EMPLOYMENT AGREEMENT
This Employment Agreement (this "Employment Agreement") is made and entered
into by and between International Fuel Technology, Inc., a Nevada corporation
(the "Company"), and Xxx Xxxxxxxxxx (the "Employee"), and is dated as of
May 25, 2001.
Recitals:
Whereas, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its shareholders to employ
the Employee in the position set forth below, and the Employee desires to serve
in that capacity.
Whereas, the Company is engaged in the business of i) researching,
developing, licensing, or selling technologies intended to reduce harmful
pollutant emissions from petroleum-based fuels and ii) manufacturing or
marketing products derived or related to such technologies (the "Business").
Now, Therefore, in consideration of the foregoing premises, the mutual
covenants and promises herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and Employee hereby agree as follows:
I. Employment Period. The Company shall employ the Employee, and the Employee
shall serve the Company, on the terms and conditions set forth in this
Employment Agreement, for the period commencing on the date hereof and ending on
the second anniversary hereof (the "Initial Term" and, together with any
subsequent term of Employment, the "Employment Period"); provided that the term
of employment hereunder will automatically be renewed for successive one year
terms (each such term a "Renewal Term") unless either party shall, at least 30
days before such date, provide notice to the other party that the Employment
Period will not be extended.
1. Position and Duties.
(a) Duties. The Employee shall have such duties and responsibilities
as may be assigned by the Board to the Consultant from time to time.
(b) Full Time. During the Employment Period, and excluding any periods
of vacation and sick leave to which the Employee is entitled, the Employee shall
devote his full-time efforts to the business and affairs of the Company and use
his best efforts to carry out such responsibilities faithfully and efficiently.
It shall not be considered a violation of the foregoing for the Employee to (1)
serve on corporate, civic or charitable boards or committees, (2) deliver
lectures or fulfill speaking engagements, or (3) manage personal investments, so
long as such activities do not interfere with the performance of the his
responsibilities as an employee of the Company in accordance with this
Employment Agreement or violate the provisions of (S)5 of this Employment
Agreement.
2. Compensation.
(a) Base Salary. During the Initial Term, the Employee shall receive
an annual base salary (the "Annual Base Salary") at the minimum rate of
$120,000. In the event of any Renewal Term as provided for in (S)1 above, the
Annual Base Salary shall be renegotiated by the parties hereto. The Annual Base
Salary shall be payable in accordance with the Company's payroll practices as in
effect from time to time. The Board may increase the Annual Base Salary above
the foregoing amounts at its discretion.
(b) Benefits. The Employee shall be eligible to participate in all
employee benefit plans of the Company in which other employees of the Company in
comparable positions, responsibility and seniority are eligible to participate,
provided that the Employee acknowledges that entitlement to benefits under any
of the Company's discretionary benefit plan is within the sole discretion of the
Company management.
(c) Compensation Shares. In addition to the Annual Base Salary, the
Employee shall be awarded a total of One Million (1,000,000) Compensation
Shares, with such shares to be issued as follows:
(1) Thirty percent (30%) of such Compensation Shares shall be
issued upon the execution of this Employment Agreement;
(2) Thirty percent (30%) of such Compensation Shares shall be
issued upon the first anniversary of the execution of this Employment Agreement;
and
(3) The remaining forty percent (40%) of such Compensation Shares
shall be issued upon the second anniversary of the execution of this Employment
Agreement.
(d) Compensation Shares; Cap. As used above, the term "Compensation
Shares" shall mean shares of the Company's common stock, $0.01 par value
("Common Stock"). In no event shall the total Compensation Shares awarded
pursuant to (S)2(c) be in excess of One Million (1,000,000).
3. Termination of Employment.
(a) Death or Disability. The Employee's employment shall terminate
automatically upon the Employee's death during the Employment Period. The
Company shall be entitled to terminate the Employee's employment because of the
Employee's Disability during the Employment Period. "Disability" means that (1)
the Employee has been unable, for a period of six months, or for a total of 90
consecutive days in any given period, to perform the Employee's duties under
this Employment Agreement, as a result of physical or mental illness or injury,
and (2) a physician selected by the Company or its insurers, and acceptable to
the Employee or the Employee's guardian or legal representative, has determined
that the Employee's incapacity is total and permanent. A termination of the
Employee's employment by the Company for Disability shall be communicated to the
Employee by written notice, and shall
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be effective on the 30th day after receipt of such notice by the Employee (the
"Disability Effective Date"), unless the Employee is able to, and does, return
to full-time performance of the Employee's duties before the Disability
Effective Date.
(b) By the Company.
(1) The Company may terminate the Employee's employment during
the Employment Period for Cause or without Cause. "Cause" means:
(i) any fraud, embezzlement or other dishonesty of the
Employee that materially and adversely affects the Company's business or
reputation; or
(ii) the Employee's conviction for a felony or entering into
a plea of nolo contendere with respect to a felony.
(2) A termination of employment by the Company for Cause shall be
effectuated by giving the Employee written notice ("Notice of Termination for
Cause") of the termination, setting forth the conduct of the Employee that
constitutes Cause. Termination of employment by the Company for Cause shall be
effective on the date when the Notice of Termination for Cause is given, unless
the notice sets forth a later date (which date shall in no event be later than
30 days after the notice is given).
(3) A termination of the Employee's employment by the Company
without Cause shall be effected by giving the Employee written notice of the
termination at least thirty (30) days prior to the termination date.
(c) By the Employee.
(1) The Employee may terminate employment in the event of a Good
Reason. "Good Reason" means:
(i) The assignment to the Employee of any duties
inconsistent in any respect with (S)1(a) of this Employment Agreement, other
than actions that are not taken in bad faith and are remedied by the Company
within fifteen (15) days after receipt of notice thereof from the Employee; or
(ii) any failure by the Company to comply with any provision
of (S)2 of this Employment Agreement, other than failures that are not taken in
bad faith and are remedied by the Company within fifteen (15) days after receipt
of notice thereof from the Employee.
(2) A termination of employment by the Employee for Good Reason
shall be effectuated by giving the Company written notice ("Notice of
Termination for Good Reason") of the termination, setting forth the conduct of
the Company that constitutes Good Reason. A termination of employment by the
Employee for Good Reason shall be effective on the fifth business day following
the date when the Notice of Termination for Good Reason is given, unless the
notice sets forth a later date (which date shall in no event be later than 30
days after the notice is given).
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(d) No Waiver.
The failure to set forth any fact or circumstance in a Notice of
Termination for Cause or a Notice of Termination for Good Reason shall not
constitute a waiver of the right to assert, and shall not preclude the party
giving notice from asserting, such fact or circumstance in an attempt to enforce
any right under or provision of this Employment Agreement.
(e) Date of Termination.
The "Date of Termination" means the date of the Employee's death, the
Disability Effective Date, the date on which the termination of the Employee's
employment by the Company for Cause or by the Employee for Good Reason is
effective, or the date on which the Company gives the Employee notice of a
termination of employment without Cause, as the case may be.
4. Obligations of the Company upon Termination. In full satisfaction of
its obligations under this Employment Agreement, Company shall make the payments
set forth in this (S)4 upon a termination of the employment relationship.
(a) Other Than for Cause, Death or Disability; Good Reason. If, during
the Employment Period, the Company terminates the Employee's employment, other
than for Cause, Death or Disability, or the Employee terminates his employment
for Good Reason, the Company shall (i) pay the Employee's accrued but unpaid
portion of the Annual Base Salary (the "Accrued Salary") to the Employee in a
lump sum in cash within 30 days after the Date of Termination, (ii) continue to
pay the Annual Base Salary for the remainder of the term hereof, (iii) issue the
accrued, but unissued, Compensation Shares (the "Accrued Compensation Shares";
the Accrued Compensation Shares and the Accrued Salary shall be referred to
herein, collectively, as the "Accrued Obligations"), and (iv) issue the
Compensation Shares for the remainder of the term hereof. In addition, the
Employee shall be entitled to a Bonus in an amount equal to the Bonus the
Employee would have received for the Employment Period had this Employment
Agreement not been terminated.
(b) Death or Disability. If the Employee's employment is terminated by
reason of the Employee's death or Disability during the Employment Period, the
Company shall pay the Accrued Obligations to the Employee or the Employee's
estate or legal representative, as applicable, in a lump sum in cash within 30
days after the Date of Termination. In addition, if the Employee's employment is
terminated by reason of Disability, the Company will continue to pay to Employee
until the earlier of: (i) expiration of the Employment Period, or (ii) the date
of Employee's death, the Annual Base Salary, less any amounts received by
Employee under any disability insurance coverage maintained for Employee by the
Company.
(c) Cause. If the Employee's employment is terminated by the Company
for Cause during the Employment Period, the Company shall pay Employee the
Accrued Obligations.
(d) Notwithstanding anything to the contrary contained herein, in
addition to the amounts described above, following any termination of the
Employee's employment, the Company shall pay the Employee all amounts to which
the Employee is then entitled as of the date of termination, under any
compensation or benefit plan or program of the Company.
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5. Confidential Information; Non-Competition.
(a) Confidential Information.
(1) The Employee (i) shall hold in a fiduciary capacity for the
benefit of the Company all Confidential Information that the Employee obtains or
has access to during the Employment Period and (ii) shall not communicate,
divulge, use or disseminate Confidential Information, except with the prior
written consent of the Company. In the event that Employee is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, Employee will notify the
Company promptly of the request or requirement so that the Company may seek an
appropriate protective order or waive compliance with the provisions of this
(S)5(a). If, in the absence of a protective order or the receipt of a waiver
hereunder, Employee is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt,
Employee may disclose the Confidential Information to the tribunal; provided,
however, that the Employee shall use his best efforts to obtain, at the request
of the Company, an order or other assurance that confidential treatment will be
accorded to such portion of the Confidential Information required to be
disclosed as the Company shall designate.
(2) As used herein, the term "Confidential Information" means all
information of Company that is not generally known to the public, whether of a
technical, business or other nature (including, without limitation, trade
secrets, know-how and information relating to the technology, customers,
business plans, promotional and marketing activities, finances and other
business affairs of the Company). In furtherance of the foregoing, "Confidential
Information" means information, not publicly known, about any one or more of
Company's methods, processes, techniques equipment, research, engineering,
software, computer systems, activities, sources of supply, customer contact
lists, sales devices, pricing methods, services or products, all matters
relating to Company's research development, finances, manufacturing, purchasing,
accounting, engineering marketing merchandising pricing, profit margins, or
selling, or any one or more of them. Notwithstanding anything herein to the
contrary, "Confidential Information" shall not include (i) such data which is or
becomes public or publicly available other than as a result of the acts of the
Employee, or (ii) is independently obtained by Employee from a third party that,
to the knowledge of the Employee, has no duty of confidentiality to the Company,
or (iii) is independently developed by Employee and does not incorporate
anything otherwise deemed herein to be Confidential Information.
(b) Noncompetition. During and for a period of three (3) years
following the termination of this Employment Agreement other than by the Company
without Cause or by the Employee for Good Reason (the "Restricted Period"),
Employee will not, directly or indirectly, personally or as an Employee, owner,
partner, member, associate, officer, manager, agent, advisor, Employee or
otherwise, or by means of any corporate or other entity or device, to engage in
any business anywhere in the world which is competitive with the Business; (ii)
solicit, divert, take away or interfere with any of the clients or Employees of
the Company; or (iii) disclose, divulge, publish or communicate to any person,
firm or other entity, in any manner whatsoever, any confidential or proprietary
information concerning any matters affecting or relating to the Company.
Employee acknowledges that the geographic area covered hereby and
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the period and nature of the restrictions
set forth above are reasonable and necessary for the protection of the Company's
legitimate business interests. The parties agree that should any of the
provisions set forth herein be held to be too broad for that purpose or invalid
or unenforceable for any reason, said provisions will be interpreted in such
narrower sense as shall be necessary to make the same valid and enforceable.
6. INVENTIONS.
(a) Employee acknowledges that (1) because Employee possesses
substantial technical expertise and skill with respect to Company's businesses,
Company desires to obtain exclusive ownership of each Invention, and Company
will be at a substantial competitive disadvantage if it fails to acquire
exclusive ownership of each Invention; (2) the services to be performed by
Employee under this Employment Agreement are of a special, unique, unusual,
extraordinary, and intellectual character and (3) the provisions of this (S)6
are reasonable and necessary to provide Company with exclusive ownership of all
Inventions.
(b) In consideration of the amounts that have been and will be paid by
Company to Employee under this Employment Agreement, Employee covenants as
follows:
(1) Each Invention will belong exclusively to Company. Employee
acknowledges that all of Employee' writing, works of authorship, and other
Inventions are works made for hire and the property of Company, including any
copyrights, patents, or other intellectual property rights pertaining thereto.
If it is determined that any such works are not works made for hire, Employee
hereby assigns to Company all of Employee' right, title, and interest, including
all rights of copyright, patent, and other intellectual property rights, to or
in such Inventions. Employee covenants that he will promptly:
(i) disclose to Company in writing any Invention;
(ii) assign to Company or to a party designated by Company,
at Company's request and without additional compensation, all of Employee'
right to Inventions for the United States and all other jurisdictions;
(iii) execute and deliver to Company such applications,
assignments, and other documents as Company may request in order to apply for
and obtain patents or other registrations with respect to any Invention in the
United States and all other jurisdictions;
(iv) sign all other documents and papers necessary to carry
out the above obligations; and
(v) give testimony and render any other assistance in
support of Company's rights to any Invention.
(c) Employee will give notice to Company, within ten days after
accepting any employment with a Person other than Company, of the identity
of such Person. Company may notify such Person that Employee is bound by
this Employment Agreement and, at Company's
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election, furnish such Person with a copy of this Employment Agreement or
relevant portions hereof.
(d) As used in this (S)6 the term "Invention" shall mean any idea,
invention, technique, modification, process, or improvement (whether patentable
or not), any industrial design (whether registerable or not), and any work of
authorship (whether or not copyright protection may be obtained for it) created,
conceived, or developed by Employee, either solely or in conjunction with
others, during the Employment Period, or a period that includes a portion of the
Restricted Period, that relates in any way to, or is useful in any manner in,
the Business or the business then being conducted or proposed to be conducted by
the Company, and any such item created by Employee, either solely or in
conjunction with others, following the termination of this Employment Agreement,
that is based upon or uses Confidential Information.
7. Loans from Company. During the period commencing upon the execution of
this Employment Agreement and continuing for the first calendar month
thereafter, the Company will one (1) time, at the Employee's request, loan the
Employee an amount up to $25,000. During the twelve (12) month period after the
effective date (as declared by the Securities and Exchange Commission, the
"Effective Date") of the registration statement filed by the Company pursuant to
Section 2(f) of the Share Purchase Agreement entered into on or about the date
hereof between, among others, the Company and the Employee, if- after the use of
Employee's best efforts - the Employee is unable to sell the Employee's shares
of the Company's common stock on the open market the Company will, at the
Employees request, loan the Employee an amount up to $25,000 not more than once
during each calendar month. Notwithstanding anything else contained herein, the
Company shall not be obligated to lend any amount, after the aggregate principal
amount of all loans made by the Company hereunder exceeds $300,000. Each loan
provided for in this section shall be memorialized by a demand promissory note
in the form of Exhibit A, attached hereto, which promissory note shall be
secured by a pledge agreement in the form of Exhibit B from Employee in favor of
the Company, pledging Employee's interest in the number of shares of Common
Stock necessary (when valued at the last sale price quoted on the NASD Over-The-
Counter Bulletin Board on the trading day immediately preceding the loan date)
to secure the original principal balance of the note evidencing such loan.
8. Successors.
(a) Assignment. This Employment Agreement is personal to the Employee
and, without the prior written consent of the Company, shall not be assignable
by the Employee.
(b) Successors and Assigns. This Employment Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns.
9. Miscellaneous.
(a) Attorneys' Fees. If any action or proceeding relating to this
Employment Agreement or the enforcement of any provision of this Employment
Agreement is brought against any party hereto, the prevailing party shall be
entitled to recover reasonable attorneys'
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fees, costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
(b) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Employee:
Xxx Xxxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx XX000XX
Xxxxxxx
Copy to:
Xxxx Xxxx X'Xxxxxxx
Husch & Eppenberger, LLC
000 X. Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
If to the Company:
Xxxxxxx X. Xxxxxxxxxxx
President
International Fuel Technology, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Copy to:
Xxxxxxxxx Xxxxxxxx LLP
Xxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Party notice in the manner herein set forth.
(c) Headings. The underlined headings contained in this Employment
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Employment
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Agreement and shall not be referred to in connection with the construction or
interpretation of this Employment Agreement.
(d) Counterparts. This Employment Agreement may be executed in
several counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute one agreement.
(e) Governing Law. This Employment Agreement shall be construed in
accordance with, and governed in all respects by, the internal laws of the State
of Missouri (without giving effect to principles of conflicts of laws).
(f) Waiver. No failure on the part of any Person to exercise any
power, right, privilege or remedy under this Employment Agreement, and no delay
on the part of any Person in exercising any power, right, privilege or remedy
under this Employment Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or of
any other power, right, privilege or remedy. No Person shall be deemed to have
waived any claim arising out of this Employment Agreement, or any power, right,
privilege or remedy under this Employment Agreement, unless the waiver of such
claim, power, right, privilege or remedy is expressly set forth in a written
instrument duly executed and delivered on behalf of such Person; and any such
waiver shall not be applicable or have any effect except in the specific
instance in which it is given.
(g) Amendments. This Employment Agreement may not be amended,
modified, altered or supplemented other than by means of a written instrument
duly executed and delivered on behalf of all of the parties hereto.
(h) Severability. In the event that any provision of this Employment
Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Employment Agreement, and the
application of such provision to Persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
(i) Parties in Interest. None of the provisions of this Employment
Agreement is intended to provide any rights or remedies to any Person other than
the parties hereto and their respective successors and assigns, if any.
(j) Entire Agreement. This Employment Agreement, the Recitals hereto,
and the other agreements referred to herein set forth the entire understanding
of the parties hereto relating to the subject matter hereof and thereof and
supersede all prior agreements and understandings among or between any of the
parties relating to the subject matter hereof and thereof.
[Remainder of Page Intentionally Left Blank.]
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In Witness Whereof, the undersigned have entered into this Employment
Agreement as of this date and year first above written.
Company Employee
International Fuel Technology, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxx Xxxxxxxxxx
----------------------------------- ----------------------------
Printed Name: Xxxxxxx X. Xxxxxxxxxxx Xxx Xxxxxxxxxx
Title: President
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EXHIBIT A
PROMISSORY NOTE
St. Louis, Missouri
$25,000.00
---------
May 25, 2001
------------
1. MAKER'S PROMISE TO PAY. The undersigned maker,
("Maker"), promises to pay the sum of twenty five thousand and No/100 Dollars
($25000.00), (this amount is called "principal") to the order of International
Fuel Technology, Inc., a Nevada corporation ("Lender"), on the terms and
conditions provided for herein. Lender shall have no further obligation to
advance any additional sums under this Note.
2. INTEREST. Principal due under this Note shall bear interest at an
annual rate of %, compounded daily.
3. PAYMENTS. Maker shall pay principal and interest on demand. Maker shall
make all payments at 0000 Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000 or at
a different place if required by Lender.
4. BORROWER'S RIGHT TO PREPAY. Maker shall have the right to make payments
of principal at any time before they are due. A payment of principal in such
fashion is known as a "prepayment." Maker may make a full prepayment or partial
prepayments without paying any prepayment charge. Lender will use all such
prepayments to reduce the amount of principal owed under this Note. If Maker
makes a partial prepayment, there will be no changes in the amount or timing of
payments due hereunder unless the Lender agrees in writing to those changes.
5. BORROWER'S FAILURE TO PAY AS REQUIRED. Maker shall be in default if
Maker fails to pay the full amount of each payment on the date it is due. If
Maker is in default, Lender will have the right to exercise its rights under
that certain Pledge Agreement, which secures the Maker's obligations hereunder
(the "Pledge Agreement") and to be paid back by Maker for all of Lender's costs
and expenses in enforcing this Note. Those expenses include, for example,
reasonable attorneys' fees.
6. BUSINESS PURPOSE. Maker states that the loan evidenced by this
Promissory Note from the Lender is a business loan for business purposes.
7. MISCELLANEOUS. This Note shall be governed by and construed in
accordance with the laws of the State of Missouri, without regard to any
conflict of laws principles which would apply the laws of any other
jurisdiction, and shall be binding upon the successors of the undersigned and
inure to the benefit of the Lender, its successors, endorsees and assigns. If
any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby. No delay or failure by the Lender in exercising any
right, power or remedy hereunder shall affect or
operate as a waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy. The rights and remedies hereunder of the Lender are cumulative and not
exclusive of any rights or remedies which it would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of the Lender
of any breach or default under this Note or any such waiver of any provision or
condition of this Note must be in writing and shall be effective only to the
extent in such writing specifically set forth. The undersigned Maker agrees to
pay to the Lender all expenses, including, without limitation, reasonable fees
and disbursements of counsel, incurred by the Lender in the administration,
enforcement and collection of this Lender. The undersigned Maker waives
presentment for payment, notice of non-payment, protest and notice of protest of
this note and diligence in collection or bringing suit. Time is of the essence
with respect to repayments under this Note.
8. Non-Recourse. Notwithstanding anything to the contrary contained in
this Note, except as specifically provided in this Note, the Maker shall not
have any personal liability for the payment of any sum of money which is or may
be payable hereunder, except that Lender may bring a foreclosure action or
action for specific performance or any other appropriate action or proceeding
against Maker to enable Lender to enforce and realize upon any interests under
the Pledge Agreement.
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FOREBEAR
FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH
DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (MAKER(S)) AND US (LENDER) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
IN WITNESS WHEREOF, the Maker has executed and delivered this agreement as
of the day and year set forth above.
Maker
________________________________________
Printed Name____________________________
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Exhibit B
PLEDGE AGREEMENT
This Pledge Agreement by and between International Fuel Technology, Inc., a
Nevada corporation (the "Lender"), and Xxx Xxxxxxxxxx (the "Pledgor"), is dated
as of May 25, 2001.
1. PLEDGE AND GRANT OF SECURITY INTEREST. FOR VALUE RECEIVED AND IN
CONSIDERATION of the LENDER extending and making available to the PLEDGOR
certain loans and other financial accommodations including those provided for
pursuant to a $25,000.00 Promissory Note of even-date herewith and all
notes and other documents related thereto (collectively, the "Loan Agreement").
PLEDGOR hereby assigns, pledges and grants a continuing security interest in and
to the following property, herein called "Collateral":
(a) 54,645 common shares (collectively referred to herein as
the "Pledged Stock");
(b) all dividends, new shares, warrants, liquidation rights and all
other rights, proceeds and payments or distributions of any nature, in respect
to the foregoing Pledged Stock;
(c) all increases, substitutions, replacements, additions, and
accessions with respect to the Pledged Stock; and
(d) all cash and non-cash proceeds of all the foregoing,
to secure the payment and performance by PLEDGOR of all obligations
pursuant to the Loan Agreement, including any and all extensions, renewals and
modifications thereof (all of the foregoing herein referred to as the
"Obligations").
2. DELIVERY OF COLLATERAL. The PLEDGOR delivers to LENDER herewith the
certificates representing the Pledged Stock, together with signature guaranteed
stock powers and in such other form as the LENDER shall require.
3. OWNERSHIP OF COLLATERAL. The PLEDGOR hereby represents and warrants
to the LENDER that it is the sole owner of; that it has the full right and
authority to convey the pledge and security interest herein provided to the
LENDER; and that no other person has or purports to have any right, title, lien,
encumbrance, adverse claim, or interest in the Collateral.
4. AUTHORITY. The PLEDGOR hereby warrants to the LENDER, that it has full
power and authority to enter into the Loan Agreement and this Agreement and to
grant and create the security interest provided herein.
5. ACTS TO BE PERFORMED BY THE PLEDGOR. The PLEDGOR further agrees as
follows:
(a) Payment and Performance. The PLEDGOR shall pay and perform all
Obligations secured by this Agreement according to their terms.
(b) Further Assurances. The PLEDGOR shall defend the title to the
Collateral against all persons and against all claims and demands whatsoever,
shall indemnify the LENDER for all costs, fees, and expenses incurred in
connection with such claims and demands. On demand by the LENDER, the PLEDGOR
shall (1) furnish further assurance of title, (2) execute any written
instruments or do any other acts necessary to make effective the purposes and
provisions of this Agreement, and (3) execute any instrument or statement
reasonably required by law or otherwise in order to perfect or continue the
security interest and pledge of the LENDER in the Collateral and pay all costs
of filing, if any in connection therewith.
(c) Encumbrances and Taxes. The PLEDGOR shall keep the Collateral
free from all security interests (other than of this Agreement), liens, claims,
charges, encumbrances, pledges, taxes and assessments, if any, and shall pay
when due all taxes and assessments relating to the Collateral.
(d) Notification of Change. The PLEDGOR shall notify the LENDER
promptly of any change, to the extent permissible pursuant to hereto and the
Loan Agreement, in the PLEDGOR, the Collateral or in the PLEDGOR's place of
business or mailing addresses.
(e) Failure to Perform Required Acts; Performance by LENDER. Upon
failure by the PLEDGOR to perform any of the acts hereinabove described, the
LENDER is authorized and has the option to perform any of the foregoing acts
described in this Agreement in any manner deemed proper by the LENDER, without
waiving any rights to enforce this Agreement. For the foregoing purposes, the
LENDER may act in its own name or that of the PLEDGOR.
(f) Advances Secured. The reasonable expenses (including, without
limitation, attorney's fees, taxes or other charges) incurred by the LENDER in
respect to the Collateral or pursuant to the exercise of LENDER'S rights under
this Agreement shall be deemed advanced to the PLEDGOR by the LENDER, shall bear
interest at a per annum rate equal to and shall be secured by this Agreement.
6. VOTING RIGHTS. Until notified to the contrary by the LENDER, the
PLEDGOR may continue to exercise all voting rights with respect to the
Collateral.
7. DIVIDENDS AND DISTRIBUTIONS. PLEDGOR shall cause all dividends, new
shares or warrants, liquidation distributions and other rights, proceeds and
payments or distributions of any nature in respect of the Collateral to be
transferred and assigned to LENDER and the PLEDGOR shall instruct the issuer of
the Pledged Stock (if other than the LENDER) to deliver all of the foregoing
directly to the LENDER and the PLEDGOR shall execute any documents or
instruments necessary in order to carry out the transfer and assignment.
8. DEFAULT. Any one of the following shall constitute an Event of
Default hereunder:
(a) The occurrence of any default or default pursuant to the Loan
Agreement.
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(b) Failure by the PLEDGOR to pay or perform any of the Obligations
when due.
(c) If the PLEDGOR shall fail to perform any covenant, condition or
provision of this Agreement, or any representation made shall be materially
false or any warranty herein shall be materially breached.
9. REGULATION U. The proceeds of all Obligations have not and will not be
used directly or indirectly for the purpose of purchasing or carrying, or for
the purpose of extending credit to others for the purpose of purchasing or
carrying, any "margin stock" as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System.
10. STATUS OF COLLATERAL. All Collateral that is issued pursuant to a
registration statement properly filed with, and declared effective by, the
Securities and Exchange Commission, is freely transferable and is not subject to
any transfer restrictions, rights of first refusal or any other agreement which
in any way would restrict the LENDER'S ability to sell the Collateral.
11. REMEDIES. If any Event of Default shall occur pursuant to this
Agreement, then the LENDER shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code of Missouri, including, without
limitation the right to vote the Collateral and exercise all powers and rights
conferred upon shareholders of the Pledged Stock and the right to sell or
otherwise dispose of, from time to time, any or all of the Collateral in whole
or in parcels in one or more sales in such order as it shall select. If notice
of intended disposition is required by law, such notice, if mailed, shall be
deemed reasonably and properly given if mailed to the notice address herein
given at least five days before the date of such disposition. If any Event of
Default shall occur pursuant to this Agreement, LENDER is authorized, at its
option and without notice or demand, to cause the Collateral to be transferred
of record to the LENDER. After deducting all costs and expenses of every kind,
the LENDER may apply the residue of the proceeds of any sale or sales of any of
the Collateral to any of the Obligations in such order and manner as LENDER in
its sole discretion shall deem advisable. If the proceeds of any sale or
disposition are insufficient to pay all of the Obligations, LENDER and PLEDGOR
agree that PLEDGOR shall have no personal liability to pay the balance thereof.
12. MISCELLANEOUS. The PLEDGOR and the LENDER further agree as follows:
(a) Waiver of Certain Matters. The LENDER may, but shall not be
required to, take any action to preserve its rights against the PLEDGOR or the
Collateral. The PLEDGOR expressly waives all requirements of presentment,
protest, notice of protest, notice of non-payment or dishonor and all diligence.
No omission on the part of the LENDER with respect to any such matters shall in
any manner impair or discharge the PLEDGOR or from or upon any Obligations
secured hereby.
(b) Non-Waiver of Certain Matters. Any failure by the LENDER to
exercise any right set forth in this Agreement shall not constitute a waiver
thereof. Nothing in this
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Agreement or in the obligations secured by it shall preclude any action for the
enforcement of this agreement.
(c) Succession. This Agreement shall bind the respective executors,
administrators, distributees, beneficiaries, successors and assigns of the
PLEDGOR and the LENDER.
Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered as provided in that certain
Employment Agreement between LENDER and PLEDGOR.
(d) Security Interest and Pledge Absolute. All rights of the LENDER
and security interests and pledge hereunder, and all obligations of the PLEDGOR
hereunder, shall be absolute and unconditional irrespective of:
(1) any lack of validity or enforceability of the Obligations or
any other agreement or instrument relating thereto:
(2) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Obligations or any agreement
or instrument relating thereto; or
(3) any exchange release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations.
(e) Captions and Section Numbers. The captions and section numbers
in this Agreement have been inserted for convenience and reference only and
shall in no way restrict or otherwise modify any of the terms or provisions
hereof.
(f) Governing Law or Jurisdiction. This Agreement and any other
instruments and documents delivered hereunder shall be deemed contracts under
the laws of Missouri and for all purposes shall be construed in accordance with
the laws of Missouri. Exercise of any right or remedy in the event of default
shall likewise be governed by the laws of Missouri.
(g) Severability. If any part of this Agreement or the application
thereof to any person or circumstance is held invalid, the remainder of this
Agreement shall not be affected thereby.
(h) Statutory Notice. The following notice is given pursuant to
Section 432.045 of the Missouri Revised Statutes; nothing contained in such
notice shall be deemed to limit or modify the terms of this Agreement. "ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (PLEDGOR) AND US (LENDER) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS
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THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE
MAY LATER AGREE IN WRITING TO MODIFY IT."
In Witness Whereof, the undersigned have entered into this Pledge Agreement
as of this date and year first above written.
Lender Pledgor
International Fuel Technology, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
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Printed Name: Xxxxxxx X. Xxxxxxxxxxx /s/ Xxx Xxxxxxxxxx
-----------------------
Title: President Xxx Xxxxxxxxxx
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