	
(b) 		
on or before July 31, 2008, and subject to the completion of Investment One, Pubco shall have the right, but not the obligation, to acquire an additional 15% of the issued and outstanding shares of each of Aurora and Boreal for an
aggregate payment of $600,000 by Pubco to Aurora and Boreal (as to $300,000 to each of Aurora and Boreal), or as each of Aurora and Boreal may direct (“Investment Two”);

	
	 	 
	
(c) 		
on or before January 31, 2009 and subject to the completion of Investment One and Investment Two, Pubco shall have the right, but not the obligation, to acquire an additional 25% of the issued and outstanding shares of each of
Aurora and Boreal for an aggregate payment of $1,000,000 by Pubco to Aurora and Boreal (as to $500,000 to each of Aurora and Boreal), or as each of Aurora and Boreal may direct (“Investment Three”); and

	
	 	 
	
(d) 		
on or before July 31, 2009 and subject to the completion of Investment One, Investment Two and Investment Three, Pubco shall have the right, but not the obligation, to acquire an additional 30% of the issued and outstanding shares
of each of Aurora and Boreal for an aggregate payment by Pubco of $5,200,000 by Pubco to Aurora and Boreal (as to $2,600,000 to each of Aurora and Boreal), or as each of Aurora and Boreal may direct.

	

 3.     Pubco, Pantera, Aurora and Boreal
  each acknowledge and agree that all other respective provisions of the Purchase
  Agreement remain in full force and effect.

4.     This Agreement may be executed in
  several counterparts, each of which will be deemed to be an original and all
  of which will together constitute one and the same instrument.

5.     Delivery of an executed copy of this
  Agreement by electronic facsimile transmission or other means of electronic
  communication capable of producing a printed copy will be deemed to be execution
  and delivery of this Agreement as of the date first set forth above.

6.     This Agreement shall in all respects
  be governed by and construed in accordance with the laws of the State of Texas.
  The parties hereby attorn to the exclusive jurisdiction of the Courts in the
  State of Texas.

IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.

PANTERA PETROLEUM INC.

	Per: 	/s/ Chris Metcalf
    
	  	Name: Chris Metcalf 
	  	Title: President and Chief Executive Officer 

ARTEMIS ENERGY PLC (formerly PANTERA OIL AND GAS
PLC)

	Per: 	/s/ Rohan Courtney
    
	  	Name: Rohan Courtney 
	 	Title: Chairman 

AURORA PETROLEOS SA

	Per: 	/s/ Jacob Jan Henrik
      Botha 
	  	Name: Jacob Jan Hendrik Botha 
	  	Title: Director 

BOREAL PETROLEOS SA

	Per: 	/s/ Jacob Jan Hendrik
      Botha 
	  	Name: Jacob Jan Hendrik Botha 
	  	Title: Director 

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