AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.7
AMENDED
AND RESTATED
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this
“Agreement”),
is
entered into as of September 19, 2006, by and between H2Diesel, Inc., a Delaware
corporation (the “Company”),
and
Xxxxxx Xxxxxxxxx (the “Executive”).
WHEREAS,
the
Company and the Executive are parties to that certain Employment Agreement
dated
April 1, 2006 (the “Original
Agreement”);
WHEREAS,
the
Company and the Executive now desire to amend and restate the Original Agreement
on the terms and conditions hereinafter set forth;
NOW,
THEREFORE,
in
consideration of the covenants herein contained, and other good and valuable
consideration, the receipt and adequacy of which are hereby forever
acknowledged, the parties, with the intent of being legally bound hereby, agree
as follows:
1. Term.
The term of this Agreement shall commence effective on April 1, 2006
(the “Effective
Date”)
and
shall end on the date which is the third anniversary of the Effective Date
unless the Executive’s employment is terminated earlier in accordance with this
Agreement (the “Initial
Term”);
provided, however, that the term of this Agreement shall automatically be
extended beyond the Initial Term for a one year period, effective upon the
third
anniversary of the Effective Date (the “Renewal
Term”)
unless
either party notifies the other by a date which is ninety (90) days prior to
the
expiration of the Initial Term that such party desires not to extend the Initial
Term beyond the third anniversary of the Effective Date. This Agreement shall
continue for successive one-year Renewal Terms unless and until either party
gives ninety (90) days notice to the other of its desire not to extend further
the term of this Agreement beyond the end of the then-current Renewal Term,
or
this Agreement is otherwise terminated pursuant to Section
5
hereof.
The term of this Agreement, whether during the Initial Term or any Renewal
Term,
shall be referred to as the “Term.”
2. Position
and Responsibilities.
2.1 Position.
Executive will be employed by the Company to render services to the Company
in
the position of Chief Technology Officer. In that capacity, Executive shall
be
responsible for the Company’s long-term and short-term technology strategy,
which includes, but is not limited to overseeing the Company’s research and
development, implementing improvements and enhancements to the Company’s
technology and related processes and operations and establishing policies and
procedures for addressing technology related issues that may arise at the
Company with respect to its technology. The Executive shall also perform such
other duties as may be consistent with Executive’s position. The Executive shall
report directly to the Chief Executive Officer and the Chairman of the Company.
Executive shall, in all material respects, abide by all material and written
Company rules, policies, and practices as adopted or modified, from time to
time, in the Company’s sole discretion; and Executive shall attempt to use his
best efforts in the performance of his duties hereunder.
2.2 Other
Activities.
While employed by the Company, Executive shall devote such portion as he shall
reasonably determine of his business time, attention, and skill to perform
his
assigned
duties, services, and responsibilities hereunder, and shall act at all times
in
the furtherance of the Company’s business and interests. Executive shall not,
during the term of this Agreement engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage) which could
reasonably be expected to materially interfere with Executive’s duties and
responsibilities hereunder or create a conflict of interest with the Company.
The foregoing limitations shall not prohibit Executive from making and managing
his personal and family investments in such form or manner as will neither
require Executive’s services in the operation or affairs of the companies or
enterprises in which such investments are made nor materially interfere with
the
performance of the Executive’s duties hereunder. The Company acknowledges that
Executive will from time-to-time serve on the boards of corporations, advisory
committees, trade organizations, philanthropic organizations or other entities.
Accordingly, the foregoing limitations shall not prohibit Executive from serving
on the boards of corporations, advisory committees, trade organizations,
philanthropic organizations or other entities, provided that such service does
not create a material conflict of interest with the Company.
2.3 No
Conflict.
Executive represents and warrants that Executive’s execution of this Agreement,
Executive’s employment with the Company, and the performance of Executive’s
proposed duties under this Agreement shall not violate any obligations Executive
may have to any other employer, person, or entity, including but not limited
to
any obligations with respect to not disclosing any proprietary or confidential
information of any other person or entity.
3. Compensation
and Benefits.
3.1 Base
Salary.
In consideration of the services to be rendered under this Agreement, the
Company shall pay Executive an initial base salary of Twelve Thousand Five
Hundred Dollars ($12,500.00) per month (“Base
Salary”)
in
accordance with the Company’s standard payroll practices. Such Base Salary shall
be subject to such withholding or deductions as may be mutually agreed between
the Company and Executive or as required by law. Executive’s Base Salary will be
reviewed, from time to time, and may be adjusted (upward, but not downward)
at
the discretion of the Board.
3.2 Stock
Options.
In consideration of the services to be rendered under this Agreement, the
Company hereby grants Executive the option to purchase 500,000 shares of the
Company’s Common Stock at a price of $1.50 per share, of which 100,000 shares
shall vest on the date hereof, 200,000 shares shall vest on the first
anniversary of the Effective Date and 200,000 shall vest on the second
anniversary of the Effective Date. Such options shall be more fully documented
in a Stock Option Agreement containing customary terms and conditions. The
options set forth in this Section 3.2 shall expire on the tenth (10th)
anniversary of the Effective Date.
3.3 Equity
Compensation.
To the extent that the Board and the stockholders of the Company approve an
equity compensation or incentive plan (the “Plan”),
the
Executive shall be eligible to participate in such plan. The amount of any
equity awards to the Executive and terms and conditions thereof shall be
determined not less frequently than annually by a committee of the Board
appointed pursuant to the Plan, or by the Board, in its discretion and pursuant
to the Plan.
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3.4 Benefits.
Executive shall be entitled to participate in the pension and health and welfare
benefit plans and perquisites that the Company generally makes available to
its
employees or other executives, at a level commensurate with his position (the
“Executive
Benefits”).
3.5 Vacation.
During the Term, Executive shall be entitled to vacation each year in accordance
with the Company’s policies in effect from time to time, but in no event less
than four (4) weeks paid vacation per calendar year. The Executive shall also
be
entitled to such periods of sick leave as is customarily provided by the Company
for its senior executive employees.
3.6 Business
Expenses.
Throughout the term of Executive’s employment hereunder, the Company shall
reimburse Executive for all reasonable and necessary travel, entertainment,
promotional, and other business expenses that may be incurred by Executive
in
the course of performing Executive’s duties. Authorized expenses shall be
reimbursed by the Company in accordance with policies and practices adopted,
from time to time, by the Company concerning expense reimbursement for employees
and shall be reimbursed upon timely presentation to the Company of an itemized
expense statement with respect thereto, including substantiation of expenses
incurred and such other documentation as may be required by the Company’s
reimbursement policies from time to time and in accordance with Internal Revenue
Service guidelines.
3.7 Bonus
Plan.
To the extent that the Board of the Company establishes an annual cash bonus
plan (“Bonus
Plan”),
the
Executive shall be eligible to participate in such Bonus Plan. The amount of
any
bonus to be paid to the Executive and the terms and conditions thereof shall
be
determined not less frequently than annually by a committee of the Board or
by
the Board in accordance with the terms of any such Bonus Plan. Any bonus paid
under this Section shall be paid in accordance with the Company’s
practices.
4. Nondisclosure
of Confidential and Proprietary Information.
At all times before and after the termination of Executive’s service (for any
reason by the Company or by Executive), Executive agrees to keep all
Confidential or Proprietary Information in strict confidence and secrecy, and
not to disclose or use the Confidential or Proprietary Information in any way
outside of Executive’s assigned responsibilities for the Company. “Confidential
or Proprietary Information” means any non-public information or idea (whether or
not a trade secret) relating to the business of the Company that is not
generally known outside the Company or not generally known in the industry
or by
persons engaged in businesses similar to that of the Company (including
information which may be available from sources outside the Company, but not
in
the form, arrangement, or compilation in which it exists within the Company)
that the Company considers confidential, including, but not limited to: (i)
customer lists and records of current, former, and prospective customers; (ii)
special needs and characteristics of current, former, or prospective customers;
(iii) present or future business plans; (iv) trade secrets, proprietary, or
confidential information of any customer or other entity to which the Company
owes an obligation not to disclose such information; (v) marketing, financing,
business development, or strategic plans; (vi) sales methods, practices, and
procedures; (vii) personnel information; (viii) research and development data
and projections; (ix) information or data concerning the Company’s competitive
position in its various lines of business; (x) existing, new, or envisioned
products, programs, services, methods, techniques, processes, projects, or
systems; and (xi) sales,
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pricing,
billing, costs, and other financial data and projections. All documents
containing this information will be considered Confidential or Proprietary
Information whether or not marked with any proprietary or confidential notice
or
legend. Notwithstanding the foregoing, nothing herein shall prohibit the
Executive from disclosing any information: (1) in connection with performance
of
his duties hereunder as he deems in good faith to be necessary or desirable;
or
(2) if compelled pursuant to the order of a court or other governmental or
legal
body having jurisdiction over such matter. In the event Executive is compelled
by order of a court or other governmental or legal body to communicate or
divulge any such information, knowledge or data, he shall promptly notify the
Company.
5. Termination;
Rights and Obligations on Termination. The
Executive’s employment under this Agreement may be terminated in any one of the
followings ways:
(a) Death.
The death of Executive shall immediately and automatically terminate the
Executive’s employment under this Agreement. If Executive dies while employed by
the Company, any unvested equity compensation granted to Executive under the
Plan shall immediately vest and any vested options may be exercised on or before
the earlier of (i) the option’s expiration date or (ii) twelve months after the
Executive’s death. Any option that remains unexercised after this period shall
be forfeited. Upon the Executive’s death, the Executive’s legal representative
shall receive: (1) any compensation earned but not yet paid, including and
without limitation, any bonus if declared or earned but not yet paid for a
completed fiscal year, any amount of Base Salary earned but unpaid, any accrued
vacation pay payable pursuant to the Company’s policies, and any unreimbursed
business expenses, which amounts shall be promptly paid in a lump sum, and
(2)
any other amounts or benefits owing to the Executive under the then applicable
employee benefit plans, long term incentive plans or equity plans and programs
of the Company which shall be paid or treated in accordance with the terms
of
such plans and programs (subsections (1) and (2) shall be collectively referred
to as, the “Accrued
Amounts”).
Other
than the benefits described above, no further compensation or benefits shall
be
due or owing upon the Executive’s death.
(b) Disability.
If as a result of incapacity due to physical or mental illness or injury,
Executive shall have been absent from Executive’s duties hereunder for six (6)
consecutive months, then thirty (30) days after receiving written notice (which
notice may occur before or after the end of such six (6) month period, but
which
shall not be effective earlier than the last day of such six (6) month period),
the Company may terminate Executive’s employment hereunder provided Executive is
unable to substantially perform his duties hereunder at the conclusion of such
notice period (a “Disability”),
as
determined by a physician mutually selected by the parties hereto. In the event
the Executive’s employment is terminated as a result of Disability, Executive
shall receive from the Company, in a lump-sum payment due within ten (10) days
of the effective date of termination, an amount equal to the sum of the Base
Salary and bonus, if any, that would have been paid to Executive through the
end
of the then remaining Term if the Executive was not disabled or for six months,
whichever is less (assuming that Executive would have received no further
increases in his Base Salary after his termination of employment and assuming
achievement of all performance factors applicable to Executive’s participation
in any Bonus Plan). The Executive shall also be entitled to the Accrued Amounts.
Additionally, if Executive is terminated due to a Disability, any unvested
equity compensation granted to Executive under the Plan shall immediately vest
and any vested options may be
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exercised
on or before the earlier of: (i) the option’s expiration date or (ii) twelve
months after the Executive’s termination due to the Disability. Any option that
remains unexercised after this period shall be forfeited. Other than the
benefits described above, no further compensation or benefits shall be due
or
owing upon the Executive’s termination due to a Disability.
(c) Cause.
The Company may terminate this Agreement immediately upon written notice to
Executive for “Cause,” which shall mean: (i) the Executive’s willful, material,
and irreparable breach of this Agreement; (ii) Executive’s willful misconduct in
the performance of any of his material duties and responsibilities hereunder
that has a material adverse effect on the Company; (iii) Executive’s intentional
and continued non-performance (other than by reason of disability or incapacity)
of any of the Executive’s material duties and responsibilities hereunder or of
any reasonable, lawful instructions from the Board, which continues for ten
(10)
days after receipt by Executive of written notice from the Company; (iv)
Executive’s material and willful dishonesty or fraud with regard to the Company
(other than good faith expense account disputes) that has a material adverse
effect on the Company (whether to the business or reputation of the Company;
or
(v) Executive’s conviction of a felony (other than as a result of vicarious
liability or a traffic related offense). For purposes of this paragraph, no
act,
or failure to act, on Executive’s part shall be considered “willful” unless done
or omitted to be done, by him not in good faith and without reasonable belief
that his action or omission was in the best interests of the Company. In the
event of the Executive’s termination of employment by the Company for Cause the
Executive shall receive the Accrued Amounts.
Notwithstanding
the foregoing, following the Executive’s receipt of written notice from the
Company of any of the events described in subsections (i) through (iv) above,
the Executive shall have ten (10) days in which to cure the alleged conduct
(if
curable).
(d) Without
Cause.
At any time after Executive’s commencement of employment, the Company may,
without Cause, terminate the Executive’s employment, effective thirty (30) days
after written notice is provided to Executive. In the event Executive is
terminated by the Company without Cause, Executive shall receive from the
Company within ten (10) days after such termination, in a lump sum payment,
an
amount equal to the sum of the Base Salary and bonus, if any, that would have
been paid to Executive through the end of the then remaining Term if the
Executive had not been terminated or for six months, whichever is less (assuming
that Executive would have received no further increases in his Base Salary
after
his termination of employment and assuming achievement of all performance
factors applicable to Executive’s participation in any Bonus Plan). The
Executive shall also receive the Accrued Amounts. Additionally, if Executive
is
terminated by the Company without Cause, any unvested equity compensation
granted to Executive under the Plan shall immediately vest and any vested
options may be exercised on or before the earlier of: (i) the option’s
expiration date or (ii) twelve months after the Executive’s termination. Any
option that remains unexercised after this period shall be
forfeited.
(e) Resignation
for Good Reason.
At any time after Executive’s commencement of employment, the Executive may
resign for Good Reason (as defined below) effective thirty (30) days after
written notice is provided to the Company. Upon the Executive’s termination of
employment for Good Reason, the Executive shall be entitled to all payments
and
benefits as if
5
his
employment was terminated by the Company without Cause as provided in subsection
(d) above. For purposes of this Agreement, Good Reason means: (i) any
adverse change in the Executive’s position, title or reporting relationship or a
material diminution of his then duties, responsibilities or authority or the
assignment to Executive of duties or responsibilities that are inconsistent
with
the Executive’s then position; (ii) the failure by the Company to continue
in effect any material compensation or benefit plan or arrangement in which
Executive participates unless an equitable and substantially comparable
arrangement (embodied in a substitute or alternative plan) has been made with
respect to such plan or arrangement, or the failure by the Company to continue
Executive’s participation therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the amount of
benefits provided and the level of participation relative to other participants,
as existed at the time of the Executive’s termination of employment;
(iii) any breach of this Agreement (or any other written agreement entered
into between the Executive and the Company) by the Company; or (iv) failure
of any successor to the Company (whether direct or indirect and whether by
merger, acquisition, consolidation or otherwise) to assume in a writing
delivered to Executive upon the assignee becoming such, the obligations of
the
Company hereunder.
Notwithstanding
the foregoing, following the Company’s receipt of written notice from the
Executive of any of the events described in subsections (i) through (iv) above,
the Company shall have ten (10) days in which to cure the alleged conduct (if
curable).
(f) Resignation
without Good Reason or Retirement by Executive.
The Executive may resign without Good Reason or retire upon thirty (30) days’
written notice, and upon such termination of employment he shall receive the
Accrued Amounts.
(g) Superseding
Agreement.
This Agreement shall be terminated immediately and automatically if the parties
enter into another employment agreement which supersedes this Agreement. In
the
event the parties enter into a superseding agreement, no severance pay or other
compensation shall be due to Executive with respect to the termination of this
Agreement.
6. Use
and Return of Company Property.
Executive acknowledges the Company’s proprietary rights and interests in its
tangible and intangible property. Accordingly, Executive agrees that upon
termination of Executive’s employment with the Company, for any reason, and at
any time, Executive shall deliver to the Company all Company property,
including: (a) all documents, contracts, writings, disks, diskettes, computer
files or programs, computer-generated materials, information, documentation,
or
data stored in any medium, recordings and drawings pertaining to trade secrets,
proprietary or confidential information, or other inventions and works of the
Company; (b) all records, designs, plans, sketches, specifications, patents,
business plans, financial statements, accountings, flow charts, manuals,
notebooks, memoranda, lists, and other property delivered to or compiled by
Executive, by or on behalf of the Company or any of its representatives,
vendors, or customers which pertain to the business of the Company, all of
which
shall be and remain the property of the Company, and shall be subject, at all
times, to its discretion and control; (c) all equipment, devices, products,
and
tangible property entrusted to Executive by the Company; and (d) all
correspondence, reports, records, notes, charts, advertisement materials, and
other similar data pertaining to the business, activities, or future plans
of
the Company, in the possession or control of Executive, shall be delivered
promptly to the Company without request by it. Executive shall certify to the
Company, in writing, within
6
five
(5)
days of any request by the Company, that all such materials have been returned
to the Company. Notwithstanding the foregoing, the Executive may retain his
rolodex and similar address and telephone directories (whether in writing or
electronic format).
6.1 Non-competition.
At all times while the Executive is employed by the Company and for a period
of:
(i) two (2) years after any termination of the Executive’s employment for Cause
or the Executive’s termination of his employment without Good Reason; (ii) the
lesser of one (1) year or the remainder of the Term after any termination of
the
Executive’s employment by the Company without Cause or the Executive’s
termination for Good Reason; and (iii) one (1) year following the non-renewal
of
this Agreement or any termination pursuant to Section
5,
the
Executive shall not, directly or indirectly, engage in or have any interest
in
any person (whether as an employee, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) competes with the Company’s Business (as defined
below); provided that such provision shall not apply to the Executive’s
ownership of securities of the Company or the acquisition by the Executive,
solely as an investment, of securities of any issuer that is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended and
that are listed or admitted for trading on any United States national securities
exchange or that are quoted on the National Association of Securities Dealers
Automated Quotations System, or any similar system or automated dissemination
of
quotations of securities prices in common use, so long as the Executive does
not
control, acquire a controlling interest in or become a member of a group which
exercises direct or indirect control of, more than five percent of any class
of
capital stock of such issuer. For purposes of this Section
6.1,
the
term “Business” shall mean the Business and any other business in which the
Company is engaged prior to the delivery of a notice of termination by the
Company or the Executive hereunder and which business the Company is engaged
at
the date of termination of the Executive’s employment.
6.2 Non-Solicitation.
At all times while the Executive is employed by the Company and for a period
of:
(i) two (2) years after any termination of the Executive’s employment for Cause
or the Executive’s termination of his employment without Good Reason; (ii) the
lesser of one (1) year or the remainder of the Term after any termination of
the
Executive’s employment by the Company without Cause or the Executive’s
termination for Good Reason; and (iii) one (1) year following the non-renewal
of
this Agreement or any termination pursuant to Section
5,
the
Executive shall not, directly or indirectly, for himself or for any other person
(a) employ or attempt to employ or enter into any contractual arrangement with
any employee or former employee of the Company, or (b) call on or solicit any
of
the actual or targeted prospective customers or suppliers of the Company on
behalf of any person in connection with any business that competes with the
Business of the Company nor shall the Executive make known the names and
addresses of such customers or suppliers or any information relating in any
manner to the Company’s trade or business relationships with such customers or
suppliers, other than in connection with the performance of Executive’s duties
under this Agreement.
6.3 Inventions
Retained and Licensed.
Executive represents and warrants that Executive has disclosed to the Company
all inventions, original works of authorship, developments, improvements, and
trade secrets which were conceived of, reduced to practice, created or otherwise
developed prior to Executive’s employment with the Company which belong to
Executive, which relate to the Company’s proposed business, products or research
and
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development,
and which are not assigned to the Company hereunder. If in the course of
Executive’s employment with the Company, Executive incorporates into a Company
product, service or process any of the foregoing, Executive hereby grants to
the
Company a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license
to make, have made, modify, use and sell same as part of or in connection with
such product, process or machine.
6.4 Work
Product. Executive agrees that, during his or her employment with the
Company:
(a) Executive
will disclose promptly and fully to the Company all works of authorship, ideas,
inventions, discoveries, improvements, designs, processes, formulae, software,
or any improvements, enhancements, or documentation of or to the same that
Executive makes, works on, conceives, or reduces to practice, individually
or
jointly with others, in the course of Executive’s employment by the Company or
with the use of the Company’s time, materials or facilities, in any way related
or pertaining to or connected with the present or anticipated business,
development, work or research of the Company or which results from or is
suggested by any work Executive may do for the Company and whether produced
during normal business hours or on personal time (collectively the “Work
Product”).
(b) All
Work
Product of Executive shall be deemed, as applicable, to be a “work made for
hire” within the meaning of §101 of the Copyright Act. All intellectual property
rights, including patent, trademark, trade secret and copyright rights, in
and
to the Work Product are and shall be the sole property of the Company. To the
extent that the Work Product is deemed not to be “work made for hire,” this
Agreement shall constitute an irrevocable assignment by the Executive to the
Company of all right, title and interest in and to all intellectual property
rights in and to the Work Product. Any and all rights of whatever kind and
nature, now or hereafter, to make, use, sell, license, distribute or otherwise
transfer and reproduce such Work Product in any and all media throughout the
world, are and shall be the sole property of the Company. Executive hereby
agrees to assist the Company in any manner as shall be reasonably requested
by
the Company to protect the Company’s interest in such intellectual property
rights and to execute and deliver such legal instruments or documents as the
Company shall request in order for the Company to obtain protection of the
Work
Product throughout the world, including but not limited to, declarations of
inventorship, powers of attorney and assignment documents. Likewise, Executive
hereby agrees to assist the Company by executing such other documents and
instruments which the Company deems necessary to enable it to evidence, perfect
and protect its rights, title and interest in and to the Work Product. Executive
further agrees that Executive’s obligation to execute or cause to be executed
any such instrument or document shall continue after Executive’s cessation of
employment with the Company, regardless of reason for cessation of employment.
If the Company is unable because of Executive’s mental or physical incapacity or
for any other reason to secure Executive’s signature to apply for or to pursue
any application for any United States or foreign patents or copyright
registrations assigned to the Company in accordance herewith, then Executive
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Executive’s agent and attorney in fact, to act for and in
Executive behalf and stead to execute and file any such applications and to
do
all other lawfully permitted acts to further the prosecution and issuance of
patent or copyright registrations thereon with the same legal force and effect
as if executed by Executive. Executive will at any time, including after
termination of Executive’s employment with the Company, upon
8
request,
communicate to the Company, its successors, assigns, or other legal
representatives, such facts relating to the Work Product as may be known
to
Executive, and to testify, at the Company’s expense, as to the same in any
interference or other legal proceeding.
(c) Executive
shall make and maintain adequate and current written records and evidence of
all
Work Product, including drawings, work papers, graphs, computer code,
documentation, records and any other document which shall be and remain the
property of the Company, and which shall be surrendered to the Company upon
request and upon the cessation of Executive’s employment with the Company,
regardless of the reason for such cessation.
(d) Executive
hereby waives, and further agrees not to assert, any moral rights in or to
the
Work Product, including, but not limited to, rights to attribution and
identification of authorship, rights to approval of modifications or limitations
on subsequent modifications, and rights to restrict, cause or suppress
publication or distribution of the Work Product.
6.5 Reasonable
Restrictions. Executive hereby acknowledges and agrees that the limits on
his ability to engage in activities that are competitive with the Company,
as
defined above, are warranted in order to protect the Company’s trade secrets and
Confidential or Proprietary Information, and further, are warranted to protect
the Company in developing and maintaining its reputation, goodwill, and status
in the marketplace. Executive specifically agrees that the time period,
geographic scope, and nature of the restrictions set forth in Sections
6.1
and
6.2
are
reasonable and necessary to protect the Company’s legitimate business interests
and do not impose any limitations greater than those necessary to protect those
interests.
6.6 Remedies.
Executive hereby acknowledges and agrees that the services Executive has
rendered and will continue to render to the Company are of a special and unique
character, which gives this Agreement a peculiar value to the Company, and
further acknowledges and agrees that the loss of those services to a direct
competitor or the direct competition by Executive against the Company cannot
be
reasonably or adequately compensated for by damages in an action at law.
Executive further acknowledges and agrees that any material breach by Executive
of any provision of Sections
4
or
6
of this
Agreement shall cause irreparable harm to the Company, which harm cannot be
reasonably or adequately compensated for by damages in an action at law.
Accordingly, without prejudice to the rights and remedies otherwise available
to
the Company, Executive agrees that, in addition to any other right or remedy
the
Company may have, upon adequate proof of a material breach the Company shall
be
entitled to a temporary restraining order and to a preliminary and permanent
injunction enjoining or restraining the breach of this Agreement by Executive,
without the necessity of proving the inadequacy of monetary damages or the
posting of any bond or security. Executive acknowledges and agrees that the
preceding remedies shall be in addition to any and all other rights available
to
the Company at law or in equity. The failure of the Company to promptly
institute legal action upon any breach of this Agreement shall not constitute
a
waiver of that or any other breach hereof.
7. Indemnification;
Insurance.
7.1 Indemnification
of Executive.
Except as otherwise provided by applicable law, while the Executive is employed
by the Company and thereafter while potential liability exists
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(but
in
no event less than three (3) years after termination), in the event Executive
is
made a party to any threatened, pending, or contemplated action, suit, or
proceeding, whether civil, criminal, administrative, or investigative (other
than an action by the Company against Executive), by reason of the fact that
Executive is or was performing services under this Agreement, then the Company
shall indemnify Executive to the fullest extent permitted by applicable law
against all expenses (including attorneys’ fees), judgments, fines, and amounts
paid in settlement, as actually and reasonably incurred by Executive in
connection therewith. In the event that both Executive and the Company are
made
a party to the same third party action, complaint, suit, or proceeding, the
Company will engage competent legal representation, and Executive will use
the
same representation, provided that if counsel selected by the Company shall
have
a conflict of interest that prevents such counsel from representing Executive,
then the Company may engage separate counsel on Executive’s behalf, and subject
to the provisions of this Section
7,
the
Company will pay all attorneys’ fees of such separate
counsel.
7.2 Insurance
Provided by Company.
As soon as practicable after the Effective Date, the Company shall obtain a
directors and officers liability insurance policy covering all directors and
officers of the Company, including Executive, which insurance policy shall
provide adequate insurance coverage for each of such persons, as shall be
approved by the Board. The Executive shall be entitled to such coverage while
employed and thereafter while potential liability exists.
8. Assignment;
Binding Effect.
Executive shall have no right to assign this Agreement to another party other
than by will or by the laws of descent and distribution. This Agreement may
be
assigned or transferred by the Company only to an acquirer of all or
substantially all of the assets of the Company, provided such acquirer promptly
assumes all of the obligations hereunder of the Company in a writing delivered
to the Executive and otherwise complies with the provisions hereof with regard
to such assumption. Nothing in this Agreement shall prevent the consolidation,
merger, or sale of the Company or a sale of any or all or substantially all
of
its assets. Subject to the foregoing restriction on assignment by Executive,
this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors, and assigns.
9. Additional
Provisions.
9.1 Damages.
Nothing contained herein shall be construed to prevent the Company or the
Executive from seeking and recovering from the other damages sustained by either
or both of them as a result of its or his breach of any term or provision of
this Agreement. In the event that either party hereto brings suit for the
collection of any damages resulting from, or the injunction of any action
constituting, a breach of any of the terms or provisions of this Agreement,
then
the party found to be at fault shall pay all reasonable court costs and
attorneys’ fees of the other.
9.2 Amendments;
Waivers; Remedies.
This Agreement may not be amended, and no provision of this Agreement may
be waived, except by a writing signed by Executive and by a duly authorized
representative of the Company. Failure to exercise any right under this
Agreement shall not constitute a waiver of such right. Any waiver of any breach
of this Agreement shall not operate as a waiver of any subsequent breaches.
All
rights or remedies
10
specified
for a party herein shall be cumulative and in addition to all other rights
and
remedies of the party hereunder or under applicable law.
9.3 Notices.
Any notice under this Agreement must be in writing and addressed to the Company
or to Executive at the corresponding address below. Notices under this Agreement
shall be effective upon: (a) hand delivery, when personally delivered; (b)
written verification of receipt, when delivered by overnight courier or
certified or registered mail; or (c) acknowledgment of receipt of electronic
transmission, when delivered via electronic mail or facsimile. Executive shall
be obligated to notify the Company, in writing, of any change in Executive’s
address. Notice of change of address shall be effective only when done in
accordance with this Section
9.3.
|
Company’s
Notice Address:
|
H2Diesel,
Inc.
00000
Xxxxx Xxxx 0, Xxxxx 00
Xxxx
Xxxxx, Xxxxxxx 00000
Attn.:
Xxx X. Xxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
|
|
Executive’s
Notice Address:
|
Circonvallazione
Gianicolense, 295
00000
Xxxx-Xxxxx
Attn.:
Xxxxxx Xxxxxxxxx
Telephone:
Facsimile:
|
9.4 Severability.
If any provision of this Agreement shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, such provision shall be
enforced to the fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect. In the event that the time
period or scope of any provision is declared by a court of competent
jurisdiction to exceed the maximum time period or scope that such court deems
enforceable, then such court shall reduce the time period or scope to the
maximum time period or scope permitted by law.
9.5 Taxes.
All amounts paid under this Agreement (including, without limitation, Base
Salary) shall be reduced by all applicable state and federal tax withholdings
and any other withholdings required by any applicable jurisdiction.
9.6 Governing
Law.
The validity, interpretation, enforceability and performance of this Agreement
shall be governed by and construed in accordance with the laws of the State
of
Florida, without regard to conflict of laws principles that would cause the
laws
of another jurisdiction to apply.
9.7 Venue.
Each of the parties hereto irrevocably submits to the exclusive jurisdiction
of
the courts of the State of Florida located in Broward County and the Federal
Courts of the United States of America located in Broward County, Florida,
for
the purposes of any suit, action, or other proceeding arising out of this
Agreement or any transaction contemplated hereby.
11
9.8 Interpretation.
This Agreement shall be construed as a whole, according to its fair meaning,
and
not in favor of or against any party. Sections and section headings contained
in
this Agreement are for reference purposes only, and shall not affect, in any
manner, the meaning or interpretation of this Agreement. Whenever the context
requires, references to the singular shall include the plural and the plural
the
singular.
9.9 Survival.
Sections 4, 6.1, 6.2, 6.3, 6.4 and any other provision in this Agreement that
requires performance by Executive following termination of Executive’s
employment hereunder shall survive any termination of this
Agreement.
9.10 Counterparts.
This Agreement may be executed in several counterparts (including by means
of
telecopied signature pages), each of which shall be deemed an original but
all
of which shall constitute one and the same instrument.
9.11 Authority.
Each party represents and warrants that such party has the right, power, and
authority to enter into and execute this Agreement and to perform and discharge
all of the obligations hereunder, and that this Agreement constitutes the valid
and legally binding agreement and obligation of such party and is enforceable
in
accordance with its terms.
9.12 Additional
Assurances.
The provisions of this Agreement shall be self-operative and shall not require
further agreement by the parties except as may be herein specifically provided
to the contrary; provided, however, that at the request of the Company,
Executive shall execute such additional instruments and take such additional
acts as the Company may deem necessary to effectuate this
Agreement.
9.13 Entire
Agreement.
This Agreement is the final, complete, and exclusive agreement of the parties
with respect to the subject matter hereof and supersedes and merges all prior
or
contemporaneous representations, discussions, proposals, negotiations,
conditions, communications, and agreements, whether written or oral, between
the
parties relating to the subject matter hereof and all past courses of dealing
or
industry custom. No oral statements or prior written material not specifically
incorporated herein shall be of any force and effect, and no changes in or
additions to this Agreement shall be recognized unless incorporated herein
by
amendment, as provided herein (such amendment to become effective on the date
stipulated therein).
9.14 Executive
Acknowledgment.
Executive acknowledges that, before signing this Agreement, Executive was
advised of his right to consult with an attorney of his choice to review this
Agreement and that Executive had sufficient opportunity to have an attorney
review the provisions of this Agreement and negotiate its terms. Executive
further acknowledges that Executive had a full and adequate opportunity to
review this Agreement before signing it; that Executive carefully read and
fully
understood all the provisions of this Agreement before signing it, including
the
rights and obligations of the parties; and that Executive has entered into
this
Agreement knowingly and voluntarily.
12
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above
written.
COMPANY:
H2DIESEL,
INC.
By:
/s/
Xxx X. Xxxxx
Name:
Xxx
X. Xxxxx
Title:
Chairman of the Board
EXECUTIVE:
/s/
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
