Document:

exhibit101.htm

    December
12,  2008

     

    STRICTLY
PRIVATE AND CONFIDENTIAL

     

    Farm
Fresh Marketing Inc

    141 
First  Ave  East,  

    Jerome, 

    Idaho 
83338 

     

    Attention:
Mr. Herb Allen

     

    Dear Mr
Allen

     

    Memorandum
of Understanding – proposed project for the installation of Heat Recovery Steam
Engines to be developed and manufactured by Clean Power Technologies
Inc.

     

    Further
to our recent discussions, this memorandum of understanding (“Memorandum of
Understanding”) sets out the high-level commercial principles subject to
which Clean Power Technologies Inc. (“CPTI”) and
Farm Fresh Marketing Inc. a company incorporated in the State of Idaho, and
having its Head Office at 141 First Avenue East, Jerome, Idaho (“Farm Fresh”)
intend to work together with the ultimate objective of making the Farm Fresh
truck fleet more energy efficient by installing a system developed and
manufactured by CPTI that utilises the otherwise wasted heat from the prime
mover exhaust system to power the refrigeration/conditioning unit (the “project”),
subject to further negotiation and signature by the parties of a legally binding
agreement.

     

    1.         INTRODUCTION

     

    
      	
              1.1  

            	
              With
      the exception of clause 1.2 and clauses 5, 6 and 7, this Memorandum of
      Understanding is intended to set out the high-level commercial principles
      and is

            

    

    not
intended by the parties to be legally binding.

     

    
      	
              1.2  

            	
              This
      Memorandum of Understanding is confidential to the parties and their
      advisers and any information or know-how disclosed to, or discovered by,
      either party to this Memorandum of Understanding is subject to the
      confidentiality agreement to be entered into simultaneously with this MOU
      between CPTI and Farm Fresh.

            

    

     

    
      	
              1.3  

            	
              Farm
      Fresh has a large fleet of trucks with refrigeration/conditioning
      units.

            

    

     

    
      	
              1.4  

            	
              CPTI
      is developing an energy efficient system that utilises the otherwise
      wasted heat from the prime mover exhaust system to power the
      refrigeration/conditioning unit (the
      “System”).
      The System proposed is a dual system unit which will operate when the
      tractor is operating with the refrigeration unit attached to it and as
      well it will be a stand-alone unit from the tractor unit being fixed to
      the

            

    

    refrigeration
unit and will operate to cool goods when the refrigeration unit is

    awaiting
the prime delivery vehicle.

     

    
      	
              1.5  

            	
              For
      the consideration described herein, Farm Fresh agrees to install the
      System into the truck and CPTI and Farm Fresh shall work together to
      ensure the efficient and effective installation of the
    system.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    2.         DATA
COLLECTION

     

    
      	
              2.1 

            	Before the System can be implemented into the
      truck fleet, CPTI shall undertake a
      period of data collection.
	 	 
	
              2.2 

            	
              CPTI
      requires the data to:

            

    

     

    
      
        	 	
                2.2.1

              	
                size
      the various components for the design of the new refrigeration units;
      and

              

      

    

     

    
      	 	
              2.2.2

            	
              understand
      the working practices of the Farm Fresh drivers and truck
      usage.

            

    

     

    
      
        	
                2.3 

              	
                During the data collection stage Farm Fresh shall make
      available:

                 

              

      

      	 	
              2.3.1  

            	
              key
      members of staff to assist with any reasonable requests of CPTI;
      and

            

    

     

    
      	 	
              2.3.2  

            	
              the
      truck fleet and garage facilities

            

    

     

    in order
to assist with the data collection process referred to in clause
2.1.

     

    
      	 	
              2.4 
      

            	
              CPTI shall seek Farm Fresh’s prior approval (not
      to be unreasonably withheld or delayed)
      before undertaking the activities specified in clause
      2.3.

            

    

           
3.         DATA COLLECTION
VEHICLE

     

    
      	
              3.1
       

            	
              Farm
      Fresh shall provide CPTI a truck, described as Road Load Data
      Collection Vehicle (“RLDCV”), type and specifications of which will
      be discussed with Farm Fresh’s President/Representative, Herb Allen, in
      Jerome, Idaho during personal meetings or telephonic
      discussions.

            

    

     

    
      	
              3.2  

            	
              CPTI
      shall install the data gathering systems on to the RLDCV for
      testing.

            

    

     

    
      	
              3.3
       

            	
              The Parties have agreed that testing procedures,
      including, but not limited to, fuel and operating efficiencies of CPTI’s
      Heat recovery Systems, noise and emission level and efficiencies, will be
      agreed to in detail during the follow-up meetings with the said Herb Allen
      (2.6) and from time to time on an ongoing basis.  Once
      CPTI’s Heat recovery Systems is developed and shown to the satisfaction of
      , the Parties hereto will thereafter enter into discussions to establish
      collaborations and commercial
      relationships.

            

    

     

    
      	
              3.4  

            	
              CPTI
      hereby agrees to indemnify and to hold Farm fresh harmless from and
      against any and all loss, liability, claims, causes of action, damages,
      penalties, fines, imposts, and expenses, including reasonable attorney
      fees and costs, arising out of or incurred in connection with the System,
      its installation on the RLDCV, or its use by Farm Fresh (except to the
      extent that Farm Fresh’s use is negligent or
  wrongful).

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              4.  

            	
              COSTS

            

    

     

    
      	
              4.1  

            	
              CPTI
      shall be responsible for the data gathering, development of the engines
      and of outsourcing any part of the Project costs.  CPTI shall
      also be responsible for installation of the System on the RLDCV and for
      any damage to the RLDCV caused by such installation or the use of the
      System on the RLDCV.

            

    

     

    
      	
              4.2  

            	
              Other
      than as set out in 4.1, each party shall bear its own costs of the Project
      and providing any assistance referred to in this Memorandum of
      Understanding in accordance with Clause
6.

            

    

     

    
      	
              4.3  

            	
              For
      and in consideration of the services provided by Farm Fresh hereunder,
      including use of the RLDCV, CPTI agrees, for two years following
      completion of the test, to make the System (once it is in production)
      available to Farm Fresh, in such quantities as it may reasonably order, at
      prices and on terms at least as favourable to Farm Fresh as those offered
      by CPTI to any of its other
customers.

            

    

     

    
      	
              4.4  

            	
              Farm
      Fresh has a fleet of approximately 53 trucks and trailers and once CPTI’s
      technology is proven, it intends to purchase at least 53 Systems within
      the period mentioned in 4.3.

            

    

     

    
      	
              4.5  

            	
              Subject
      to formulation of a formal Distributorship Agreement and its acceptance
      thereof by future Distributors, CPTI hereby grants a First Right of
      refusal to Farm fresh for Distributorships for the States of Idaho,
      Montana, Washington, Oregon, Utah, Colorado and
  Nevada.

            

    

     

    5.         TITLE AND
INTELLECTUAL PROPERTY

     

    
       

      
        	
                5.1  

              	
                For
      the purposes of this Clause 5, the following term shall have the following
      meaning:

              
	 	 
      
                “Intellectual
      Property Rights” means trade marks, designs, patents, copyright,
      database rights, internet domain names, and other intellectual property
      rights, data and test results in each case whether registered or
      unregistered, and including applications for the grant of the foregoing
      and all rights or forms of protection having equivalent or similar effect
      to any of the foregoing which may subsist anywhere in the
      world.

              

      

       

      
        	
                5.2  

              	
                      
                  The
      parties agree and acknowledge that CPTI owns all
      Intellectual  Property Rights in the System and, notwithstanding
      any assistance provided by Farm Fresh, shall continue to own the
      Intellectual Property rights in the
  System.

                

              

      

       

      
        	
                5.3  

              	
                In
      the event that Farm Fresh by operation of law or otherwise acquire any
      Intellectual Property Rights in the System, it shall procure the
      assignment of such Intellectual Property Rights in the System (Licensing
      and/or Royalty terms and conditions to be negotiated) from CPTI and such
      assignment to be with full title guarantee and to include the right to sue
      for past infringement.

              

      

       

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    6.         GENERAL

     

    Both
parties are responsible for their own costs in connection with the proposed
Project, whether or not it proceeds (including (without limitation) the
preparation and negotiation of this Memorandum of Understanding) and any party
may end negotiations in relation to the proposed Project at any time in writing
without having to give any reasons for doing so or incurring any liability to
the other party.

     

    7.         GOVERNING LAW AND
THIRD PARTY RIGHTS

     

    
      	
              7.1. 

            	
              This
      Memorandum of Understanding and the negotiations between CPTI and Farm
      Fresh in connection with the proposed Project (“Negotiations”),
      and all disputes and claims arising out of or in connection with them, are
      governed by, and shall be construed in accordance with the laws of the
      State of Nevada. Each party irrevocably agrees to submit to the exclusive
      jurisdiction of the State of Nevada courts as regards any claim or matter
      arising under or in connection with this Memorandum of Understanding and
      the Negotiations.

            

    

     

    
      	
              7.2  

            	
              The
      parties agree that, this Memorandum of Understanding is not intended to,
      and does not, give to any person who is not a party to the Memorandum of
      understanding any rights to enforce the provisions of this Memorandum of
      Understanding.

            

    

     

    Please
confirm your agreement to the terms and conditions set out above by signing,
dating and returning a copy of this Memorandum of Understanding to
CPTI.

     

    Yours
sincerely

     

    /s/ Abdul
A.
Mitha                                                      

    ABDUL A.
MITHA,

    President/CEO

    For and
on behalf of

    Clean
Power Technologies Inc.

     

    CONFIRMATION

     

    We
confirm our agreement to the terms and conditions set out in the above
Memorandum of Understanding.

     

    Dated:  December
12, 2008

    Signed
by: Herb Allen

     

    SIGNED BY
FARM FRESH MARKETING INC.

     

    /s/ Herb
Allen                                                                

    For and
on behalf of

    FARM
FRESH MARKETING INC.

    
      
         

      

      
        4ex10-16.htm

    
      

      

    

    Exhibit 10.16

    

    This
Supplement No. 1 to the Joint Ownership Agreement has been filed to provide
investors with information regarding its terms.  It is not intended to
provide any other factual information about the Tennessee Valley
Authority.  The representations and warranties of the parties in this
Supplement No. 1 to the Joint Ownership Agreement were made to, and solely for
the benefit of, the other party to this Supplement No. 1 to the Joint Ownership
Agreement.  The assertions embodied in the representations and
warranties may be qualified by information included in schedules, exhibits, or
other materials exchanged by the parties that may modify or create exceptions to
the representations and warranties.  Accordingly, investors should not
rely on the representations and warranties as characterizations of the actual
state of facts at the time they were made or otherwise.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    TVA
Contract No. 00069956, Supp. No. 1

    

    AGREEMENT

    Between

    TENNESSEE
VALLEY AUTHORITY

    And

    SEVEN
STATES POWER CORPORATION

    

    

    

    THIS AGREEMENT, dated as of September
2, 2008 (Agreement), is entered into by and between SEVEN STATES POWER
CORPORATION (Seven States), a not-for-profit mutual benefit corporation created
and existing under the Laws of the State of Tennessee, and TENNESSEE VALLEY
AUTHORITY (TVA), a corporate agency and instrumentality of the United States
Government created and existing under and by virtue of the Tennessee Valley
Authority Act of 1933, as
amended, 16 U.S.C. §§ 831-831ee (2006).

    

    W I T N E S S E T
H:

    

    WHEREAS,
TVA and Seven States have entered into a Joint Ownership Agreement dated April
30, 2008, numbered as TVA Contract No. 00069956 (JOA); and

    

    WHEREAS,
Section 3(c) of the JOA provides for discussions among TVA, Seven States, and
the Lenders of methods to secure Seven States’ obligations upon any exercise of
the Buy-Back Option; and

    

    WHEREAS,
agreement has been reached on such security arrangements and, in accordance with
the last sentence of said Section 3(c) of the JOA, TVA and Seven States wish to
supplement and amend the JOA in the respects necessary and appropriate to
provide for the agreed-upon security;

    

    NOW,
THEREFORE, for and in consideration of the premises, the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, TVA and Seven States
agree as follows:

    

    1.  The
Designated Entity designated by Seven States pursuant to Section 3(b) of the
JOA:

    

    (a) Shall
be a single-purpose entity organized for the benefit of Seven States and
controlled by Seven States’ members for the limited purposes of (i) owning and
leasing the Elected Percentage of the Purchased Assets, including any
Modifications and Replacement Components (Seven States’ Purchased Assets Share),
and (ii) potentially transferring ownership to another entity in
connection

    
      
         

      

      
        –1–

        
          

        

      

      
         

      

    

    with the
implementation of the Long-Term Arrangements contemplated by the
JOA;

    

    (b) Until
such time as Long-Term Arrangements are in place or until such time as there is
a consummation of a Buy-Back Closing, shall not have the power or authority
to:

    

    (i) Borrow
any funds or otherwise incur any debt beyond the Lenders’ short-term loan
agreement (Loan) to finance the purchase of Seven States’ Purchased Assets Share
from TVA and to provide a line of credit (not to exceed $25 million) to finance
Capitalized Modifications and Capitalized Replacement Components;

    

    (ii) Enter
into any Loan in which (A) the Borrowing Cost Rate for said Loan exceeds
five percent (5%) at the time of origination or (B) there are additional
penalties, charges, or fees for early Loan repayments or for early payoff of the
Loan, provided, however, that nothing in this Subsection 1(b)(ii)(B) shall apply
to customary LIBOR break charges for an early payoff so long as the LIBOR period
does not exceed thirty (30) days; or

    

    (iii)
engage in any business or transactions other than those contemplated by the JOA,
as shall be stated in the Designated Entity’s charter;

    

    (c) Until
such time as Long-Term Arrangements are in place or until such time as there is
a consummation of a Buy-Back Closing, shall not have the power or authority to
grant a lien or other security interest on any of its property, other than the
TVA liens and security interests provided for below in this
Agreement;

    

    (d) Shall
be organized under constituent documents, approved by TVA and the Lenders, that
include bankruptcy remoteness provisions including the Designated Entity lacking
corporate authority to seek bankruptcy relief;

    

    (e) Shall
at all times observe the applicable legal requirements for the recognition of
the Designated Entity as a legal entity separate from each of its members and
from Seven States;

    

    (f) Until
such time as Long-Term Arrangements are in place or until such time as there is
a consummation of a Buy-Back Closing, shall be governed by a governing Board
with five Directors, two appointed by Seven States or the members of Seven
States, two appointed by TVA, and a fifth elected by a majority vote of the
other four Directors;

    

    (g) Shall
remit a portion of its net cash flow monthly to Seven States for the duration of
the Lease, said portion to be specified under a management agreement between
Seven States and the Designated Entity to be equal to the portion
of

    
      
         

      

      
        –2–

        
          

        

      

      
         

      

    

    Basic
Rent described in Section 3.3(a) of the Lease; and

    

    (h) Shall
meet all the requirements for the Designated Entity provided for by the
JOA.

    

    2.  In addition to the
Buy-Back Arrangements provided for in Section 5 of the JOA, TVA and the Lenders
shall enter into Separate Buy-Back Arrangements to provide for:

    

    (a) Lenders
to give TVA concurrent notice of any default on the Loan when Lenders send
notice of such default to the Designated Entity;

    

    (b) The
same repurchase by TVA of all of the Designated Entity’s right, title, and
interest in and to the Purchased Assets as is provided for under Section 5 of
the JOA, including Subsection (e) of said Section 5 as amended by Section 4 of
this Agreement below;

    

    (c) The
Separate Buy-Back Arrangements between TVA and the Lenders to survive any
rejection of the JOA in a bankruptcy of the Designated Entity.

    

    As used
below in this Agreement, “Buy-Back Arrangements” refers both to the arrangements
provided for in Section 5 of the JOA as amended by Section 4 of this Agreement
and to the Separate Buy-Back Arrangements to be entered into by TVA and the
Lenders under this Section 2.

    

    3.  Section
3 of the JOA is supplemented and amended in the respects necessary to provide
that if TVA conveys Seven States’ Purchased Assets Share at any Seven States
Closing pursuant to Section 3(b)(ii)(B) of the JOA, then:

    

    (i) Seven
States’ Purchased Assets Share shall be subject to a TVA-reserved deed of trust
or mortgage interest and other appropriate security interest; and

    

    (ii) Any
cash not remitted to Seven States in accordance with Section 1(g) above shall be
subject to an appropriate security interest and shall be placed in an escrow
account for the duration of the Lease, said escrow account to be used only
(A) to pay for Capitalized Modifications and Capitalized Replacement
Components or (B) to pay off the Loan or to complete a Buy-Back Closing as
provided for under Section 5(e) of the JOA as amended by Section 4 of this
Agreement.

    

    The
security interests described in both (i) and (ii) above (referred to
collectively below as the “Lien”) shall be for the purpose of securing the
Designated Entity’s obligations to convey to TVA full, clear title to Seven
States’ Purchased Assets Share pursuant to the exercise of any Buy-Back
Arrangements.  The Lien shall provide that, if, upon exercise of any
Buy-Back Arrangements, the Designated Entity should fail to convey such
full,

    
      
         

      

      
        –3–

        
          

        

      

      
         

      

    

    clear
title as required under the JOA as amended by this agreement, TVA shall be
entitled to foreclose on the Lien, and to collect thereby the damages to TVA
(Actual Damages) that result from TVA not immediately receiving such full, clear
title, including the cost of temporarily or otherwise replacing the generation
resource represented by Seven States’ Purchased Assets Share and any amounts
paid by TVA to cure or to purchase the Loan.  Further, it is expressly
recognized and agreed that said Actual Damages shall be equal to the full fair
market value of the Purchased Assets, including any Modifications and
Replacement Components and inclusive of the portion of said Purchased Assets
owned by TVA, which full fair market value shall be determined as of the date of
such failure.

    

    4.  Section
5(e) of the JOA is deleted and replaced in its entirety by the
following:

    

    5(e) Upon exercise of a Buy-Back
Option under 5(a), 5(b), or 5(d) above, or upon a Buy-Back Option being deemed
to have been exercised under 5(c) above, the following steps shall be
taken:

    

    (i) TVA
shall immediately purchase the Loan at par by paying to Lenders a sum equal
to:

    

    (A) All
outstanding principal;

    

    (B) All
accrued and unpaid interest, including default interest only to the extent TVA
was given prompt notice of the relevant default or defaults; and

    

    (C) All
accrued and unpaid fees and unreimbursed expenses but, if these fees and
unreimbursed expenses result from any defaults, only to the extent TVA was given
prompt notice of the relevant default or defaults; provided, however, that
nothing in this Subsection 5(e)(i)(C) shall exclude customary LIBOR break
charges for an early payoff so long as the LIBOR period does not exceed thirty
(30) days.

    

    (ii) Upon
TVA purchasing the Loan at par under (i) above:

    

    (A) The
amount so paid by TVA to the Lenders shall be deducted from the Buy-Back Price
that TVA is to pay at the Buy-Back Closing, and

    

    (B) TVA’s
obligation to pay Rent under the Lease shall cease; provided further, however,
that it is expressly recognized and agreed that the Lease shall otherwise
continue in full force and effect until the consummation of the Buy-Back
Closing.

    

    (iii) 
Within a reasonable time, but not to exceed thirty (30) days after TVA’s
purchase of the Loan at par under (i) above, Seven States shall
sell

    
      
         

      

      
        –4–

        
          

        

      

      
         

      

    

    and TVA
shall buy all of Seven States’ rights, title, and interest (including transfer,
assignment, or other conveyance of any and all relevant contracts, warranties,
permits, licenses, and other approvals of Governmental Authorities) in the
Purchased Assets at the Buy-Back Price, as said Buy-Back Price is reduced under
(ii)(a) above.

    

    It is
expressly recognized and agreed that step (i) above is a precondition to steps
(ii) and (iii).

    

    

    5.  It
is further expressly recognized and agreed that TVA, Seven States, and the
Designated Entity shall cooperate with each other and with the Lenders in
enforcing any

    exercise
of the Buy-Back Arrangements and in consummating any Buy-Back Closing, including
cooperating in any bankruptcy proceedings in order to facilitate TVA obtaining
full, clear title to Seven States’ Purchased Assets Share.  It is
further expressly recognized and agreed that said cooperation shall include
supporting any motion to lift the stay in any bankruptcy proceedings or any
other action that may be necessary to allow exercise of the Buy-Back
Arrangements and the consummation of the Buy-Back Closing.

    

    6.  Seven
States and the Designated Entity shall include in the documents relating to the
Loan:

    

    (a) Provisions
acceptable to TVA requiring Lenders to designate a single Lender to act as the
agent for each of the Lenders for purposes of any purchase of the Loan by TVA
under Section 5(e) of the JOA as amended by Section 4 of this
Agreement;

    

    (b) Provisions
acceptable to TVA requiring Lenders to cooperate with TVA in enforcing any
exercise of the Buy-Back Arrangements and in consummating any Buy-Back Closing,
by (i) promptly executing all documents necessary to confirm TVA’s purchase
of the Loan under Section 5(e) of the JOA as amended by Section 4 of this
Agreement, (ii) not opposing the exercise of the Buy-Back Arrangements and
the consummation of the Buy-Back Closing, and (iii) not opposing any motion
to lift the stay or any other action in bankruptcy to allow exercise of the
Buy-Back Arrangements and the consummation of the Buy-Back Closing;
and

    

    (c)
Provisions expressly recognizing that TVA shall be a third-party beneficiary of
the provisions required by this Section 6.

    

    7.  Capitalized
terms used in this Agreement, including the recitals, and not otherwise defined
herein, shall have the respective meanings set forth in the JOA.

    

    
      
         

      

      
        –5–

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, Seven States and TVA have caused this Agreement to be executed
by their duly authorized representatives as of September 2, 2008.

    

    SEVEN
STATES POWER CORPORATION

    

    

    

    By:  /s/ Jack
Simmons_______________

            Title:
President and CEO

    

    

    TENNESSEE
VALLEY AUTHORITY

    

    

    

    By:  /s/ Tom D.
Kilgore______________

    Title:
President and CEO

    
      
         

      

      
        –6–

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]