MEMORANDUM OF UNDERSTANDING
MitsuiBabcock
15 August 2006
Between Mitsui Xxxxxxx Energy Limited 00 xxx Xxxxxxxxx
Xxxxxxx
Xxxx Xxxxxx
XX00 1 UX
and
Clean Power Technologies, Inc 000-00xx Xxxxxx X.X.,
Xxxxxxx, Xxxxxxx, Xxxxxx X0X
The parties have agreed to the following to form the basis for an Agreement.
1
Mitsui Xxxxxxx has agreed to develop a Steam Accumulator and other related technologies ("the accumulator technologies") in partnership with Clean Power Technologies, Inc ("CPTI") for use in CPTI's petrol (gas)/steam and diesel/steam hybrid technologies project (hereinafter referred to collectively as "the said technologies") .
2
Mitsui Babcock's agreement under clause 1 is conditional on the assumption that the development cost of the said accumulator technologies will be approximately £200,000 or US$400,000. CPTI has agreed to give and Mitsui has agreed to accept 4,000,000 common stock of CPTI in lieu of cash reimbursement for the said development costs.
3
Within 18 months after the first petrol(gas)/steam vehicle is publicly and formally unveiled, Mitsui may, at its option, seek cash reimbursement of the development costs it has then incurred from CPTI. Upon payment of such development costs by CPTI, Mitsui Xxxxxxx will return 3,000,000 of CPTI's common stock to CPTI.
4
If Mitsui Xxxxxxx spends more than the anticipated $400,000 towards the development, it will have an option either to receive cash reimbursement for the excess from CPTI or it may choose to receive CPTI shares in lieu thereof, at a price to be negotiated.
MitsuiBabcock
5
All technologies and intellectual properties which are developed by Mitsui Xxxxxxx in connection with CPTI's petrol(gas)/steam and diesel/steam project and which are patentable and/or patented will, at all times, belong to CPTI. Any intellectual property which is not patentable may be used by Mitsui Xxxxxxx without the prior approval or consent of CPTI.
6
If CPTI is unable to make cash reimbursement to Mitsui Xxxxxxx as per clause 3 hereof, it is agreed by and between the parties hereto that all technologies hitherto owned by CPTI, whether patented and/or patentable, will be transferred to joint ownership of CPTI and Mitsui Xxxxxxx.
7
CPTI has agreed to provide 100,000 of its common stock to Mitsui Xxxxxxx. Mitsui Xxxxxxx, at its discretion, will reward any employees who have helped and participated in development of the said accumulator technologies for the CPTI project.
8
It is agreed that Xxxxxxx Xxxxxx will be appointed to the Board of Directors of CPTI after a formal agreement is signed. Xxxxxxxx Xxxxxx will be appointed to CPTI's Advisory Board.
Signed on behalf of Mitsui Xxxxxxx Energy Limited:
/s/ Xxxxxxxx Xxxxxx
Authorised Signatory
Name (Print) Xxxxxxxx Xxxxxx
Position Head of Strategic Development
Date 31/8/06
Signed on behalf of Clean Power Technologies Inc.:
/s/ Xxxxx Xxxxx
Authorised Signatory
Name (PRINT) ABDUL ,MITHA
Position President and Chief Executive Officer
Date September 11, 2006
