TURNKEY PROJECT ACQUISITION, LOAN AND SECURITY AGREEMENT,

Asset Purchase Agreement

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CHAPEAU INC | TEFCO, LLC

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Title: TURNKEY PROJECT ACQUISITION, LOAN AND SECURITY AGREEMENT,
Governing Law: Virginia Date: 3/28/2008
Law Firm: Manatt Phelps

Exhibit 10.1

TURNKEY PROJECT ACQUISITION, LOAN

AND

SECURITY AGREEMENT

between

CHAPEAU, INC.

and

TEFCO, LLC

Dated as of March 20, 2008

TABLE OF CONTENTS

		Page

ARTICLE I	DEFINITIONS	2
Section 1.1	Certain Definitions	2
Section 1.2	Terms Defined in Other Sections	2
Section 1.3	Other Definitional Provisions	12

ARTICLE II	THE CLOSING	12
Section 2.1	Closing	12
Section 2.2	Deliveries at the Closing	12
Section 2.3	Option to Acquire Future Turnkey Projects	13
Section 2.4	The Loan	15

ARTICLE III	REPRESENTATIONS AND WARRANTIES OF INVESTOR GROUP	15
Section 3.1	Due Organization; Good Standing and Power	15
Section 3.2	Authorization; Noncontravention	15
Section 3.3	No Litigation or Regulatory Action	16
Section 3.4	Financing	16
Section 3.5	Prior Activities	16
Section 3.6	Brokers	16
Section 3.7	Securities Law Matters	17

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF CHAPEAU	17
Section 4.1	Due Organization; Good Standing and Power	17
Section 4.2	Authorization; Noncontravention	18
Section 4.3	Capitalization	18
Section 4.4	Authorization of Securities	18
Section 4.5	Financial Statements	19
Section 4.6	No Undisclosed Liabilities	19
Section 4.7	Governmental Approvals	19
Section 4.8	Title to Assets; Absence of Liens	19
Section 4.9	Compliance with laws	20
Section 4.10	Product Warranty; Product Liability	20

TABLE OF CONTENTS
(continued)

Section 4.11	Brokers	20
Section 4.12	Full Disclosure	20
Section 4.13	Location of Collateral; and Books and Records	21
Section 4.14	Accounts	21
Section 4.15	Tax Matters	21
Section 4.16	Employee Benefits	22
Section 4.17	Absence of Certain Changes	22
Section 4.18	Contracts; No Defaults	23
Section 4.19	Insurance	24
Section 4.20	Environmental Compliance	24
Section 4.21	Intellectual Property	24

ARTICLE V	COLLATERAL	25
Section 5.1	Security Interest	25
Section 5.2	Perfection and Protection of the Company’s Security Interest	25
Section 5.3	First Priority	25
Section 5.4	Collateral Proceeds Management	25

ARTICLE VI	CONDITIONS	27
Section 6.1	Conditions Precedent to the Initial Acquisition and the Loan	27
Section 6.2	Conditions Precedent to All Future Acquisitions	29
Section 6.3	Conditions Precendent to Chapeau’s Obligations	29

ARTICLE VII	COVENANTS	30
Section 7.1	Existence and Good Standing	30
Section 7.2	Fundemental Changes	30
Section 7.3	Compliance with Laws	30
Section 7.4	Books and Records	30
Section 7.5	Financial Reporting	31
Section 7.6	Notification to Company	32
Section 7.7	Collateral Locations	32

TABLE OF CONTENTS
(continued)

Section 7.8	Use of Proceeds	32
Section 7.9	Business	33
Section 7.10	Liens	33
Section 7.11	Accounts	33
Section 7.12	Inventory	33
Section 7.13	Equipment	33
Section 7.14	Insurance	33
Section 7.15	Disposition of Property	33
Section 7.16	Sale and Leasback	33
Section 7.17	Distributions	34
Section 7.18	Restricted Investments	34
Section 7.19	Guarantees	34
Section 7.20	Indebtedness	34
Section 7.21	Transactions with Affiliates	34
Section 7.22	New Subsidiaries	34
Section 7.23	Financial Covenants	34
Section 7.24	Subordinated Indebtedness	34
Section 7.25	Future Assurances	34

ARTICLE VIII	EVENTS OF DEFAULT	35
Section 8.1	Events of Default	35

ARTICLE IX	REMEDIES	36
Section 9.1	Obligations	36
Section 9.2	Collateral	37
Section 9.3	Injunctive Relief	37
Section 9.4	Setoff	38

ARTICLE X	INDEMNIFICATION	38
Section 10.1	Survival	38
Section 10.2	Indemnification	38
Section 10.3	Indemnification Procedures	39

iii

TABLE OF CONTENTS
(continued)

Section 10.4	Calculation of Losses; Tax Treatment of Payments	40

ARTICLE VIII	MISCELLANEOUS	40
Section 11.1	Notices	40
Section 11.2	Reserved	41
Section 11.3	Amendments; Waiver	41
Section 11.4	Assignment	41
Section 11.5	Binding Effect	42
Section 11.6	Entire Agreement	42
Section 11.7	No Third-Party Beneficiaries	42
Section 11.8	Specific Performance	42
Section 11.9	Severability	42
Section 11.10	Governing Law; Jurisdiction	43
Section 11.11	Arbitration	43
Section 11.12	Counterparts	43
Section 11.13	No Presumption	43

TURNKEY PROJECT ACQUISITION, LOAN AND SECURITY AGREEMENT

This Turnkey Project Acquisition, Loan and Security Agreement (this “ Agreement ”) is entered into as of this 20th day of March, 2008, by and among Chapeau, Inc., a Utah corporation (“ Chapeau ”), and TEFCO, LLC, a Virginia limited liability company (the “ Company ”).

RECITALS

A. Chapeau and the Company entered into a Joint Venture Agreement dated as of December 14, 2007 (the “ Joint Venture Agreement ”), pursuant to which the parties agreed that the Company would acquire from Chapeau various turnkey projects in combined heat and power and combined cooling heat and power applications incorporating Chapeau’s EnviroGen™ energy modules or similar products and related rights (collectively, the “ Turnkey Projects ”).

B . In connection with each Turnkey Project, (i) the Company will enter into a discount energy service or purchase agreement (a “ DES Agreement ”) with each Turnkey Project customer (each a “ Customer ”) for the tolling of energy by each such Turnkey Project for the benefit of such Customer, and (ii) the Company and Chapeau will enter into a Service and Maintenance Agreement (a “ S&M Agreement”) to provide essential services in respect of such Turnkey Project. The Company wishes to acquire Turnkey Projects identified by Chapeau in the future (“ Future Turnkey Projects ”) pursuant to agreements having terms mutually agreeable to the Company and Chapeau in their reasonable discretion.

C . The Company wishes to purchase from Chapeau each Turnkey Project in operation on the date of this Agreement (collectively, the “ Existing Turnkey Projects ”), on the terms and subject to the conditions set forth below, and Chapeau wishes to sell the Existing Turnkey Projects on such terms and subject to such conditions.

D . Chapeau has entered into a DES Agreement with each Customer of each Existing Turnkey Project (the “ Existing DES Agreements ”). Chapeau wishes to assign the Existing DES Agreements to the Company on the terms and conditions set forth below, and the Company wishes to accept and assume the Existing DES Agreements on such terms and conditions. In that regard and in connection with the assignment and assumption of the Existing DES Agreements, Chapeau agrees to service, operate and maintain each such Turnkey Project, pursuant to the continuing service obligation of Chapeau set forth below (the “ Continuing Service Obligation ”).

E . Additionally, the Company has agreed to loan $10 million to Chapeau for general working capital purposes on the terms and subject to the conditions set forth below (the “ Loan ”), which Loan will be secured by a first priority security interest on all of the assets and properties of Chapeau.

F . In consideration for the transactions contemplated hereby (collectively, the “ Transactions ”), Chapeau wishes to grant to the Company an option to acquire Future Turnkey Projects (the “ Future Turnkey Project Option ”), such option to be on the terms and subject to the conditions set forth below, and the Company wishes to accept the Future Turnkey Project Option on such terms and conditions, provided, that the Company has made it a condition precedent to its entry into the Transactions that the right of first refusal granted to Gordon V. Smith in Section 10 of those certain Secured Promissory Notes, dated September 11, 2007, in the principal amounts of $3,400,000 and $2,700,000, respectively, be terminated.

G. Chapeau and the Company wish to amend and restate the Joint Venture Agreement in its entirety. Each of the Board of Directors of Chapeau and the Board of Managers of the Company has determined that the transactions contemplated by the Joint Venture Agreement, as amended and restated pursuant to the terms hereof, are in the best interests of its shareholders and members, as the case may be.

H . In connection with the transactions contemplated by the Joint Venture Agreement, the Company was entitled to the payment of a facilities fee (the "Fee") and to receive the Option and the Warrant. The Fee is due and payable, if at all, and the Option and Warrant issuable, on completion by the Company of the funding of the Note. Pursuant to the terms of this Agreement, the parties acknowledge and agree that, on the Initial Closing Date, such transactions will be consummated and the Fee will then be due, and the Option and Warrant issuable, to the Company.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Certain Definitions . For purposes of this Agreement, the following terms shall have the following meanings.

Section 1.2 Terms Defined in Other Sections .

“Account” means any “account,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Chapeau, or in which Chapeau now holds or hereafter acquires any interest and, in any event, shall include, without limitation, all accounts receivable, book debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper, Documents or Instruments) now owned or hereafter received or acquired by or belonging or owing to Chapeau (including, without limitation, under any trade name, style or division thereof) whether arising out of goods sold or services rendered by Chapeau or from any other transaction, whether or not the same involves the sale of goods or any other transaction, whether or not the same involves the sale of goods or services by Chapeau (including, without limitation, any such obligation which may be characterized as an account or contract right under the UCC) and all of Chapeau’s rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of Chapeau’s rights to any goods represented by any of the foregoing (including, without limitation, unpaid seller’s rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), and all monies due or to become due to Chapeau under all purchase orders and contracts for the sale of goods or the performance of services or both by Chapeau (whether or not yet earned by performance on the part of Chapeau or in connection with any other transaction), now in existence or hereafter occurring, including, without limitation, the right to receive the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any Person with respect to any of the foregoing.

“Account Debtor” means any “account debtor,” as such term is defined in Article 9 of the UCC.

“ Action ” means any action, litigation, claim, suit, mediation, arbitration, inquiry, government or other investigation or proceeding of any nature, whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise, by or before any mediator, arbitrator or Governmental Body or similar Person.

“Affiliate” means, as to any Person, any other Person (i) that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such Person; (ii) who is a director or officer (A) of such Person, (B) of any subsidiary of such Person or (C) of any Person described in the foregoing clause (i) with respect to such Person; or (iii) which, directly or indirectly through one or more intermediaries, is the beneficial or record owner (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, as the same is in effect on the date hereof) of ten percent or more of any class of the outstanding voting stock, securities or other equity or ownership interests of such Person, or of any option, warrant or other right to acquire such equity or ownership interest. For purposes of this definition, the term “control” (and the correlative terms, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies, whether through ownership of securities or other interests, by contract or otherwise. For purposes hereof, “Affiliate” includes any subsidiary.

“Bankruptcy Code” means Title 11 of the U.S. Code.

“Business” means the installation of self-contained electrical generators in combined heat and power and combined cooling heat and power applications incorporating Chapeau’s EnviroGen™ Energy Modules or similar products and related rights on a turnkey basis and the servicing and support of such projects.

“ Business Day ” means a day on which national banks are open for business in Los Angeles, California.

“Change in Control” means a merger, business combination, reorganization, recapitalization or other transactions, which results in the stockholders of Chapeau who own at least 50% of its shares of Common Stock then outstanding immediately prior to such transaction owning less than 50% of the surviving entity’s voting control immediately after the transaction, or a sale, transfer or other disposition in any transaction or series of transaction of all or substantially all of the assets of Chapeau.

“Chattel Paper” means any “chattel paper,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest.

“Collateral” shall have the meaning assigned to such term in Article V of this Agreement.

“ Commercial Tort Claim ” has the meaning prescribed for such term as defined by the UCC, which definition is incorporated herein by reference, and includes, without limitation, a claim arising in tort with respect to which (a) the claimant is an organization or (b) the claimant is an individual and the claim (i) arose in the course of the claimant’s business or profession and (ii) does not include damages arising out of personal injury to or the death of an individual.

“Commission” means the United States Securities and Exchange Commission.

“Commissioning” means the process of enabling an installed Turnkey Project for commercial operation, which process is (i) performed in accordance with Chapeau’s then current standard Commissioning procedures and (ii) evidenced by the commencement of Services (as such term is defined in a DES Agreement) pursuant to a DES Agreement.

“Common Stock” means the common stock, par value $0.001 per share, of Chapeau.

“Contracts” means all contracts, undertakings, franchise agreements or other agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under which Chapeau may now or hereafter have any right, title or interest, including, without limitation, with respect to an Account, any agreement relating to the terms of payment or the terms of performance thereof.

“Copyrights” means all of the following now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest: (i) all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, any state thereof or of any other country; (ii) registrations, applications and recordings in the United States Copyright Office or in any similar office or agency of the United States, any state thereof or any other country; (iii) any continuations, renewals or extensions thereof; and (iv) any registrations to be issued in any pending applications.

“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest.

“ Deposit Account ” has the meaning prescribed for such term as defined by the UCC, which definition is incorporated herein by reference, and includes, without limitation, a nonnegotiable certificate of deposit or a demand, time, savings, passbook, or similar account maintained with a bank.

“ Distribution ” means, with respect to a Person, any dividend or other distribution in respect of its Equity Interests or any payment on account of the purchase, redemption or other acquisition or retirement of its Equity Interests.

“Documents” means any “documents,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest.

“Equipment” means any “equipment,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest, other than any leasehold interest, and any and all additions, substitutions and replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such interest.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Environment” means soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air) and any other environmental medium.

“Environmental, Health and Safety Liabilities” means any obligations or liabilities (including any proceeding or other assertions of obligations or liabilities) that are (i) related to environmental, health or safety issues (including on-site or off-site contamination by Hazardous Substances of surface or subsurface soil or water); or (ii) based upon or related to (A) any Environmental Law or (B) any Order imposed by any Governmental Authority with respect to any Environmental Law.

“Environmental Law” means any Law that addresses or is otherwise related to environmental, human health or safety issues, including any Law relating to (i) the protection, preservation or remediation of the Environment, (ii) any emissions, Releases or discharges of Hazardous Substances into the Environment or (iii) the manufacture, processing, distribution, use, treatment, storage, disposal, transport, handling, clean-up or control of Hazardous Substances.

“Fixtures” means any “fixtures,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest and, now or hereafter attached or affixed to or constituting a part of, or located in or upon, real property wherever located, together with all right, title and interest of Chapeau in and to all extensions, improvements, betterments, renewals, substitutes, and replacements of, and all additions and appurtenances to any of the foregoing property, and all conversions of the security constituted thereby, immediately upon any acquisition or release thereof or any such conversion, as the case may be.

“GAAP” means generally accepted accounting principles, as in effect in the United States, applied on a consistent basis during the periods involved and consistent with past practices.

“General Intangibles” means any “general intangibles,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest and, in any event, shall include, without limitation, all right, title and interest which Chapeau may now or hereafter have in or under any Contract, all customer lists, interests in partnerships, joint ventures and other business associations, permits, goodwill (other than the goodwill associated with any Trademark, Trademark registration or Trademark licensed under any Trademark License), claims in or under insurance policies, including unearned premiums, uncertificated securities, cash and other forms of money or currency, deposit accounts (including as defined in Article 9 of the UCC), rights to receive tax refunds and other payments and rights of indemnification.

“Governmental Authority” means any United States federal, state, local or other governmental department, commission, board, bureau, agency, central bank, court, tribunal or other instrumentality or authority, domestic or foreign, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Hazardous Substance” means chemicals, contaminants or industrial, toxic, hazardous or radioactive substances, wastes or other pollutants (including petroleum or petroleum distillates, asbestos or asbestos-containing material) regulated by Environmental Law.

“ Indebtedness ” of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or letters of credit (or reimbursement obligations in respect thereof), (iii) all obligations of such Person to pay the deferred purchase price of property or services, except for current accounts payable and accrued expenses arising in the Ordinary Course of Business, (iv) all indebtedness represented by obligations of such Person under a lease that is required to be capitalized for financial reporting purposes by such Person, (v) all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities, (vi) all obligations, contingent or otherwise, of such Person to guarantee any Indebtedness of any other Person, (vii) all obligations under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices, and (viii) all Indebtedness of the types referred to in clauses (i) through (vii) above of any other Person secured by any mortgage, lien, pledge, charge or security interest on property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness.

“Initial Closing Date” means the date of this Agreement .

“Initial Term” shall have the meaning therefor, as set forth in each applicable DES Agreement.

“Instruments” means any “instrument,” as such term is defined in Article 9 of the UCC, now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest.

“Intellectual Property” means all Copyrights, Trademarks, Patents, rights to Intellectual Property, Licenses, trade secrets, source codes, customer lists, proprietary or confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, data bases, skill, expertise, experience, processes, models, drawings, materials and records and goodwill.

“Interest Shares” means that number of shares of Common Stock determined by (a) multiplying the dollar amount of monies advanced to Chapeau in accordance with Section 2.3(a) for a particular period pursuant to any provision of this Agreement by (b) 0.17, then by multiplying such product by (c)(i) the number of days in the period for which the principal balance in question was outstanding divided by (ii) 365 and then by dividing such amount by (d) the volume weighted average closing price of one share of Common Stock on the over-the-counter bulletin board, or such other exchange, market or listing service on which shares of Common Stock trade subsequent to the date of this Note, over the period in which such interest amount has accrued, and expressing that quotient as a whole number.

“Inventory” means any “inventory,” as such term is defined in Article 9 of the UCC, wherever located, now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest, and, in any event, shall include, without limitation, all inventory, goods and other personal property which are held by or on behalf of Chapeau for sale or lease or are furnished or are to be furnished under a contract of service or which constitute raw materials, work in process or materials used or consumed or to be used or consumed in Chapeau’s business, or the processing, packaging, promotion, delivery or shipping of the same, and all furnished goods whether or not such inventory is listed on any schedules, assignments or reports furnished to the Company from time to time and whether or not the same is in transit or in the constructive, actual or exclusive occupancy or possession of Chapeau or is held by Chapeau or by others for Chapeau’s account, including, without limitation, all goods covered by purchase orders and contracts with suppliers and all goods billed and held by suppliers and all inventory which may be located on premises of Chapeau or of any carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or other persons.

“ Investment ” means, with respect to a Person, any investment, loan, guarantee, advance or capital contribution by such Person in, to or with respect to its Affiliates (other than the Company) or to any other Person, or any acquisition of property in exchange for cash or other property, provided that the purchase of Equipment in the Ordinary Course of Business shall not be included in the definition of Investment.

“ Investment Property ” has the meaning prescribed for such term as defined by the UCC, which definition is incorporated herein by reference, and includes, without limitation, a security (whether certificated or uncertificated) security entitlement, securities account, commodity contract, or commodity account.

“ Knowledge ” as it relates to Chapeau means, with respect to any matter in question, the actual knowledge of Chapeau’s directors and executive officers following such investigation as would be made by a reasonably prudent person similarly situated.

“Law” means any and all laws, statutes, ordinances, codes, rules, regulations, decrees and orders of any Governmental Authority.

“ Letter of Credit Rights ” has the meaning prescribed for such term as defined by the UCC, which definition is incorporated herein by reference, and includes, without limitation, a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance. The term does not include the right of a beneficiary to demand payment or performance under a letter of credit.

“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests now held or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest and any renewals or extensions thereof.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, any lease in the nature of a security interest, and the filing of any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the UCC or comparable law of any jurisdiction.

“ Loss ” means any losses, claims, damages, fines, penalties, assessments by public agencies, settlement, cost or expenses (including actual costs of defense and reasonable attorneys’ fees) and other liabilities, but excluding, any consequential, incidental, indirect, special or punitive damages, but including penalties and additions to Taxes.

“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets, or financial condition of Chapeau; (ii) the ability of Chapeau to pay and perform the Secured Obligations in accordance with the terms thereof; or (iii) the ability of any party to perform its obligations under this Agreement and the Transaction Documents.

“Minimum Annual Electric Service and Billing Rate” shall have the meaning therefor, as set forth in the applicable DES Agreement.

“Note” means a secured promissory note in the principal amount of $10 million, in the form agreed to by the parties to this Agreement.

“Option” means an option to acquire 5,000,000 shares of Common Stock issuable by Chapeau to the Company in connection with the Transactions, such Option to be substantially in the form of Exhibit A attached hereto.

“ Order ” means any judgment, order (consent or other), writ, stipulation, injunction, ruling, decision or decree of any Governmental Body.

“ Ordinary Course of Business ” means the ordinary and usual course of day-to-day operations of the business of Chapeau through the date hereof consistent with past practice.

“Patent License” means any written agreement granting any right with respect to any invention on which a Patent is in existence now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest.

“Patents” means all of the following now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest: (i) letters patents of, or rights corresponding thereto in, the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding thereto in the United States or any other country, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country; (ii) all reissues, continuations, continuations-in-part or extensions thereof; (iii) all petty patents, divisionals, and patents of addition; and (iv) all patents to issue in any such applications.

“Patent Security Agreement” means that certain Patent Security Agreement dated as of an even date herewith, substantially in the form of Exhibit D hereto.

“Permitted Liens” means any and all of the following: (i) liens in favor of the Company under this Agreement, (ii) liens securing the payment of taxes or other governmental charges not yet delinquent or being contested in good faith by appropriate proceeding, for which adequate reserves are maintained in accordance with GAAP; (iii) liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons imposed without action of such parties, provided that the payment thereof is not yet required or is otherwise being contested in good faith; (iv) liens incurred or deposits made in the Ordinary Course of Business in connection with worker’s compensation, unemployment insurance, social security and other like laws; (v) purchase money security interests in personal property acquired after the date of this Agreement, provided such are limited to the personal property so acquired and proceeds, thereof; (vi) any liens existing as of the date hereof and specifically disclosed to the Company herein; (vii) leases, subleases, licenses and sublicenses granted to others in the Ordinary Course of Business not interfering in any material respect with the conduct of the business of Chapeau; (viii) liens arising from judgments, decrees or attachments to the extent and only so long as such judgment, decree or attachment has not caused or resulted in an Event of Default (as defined herein); (ix) liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (x) liens which constitute rights of set-off of a customary nature or bankers’ liens with respect to amounts on deposit, whether arising by operation of law or by contract, in connection with arrangements entered into with banks in the Ordinary Course of Business; (xi) such Liens and other imperfections of title as do not materially detract from the secured property; (xii) such Liens already disclosed in Chapeau’s latest periodic report filed with the Commission prior to the Initial Closing Date; and (xiii) liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by liens of the type described in clause (vi) above, provided that any extension, renewal or replacement lien shall be limited to the property encumbered by the existing lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

“Person” means any individual, sole proprietorship, corporation (whether for profit, not-for-profit, professional or any other form of corporation), trust (including business trusts), estate, unincorporated association, employee organization, firm, business, institution, association, partnership (general, limited, limited liability or any other form of partnership), joint venture, limited liability company, Governmental Authority and any other entity of any kind or nature.

“Proceeds” means “proceeds,” as such term is defined in Article 9 of the UCC and, in any event, shall include, without limitation, (i) any and all Accounts, Chattel Paper, Instruments, cash or other forms of money or currency or other proceeds payable to Chapeau from time to time in respect of the Collateral, (ii) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to Chapeau from time to time with respect to any of the Collateral, (iii) any and all payments (in any form whatsoever) made or due and payable to Chapeau from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), and (iv) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

“Receivables” shall mean and include all of Chapeau’s Accounts, Instruments, Documents, Chattel Paper and General Intangibles whether secured or unsecured, whether now existing or hereafter created or arising, and whether or not specifically sold or assigned to the Company hereunder.

“Registration Rights Agreement” means that certain Registration Rights Agreement dated as of an even date herewith, which agreement sets forth Chapeau’s obligations with respect to the registration under the 1933 Act of all shares of Common Stock issued or issuable to the Company pursuant to the terms hereof. The Registration Rights Agreement is attached hereto as Exhibit C.

“Release” means any actual or threatened release, spill, emission, leaking, dumping, injection, pouring, disposal, discharge, leaching or migration into or through the Environment (including ambient air, surface water, groundwater, land surface or subsurface strata).

“ Restricted Investment ” means, with respect to Chapeau, any Investment except (a) purchases of Inventory in the Ordinary Course of Business, (b) acquisitions (not otherwise prohibited by this Agreement) of Equipment for use in the Ordinary Course of Business, (c) direct obligations of the United States of America or any agency thereof, or obligations guaranteed by the United States of America, that mature within one year from the date of acquisition thereof, certificates of deposit, maturing within one year from the date of acquisition, and money market or demand deposit accounts issued by a commercial bank that is a member of the Federal Reserve System and has capital and surplus aggregating at least $100,000,000, (d) advances on commissions due and payable in respect of Existing Turnkey Projects and to be paid with respect to Future Turnkey Projects and (e) travel and other advances to employees made in the Ordinary Course of Business.

“Secured Obligations” shall mean and include all principal, interest, fees, costs, or other liabilities or obligations for monetary amounts owed by Chapeau to the Company, whether due or to become due, matured or unmatured, liquidated or unliquidated, contingent or non-contingent arising under the Note as the same may from time to time be amended, modified, supplemented or restated.

“Subsequent Closing Date” shall mean the first Business Day immediately following the date upon which all of the necessary consents and assignments have been executed to effectuate the sale and transfer of the Existing Turnkey Projects to the Company.

“ Taxes ” means (A) all federal, state, local or foreign taxes or similar charges, fees, imposts, levies and assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties and similar fees, assessments and charges imposed by any taxing authority, (B) all interest, penalties, fines, additions to tax or additional amounts imposed by any taxing authority in connection with any item described in clause (A), and (C) any liability for the foregoing payable by reason of contract, assumption, operation of Law, Treasury Regulation Section 1.1502-6 (or any predecessor or successor thereof of any analogous or similar provision under Law), as a transferee or otherwise

“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest.

“Trademarks” means any of the following now owned or hereafter acquired by Chapeau or in which Chapeau now holds or hereafter acquires any interest: (i) any and all trademarks, trade names, corporate names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and any applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any sthereof or any other country or any political subdivision thereof and (ii) any reissues, extensions or renewals thereof.

“Trademark Security Agreement” means that certain Trademark Security Agreement dated as of an even date herewith, substantially in the form of Exhibit E hereto.

“Transaction Documents” means this Agreement, the Note, Option, Warrant and any other agreement entered into between Chapeau and the Company pursuant to the Transactions.

“UCC” shall mean the Uniform Commercial Code as the same may, from time to time, be in effect in the State of Virginia. Unless otherwise defined herein, terms that are defined in the UCC and used herein shall have the meanings given to them in the UCC.

“Warrant” means a warrant to acquire 5,000,000 shares of Common Stock issuable by Chapeau to the Company in connection with the Transactions, such Warrant to be substantially in the form of Exhibit B attached hereto.

Section 1.3 Other Definitional Provisions . The Section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provision hereof. Unless the context otherwise requires, (i) all references to Sections contained in this Agreement are references to sections of this Agreement, (ii) words in the singular include the plural and vice versa and (iii) words of any gender include each other gender. As used in this Agreement, the following words or phrases have the following meanings: (i) “ include ”, “ includes ” or “ including ” shall be deemed to be followed by the words “without limitation”; (ii) “ hereby ”, “ herein ”, “ hereof ”, “ hereto ”, “ hereunder ”, and words of similar import refer to this Agreement as a whole and not to any particular provision hereof; and (iii) “ or ” means “and/or”. References in this Agreement to any Persons shall include such Persons and their successors and permitted assigns.

ARTICLE II

PURCHASE OF EXISTING TURNKEY PROJECTS; ASSIGNMENT AND ASSUMPTION

Section 2.1 Purchase and Sale On the Subsequent Closing Date, Chapeau agrees to sell all of its right, title and interest in and to the Existing Turnkey Projects identified on Schedule 2.1(a) and for the dollar amounts identified on Schedule 2.1(a) (the “ Purchase Price ”) and the Company agrees to purchase the Existing Turnkey Projects for such Purchase Price (the “ Initial Acquisitions ”). The parties acknowledge that payment of the Purchase Price is intended to be: (a) generally in accordance with the Project Funding Schedule set forth in Section 2.3(a)(iii) of this Agreement; and (b) on other terms and conditions mutually agreed to by the parties. The parties further acknowledge and agree that the Purchase Price was calculated based on a total sales price to the Company, inclusive of all installation, sales or use tax, sales commissions, insurance and any other cost associated with the installation, maintenance and provision of service over the Initial Term of the Existing Turnkey Projects, as is necessary to provide the Company with a projected internal rate of return (“ IRR ”) of 17% over such Initial Term, with such return taking into effect the specified future cash flows from the Minimum Annual Electric Service and Billing Rate as such terms are defined in the respective DES Agreement for each Existing Turnkey Project.

Section 2.2 Assignment and Assumption. In connection with such purchase and sale, Chapeau agrees to transfer and assign all of its right, title and interest in and to the Existing DES Agreements set forth on Schedule 2.2 and the Company agrees to assume such agreements, subject to Chapeau’s Continuing Service Obligation, as follows:

(a) Chapeau shall perform Chapeau’s Continuing Service Obligation with respect to each Turnkey Project sold to the Company pursuant to the terms of a S&M Agreement on terms to be mutually agreed, which S&M Agreement shall include the monitoring, operation, service, maintenance and all other support activities to be performed by Chapeau in connection with each such Turnkey Project (collectively, “ Chapeau’s Support ”).

(b) Chapeau shall use its best efforts, and, to the extent relevant, the Company shall provide reasonable assistance, to obtain the Customer’s consent to the assignment of all of Chapeau’s rights and obligations under each DES Agreement related to Existing Turnkey Projects.

Section 2.3 Option to Acquire Future Turnkey Projects . In consideration of the transactions contemplated by this Agreement, Chapeau grants to the Company the Future Turnkey Project Option and the Company hereby accepts the grant thereof.

(a) The Future Turnkey Project Option shall be subject to the following terms and conditions:

(i) Chapeau agrees to present to the Company detailed information relating to each Future Turnkey Project, including without limitation, the location of the project, the state and county of permitting and installation, the terms of any DES Agreement being negotiated with a potential Customer, the salient terms of the associated S&M Agreement and all other information reasonably requested by the Company (collectively, the “ Turnkey Information Package ”). Chapeau will use commercially reasonably efforts to originate and negotiate a DES Agreement for each Future Turnkey Project to be offered to the Company that (A) are (i) forms of master agreements with key Customers reasonably and mutually acceptable to the Company and Chapeau, which forms of master agreement can be readily adapted to multiple Customer locations with minimal modifications, solely for location specific data, or (ii) single agreements with Customers reasonably and mutually acceptable to the Company and Chapeau and (B) have a term of 10 years or more, and such other terms as are reasonably and mutually acceptable to the Company and Chapeau.

(ii) The Company shall have thirty (30) days from the date of receipt of the complete Turnkey Information Package to determine whether to acquire such Future Turnkey Project. If the Company elects not to acquire such Future Turnkey Project then Chapeau may seek financing for that particular project from third party financing sources, provided that the failure of the Company to acquire one or more Future Turnkey Projects shall not alter Chapeau’s obligations under this Section 2.3.

(iii) If the Company does elect to acquire such Future Turnkey Project, the acquisition thereof shall be on a project funding schedule (“ Project Funding Schedule ”) based upon a project management plan for each Turnkey Project presented to the Company by Chapeau, which schedule shall project the funding requirements for each aspect of the project (i.e., permitting, engineering, product development, construction, Commissioning, etc.) and, unless otherwise agreed by the parties, shall provide the following purchase price installments according to the following schedule:

(1) 35% shall be paid to Chapeau upon execution of a DES Agreement in respect of such Future Turnkey Project;

(2) 25% shall be paid to Chapeau upon delivery by its third party supplier of the generator and its prime mover engine to Chapeau for assembly;

(3) 20% shall be paid to Chapeau upon successful completion of Chapeau’s factory validation testing in accordance with Chapeau’s then current standard procedures of the assembly of the EnviroGen™ Energy Module(s) or similar products required for the corresponding Turnkey Project;

(4) 10% shall be paid to Chapeau upon delivery of the EnviroGen™ Energy Module(s) or similar products required for such Future Turnkey Project to the Customer’s site; and

(5) the remaining 10% shall be paid to Chapeau upon Commissioning of such Future Turnkey Project.

(b) The Company shall be entitled to receive quarterly interest payments on the amounts advanced to Chapeau in accordance with Section 2.3(a), payable in the form of Interest Shares, provided that, interest on such advances shall cease to accrue upon the commissioning of the Turnkey Project in question and the final payment of Interest Shares shall be due within thirty (30) days following the date of such commissioning.

(c) If the Company experiences a default in or cancellation of a DES Agreement (A) prior to the complete installation of the corresponding Turnkey Project, in the Company’s reasonable direction Chapeau shall (i) use all reasonable efforts to obtain a new DES Agreement and Customer on terms and with a counterparty reasonably acceptable to the Company or (ii) cancel the DES Agreement or Existing Service Agreement, as applicable, and return to the Company all funds received in connection therewith, net of any offsetting amounts collected by the Company from the Customer pursuant to the terms of the cancelled DES Agreement; or (B) after the Commissioning of the corresponding Turnkey Project, Chapeau will use all reasonable efforts to relocate the affected Turnkey Project and to obtain a new DES Agreement therefor on terms and with a counterparty reasonably acceptable to the Company, provided that all amounts expended by the Company in respect of such terminated Turnkey Project under Section 2.3(a) shall continue to earn interest pursuant to Section 2.3(b) until Chapeau has either fully reimbursed the Company in respect of such expenditures or a replacement Turnkey Project has been selected and Commissioned.

(d) The Company and Chapeau will execute a Turnkey Project Purchase Agreement with respect to each such Future Turnkey Project to be acquired by the Company, which Agreement will set forth the Project Funding Schedule for such Future Turnkey Project. In respect of each such Future Turnkey Project, the Parties acknowledge and agree that:

(i) the sales price to the Company therefor will be an amount calculated to provide the Company a projected IRR of 17% over the Initial Term of the relevant DES Agreement including all installation, sales or use tax, sales commissions, insurance and any other cost associated with the installation, maintenance and provision of service over the Initial Term, taking into effect the specified future cash flows from the Minimum Annual Electric Service and Billing Rate;

(ii) Chapeau will bear full responsibility with respect to the terms of Chapeau’s Continuing Service Obligation relating to such Future Turnkey Project.

(e) The Future Turnkey Project Option shall continue until the Company has acquired $300 million in Future Turnkey Projects (the “Funding Threshold” ), unless (i) the Company elects to discontinue such acquisitions prior to fulfillment of the Funding Threshold (ii) this Agreement has been terminated.. If the Company and Chapeau have executed Turnkey Project Purchase Agreements equal to or in excess of the Funding Threshold, then the Company shall have the exclusive right to acquire an additional $300 million in Future Turnkey Projects (the “Secondary Funding Threshold” ) on terms and conditions substantially similar to those provided for in Section 2.3 of this Agreement except that the sales price to the Company for such Future Turnkey Projects shall provide for a projected IRR to the Company of 15%. If the Company declines to acquire any such additional Future Turnkey Projects then Chapeau may secure alternative financing for the sale of any such Future Turnkey Projects. If the Company and Chapeau have executed Turnkey Project Purchase Agreements equal to or in excess of the Secondary Funding Threshold, then the Company shall have the exclusive right to acquire all Turnkey Projects generated by Chapeau for so long as the Company has the financial capability to undertake said transactions, which acquisitions shall be on terms and conditions to be mutually agreed upon by Chapeau and the Company. If the Company declines to acquire any such additional Turnkey Projects or the parties are unable to reach mutual agreement in respect of the terms of such acquisitions, then Chapeau may secure alternative financing for the manufacture and sale of any such Turnkey Projects.

Section 2.4 The Loan . Subject to the conditions set forth in this Agreement, on the Initial Closing Date, the Company shall make the Loan to Chapeau. Except as otherwise set forth herein, the terms and conditions of the Loan shall be governed by the Note.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Chapeau that:

Section 3.1 Due Organization; Good Standing and Power . The Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Virginia, and has all requisite limited liability company power and authority necessary to own or lease all of its properties and assets and to carry on its business as it is now being conducted.

Section 3.2

Authorization; Noncontravention .

(a) The Company has all necessary limited liability company power and authority to execute and deliver this Agreement and the Transaction Documents to which it is a party and, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Company of this Agreement and the Transaction Documents to which it is a party, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by all necessary limited liability company action on the part of the Company. This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by Chapeau, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at law or in equity (the “ Bankruptcy and Equity Exception ”). The Transaction Documents to which the Company is a party will upon execution be duly executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the other parties thereto, and will constitute the legal, valid and binding obligations of the Company, enforceable against it in accordance with their respective terms, subject to the Bankruptcy and Equity Exception.

(b) The execution and delivery by the Company of this Agreement and the Transaction Documents to which it is a party do not, and neither the consummation by the Company of the transactions contemplated by this Agreement and the Transaction Documents to which it is a party nor the compliance by the Company with any of the terms or provisions hereof and thereof will, (i) conflict with or violate any provision of the certificate of formation or limited liability company agreement of the Company, or (ii) (x) violate any Law or Order applicable to the Company or any of its properties or assets, or (y) violate or constitute a default under any of the terms, conditions or provisions of any Contract to which the Company is a party or by which any of its properties or assets is bound.

Section 3.3 No Litigation . There is no action, suit, proceeding, hearing or investigation pending or, to the Company’s actual knowledge, threatened, against the Company or any of its Affiliates that would reasonably be expected to prevent, hinder or delay the consummation of any of the transactions contemplated hereby or that questions the legality or propriety of the transactions contemplated hereby.

Section 3.4 Securities Law Matters . The Company acknowledges that shares of Common Stock to be issued by Chapeau under this Agreement have not been registered under the Securities Act of 1933, as amended (the “ Securities Act ”), or the securities laws of any state or foreign jurisdiction and, unless so registered, may not be offered, sold, transferred, or otherwise disposed of except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable securities laws of any state or foreign jurisdiction. The Company is acquiring shares of Common Stock for investment and not with a present view to the sale or distribution of them within the meaning of Section 2(11) of the Securities Act.

Section 3.5 No Prior Act

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