Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”), which is dated January 28th, 2019 (the
“Effective Date”), is made by and between ClearSign Combustion Corporation,
located at 12870 Interurban Avenue South, Seattle, Washington 98168 and
hereinafter referred to as “Company”, and Colin James Deller, whose address is
________________, hereinafter referred to as “Executive.” The purpose of this
Agreement is to confirm the terms of the employment relationship between Company
and Executive.

 

RECITALS

 

WHEREAS, Company wishes to retain the services of Executive, and Executive
wishes to render services to Company, initially as its President and, no later
than April 1, 2019, as its Chief Executive Officer;

 

WHEREAS, Company and Executive wish to set forth in this Agreement the duties
and responsibilities that Executive has agreed to undertake on behalf of
Company, and the responsibilities that Company will owe to Executive.

 

THEREFORE, in consideration of the foregoing and of the mutual promises
contained in this Agreement, Company and Executive (who are sometimes
individually referred to as a “Party” and collectively referred to as the
“Parties”) agree as follows:

 

AGREEMENT

 

1.TERM.

 

Pursuant to the terms of this Agreement, Company hereby employs Executive as
Company’s President through March 31, 2019 and as its Chief Executive Officer
beginning on April 1, 2019 and Executive hereby accepts employment with Company
pursuant to the terms of this Agreement. This Agreement is effective on the
Effective Date and will continue for a period of two years (the “Initial Term”).
Before the expiration of the second year of the Initial Term, the Compensation
Committee will review Executive’s performance and, if the Board of Directors
(the “Board”) deems Executive’s performance is satisfactory, the term of
Executive’s employment will be extended for an additional year (the
“Extension”). During the Extension and each one year Extension thereafter, the
Compensation Committee will review Executive’s performance and, if it is deemed
by the Board to be satisfactory, will continue Executive’s employment for an
additional one year Extension. In this Agreement, the word “Term” shall refer,
depending on the context used, to the Initial Term or to any subsequent
Extension. Irrespective of the foregoing, this Agreement may be terminated at
any time in accordance with the provisions of Section 11 or Section 12 below.

 

2.GENERAL DUTIES.

 

Service as President and Chief Executive Officer. Executive shall devote his
entire productive time, ability, and attention to Company’s business during
Executive’s employment. As President, Executive shall report to the Chief
Executive Officer and to the Board and, upon assuming the role of Chief
Executive Officer, Executive shall report to the Board. During his tenure as
President, Executive agrees to keep the Chief Executive Officer and the Board,
and during his tenure as Chief Executive Officer, Executive agrees to keep the
Board, fully informed with regard to critical issues affecting the value and
reputation of Company. In his capacity as President, Executive shall exercise
the powers and discharge the duties of his office that are not reserved to the
Chief Executive Officer. Once he assumes the role of Chief Executive Officer,
Executive shall exercise the powers and discharge the duties of his office that
are not reserved to the Board, and shall have the authority and control over all
personnel of Company (with the exception of the powers reserved to the Board
pursuant to Section 4 of Company’s bylaws to appoint and to terminate or remove
executive officers or subordinate officers), shall be responsible for managing
the overall operations of Company, and shall act as the main point of
communication between the Board and Company’s operations. Executive shall do and
perform all services, acts, or things necessary or advisable to discharge his
duties under this Agreement, and such other duties as are commonly performed by
an employee of his rank in a publicly traded corporation or which may, from time
to time, be prescribed by Company through the Board. Executive agrees to
cooperate with and work to the best of his ability with Company’s management
team, which includes the Board and the officers and other employees, to
continually improve Company’s reputation in its industry for quality products
and performance.

 

 

 

 

3.NONSOLICITATION AND PROPRIETARY PROPERTY AND

CONFIDENTIAL INFORMATION PROVISIONS.

 

As a condition of his employment with Company, Executive has executed
an Employee Intellectual Property Assignment and Nondisclosure Agreement, the
terms of which are included by reference into this Agreement.

 

4.COMPLIANCE WITH SECURITIES LAWS AND COMPANY POLICIES.

 

(a)       Securities Law Compliance. Executive acknowledges that he is subject
to the provisions of Sections 10 and 16 of the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder. Executive acknowledges
that Sections 10 and 16 and the rules and regulations promulgated thereunder may
prohibit Executive from selling or transferring his securities in Company.
Executive agrees that he will comply with Company’s policies, as stated from
time to time, relating to selling or transferring Company’s securities.

 

(b)       Compliance with Company Policies. Executive acknowledges that, as an
employee of Company, he will be subject to all policies and procedures enacted
by Company including, but not limited to, Company’s Code of Business Conduct and
Ethics, policies and procedures relating to the use of Company’s information
technology, policies and procedures relating to the protection of Company’s
intellectual property and policies and procedures relating to workplace safety.

 

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(c)       Violations of Securities Laws or Company Policies. Executive agrees
that violations of the federal or state securities laws or Company policies may
result in disciplinary action, up to and including termination for cause.

 

5.COMPENSATION.

 

(a)       Annual Salary. Company shall pay to Executive an annual base salary in
the amount of $350,000 (the “Annual Salary”). The Annual Salary shall be subject
to any tax withholdings and/or employee deductions that are applicable. The
Annual Salary shall be paid to Executive in equal installments in accordance
with the periodic payroll practices of Company for its employees. The Annual
Salary will be subject to review and increase at the sole discretion of the
Board no less frequently than annually.

 

(b)       Bonuses. At least annually, Executive and the Compensation Committee
of the Board of Directors shall meet to establish (i) performance standards and
goals (“Standards and Goals”) to be met by Executive and (ii) bonus targets
based on the Standards and Goals that are achieved. The Standards and Goals will
support a bonus of 60% of Executive’s Annual Salary. The Standards and Goals and
the bonus targets shall be mutually agreed to by Executive and the Compensation
Committee. Nothing in this subsection (b) shall prevent Executive and the
Compensation Committee from mutually agreeing to alternatives to the computation
of the bonus to be paid to Executive in accordance with this subsection (b) (the
“Bonus”). Any Bonus shall be paid in options to purchase Company’s common stock
valued using the Black-Scholes option valuation model, will be subject to any
applicable tax withholdings and/or employee deductions and shall be payable no
later than April 1st in the year following the year in which the Bonus was
earned, provided that Executive’s employment has not been sooner terminated
under Sections 11 or 12(c) of this Agreement. Assuming that Executive’s
employment has not been terminated under Sections 11 or 12(c) of this Agreement,
Executive shall receive a Bonus having a value of no less than $100,000 for
services provided pursuant to this Agreement through December 31, 2019.

 

(c)       Participation In Employee Benefit Plans. Executive shall have the same
rights, privileges, benefits and opportunities to participate in any of
Company’s employee benefit plans that may now or hereafter be in effect on a
general basis for executive officers or employees. During Executive’s
employment, the Company shall provide, at Company’s sole expense, medical health
insurance (including vision and dental) benefits for Executive, his spouse and
children (as defined in such policy or policies), under the same policy or
policies generally available to other executive officers of Company.
Irrespective of the foregoing, Company may change any benefits contractor, or
discontinue any of the foregoing benefits without replacement, in its sole
discretion, and any such change or discontinuance will not be a breach of this
Agreement.

 

6.EQUITY COMPENSATION.

 

(a)       Signing Option. On the Effective Date, Company shall issue to
Executive an option (the “Signing Option”) for the purchase of 400,000 shares of
Company’s common stock (the “Signing Option Shares”). The Signing Option shall
be an incentive stock option to the extent permitted under the Internal Revenue
Code (the “Code”). The per share exercise price of the Signing Option Shares
shall be equal to the closing price of Company’s common stock on the grant date
and the term of the Signing Option shall be 10 years. The right to purchase
one-third of the Signing Option Shares shall vest on the Effective Date; the
right to purchase one-third of the Signing Option Shares shall vest on the first
anniversary of the grant date; and the right to purchase one-third of the
Signing Option Shares shall vest on the second anniversary of the grant date.

 

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(b)       Additional Option. On the Effective Date, Company shall issue to
Executive an option (the “Additional Option”) for the purchase of 200,000 shares
of Company’s common stock common stock (the “Additional Option Shares”). The
Additional Option shall be an incentive stock option to the extent permitted
under the Code. The per share exercise price of the Additional Option Shares
shall be $2.25 and the term of the Additional Option shall be 10 years. The
right to purchase one-third of the Additional Option Shares shall vest on the
Effective Date; the right to purchase one-third of the Additional Option Shares
shall vest on the first anniversary of the grant date; and the right to purchase
one-third of the Additional Option Shares shall vest on the second anniversary
of the grant date.

 

7.REIMBURSEMENT OF BUSINESS EXPENSES AND MOVING ALLOWANCE.

 

(a)       Reimbursement of Business Expenses. Company shall promptly reimburse
Executive for all reasonable business expenses incurred by Executive in
connection with the business of Company. However, each such expenditure shall be
reimbursable only if Executive furnishes to Company adequate records and other
documentary evidence required by federal and state statutes and regulations
issued by the appropriate taxing authorities for the substantiation of each such
expenditure as an income tax deduction.

 

(b)       Relocation Adjustment. Company shall provide Executive with up to
$6,000 each month to be used for accommodations at hotels, rent for a personal
residence in Seattle, Washington, trips to and from Tulsa, Oklahoma for himself
and/or his wife and family and for any additional expenses agreed to by Company
(the “Relocation Adjustment”). For so long as the Relocation Adjustment is paid
for these expenses, reimbursement shall be subject to the evidence requirements
of Section 7(a) above. Executive shall receive the Relocation Adjustment for a
period of 4 years from the Effective Date (the “Payment Period”), provided,
however, if, during the Payment Period, Company relocates its corporate
headquarters to Tulsa, Oklahoma, Company shall no longer be required to pay the
Relocation Adjustment. If, during the Payment Period, Company relocates its
corporate headquarters from Seattle, Washington to a location in the United
States other than Tulsa, Oklahoma, Executive and Company shall determine whether
the Relocation Adjustment shall be adjusted or terminated.  If Executive
purchases a home in Seattle, Washington or a nearby suburb, Company shall pay
the entire Relocation Adjustment ($6,000) each month throughout the remainder of
the Payment Period. The Relocation Adjustment may be adjusted or terminated upon
mutual agreement of Company and Executive. Payment of the Relocation Adjustment
shall be subject to any federal or state withholding or employment taxes, as may
be applicable. Any tax incurred by Executive as a result of payment of the
Relocation Adjustment, other than federal or state withholding or employment
taxes, shall be payable by Executive.

 

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(c)       Relocation Allowance. Company shall reimburse Executive for reasonable
relocation expenses actually and properly incurred if the Executive moves to
Seattle, Washington from Tulsa, Oklahoma, up to a maximum of $100,000, which
expenses shall be subject to the evidence requirements of Section 7(a) above.
Such expenses shall include:

 

(i)       Moving Expenses. All reasonably incurred expenses to move Executive’s
home furnishings and personal property to Seattle, Washington.

 

(ii)       Closing Costs. Customary closing costs in connection with the sale of
Executive’s home in Tulsa, Oklahoma, including realtor commissions.

 

(iii)       Income Tax Consequences. Payment of the relocation expenses shall be
subject to any federal or state withholding or employment taxes, as may be
applicable. Any tax incurred by Executive as a result of payment of the
relocation expenses, other than federal and state withholding or employment
taxes, shall be payable by Executive

 

8.PAID TIME OFF.

 

Executive shall be entitled to four weeks of paid time off each year and, if
unused, may carry-over one week of paid time off into the next year. However,
failure to use paid time off by the end of the year in which it is earned shall
prevent the accrual of additional paid time off during the next year.

 

9.INDEMNIFICATION OF LOSSES.

 

So long as Executive’s actions were taken in good faith and in furtherance of
Company’s business and within the scope of Executive’s duties and authority,
Company shall indemnify and hold Executive harmless to the full extent of the
law from any and all claims, losses and expenses sustained by Executive as a
result of any action taken by him to discharge his duties under this Agreement
and Company shall defend Executive, at Company’s expense, in connection with any
and all claims by stockholders or third parties.

 

10.PERSONAL CONDUCT.

 

Executive agrees promptly and faithfully to comply with all present and future
policies, requirements, directions, requests and rules and regulations of
Company in connection with Company’s business. Executive further agrees to
conform to all laws and regulations and not at any time to commit any act or
become involved in any situation or occurrence tending to bring Company into
public scandal, ridicule or which will reflect unfavorably on the reputation of
Company.

 

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11.TERMINATION FOR CAUSE.

 

The Board may terminate Executive for cause immediately, without notice, if
Company reasonably concludes that Executive has committed fraud, theft,
embezzlement, misappropriation of Company funds or other property, or any
felony. The Board may also terminate Executive for cause for any of the
following:

 

(a)       breach by Executive of any material provision of this Agreement;

 

(b)       violation by Executive of any statutory or common law duty of loyalty
to Company;

 

(c)       a material violation by Executive of Company’s employment policies; or

 

(d)       commission of such acts of dishonesty, gross negligence, or willful
misconduct as would prevent the effective performance of Executive’s duties or
which result in material harm to Company, its reputation or its business.

 

The Board may terminate this Agreement for cause by giving written notice of
termination to Executive, provided, however, if the Board declares Executive to
be in default of this Agreement under subsection (a) above because Executive
fails to substantially perform his material duties and responsibilities under
this Agreement, the Board shall deliver a written demand for substantial
performance of such duties and responsibilities to Executive. Such demand must
identify the manner in which the Board believes that Executive has not
substantially performed his duties, and Executive shall have a period of 30 days
to correct the deficient performance. Upon termination for cause, with the
exception of the terms of this Sections 11 and any obligations, duties and
responsibilities Executive has under the Employee Intellectual Property
Assignment and Nondisclosure Agreement, the obligations of Executive and Company
under this Agreement shall immediately cease. Such termination shall be without
prejudice to any other remedy to which Company may be entitled either at law, in
equity, or under this Agreement. If Executive’s employment is terminated
pursuant to this Section 11, Company shall pay to Executive (i) Executive’s
accrued but unpaid Annual Salary and the value of unused paid time off through
the effective date of the termination, (ii) business expenses incurred prior to
the effective date of termination, and (iii) the Relocation Adjustment accrued
but unpaid prior to the effective date of termination. Executive shall not be
paid the Relocation Adjustment for the remainder of the Payment Period and shall
not be entitled to continue to participate in any employee benefit plans except
to the extent provided in such plans for terminated participants, or as may be
required by applicable law.

 

In the event of a termination of Executive’s employment pursuant to this Section
11, the disposition of Executive’s options granted pursuant to Section 6 hereof
shall be governed by the applicable terms and conditions of the 2011 Equity
Incentive Plan (the “Plan”), if the option has been granted pursuant to the
Plan, and any award agreement executed in respect of such options.

 

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12.TERMINATION WITHOUT CAUSE.

 

(a)       Death. Executive’s employment shall terminate upon the death of
Executive. Upon such termination, the obligations of Executive and Company under
this Agreement shall immediately cease. If Executive’s employment is terminated
pursuant to this Section 12(a), Company shall pay to Executive’s estate (i)
Executive’s accrued but unpaid Annual Salary and the value of unused paid time
off through the effective date of the termination; (ii) business expenses
incurred but unpaid prior to the effective date of termination; (iii)
Executive’s accrued but unpaid Bonus, if any; (iv) the Relocation Adjustment,
accrued but unpaid prior to the effective date of termination; and (v) the
Relocation Adjustment from and after the effective date of termination through
the end of the Payment Period. All payments made pursuant to this paragraph
shall be made less legal deductions. Company may elect, in its sole discretion,
to pay the Relocation Adjustment in one lump sum or on regular pay days
following termination of Executive’s employment. Executive’s family shall not be
entitled to continue to participate in any employee benefit plans except to the
extent provided in such plans for terminated participants, or as may be required
by applicable law. The disposition of Executive’s options granted pursuant to
Section 6 hereof shall be governed by the applicable terms and conditions of the
Plan, if the option has been granted pursuant to the Plan, and any award
agreement executed in respect of such options.

 

(b)       Disability. The Board reserves the right to terminate Executive’s
employment upon 30 days written notice if, for a period of 90 days, Executive is
prevented from substantially discharging the essential functions of his position
as President and Chief Executive Officer, with or without reasonable
accommodation, due to any physical or mental disability. If Executive’s
employment is terminated pursuant to this Section 12(b), Company shall pay to
Executive (i) Executive’s accrued but unpaid Annual Salary and the value of
unused paid time off through the effective date of the termination; (ii)
business expenses incurred but unpaid prior to the effective date of
termination; (iii) Executive’s accrued but unpaid Bonus, if any; (iv) the
Relocation Adjustment, accrued but unpaid prior to the effective date of
termination; and (v) the Relocation Adjustment from and after the effective date
of termination through the end of the Payment Period. All payments made pursuant
to this paragraph shall be made less legal deductions. Company may elect, in its
sole discretion, to pay the Relocation Adjustment in one lump sum or on regular
pay days following termination of Executive’s employment. Executive shall not be
entitled to continue to participate in any employee benefit plans except to the
extent provided in such plans for terminated participants, or as may be required
by applicable law. The disposition of Executive’s options granted pursuant to
Section 6 hereof shall be governed by the applicable terms and conditions of the
Plan, if the option has been granted pursuant to the Plan, and any award
agreement executed in respect of such options.

 

(c)       Election By Executive. Executive’s employment may be terminated at any
time by Executive upon not less than 30 days written notice by Executive to the
Board. If Executive’s employment is terminated pursuant to this Section 12(c),
Company shall pay to Executive (i) Executive’s accrued but unpaid Annual Salary
and the value of unused paid time off through the effective date of the
termination; (ii) business expenses incurred but unpaid prior to the effective
date of termination; and (iii) the Relocation Adjustment, accrued but unpaid
prior to the effective date of termination. All payments made pursuant to this
paragraph shall be made less legal deductions. Executive shall not be paid the
Relocation Adjustment for the remainder of the Payment Period and shall not be
entitled to continue to participate in any employee benefit plans except to the
extent provided in such plans for terminated participants, or as may be required
by applicable law. The disposition of Executive’s options granted pursuant to
Section 6 hereof shall be governed by the applicable terms and conditions of the
Plan, if the option has been granted pursuant to the Plan, and any award
agreement executed in respect of such options.

 

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(d)       Election By Company. Executive’s employment may be terminated at any
time by Company upon not less than 30 days written notice by the Board to
Executive. If Executive’s employment is terminated pursuant to this Section
12(d), Company shall pay to Executive (i) Executive’s accrued but unpaid Annual
Salary and the value of unused paid time off through the effective date of the
termination; (ii) Executive’s accrued but unpaid Bonus, if any; (iii) business
expenses incurred but unpaid prior to the effective date of termination; (iv)
the Relocation Adjustment, accrued but unpaid prior to the effective date of
termination; (v) the Relocation Adjustment from and after the effective date of
termination through the end of the Payment Period; and (vi) severance consisting
of six months Annual Salary, all less legal deductions. Company may elect, in
its sole discretion, to pay the severance and the Relocation Adjustment in one
lump sum or on regular pay days following termination of Executive’s employment.
Executive shall be entitled, at Executive’s expense, to continue to participate
in employee benefit plans described in Section 5(c) for a period of six months
following termination of Executive’s employment, to the extent provided in such
plans for terminated participants, or as may be required by applicable law. The
disposition of Executive’s options granted pursuant to Section 6 hereof shall be
governed by the applicable terms and conditions of the Plan, if the option has
been granted pursuant to the Plan, and any award agreement executed in respect
of such options.

 

(e)       Termination Due to a Change in Control. Executive’s employment may be
terminated upon a Change in Control. For purposes of this Agreement, the term
“Change in Control” shall mean the sale or disposition by Company to an
unrelated third party of substantially all of its business or assets, or the
sale of the capital stock of Company in connection with the sale or transfer of
a Controlling Interest in Company to an unrelated third party, or the merger or
consolidation of Company with another corporation as part of a sale or transfer
of a Controlling Interest in Company to an unrelated third party. For purposes
of this definition, the term “Controlling Interest” means the sale or transfer
of Company’s securities representing greater than 50% of the voting power. It
will be presumed that a termination is a termination under this subsection (e)
rather than a termination under subsection (d) (Election by Company) if
Executive’s employment is terminated during the period that begins when
negotiations for the Change in Control begin and ends on the six month
anniversary of the closing of the Change in Control transaction and such
termination is not a termination for cause pursuant to Section 11 or a
termination resulting from Executive’s death, disability, or election pursuant
to subsections (a), (b) or (c) of this Section 12. If Executive’s employment is
terminated pursuant to this Section 12(e), Executive shall be entitled to
receive (i) Executive’s accrued but unpaid Annual Salary and the value of unused
paid time off through the effective date of the termination; (ii) Executive’s
accrued but unpaid Bonus, if any; (iii) business expenses incurred but unpaid
prior to the effective date of termination; (iv) the Relocation Adjustment,
accrued but unpaid prior to the effective date of termination; (v) the
Relocation Adjustment from and after the effective date of termination through
the end of the Payment Period; and (vi) severance consisting of six months
Annual Salary, all less legal deductions. In addition, any equity award that was
scheduled to vest during the period following the termination of Executive’s
employment will vest immediately upon the termination of Executive’s employment
pursuant to this Section 12(e).

 

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With the exception of the terms of this Sections 12 and any obligations, duties
and responsibilities Executive has under the Employee Intellectual Property
Assignment and Nondisclosure Agreement, upon termination of Executive’s
employment the obligations of Executive and Company under this Agreement shall
immediately cease.

 

13.MISCELLANEOUS.

 

(a)       Preparation of Agreement. It is acknowledged by each Party that such
Party either had separate and independent advice of counsel or the opportunity
to avail itself or himself of same. In light of these facts it is acknowledged
that no Party shall be construed to be solely responsible for the drafting
hereof, and therefore any ambiguity shall not be construed against any Party as
the alleged draftsman of this Agreement.

 

(b)       Cooperation. Each Party agrees, without further consideration, to
cooperate and diligently perform any further acts, deeds and things and to
execute and deliver any documents that may from time to time be reasonably
necessary or otherwise reasonably required to consummate, evidence, confirm
and/or carry out the intent and provisions of this Agreement, all without undue
delay or expense.

 

(c)       Interpretation.

 

(i)       Entire Agreement/No Collateral Representations. Each Party expressly
acknowledges and agrees that this Agreement, including all exhibits attached
hereto: (1) is the final, complete and exclusive statement of the agreement of
the Parties with respect to the subject matter hereof; (2) supersedes any prior
or contemporaneous agreements, promises, assurances, guarantees,
representations, understandings, conduct, proposals, conditions, commitments,
acts, course of dealing, warranties, interpretations or terms of any kind, oral
or written (collectively and severally, the “Prior Agreements”), and that any
such prior agreements are of no force or effect except as expressly set forth
herein; and (3) may not be varied, supplemented or contradicted by evidence of
Prior Agreements, or by evidence of subsequent oral agreements. Any agreement
hereafter made shall be ineffective to modify, supplement or discharge the terms
of this Agreement, in whole or in part, unless such agreement is in writing and
signed by the Party against whom enforcement of the modification or supplement
is sought.

 

(ii)       Waiver. No breach of any agreement or provision herein contained, or
of any obligation under this Agreement, may be waived, nor shall any extension
of time for performance of any obligations or acts be deemed an extension of
time for performance of any other obligations or acts contained herein, except
by written instrument signed by the Party to be charged or as otherwise
expressly authorized herein. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof, or a waiver or relinquishment of any other agreement
or provision or right or power herein contained.

 

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(iii)       Remedies Cumulative. The remedies of each Party under this Agreement
are cumulative and shall not exclude any other remedies to which such Party may
be lawfully entitled.

 

(iv)       Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
determined to be invalid, illegal or unenforceable under present or future laws
effective during the term of this Agreement, then and, in that event: (A) the
performance of the offending term or provision (but only to the extent its
application is invalid, illegal or unenforceable) shall be excused as if it had
never been incorporated into this Agreement, and, in lieu of such excused
provision, there shall be added a provision as similar in terms and amount to
such excused provision as may be possible and be legal, valid and enforceable,
and (B) the remaining part of this Agreement (including the application of the
offending term or provision to persons or circumstances other than those as to
which it is held invalid, illegal or unenforceable) shall not be affected
thereby and shall continue in full force and effect to the fullest extent
provided by law.

 

(v)       No Third Party Beneficiary. Notwithstanding anything else herein to
the contrary, the parties specifically disavow any desire or intention to create
any third party beneficiary obligations, and specifically declare that no person
or entity, other than as set forth in this Agreement, shall have any rights
hereunder or any right of enforcement hereof.

 

(vi)       Headings; References; Incorporation; Gender. The headings used in
this Agreement are for convenience and reference purposes only, and shall not be
used in construing or interpreting the scope or intent of this Agreement or any
provision hereof. References to this Agreement shall include all amendments or
renewals thereof. Any exhibit referenced in this Agreement shall be construed to
be incorporated in this Agreement. As used in this Agreement, each gender shall
be deemed to include the other gender, including neutral genders or genders
appropriate for entities, if applicable, and the singular shall be deemed to
include the plural, and vice versa, as the context requires.

 

(d)       Enforcement.

 

(i)       Applicable Law. This Agreement and the rights and remedies of each
Party arising out of or relating to this Agreement (including, without
limitation, equitable remedies) shall be solely governed by, interpreted under,
and construed and enforced in accordance with the laws (without regard to the
conflicts of law principles thereof) of the State of Washington, as if this
agreement were made, and as if its obligations are to be performed, wholly
within the State of Washington.

 

(ii)       Consent to Jurisdiction and Venue. Any action or proceeding arising
out of or relating to this Agreement shall be filed in and heard and litigated
solely before the state or federal courts of Washington within King County.

 

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(iii)       Attorneys’ Fees. If court proceedings are required to enforce any
provision of this Agreement, the substantially prevailing or successful Party
shall be entitled to an award of the reasonable and necessary expenses of
litigation, including reasonable attorneys’ fees.

 

(e)       No Assignment of Rights or Delegation of Duties by Executive.
Executive’s rights and benefits under this Agreement are personal to him and
therefore (i) no such right or benefit shall be subject to voluntary or
involuntary alienation, assignment or transfer; and (ii) Executive may not
delegate his duties or obligations hereunder.

 

(f)       Notices. Unless otherwise specifically provided in this Agreement, all
notices, demands, requests, consents, approvals or other communications
(collectively and severally called “Notices”) required or permitted to be given
hereunder, or which are given with respect to this Agreement, shall be in
writing, and shall be given by: (A) personal delivery (which form of Notice
shall be deemed to have been given upon delivery), (B) by private overnight
delivery service (which forms of Notice shall be deemed to have been given upon
confirmed delivery by the delivery agency), or (C) by mailing in the United
States mail by registered or certified mail, return receipt requested, postage
prepaid (which forms of Notice shall be deemed to have been given upon the 5th
business day following the date mailed). Notices shall be addressed to the
address hereinabove set forth in the introductory paragraph of this Agreement,
or to such other address as the receiving Party shall have specified most
recently by like Notice, with a copy to the other Parties hereto. Any Notice
given to the estate of a Party shall be sufficient if addressed to the party as
provided in this subparagraph.

 

(g)       Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument, binding on all parties hereto. Any signature page
of this Agreement may be detached from any counterpart of this Agreement and
reattached to any other counterpart of this Agreement identical in form hereto
by having attached to it one or more additional signature pages.

 

(h)       Execution by All Parties Required to be Binding; Electronically
Transmitted Documents. This Agreement shall not be construed to be an offer and
shall have no force and effect until this Agreement is fully executed by all
Parties hereto. If a copy or counterpart of this Agreement is originally
executed and such copy or counterpart is thereafter transmitted electronically
by facsimile or similar device, such facsimile document shall for all purposes
be treated as if manually signed by the Party whose facsimile signature appears.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement.

 

  Company:         CLEARSIGN COMBUSTION
CORPORATION                   Date: January 28, 2019 By: /s/ Robert T. Hoffman
Sr.     Robert T. Hoffman Sr.     Chief Executive Officer         Executive:    
        Date: January 28, 2019 /s/ Colin James Deller   Colin James Deller

 

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